Kinovo Share Discussion Threads

[masurenguy] 07/8/2021 17:05

Two trades - 2,115k and 1,965k plus 3 x 150k - all @33.5p (midprice) reported late yesterday afternoon. Looks like an exchange between two existing major holders or maybe to a new investor !

[nico115] 07/8/2021 16:36

Looks like someone of offloading a declarable stake at 33.5pHope it's not the 10pct holder !!

[masurenguy] 07/8/2021 15:35

Shareprice has just drifted down by circa 20% over the past 10 weeks during the Summer doldrums. However, with the following metrics -

* Current annual sales of circa £60 - £65m.
* Forward order book of £170m.
* Net debt reduced by over 60%, from £7.2m to £2.7m.
* Cash flow positive.
* Outstanding Receivables down by 25% to £5.6m and DSO of just 34 days.
* Dividend of 1.5% on the current shareprice.
* Enterprise value of only £22.4m or circa 0.35 of annual sales

- this remains seriously undervalued with a current market cap of just £19.8m. Top 8 investors plus 3 insiders (see Header) also currently hold 68.3% of the shares.

"In the 3 months to 30 June 2021 our performance has been in line with management expectations. We remain cautiously optimistic in our outlook as the Covid-19 restrictions unwind and the new normality for society returns. As a consequence of some of the delays and disruption, particularly with regard to planned or discretionary work, we anticipate pent-up demand for our services and a strong pipeline of work to follow. This, together with continued strong cash generation and a growing order book has led the Board to recommend a dividend of 0.5p per share, reflecting our confidence in Kinovo and our future. We are excited about the repositioning of the business and the new opportunities that will bring moving forward." David Bullen, CEO, 5 July 2021

[johnhemming] 08/7/2021 17:47

Obviously we are affected by market sentiment. I take the view that the UK market is still cheap in comparison to the US. However, there will still be a response to macroeconomic nerves.

I expect quite a bit of market wide volatility as we move towards a more predictable economy (which is probably a few years away as at now).

[nico115] 08/7/2021 12:34

Ultimately I think this gets taken over at 100p in 2 to 3 years timeMy only worry is that I think 2022 we have a major crash Barring this I think we get a steady rise to 60p over next year We are just too cheap ,paying a divi No debt at year end unless we make an acquisition EV of 25m is too cheap

[lord gnome] 08/7/2021 11:41

What's your timescale for that Nic? I was just looking for 60p by the end of the year, but I think that is now a forlorn hope.

[nico115] 08/7/2021 11:33

They know website is poor What's your price target here Mine is 100p

[nico115] 07/7/2021 07:29

Another 2.2m shares in issue Is that JSOP shares ?

[nico115] 07/7/2021 07:22

There are more shares in issue now maybe that's why

[nico115] 07/7/2021 07:09

I've not sold any shares When I last looked my name wasn't mentioned but Redmayne was ?Will double check

[thirty fifty twenty] 06/7/2021 22:08

nico - i agree that the business generates CASH.

i like to be specific in my analysis:
debt 2 years ago was 10.7m (i think)
2m was raised from rights issue
and 1m is a benefit from not paying VAT as per Gvt deferrals.
so the business CASH flow is closer to 5m over 2 years.

then, as per the CEO himself, the previous business was very badly run,
and there was some low hanging fruit in reducing trade debtors (c.2m)
and as seen in most companies when turnover falls there is a CASH flow benefit which will be reversed in WC when turnover growth happens (i estimate this to be 1m)

so the ongoing debt reduction from the business i my opinion is closer to 2m to 3m
IN A PANDEMIC PERIOD which is still very impressive IMHO

any views on the new website.
i think it poor that one cannot access the old report and accounts or presentations?

nico, i see that you are no listed there as a 3% disclosed shareholder?
is this an error on behalf of the company,
or have you sold some recently?

All IMHO, DYOR + BoL
KINO is i my top5 hldgs

[nico115] 06/7/2021 17:08

I just look at the cash we are generating During pandemic we have cut debt from 11m to 2.7m (with a placing ) That for me tells me what a great investment case this is

[thirty fifty twenty] 06/7/2021 14:41

i am a long term holder.

however i was surprised to see that the electrical business had declined by > c.30% last year, whilst the other 2 business segments grew. the pluses and minuses can be explained by Covid but it was disappointing that the very different effect on electrical rather than gas was not at all addressed by the CEO commentary.

also i think house builders are out of favour so seeing that 40m of the 70m order book relates to low margin construction work might not have impressed the market.

and i think the falling of Electrical might have put off those that were hoping for a more obvious linkage from KINO into the electrification of the economy.

additionally i think expanding into Birmingham (because it is close and manageable) seems to me like a distraction and a contract given because they could get it. the logical conclusion is that they will try and be a national business which is a very different proposition and involves risk. i say logical because building up a business in london and birmingham hardly sounds like a long term moat! i'd have preferred if they had stayed in london and then been an more attractive to a national consolidator, or else just ronseal it and say that they see the potential to become the national specialist.

i remain confident that these are a decent long term investment,
but it looks less likely until the next corporate update that there is enough here for investors to get excited about and create a real step change in share price in the months ahead.

all IMHO, DYOR + BoL
BILB is in my top 5 holdings

[masurenguy] 06/7/2021 14:33

Topped up here this morning @34.4p. The price was 36.5p after the trading update on 6 May. It slowly increased to 41p over the next 4 weeks and today in fell back below the 6 May price despite the fact that the actual results corresponded to that trading update projection.

[value hound] 06/7/2021 13:56

Looks comfortably to be worth >£30m / 50pps given time, to me. I agree with wiganpunter (and share a town of birth it seems) re the takeover possibilities.

Given the healthy cash-flow, though, there should be no reason they can't return to the year before last's divi of 2.5p given a fair wind, representing a 7% potential yield at today's buy price of 35.7p.

[a2584728] 06/7/2021 13:05

Needs some life putting into it

[dodger777] 06/7/2021 12:36

Perhaps now the results are past and some share price weakness a few directors buying would be good to see

[wiganpunter] 06/7/2021 10:40

morning , am sure the great patviera aka Nico will be posting but here's a few thoughts.
on normalised birds this business now trades on 4x ev/ ebitda and a pe of 7 . the free cash flow yield is 8-10% . in short in 2 years it will have half the current market cap in cash without any operational improvements that David bullen brings . in deal terms this will either get taken private or be a multiple of current share price. is perfect for private equity - strong cash flow, no debt, recurrent pipeline , wider moat, clean energy theme. own it don't trade it and if you are selling it go have a coffee and think about getting a different hobby :)

[dodger777] 06/7/2021 10:28

Way above my knowledge on how the day arts of algos and market makers work 😆
Comfortable holding and adding on any opportunity especially as the future looks much more positive imo

[qs99] 06/7/2021 10:24

Agreed.....but provides a top up opportunity....DYOR

[johnhemming] 06/7/2021 09:37

>Slightly surprised to see it down this morning
It appears to me at times there are algorithmic trades driven by headline figures rather than an understanding of the accounts.

This may be traders who are similarly superficial, but there often are situations when good news (or the confirmation of good news) is taken by the market as bad news.

[masurenguy] 06/7/2021 08:35

That just reflects some peoples short term sentiment versus other peoples recognition of the long term value inherent in a growing business that has a current market value of only circa £22m !

[dodger777] 06/7/2021 08:16

Slightly surprised to see it down this morning ? Reults as expected, soon to be debt free, restarting dividend and very positive outlook

[qs99] 06/7/2021 08:11

So will be debt free soon and now paying a yield with c.£170m of revenues contracted over 3 years

Wonder what brokers will pencil in as EBITDA for FY22 and beyond?

[masurenguy] 06/7/2021 07:24

Results as projected in the Y/E trading update at the begining of May. Key factors were significant debt reduction, increased bank credit facility, restoration of the dividend and restructuring of the business.

Final results for the year ended 31 March 2021

Kinovo plc (AIM:KINO), the specialist property services Group that delivers compliance and sustainability solutions, announces its full year results for the twelve months ended 31 March 2021.

Financial highlights

-- Operating profit of £601,000 (2020: £2.3 million) on revenues of £60.2 million (2020: £65.4 million).

-- Adjusted EBITDA (1) of £3.0 million (2020: £4.7 million).
-- Strong adjusted operating cash flow (2) of £4.7 million (2020: £4.6 million).
-- Net debt(3) reduced by £4.5 million to £2.7 million (2020: £7.2 million).
-- Basic earnings per share of 0.27 pence per share (2020: 2.93 pence per share) based on a profit after tax of £157,000 (2020: £1.4 million).

-- Adjusted earnings per share was 3.91 pence per share (2020: 7.10 pence per share).
-- Debt facilities restructured with HSBC including changing of covenants, providing a £7.3 million term loan facility and a £2.5 million overdraft facility to ensure maximum flexibility for the Group.

-- Proposed reinstatement of dividend of 0.5 pence per share to reflect significant reduction in net debt, resilient underlying trading and confidence in outlook.

Operating highlights

-- Completion of rebranding and repositioning of the Group to Kinovo around the three key strategic pillars of Regulation, Regeneration and Renewables.

-- Investment in energy efficient solutions relating to the Microgeneration Certification Scheme.

-- Investment in Business Development Team in H2 already gaining traction with both contract wins and inclusion onto SEC and Fusion 21 frameworks, alongside geographic diversification into the Midlands.

-- Visible revenues over the next three years of £170 million (2020: £172 million) including £8 million in visible revenues secured since the year end with a strong pipeline.

-- Focus on our people accelerated with implementation of a wide range of HR initiatives including talent management and investment into key commercial and operational roles to continue driving operational excellence for growth.

-- Investment into IT infrastructure including roll-out of software package to monitor and measure our social value contribution as a Group, which was calculated at over £1.15 million in the financial year.

(1) Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and excluding non-underlying items. To align with internal and bank covenant reporting it is also stated after a charge for lease payments, as set out in note 8 of the financial statements.

(2) Adjusted operating cash generated is stated before tax and after lease payments and after adding back £379,000 (2020: £1.9 million) exceptional item cash payments incurred in the year ended 31 March 2021. It is also adjusted to reflect the payment of deferred HMRC payments to normal terms. Further analysis is set out in the Financial Review.

(3) Includes term and other loans and overdraft net of cash, and excludes lease obligations.

(4) Adjusted earnings per share is the profit, excluding non-underlying items, after tax divided by the weighted average number of ordinary shares which is set out in note 14 to the financial statements.

(5) 3 year visible revenues are the minimum identifiable revenues, over the following 3 year period; being contracted or anticipated spend as well as historical run rate.

Commenting on the results and prospects, David Bullen, Chief Executive Officer, said:"Despite the challenges of Covid-19 and the disruption caused by multiple lockdowns, we delivered a resilient performance in 2021 as well as a major achievement in repositioning the business. We have now announced our re-brand, laying the foundations for Kinovo to accelerate its growth strategy. I am positive of the outlook for the Group and I look forward to capturing the vast amount of organic growth potential alongside strategic acquisition opportunities. We sit at the centre of compliance and sustainability solutions with a complete focus on supporting our customers on their sustainability goals and the UK Government's net-zero pledges. As a result, we have invested in the skillsets that will ensure we can serve our customers fully. Since March 21, we have secured a further £8 million in visible revenues, following contract wins including de-carbonisation funding works installing air source heat pumps and solar photovoltaic systems. "