Kinovo Dividends - KINO

Kinovo Dividends - KINO

Stock Name Stock Symbol Market Stock Type
Kinovo Plc KINO London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 33.50 08:00:08
Open Price Low Price High Price Close Price Previous Close
33.50 32.50 33.50 33.50
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Kinovo KINO Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

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Posted at 01/12/2022 17:02 by dyor2
Well, as I said in my last post, the important thing for me here is the amount of cash the core Kinovo business generates. Cash generally doesn’t lie! By this time next year I estimate the core business will be generating circa £6m p.a. in cash, and growing. Let’s say you’re a private equity buyer - what would you pay for this core business? If you paid 70p a share for Kinovo that would be £43.4m. You could refinance say £30m of this on a five year loan at say 500 basis points over the 5 year gilt, which would be 8.3% p.a., i.e. an annual interest cost of £2.5m. You’d then be receiving a cash return of £3.5m p.a. (and growing) on your remaining £13.4m of equity investment if you choose to pay the surplus cash flow out as dividend - i.e. a cash return of 26% p.a., and growing. You don’t need to do much to the business, you just keep hold of it for say three years, by which time it’s making operating profits of say £8m p.a.. You then sell or re-float the business at an enterprise value of say 8X operating profit, i.e. a valuation of £64m. After repaying the £30m loan this leaves you with a return of £34m on your initial £13.4m of equity investment, plus the £13.5m you’ve taken out as dividend during the three years you’ve owned the business. i.e. a total return of £47.5m on a £13.4m equity investment. That would be a pretty impressive IRR! The numbers look even more attractive to a trade buyer, who could knock out at least £1m p.a. of central/public company cost. And all of this is on pretty conservative assumptions - you might in practice hope to float the business in a bull market at a much higher valuation than this.

The above are very rough numbers, but the point is they leave a lot of leeway even if the cost of completing the DCB contracts turns out to be a million or two higher than Kinovo’s present £4.3m estimate. Two views make a market, but as I’ve argued since these were 10p, I believe the value of the core Kinovo business is many times any conceivable cost of completing the outstanding DCB contracts. Mainly for that reason I’ve been trying to add to my holding today, but there doesn’t seem to be a lot of stock around at these lower levels.

Posted at 01/12/2022 08:57 by ddt sprite
Great Post yesterday Measuredguy!! Spot on.

The board have continually failed to address any of the questions and concerns highlighted over the DCB debacle. Market announcements have been misleading at best. Honest and truthful updates on the PCGs is needed. Even the latest results published do not tell us whether the two projects that have started are under Kinovo control or whether the clients are getting others to complete and pass that cost on to Kino. Three others expected to re-start in the new year, again do Kinovo have cost control over these? That still leaves four other projects not even mentioned. Too much left to our imagination here.
£4.3m cost to complete is continuously mentioned but you may all remember that Kino announced this time last year that they were expecting Circa £5m from the sale of DCB. I do not trust the board and clearly others do not either.

Posted at 30/7/2022 10:37 by dyor2
I’ve been thinking further about this, and IMV the Tipacs2 purchase tells us quite a lot: 1. If they thought a fund raising was going to be needed to pay for the DCB liabilities they wouldn’t be paying a 60% premium to buy stock in the market. They had 14% of the company before this latest purchase and appear to have been supportive shareholders to date, so presumably they would have been sounded out by now if Kinovo thought it would need a fund raising. And equally, the sellers of stock can’t have been sounded out about a fund raising either, because if they had been they’d be insiders and unable to trade. 2. If there isn’t going to be a fund raising, it means the further DCB liabilities are expected to be £5m or less (Kino has £1m in cash and £4m debt facilities). 3. Assuming the liability is £5m and Kino takes on £4m of debt to fund it, that would leave Kino’s enterprise value at c. £22m at 27p (i.e. £4m debt + £17m market cap). 4. The underlying business is on track to make £5m this year, and a bidder could knock out a further £1m+ of Board and public co overhead. 5. With a potential £6m of immediate annual profit contribution (most of which is generated as cash), plus expert and hard to find engineering staff, plus removing a competitor from the market, IMV this would be a no brainer acquisition for Sureserve or Mears at a minimum 6X profit contribution, That’s £36m, which less the £4m debt would be £32m as the minimum bid value, i.e. 52p a share. It could be significantly more. I suspect Tipacs2 can do this calculation as easily as I can! Of course all this depends on the further DCB liability being £5m or less and no fund raising being required. Presumably Tipacs2 must be confident of this, but we won’t know for sure until the figures are announced by Kinovo. DYOR applies here more than ever!
Posted at 16/7/2022 10:41 by dyor2
cermrew, para 3.4 of the administrators report (published at Companies House: ) states that on the 9 May, prior to their appointment, the administrators reviewed “an independent report produced by an external firm of quantity surveyors highlighting the current and projected performance on the Company’s construction contracts”. It doesn’t say who produced this surveyors report, but in para 4.2 the administrators say that they subsequently commissioned a quantity surveyors report from DNH Commercial Management into the status of the construction contracts. DNH is a one man firm based in Kent and was paid £2,130 for this latter report (page 30). But there is no way a one man firm could adequately review multiple projects of this size and complexity for a time fee of £2,130! I have reason to believe this report was simply an update/reformatting of the earlier report which was also produced by DNH at MCG’s behest. The administrators don’t confirm that this earlier report was used by MCG to pressure Kinovo to advance further working capital funds, but I believe that it was indeed used for this - hence why Kinovo commissioned its own report (para 4.2) which showed a “significant discrepancy” (i.e. much lower) estimates in order to resist MCG’s claims. The above is why I wouldn’t necessarily trust the estimates in the DNH report that there could be cost overruns of “£6m-£12m” to complete the contracts. IMV that estimate is one side of a vitriolic contract dispute between MCG and Kinovo, which led to Kinovo refusing to advance further working capital funds. Incidentally, there are interesting discrepancies in the Administrators report: for example they claim (para 3.1) that “our involvement with the company prior to being appointed [on 16 May] was fairly limited”, and that they were first consulted by DCB and MCG on 3 May. But on page 24 of the report we learn that Pierre Valentin, a Director of DCB, on 13 April agreed with CFS Restructuring (the administrators firm) that CFS would gather information on DCB to prepare for administration, and CFS ran up fees of c. £32,000 doing this prior to their formal appointment. It’s also interesting to note that Pierre Valentin was only appointed a director of DCB on 12 April, the day before he instructed CFS to start preparing for Administration. Hmm……it’s all very murky, and even though it’s fascinating to me in a “whodunnit” sort of way, regular readers of this BB could be forgiven for wondering what all this has to do with the value of Kino shares! The relevance for me is that I’ve been trying to work out who is really to blame for the DCB fiasco. And the more I’ve looked into it, the more convinced I’ve become that the primary blame lies with MCG and it’s associates. But bluntly, I think Kinovo has been legged over. They seem to have been staggeringly naive to enter into a contract on terms which allowed them to be legged over, and obviously that could have consequences for whether shareholders in due course insist on Board changes and possibly the sale of the company once the DCB debacle is dealt with. Before deciding on that I’d be keen to hear Kinovo’s side of the story (I’m sure we all would!), but for now the important thing is that I’m inclined to think that the Kino Board has been naive rather than crooked. It’s an important distinction because I’m relying on the reported figures for the underlying Kinovo maintenance business, and that’s why I’m still a shareholder and bought more shares near the lows.
Posted at 15/7/2022 10:58 by dyor2
I’ve posted here before that I estimate the maximum further cash cost to Kino under the parental guarantees is c. £5m. I’ve subsequently done quite a bit of further research, and that remains my view. Here’s why. The total original contract value of the DCB construction projects subject to parental guarantee is c. £30m. This is confirmed by the fact that DCB currently has £1.5m of client retentions on its balance sheet (retentions are 5% of contract value). According to the Administrators report the new owners of DCB obtained a quantity surveyor’s report which estimated the cost to complete the contracts would be £6m-£12m in excess of original contract value. However this estimate was obtained from a local one man surveying firm and was used to support claims for further working capital injections from Kino, so it seems likely to have been somewhat inflated. The administrators say Kino commissioned its own report which came out with significantly lower figures, perhaps not surprisingly as the projects are already c. 50% complete. But let’s be conservative and take a mid figure of £9m total excess costs to complete the contracts. DCB currently has £3.5mm of completed work in progress plus £1.5m of customer retentions on its balance sheet, i.e. £5m in total. The administrators are assuming that they will recover zero of this as the contracts have been terminated. However, the £3.5m of work has been done and the end clients haven’t paid for it, and the clients also have the £1.5m retention monies. So when negotiating the payments due to end clients under the parental guarantees to complete the projects, Kino should be able to argue that it can allow for that. Deducting this £5m from the assumed £9m excess cost would leave a further cash cost to Kino of £4m under the parental guarantees. You can do this calculation in other ways (see my previous posts), but IMV it all comes down to the same order of magnitude - i.e. a worst case of the order of another £4m-£5m cash cost to Kino under the parental guarantees, rather than the £10m+ some posters here seem to fear. I estimate that Kino currently has c. £1m net cash on its balance sheet, and looks on track to make £5m+ operating profit from its core activities this financial year, which should generate £3m+ of further cash during the balance of the financial year. Its debt facilities are currently £4.5m, but as these expire soon and are currently being re-negotiated one can’t necessarily rely on them being renewed in full. It’s touch and go, but my own feeling is that in order to get the audit signed off and the facilities renewed it’s more likely than not that a capital raise of the order of £2m or so may be required. But if this does prove necessary, then I think it should be fairly easy to raise. As for the longer term outlook, I’m presently in the camp that thinks the large shareholders will want the business sold once the DCB liabilities have been dealt with. Likely EBITDA from the core business of £5m or so this year would give a value for the core business of £35m on a conservative 7X EBITDA, compared to the present Kino market cap of c. £10m. Personally, in relation to my own shareholding (currently around 1%) I’ve got an open mind on whether or not the business should be sold and I’d be keen to listen to a full and frank explanation of how Kino got itself into the DCB mess in the first place before making up my mind. On the face of it, it looks damning, but there must be more to this than we yet know. Incidentally, I can’t find anything to back up DDT Sprite’s claims that the core business isn’t paying its suppliers - that doesn’t mean he’s wrong, but it seems strange for a business that has net cash on its balance sheet? Anyway, all the above is just my own best estimates and I could very well be hopelessly wrong, so this is certainly a situation where you should DYOR rather than rely on BB posts!
Posted at 29/5/2022 10:02 by dyor2
QS99, I'm not an expert in insolvency, but from what I've read it seems administration for DCB is potentially better for Kino than DCB's immediate insolvent liquidation, because administration gives a breathing space for the administrator to work with all parties to find a better outcome for DCB's creditors than immediately closing DCB down and selling off all its remaining assets. The administrators will revert to insolvent liquidation if there's no better alternative, but I'm hoping Kinovo are using this breathing space to negotiate a deal with the administrators and the end clients where Kino take on enough DCB staff and other assets for KINO to complete the building contracts themselves. That would be costly for Kino, but probably a lot less costly than the DCB clients being forced to seek alternative contractors and recover their costs from Kino under the parent company guarantees. I think it would also be much better for Kino's reputation with the end clients, because they'd be seen to be trying to get the contracts completed rather than walking away, and that's important for their core maintenance business. But if anybody here is more expert in this sort of situation I'm happy to be corrected! Maybe I'm reading too much into the difference between administration and insolvent liquidation?
Posted at 27/5/2022 10:24 by dyor2
I agree that the administrators can’t unilaterally release Kino from the PGs, and also that Kino’s least worst option now is to work with the administrators and the end clients to get the building projects back up and running and completed. It’s not just a question of the legalities, it’s also a reputational issue - the end clients are Housing Associations who are also clients of Kino’s core maintenance business. The end clients may or may not have already given Kino notice under the PGs (it depends on the definition of insolvency in the building contracts), but I doubt they will have yet decided to appoint alternative contractors to complete the projects, because it will be difficult for them to seize the building sites, work in progress and records whilst the administrators are in charge. So I think intense discussions will be underway between Kino, the administrators and the end clients with a view to getting the projects back under way and completed. I agree that the administrators sole interest is to protect DCB creditors, not to protect Kino or the end clients, but it’s complicated because Kino is probably also the largest DCB creditor (to the tune of £3.7m). I think it’s helpful that DCB is (for now) in administration rather than insolvent liquidation because that facilitates discussions and negotiations to find a way forward. But they haven’t got long, because the projects are on hold and the administrators can’t pay DCB staff or subcontractors without agreeing a way forward. If they can’t come to such a deal, the administrators will put DCB into insolvent liquidation, which would be worse for Kino. So it’s strongly in Kino’s interests to try and reach a deal. That would certainly involve Kino providing further funding to get the projects completed. The question is, how much? One possible way of getting the contracts back up and running would be for Kino to provide a working capital facility to the administrators (as they did with the original DCB disposal, the difference this time being that with the administrators in charge they would have more confidence in the proper use of the facility). Or Kino could take back control and ownership of the DCB business and complete the contracts itself. Either way, they’ll look incredibly stupid, but the immediate cash funding requirements to get the projects back under way would probably be manageable. So, If I were in Kino’s place I’d bite the bullet, take back control of DCB, and fund the projects to completion. If that requires a fund raising to give their bankers and auditors comfort, I’d use the convertible preference share mechanism I suggested in an earlier post. But I’m just speculating from the outside!
Posted at 26/5/2022 13:47 by ddt sprite
Im new to posting on here but I've followed this feed for many months.
There seems to be a suggestion here that Kinovo need to be negotiating with the administrators of DCB to limit their liabilities.

Kinovo hold PCGs with the clients who have employed DCB to complete the projects in question. DCB have entered administration and as such the employers who have PCGs with Kinovo will seek their own losses/expenses on those contracts direct with Kinovo and not the administrators of DCB. As such the administrators of DCB have no control over the PCGs that are in place and as such negotiation with the administrators will not change the situation at all.

Unfortunately the Clients/employers will, without exception, seek to recover all losses and costs above the contract sums directly from Kinovo. This will include the costs to engage others to complete the works, LADs, legal fees, their own costs etc. It is likely that any newly engaged contractor employed to complete the works will be expensive as they are taking on the risk of the unknown of what has been left over by the outgoing contractor, not to mention the material and labour inflation that the industry has experienced since the projects were originally awarded.

The misleading of investors over the details of the sale of DCB is inexcusable and how David Bullen and his team are still in their positions is beyond me. I fully suspect that they will be paid off and removed from the business as soon as the major investors believe the time is right, this will mean that the only people who will do well out of this is the very people who have caused the problems we are discussing. Look at the shares that they have awarded themselves over the last couple of years whilst they ran DCB into the position it was that they needed to dispose of it to limit losses.

The belief that the PCGs would be transferred to MCG after the sale (mentioned in a recent Kino announcement)is ridiculous as this would and could only be done with the full permission of the clients/employers of each individual project/PCG. Bearing in mind that MCG was only set up a matter of months before the sale and it has no assets or value, no client/employer would ever consider accepting a transfer that would render their ability to call on the PCG worthless.

Naivety / incompetence or worse by the Kinovo board, I do not know.

My question would be: Where is the link between Kinovo & MCG? How did they come to buy the company when it wasn't actually put up for sale.

I would also question the underlying performance of the rest of the group bearing in mind the same people are producing the figures that led everyone to believe that the sale of DCB was worth circa £5m to Kino. Look at the credit ratings of the other companies in the group. This is not as healthy as they are making out.

Posted at 24/5/2022 22:53 by kinwah
Honestworker, it is a letter before action. KINO as advised by their lawyers refused to pay any further sums to DCB. (If I was a practising lawyer I would have advised doing the same, however this is probably the least bad option but it does lead to litigation). MCG then got their lawyers to submit a letter to KINO saying they are in breach of the guarantees and promises they made to fund DCB and that accordingly MCG will take action against KINO for the financial loss they have suffered as a result of DCB being unable to trade. KINO is making counter claims for up to £3.7 million as to use a legal term they feel they have been done up like a kipper. KINO were clearly not streetwise in their sale of the business and didn't expect their guarantees to be drawn on so heavily to fund working capital. On the face of it, it looks as if new business and contract variations could possibly have been put through another company rather than through DCB which would have led to a severe cashflow squeeze in DCB. MCG haven't broken any laws that I can see as they could reasonably expect KINO to continue honouring their guarantees. Now the lawyers are locking horns as expected. KINO has to work with the DCB administrator and try and strike a deal with him while pushing the MCG claims into the long grass. Construction litigation generally takes years to get to court as both sides will know.
Posted at 16/5/2022 15:38 by tomboyb
Kinovo PLC Update re DCB Kent Limited ("DCB")
16/05/2022 4:33pm
UK Regulatory (RNS & others)

Kinovo (LSE:KINO)
Intraday Stock Chart

Monday 16 May 2022

Click Here for more Kinovo Charts.

RNS Number : 6689L

Kinovo PLC

16 May 2022

16 May 2022

Kinovo plc

("Kinovo" or the "Company")

Update re DCB Kent Limited ("DCB")

Kinovo Plc (AIM: KINO), the specialist property services Group that delivers compliance and sustainability solutions, provides the following update on developments in the financial position of DCB, its former subsidiary, since the release by Kinovo, on 6 May 2022, of its trading update for the year ended 31 March 2022 (the "6 May Announcement").

Kinovo has today been informed that two partners of CFS Restructuring LLP have been appointed as joint administrators of DCB (the "Joint Administrators").

As referred to in the 6 May Announcement, since the completion of its disposal of DCB, Kinovo has provided working capital support to DCB in the amount of GBP3.7 million in aggregate, to facilitate the completion by DCB of active projects. Prior to the disposal, as also referred to in the 6 May Announcement, Kinovo provided certain parent company guarantees relating to construction projects in existence at the time of the disposal, which were expected to be released by the purchaser of DCB following completion of the disposal.

Kinovo is currently establishing the impact of an administration of DCB on the monies it has advanced DCB to support its working capital, which remain at GBP3.7 million, as well as on the parent company guarantees it has provided.

The deferred purchase price for the disposal of DCB was based on the successful completion of active projects, upon trade settlements relating to those projects, and on profits for financial years ending March 2023 and 2024, respectively. In consequence of an administration of DCB, Kinovo's directors expect that any deferred consideration it may receive would only likely now arise from trade settlements and retentions related to contracts; this would be linked directly to the administration process and completion of the relevant construction projects.

A further announcement will be made to shareholders as and when appropriate.

Sangita Shah, Chairman of Kinovo plc, commented:

"We are very disappointed to be informed of the appointment by DCB of the Joint Administrators. We are actively engaged with our legal advisors in establishing Kinovo's position in consequence of an administration of DCB, and we are also in direct discussions with the Joint Administrators."


Kinovo plc
Sangita Shah, Chairman +44 (0)20 7796 4133
David Bullen, Chief Executive Officer (via Hudson Sandler)

Canaccord Genuity Limited (Nominated Adviser
and Sole Broker) +44 (0)20 7523 8000
Andrew Potts
Bobbie Hilliam

Hudson Sandler (Financial PR) +44 (0)20 7796 4133
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Harry Griffiths

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