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Kinovo Plc LSE:KINO London Ordinary Share GB00BV9GHQ09 ORD 10P
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Kinovo PLC Interim Results

28/11/2022 7:00am

UK Regulatory (RNS & others)


Kinovo (LSE:KINO)
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TIDMKINO

RNS Number : 6960H

Kinovo PLC

28 November 2022

28 November 2022

Kinovo Plc

("Kinovo" or the "Group")

Interim Results

Strong momentum in underlying business

Kinovo plc (AIM:KINO), the specialist property services Group that delivers compliance and sustainability solutions, announces its unaudited Interim Results for the six months ended 30 September 2022.

Financial highlights (Continuing operations):

   --      Revenue increased by 25% to GBP29.8 million (H1 2021: GBP23.8 million) 
   --      Gross margin percentage increased by 1.2% to 25.9% (H1 2021: 24.7%) 
   --      Adjusted EBITDA increased 31% to GBP2.4 million (H1 2021: GBP1.8 million) 
   --      Operating profit increased by 56% to GBP1.9 million (H1 2021: GBP1.2 million) 
   --      Cash conversion of 130% during the period 
   --      Net debt of GBP0.1 million (H1 2021: GBP1.7 million) 
   --      Basic earnings per share increased 59% to 2.16p from 1.36p in H1 20212 

Operating highlights:

-- The underlying business continues to perform strongly despite a challenging macro-economic trading environment

-- Revenue and profit attributable to our three key pillars; Regulation, Regeneration and Renewables, demonstrate robust growth during the period

-- The Electrical Services Division, driven by new legislation changes, delivers growth of 37% in revenues

-- The Building Services Division capitalised on decarbonisation opportunities as well as new contracts, increasing revenues by 30%

-- The Group's ESGM Strategic Report has been published and our Carbon Net Zero Strategic Report is expected to be released in the new year

-- Continued commitment to social value, with the number of apprentices compared to employees growing to 13% (H1 2021: 10%)

-- Three-year visible revenues increased to GBP146 million with a robust pipeline in play and key contract wins and renewals including:

o A four-year electrical works contract with Estuary Housing at GBP1.5 million per annum

o A four-year repairs and maintenance contract with the London Borough of Bexley at GBP1.2 million per annum

o A one-year contract worth GBP1 million with Orbit Voids

DCB (Kent) Limited ("DCB"):

-- Cost to complete of construction projects, as previously announced, estimated to be a total of GBP4.3 million with the liability included in the financial statements at 30 September 2022

-- As a result, discontinued operations loss after tax of GBP3.5 million (H1 2021: GBP0.3 million)

-- Work has recommenced on two of the nine sites with a further three expected to commence in Q1 2023 and constructive dialogue continuing regarding the remainder of outstanding projects

Outlook:

-- The implementation of regulatory-driven legislation changes during the period, alongside the Government's commitment to decarbonisation, align favourably with the Group's strategic pillars, positioning the Group well to support clients in delivering these mandates

   --      The Board is confident of achieving full year results in line with expectations 
 
                                              Unaudited       Unaudited      Audited 
                                               6 months        6 months    12 months 
                                                     to              to           to 
                                           30 September    30 September     31 March 
                                                   2022            2021         2022 
                                                GBP 000         GBP 000      GBP 000 
---------------------------------------  --------------  --------------  ----------- 
 Continuing operations 
 
 Income statement 
 Revenue                                         29,761          23,760       53,325 
 Gross profit                                     7,711           5,861       12,767 
 EBITDA(1) (excluding effect of lease 
  payments)                                       2,630           2,116        4,600 
 Adjusted EBITDA(2) (including effect 
  of lease payments)                              2,396           1,831        4,237 
 Underlying operating profit(3)                   2,311           1,758        4,091 
 Underlying profit before taxation(4)             2,099           1,606        3,822 
 Profit after taxation                            1,344             834        2,262 
 Basic earnings per share(5)                       2.16            1.36         3.66 
 Adjusted earnings per share(6)                    2.87            2.27         5.33 
 Cash flow 
 Net cash generated from operating 
  activities(7)                                   2,466           2,540        9,777 
 Adjusted net cash generated from 
  operating activities(7)                         3,119           2,826        9,442 
 Adjusted operating cash conversion(8) 
  (%)                                              130%            154%         223% 
 
 Financial position and net assets 
 Net cash                                       (1,721)         (2,237)      (2,504) 
 Term and other loans                             1,777           3,905        2,843 
 Net debt(9)                                         56           1,668          339 
 Net assets/(liabilities)                       (2,294)          11,250        (143) 
 
 Discontinued operations (see note 
  11) 
 Loss after taxation                            (3,486)           (279)     (13,144) 
 
 

1. Earnings before interest, taxation, depreciation and amortisation ("EBITDA") and excluding non-underlying items, as set out in the financial review.

2. To align with internal reporting, Adjusted EBITDA is stated after a charge for lease payments, as set out in the financial review.

3. Underlying operating profit is stated before charging non-underlying items as set out in note 4.

4. Underlying profit before taxation is stated after finance costs and before charging non-underlying items as set out in the financial review.

5. Basic earnings per share is the profit after tax divided by the weighted average number of ordinary shares.

6. Adjusted earnings per share is the profit before deducting non-underlying items after tax divided by the weighted average number of ordinary shares.

7. Net cash generated from operating activities before tax for continuing operations. Adjusted net cash generation reflects lease payments and the payment of deferred HMRC payments to normal terms. Further analysis is set out in the financial review.

8. Adjusted net cash generated from operating activities divided by Adjusted EBITDA, as set out in the financial review.

9. Net debt comprises term loans and other loans, and cash net of overdraft, and excludes lease obligations.

David Bullen, Chief Executive Officer of Kinovo, commented:

"Our strategy, business model and investment case remain stronger than ever with sustainability at the heart of what we do, underpinned by the predominantly non-discretionary nature of our three key pillars: Regulation, Regeneration and Renewables.

While the DCB disposal has been challenging, we are pleased to be making progress on the outstanding projects. We have commenced work on two of the sites, a further three will begin in Q1 2023, and we are in a constructive dialogue with the clients of all the other projects. We continue to believe that the GBP4.3m total costs to complete is an appropriate estimate.

The underlying business continues to excel, with all three pillars delivering substantial growth and Kinovo is well-positioned to grow further. We believe a number of significant legislative changes that were implemented during the period alongside the Government's decarbonisation commitments will only increase the frequency and scope of our works."

Enquiries

 
 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 
 Adam James 
  Andrew Potts 
  Harry Rees 
 
 Hudson Sandler (Financial PR)                   +44 (0)20 7796 4133 
 Dan de Belder 
  Harry Griffiths 
 

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Chair's statement

Overview

Despite the challenging macroeconomic conditions, Kinovo has continued its momentum in its continuing operations. This directly reflects our strategic repositioning and our ability to service our clients. Whilst we are not immune to the impacts of inflation, supply chain pressures and particularly labour shortages, Kinovo continues to mitigate these challenges through effective cost management, agile work practices and a focus on the implementation of the Group's strategy.

For the first half of this fiscal year, we were delighted to have achieved growth in all three of our divisions: mechanical, electrical and building services. This growth was also achieved across all three of our strategic pillars: Regulation, Regeneration and Renewables. Year on year revenues increased by 25% and, during the period, we are particularly pleased to have also won a number of significant contracts. We finish the first half of the year with EBITDA from continuing operations of GBP2.4 million, leaving Kinovo well-positioned to capitalise on further organic opportunities in a growing market requiring the services where we have considerable expertise and reputation.

DCB (Kent Limited) ("DCB")

Following the disposal of DCB, our former construction division, we provided working capital support to facilitate the completion of active projects which had not been completed to schedule, as previously announced.

We are actively managing the cost to complete on all projects, which are no longer under the sole control of third-party operators. Our team has begun working on-site on two of the projects, with a further three scheduled to commence in January 2023. We remain in constructive dialogue with clients for all of the other sites, and continue to expect the cost to complete to be approximately GBP4.3 million, over a period for completion, ranging from a number of months through to 2024. During the period, contracts have been signed on two projects and discussions are at an advanced stage on the others and the Board is confident they will be executed,

Chair Succession

As was announced at this year's Annual General Meeting, I will be stepping down from the Board of Kinovo once a suitable successor has been appointed. In spite of the myriad of challenges, it has been a privilege to serve as Chair of Kinovo. Having successfully navigated these challenges, I am pleased that the Company is firmly set on a very promising trajectory of growth and success.

The search for my successor is actively underway, and an announcement will be made on this in due course.

Sangita Shah

Non-Executive Chair

28 November 2022

Chief Executive Officer's review

Overview

I am pleased to report another period of strong growth for Kinovo's continuing operations. We announced, 18 months ago, our rebranding and repositioning to focus on the three strategic pillars: Regulation, Regeneration and Regulation. Since then, the Group has made significant progress. The strategic pillars play to our core strengths and serve to benefit from the ever-increasing regulatory drivers within our sector as well as the Government's commitment to decarbonisation.

During the period, revenue increased by 25% to GBP29.8 million (H1 2021: GBP23.8 million), representing year-on-year increases across each of our three strategic pillars: Regulation by 14%, Regeneration by 67% and Renewables by 20%. All three of our service divisions also delivered period-on-period increases in revenues: Mechanical by 6%, Electrical by 37% and Building Services by 30%. This resulted in adjusted EBITDA from continuing operations of GBP2.4 million, a 31% rise on the previous year (H1 2021: GBP1.8 million).

The Group's performance is all the more impressive being set against a challenging trading environment, affected by the Russian invasion of Ukraine, the cost-of-living crisis and the lasting effects of the Covid-19 pandemic and Brexit. While material costs and supply chain disruptions have started to normalise, skilled labour shortages continue to remain a major issue.

We are mitigating this in line with our commitment to social value, through our apprenticeship and employee development programmes, with a number of internal promotions, "graduation" of apprentices to improved status and an overall increase in the number of apprentices we employ, which now accounts for 13% of our employees. Furthermore, we have continued to invest in the personal and professional development of our people, including further leadership training across the business, with the second round of management training, empowering our employees and providing them with the necessary skills to excel within and beyond their roles.

We have also benefitted from being able to draw on the utilisation of our broad sub-contractor base as the scaling up of our workforce alone to meet the opportunities of increased scope and quantities of contracts will continue to prove challenging.

The disposal of DCB, which was a key component in streamlining operations, has been a challenge post disposal as previously disclosed in our final results for the year ended 31 March 2022. However, we have now commenced on-site on two of the outstanding projects and an additional three will start in Q1 2023. We remain in constructive dialogue with clients on all other sites.

Operational Developments & Growth Drivers

During the period, we were pleased to secure a number of critical new contracts and renewals, including a GBP1.5 million per annum four-year contract for electrical works with Estuary Housing, a four-year agreement at GBP1.2 million per annum with London Borough of Bexley for repairs and maintenance, and with Orbit Voids on a one-year term for GBP1 million . With a robust pipeline of opportunities still in play, our three-year visible revenues have increased to GBP146 million, demonstrating our resilience and providing a solid foundation on which to build.

Other than Kinovo's repositioning, there are a number of key drivers which have contributed to our recent growth.

Kinovo is a clear beneficiary of a number of recent significant regulatory-focused legislative changes, as councils are beginning to prioritise initiatives that will become mandatory in the near future. The Building Safety Act received Royal Assent on 28 April 2022 and provides ground-breaking reforms to give residents and homeowners more rights, powers and protection, increasing the accountability of owners and leaseholders to ensure their safety. It compels safety and performance audits and requires the effective management and resolution of the risks identified with the Act, creating new independent bodies to provide effective oversight of the new regime - building inspector and building control approver registers will be open by April 2024.

Alongside this, the Fire Safety Act came into force in May 2022, requiring the responsible person to ensure that a Fire Risk Assessment is carried out, and action taken to remove or negate the risks that are identified, in conjunction with increased electrical wiring legislation that, from September 2022, makes arc fault detection devices mandatory for higher risk residential buildings. Each of these key compliance drivers provides critical opportunities under our Regulation and Regeneration pillars.

ESG

We are pleased with the progress that continues to be made regarding ESG, with this being a critical part of our corporate purpose, underpinning each of our three key pillars. The Government's net zero strategy is gaining momentum, including its Public Sector Decarbonisation Scheme which supports the aim of reducing emissions from public sector buildings by 75% by 2037 and we are fully committed as an organisation to supporting its implementation. Our Renewables pillar aligns directly with this. During the period, we published a Sustainability/ESGM Strategic Report and are currently preparing a Carbon Net Zero Strategic Report. We also invested in the recruitment of a Greener Solutions Manager, further strengthening our commitment to decarbonisation, and a detailed survey is currently underway to assess and facilitate our fleet's transition to consisting entirely of electric vehicles.

With social value a key priority internally and externally, the Group has continued to support our local communities with volunteering work including Purdy regenerating a local piece of derelict land into an allotment for a local estate with raised beds, a wildflower garden, fresh running water, the provision of a shelter and a pond. Another example involves Spokemead engaging on a weekly basis in a programme to help cook and serve food for vulnerable members of the local community.

Our people remain our greatest asset, so engaging with them and listening to their feedback is vital. We recently completed our second Employee Survey, which received a 69% engagement rate and, whilst the finer details are still being reviewed, clearly demonstrates recognition from our staff of the positive and progressive development of our culture, our work environment and the benefits that we provide to our people.

Outlook

We are pleased with the progress that continues to be made across the continuing business; we have great people, a sustainable and growing pipeline of contracts and a number of industry tailwinds to support our growth.

The DCB situation has been challenging for Kinovo, particularly since DCB went into administration, but since we took active control of the outstanding sites we are managing them well and are engaged with DCB's clients to seek to reach agreement on completion of the outstanding nine projects. Although market challenges remain, notably inflationary pressures and labour shortages, the cost-of-living crisis, the energy crisis, the significance of the recent regulatory led legislation changes and the Government's increasing commitment to decarbonisation has led many councils to prioritise increasing the safety and efficiency of their homes.

Whilst there is still much to be done, our strategy, business model and investment case remain stronger than ever with sustainability at the heart of what we do, underpinned by the predominantly non-discretionary nature of our three key pillars; Regulation, Regeneration and Renewables.

The resilience of Kinovo and the potential of opportunities for us are robust. We remain confident of continuing our recent trajectory of strong revenue and Adjusted EBITDA growth, in line with the Board's expectations.

David Bullen

Chief Executive Officer

28 November 2022

Financial review

Trading review

In the six-month period to 30 September 2022, Kinovo has continued to deliver strong growth in revenues, earnings and cash generation from its continuing operations despite the market challenges of supply chain inflation and material and labour availability.

Comparative revenues for continuing operations during the period grew 25% to GBP29.76 million (H1 2021: GBP23.76 million), Adjusted EBITDA (after the effect of a charge for lease payments) increased by 31% to GBP2.40 million (H1 2021: GBP1.83 million) with operating profit from continuing operations delivering GBP1.87 million (H1 2021: GBP1.20 million).

Profit before taxation for continuing operations was GBP1.66 million (H1 2021: GBP1.05 million), an increase of 59%.

Kinovo continues to progress the fulfilment of its parent company guarantees on the DCB construction projects with two projects resuming on site. Discontinued operations include a full provision for the estimated costs to complete the projects which continues to be in line with previously disclosed expectations.

As a result of the discontinued operations provision, the Group has reported a total loss for the period of GBP2.14 million (H1 2021: profit GBP0.56 million).

The Adjusted EBITDA on continuing operations of GBP2.40 million in the period is considered by the Board to be a key Alternative Performance Measure ("APM") as it is the basis upon which the underlying management information is prepared and the performance of the business assessed by the Board.

Adjusted EBITDA is calculated as earnings before interest, taxation, depreciation and amortisation, excluding non-underlying items and is stated after the effect of a charge for lease payments.

A reconciliation of EBITDA (excluding lease payments) and Adjusted EBITDA (including a charge for lease payments) for continuing operations is set out below:

 
                                       Unaudited      Unaudited      Audited 
                                        6 months       6 months         year 
                                           ended          ended        ended 
                                    30 September   30 September     31 March 
                                            2022           2021         2022 
Continuing operations                    GBP'000        GBP'000    GBP'000 
 
Profit before tax                          1,661          1,046      2,792 
Add back: non-underlying items               438            560      1,030 
Underlying profit before tax               2,099          1,606      3,822 
Adjustments for items not included 
 in EBITDA: 
Finance costs                                212            152        269 
Depreciation of property, plant and 
 equipment                                    64             65        130 
Depreciation of right-of-use assets          222            280        336 
Amortisation of software costs                33             13         44 
Profit on disposal of property, plant 
and equipment                                  -              -        (1) 
EBITDA (excluding a charge for lease 
 payments)                                 2,630          2,116      4,600 
Adjustment for lease payments              (234)          (285)      (363) 
                                         -------  -------------  --------- 
Adjusted EBITDA                            2,396          1,831      4,237 
                                         -------  -------------  --------- 
 
 

Non-underlying items

Non-underlying items are considered by the Board to be either exceptional in size, one-off in nature or non-trading related items and are represented by the following, and as set out in note 4.

 
                                             Unaudited      Unaudited    Audited 
                                              6 months       6 months       year 
                                                 ended          ended      ended 
                                          30 September   30 September   31 March 
                                                  2022           2021       2022 
                                               GBP'000        GBP'000    GBP'000 
Continuing activities 
Amortisation of customer relationships             383            517        940 
Share based payment charge                    55                   43         90 
Total                                              438            560      1,030 
                                         -------------  -------------  --------- 
 

Customer relationship intangible fixed asset is fully amortised at 30 September 2022.

Cash flow performance

Adjusted net cash generated from continuing operating activities in the period was GBP3.12 million (H1 2021: GBP2.83 million) delivering an Adjusted operating cash conversion of 130% (H1 2021: 154%).

Adjusted operating cash conversion is calculated as cash generated from continuing operations (after lease payments) of GBP2.23 million (H1 2021: GBP2.26 million), adjusted for the effects of deferred HMRC repayments of GBP0.89 million (H1 2021: GBP0.57 million), in the period; divided by Adjusted EBITDA of GBP2.40 million (H1 2021: GBP1.83 million), as set out below;

 
Continuing operations                              Unaudited      Unaudited      Audited 
                                                    6 months       6 months         year 
                                                       ended          ended        ended 
                                                30 September   30 September     31 March 
                                                        2022           2021         2022 
                                                     GBP'000        GBP'000    GBP'000 
Net cash generated from operating 
 activities per condensed consolidated 
 statement of cash flows                                 814          1,926      3,660 
Adjustment for cash absorbed by discontinued 
 operations                                            1,652            614      6,117 
                                               -------------  -------------  --------- 
Net cash generated from continuing 
 operating activities                                  2,466          2,540      9,777 
Less lease payments                                    (234)          (284)      (471) 
                                                       2,232          2,256      9,306 
Adjustment for deferred HMRC payments                    887            570        136 
                                               -------------  -------------  --------- 
Adjusted net cash generated from 
 continuing operating activities                       3,119          2,826      9,442 
                                               -------------  -------------  --------- 
Adjusted EBITDA (as above)                             2,396          1,831      4,237 
                                               -------------  -------------  --------- 
Adjusted operating cash conversion                      130%           154%       223% 
                                               -------------  -------------  --------- 
 
 

VAT liabilities of GBP0.89 million were deferred at 31 March 2022 and during the period, in line with agreed arrangements with HMRC was fully repaid. Cash conversion in the period has benefitted from extension of credit on the HSBC purchasing card facility.

Discontinued operations

Following its rebranding and strategic review, Kinovo determined that DCB Kent Limited (DCB), the Company's construction business was non-core and initiated a process to dispose of the business which was completed in January 2022.

The terms of the disposal included certain working capital commitments. The business entered administration in May 2022 and Kinovo retained commitments under parent company guarantees, signed prior to the disposal of DCB, to complete its' construction projects.

The total cost of the commitment to complete the DCB construction projects continue to be estimated at GBP4.30 million, which has been provided for in the financial statements at 30 September 2022. The outstanding provision for the completion of the projects amounts to GBP4.00 million at 30 September 2022. The provision for the costs to complete the DCB projects together with the prior period operational results and loss on disposal have been presented as discontinued operations.

Loss after tax for the discontinued activities for the 6-month period ended 30 September 2021 was GBP0.28 million.

Cash outflow in the 6-month period to 30 September 2022 relating to the discontinued operations amounted to GBP1.65 million including GBP1.23 million in respect of working capital contributions made to DCB prior to it entering administration and accrued at 31 March 2022.

Net debt

There has been a continuing priority on cash management and reduction in net debt. In the six-month period to 30 September 2022, net debt reduced by GBP0.28 million to GBP56,000 compared to net debt of GBP0.34 million at 31 March 2022.

Net debt has reduced GBP1.61 million from GBP1.67 million at 30 September 2021 to GBP56,000 at 30 September 2022.

Set out below is an analysis of net debt:

 
                         Unaudited   Unaudited  Audited 
                   at 30 September       at 30    at 31 
                              2022   September    March 
                                          2021     2022 
                           GBP'000     GBP'000  GBP'000 
 
Net cash                   (1,721)     (2,237)  (2,504) 
HSBC term loan               1,534       3,533    2,534 
HSBC mortgage                  171         224      200 
Other term loan                 72         148      109 
                  ----------------  ----------  ------- 
Net debt                        56       1,668      339 
                  ----------------  ----------  ------- 
 
 

During the period the Group repaid GBP1.07 million of borrowings being GBP1.00 million on the HSBC term loan, GBP57,000 on the HSBC mortgage and GBP37,000 on the legacy Funding Circle Term loan. Total borrowings at 30 September 2022 were GBP1.78 million (H1 2022: GBP3.91 million).

The Group also has on demand overdraft facility of GBP2.50 million which was undrawn at 30 September 2022. The facility was renewed in September 2022 and interest is charged at 3% above Bank of England Base rate.

On 30 September 2022 the HSBC term loan was refinanced, extending the term by 1 year. The term loan now expires in September 2023 with GBP0.38 million quarterly repayments which commence in November 2022. Interest is charged at 4.0% above SONIA.

All financial covenants were achieved in the period and the covenants for the refinanced HSBC Term loan will be tested monthly and quarterly and comprise:

   (i)         achievement of minimum levels of EBITDA; 
   (ii)         interest cover; and 
   (iii)        minimum liquidity 

Dividends

No final dividend was paid for the year ended 31 March 2022 and no interim dividend is currently recommended for the year ending 31 March 2023 as the Group continues to fulfil the liabilities relating to the DCB construction projects and to proactively prioritise the reduction of net debt.

Clive Lovett

Group Finance Director

28 November 2022

 
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
For the six-month period ended 30 September 2022 (unaudited) 
                                              Unaudited      Unaudited      Audited 
                                               6 months       6 months   Year ended 
                                                     to             to     31 March 
                                           30 September   30 September         2022 
                                                   2022           2021 
                                                GBP'000        GBP'000      GBP'000 
Continuing operations 
Revenue                                          29,761         23,760       53,325 
Cost of sales                                  (22,050)       (17,899)     (40,558) 
Gross Profit                                      7,711          5,861       12,767 
Underlying administrative expenses              (5,400)        (4,103)      (8,676) 
                                          -------------  -------------  ----------- 
Operating profit before non-underlying 
 items                                            2,311          1,758        4,091 
Non-underlying administrative expenses 
Amortisation of customer relationships            (383)          (517)        (940) 
Share based payment charge                         (55)           (43)         (90) 
Total non-underlying administrative 
 expenses (note 4)                                (438)          (560)      (1,030) 
Operating profit                                  1,873          1,198        3,061 
Finance costs                                     (212)          (152)        (269) 
Profit before taxation                            1,661          1,046        2,792 
Income tax expense (note 10)                      (317)          (212)        (530) 
                                          -------------  -------------  ----------- 
Total profit from continuing operations 
 for the period                                   1,344            834        2,262 
 
Discontinued operations 
Loss for the period (note 11)                   (3,486)          (279)     (13,144) 
Total comprehensive income/(loss) 
 for the period attributable to the 
 equity holders of the parent company           (2,142)            555     (10,882) 
                                          =============  =============  =========== 
 
Earnings per share from continuing 
 operations (note 6) 
Basic (pence)                                      2.16           1.36         3.66 
Diluted (pence)                                    2.16           1.30         3.61 
Earnings/(loss) per share (note 6) 
Basic (pence)                                    (3.45)           0.90      (17.62) 
Diluted (pence)                                  (3.43)           0.87      (17.62) 
 
 

There are no items of other comprehensive income for the period.

 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
At 30 September 2022 (unaudited) 
                                         Unaudited      Unaudited    Audited 
                                      30 September   30 September   31 March 
                                              2022           2021       2022 
                                           GBP'000        GBP'000    GBP'000 
Assets 
Non-current assets 
Intangible fixed assets                      4,393          5,212      4,780 
Property plant and equipment                 1,069          1,005      1,103 
Right-of-use-assets                            696          1,420        786 
                                     -------------  -------------  --------- 
Total non-current assets                     6,158          7,637      6,669 
                                     -------------  -------------  --------- 
 
Current assets 
Inventories                                  3,528          2,547      2,454 
Deferred tax asset                             783              -        306 
Trade and other receivables                 11,988         11,775     10,625 
Cash and cash equivalents                    1,721          2,031      2,504 
                                     -------------  -------------  --------- 
Total current assets                        18,020         16,353     15,889 
                                     -------------  -------------  --------- 
 
Assets classified as held for sale 
 (note 11)                                       -          9,920          - 
 
Total assets                                24,178         33,910     22,558 
                                     =============  =============  ========= 
 
Issued share capital and reserves 
Share capital (note 8)                       6,213          6,213      6,213 
Own shares                                   (850)          (850)      (850) 
Share premium                                9,245          9,245      9,245 
Share based payment reserve                     65             30         74 
Merger reserve                               (248)          (248)      (248) 
Retained earnings                         (16,719)        (3,140)   (14,577) 
Total equity attributable to the 
 equity of the group                       (2,294)         11,250      (143) 
                                     -------------  -------------  --------- 
 
Non-current liabilities 
Borrowings (note 7)                            114          1,781        177 
Lease liabilities                              384            995        434 
Deferred tax liabilities                         -            753          - 
                                               498          3,529        611 
                                     -------------  -------------  --------- 
 
Current liabilities 
Borrowings (note 7)                      1,663              2,125      2,666 
Lease liabilities                              324            440        362 
Current income tax liabilities                   -             29          - 
Trade and other payables                    19,987         10,259   19,062 
Provisions (note 11)                         4,000              -          - 
                                            25,974         12,853     22,090 
                                     -------------  -------------  --------- 
 
Liabilities classified as held for 
 sale (note 11)                                  -          6,278          - 
 
Total equity and liabilities                24,178         33,910     22,558 
                                     =============  =============  ========= 
 
 
 
 
 
 
  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 
For the six-month period ended 30 September 2022 (unaudited) 
                                                  Unaudited      Unaudited      Audited 
                                                   6 months       6 months   Year ended 
                                                         to             to     31 March 
                                               30 September   30 September         2022 
                                                       2022           2021 
                                                    GBP'000        GBP'000      GBP'000 
 
Net cash generated from operating 
 activities (note 5)                                    814          1,926        3,660 
                                              -------------  -------------  ----------- 
 
Cash flow from investing activities 
Purchases of property, plant and equipment             (27)           (82)        (253) 
Purchase of intangible assets                           (8)          (117)        (142) 
Net cash used in investing activities                  (35)          (199)        (395) 
                                              -------------  -------------  ----------- 
 
Cash flow from financing activities 
Issue of new share capital (net of 
 share issue costs)                                       -              -           81 
Share incentive plan (SIP)                             (64)              -            - 
Repayment of borrowings                             (1,065)           (61)      (1,123) 
Interest paid                                         (212)          (158)        (275) 
Principal payments of leases                          (221)          (270)        (443) 
Dividends paid                                            -          (294)        (294) 
Net cash used in financing activities               (1,562)          (783)      (2,054) 
                                              -------------  -------------  ----------- 
 
Net increase/(decrease) in cash and 
 cash equivalents                                     (783)            944        1,211 
 
Cash and cash equivalents at beginning 
 of period/year                                       2,504          1,293        1,293 
 
Cash and cash equivalents at end 
 of period/year                                       1,721          2,237        2,504 
                                              =============  =============  =========== 
 
The condensed consolidated statement 
 of cash flows includes all activities 
 of the Group. Cash flows from discontinued 
 operations are set out in note 11. 
 
 
 
 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 For the six-month period ended 30 September 2022 (unaudited) 
 
                                    Issued     Share  Own shares  Share based    Merger   Retained     Total 
                                     share   premium                  payment   reserve   earnings    equity 
                                   capital                            reserve 
                                   GBP'000   GBP'000     GBP'000      GBP'000   GBP'000    GBP'000   GBP'000 
 
Balance at 1 April 
 2022                                6,213     9,245       (850)           74     (248)   (14,577)     (143) 
Loss and total comprehensive 
 income for the period                   -         -           -            -         -    (2,142)   (2,142) 
Issue of share capital               -             -           -            -         -          -         - 
Share-based payment 
 charge                                  -         -           -           55         -          -        55 
Share incentive plan 
 (SIP)                                   -         -           -         (64)         -          -      (64) 
Dividends paid                           -         -           -            -         -          -         - 
Balance at 30 September 
 2022                                6,213     9,245       (850)           65     (248)   (16,719)   (2,294) 
                                  ========  ========  ==========  ===========  ========  =========  ======== 
 
 For the six-month period ended 30 September 2021 (unaudited) 
 
Balance at 1 April 
 2021                                6,121     9,210       (850)           30     (248)    (3,401)    10,862 
Profit and total comprehensive 
income for the period                    -         -           -            -         -        555       555 
Issue of share capital                  93        34           -         (46)         -          -        81 
Share-based payment 
 charge                                  -         -           -           46         -          -        46 
Dividends paid                           -         -           -            -         -      (294)     (294) 
Balance at 30 September 
 2021                                6,214     9,244       (850)           30     (248)    (3,140)    11,250 
 
 For the year ended 31 March 2022 
 
Balance at 1 April 
 2021                                6,121     9,210       (850)           30     (248)    (3,401)    10,862 
Loss and total comprehensive 
 income for the period                   -         -                        -         -   (10,882)  (10,882) 
Issue of share capital                  92        35           -         (46)         -          -        81 
Share-based payment 
 charge                                  -         -           -           90         -          -        90 
Dividends paid                           -         -           -            -         -      (294)     (294) 
Balance at 31 March 
 2022                                6,213     9,245       (850)           74     (248)   (14,577)     (143) 
                                  ========  ========  ==========  ===========  ========  =========  ======== 
 
 
 

NOTES TO THE INTERIM STATEMENT

   1.         Basis of preparation 

Kinovo Plc and its subsidiaries (together "the Group") operate in the gas heating, electrical and general building services industries. The Group is a public company operating on the AIM Market of the London Stock Exchange (AIM) and is incorporated and domiciled in England and Wales (registered number 09095860). The address of its registered office is 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT.

These interim financial statements of the Group have been prepared on a going concern basis under the historical cost convention, and in accordance with UK adopted Accounting Standards, the International Financial Reporting Interpretations Committee ("IFRIC") interpretations issued by the International Accounting Standards Boards ("IASB") that are effective or issued and early adopted as at the time of preparing these financial statements and in accordance with the provisions of the Companies Act 2006. The Group has adopted all of the new and revised standards and interpretations issued by the IASB and the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB, as they have been adopted by the United Kingdom, that are relevant to its operations and effective for accounting periods beginning on 1 April 2021.

The interim financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements, being the statutory financial statements for Kinovo Plc as at 31 March 2022, which have been prepared in accordance with IFRIC of the IASB as adopted by the United Kingdom.

The interim financial information for the six months ended 30 September 2022 do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The interim financial information has not been audited.

Significant accounting policies

The accounting policies adopted in the preparation of the interim financial information is consistent with those expected to be adopted in the preparation of the Group's annual financial statements for the year ending 31 March 2023.

Going concern

The Directors have adopted the going concern basis in preparing these interim financial statements.

During the prior year Kinovo plc disposed of its non-core construction business, DCB (Kent) Limited. The terms of the disposal included provision for working capital commitments.

On 16th May 2022 DCB entered into administration and Kinovo retained commitments under parent company guarantees, signed prior to the disposal of DCB to complete its' construction projects.

Discussions have significantly progressed and Heads of Terms and new contracts are being agreed for each of the projects to recommence the construction works and complete the projects for the clients. Two projects have resumed on site.

The Directors estimate that the net costs to complete the projects will be approximately GBP4.3 million, over a period for completion, ranging from a number of months through to 2024.

Three of the projects also had performance bonds, which are indemnified by Kinovo plc, totalling GBP2.10 million. One of the bonds has now been cancelled worth GBP0.95 million, and discussion on the others continue to either cancel or novate.

During H1 a new term loan agreement has been signed with HSBC, refinancing and extending the repayment of the loan for 12 months. At the 30 September 2022 GBP1.53 million remained of the term loan, a reduction of GBP1.0 million since the year end. No further additional funding is expected to be required over the next 12 months.

During September 2022 the GBP2.50 million overdraft facility was also renewed for 12 months.

The continuing business traded strongly in the first 6 months with EBITDA 31% ahead of prior year.

In assessing the Group's ability to continue as a going concern, the Board reviews and approves the 12-month budget and longer-term strategic plan, including forecasts of cash flows.

In building these budgets and forecasts, the Board has considered the estimated costs to complete the DCB construction projects, the lasting effects of Covid-19 and the market challenges of supply chain inflation and material and labour availability on the trading of the Group.

The Directors expect that a combination of the cash generated by the continuing business together with the extension of bank facilities will enable Kinovo to fund the costs to complete the DCB construction projects and continue to drive the growth of the core operations.

After taking into account the above factors and possible sensitivities in trading performance, the Board has reasonable expectation that Kinovo plc and the Group as a whole have adequate resources to continue in operational existence for the foreseeable future.

As final agreements with some clients of the DCB projects were outstanding at 30 September 2022, technically, a material uncertainty remains, which may cast significant doubt on the Group's ability to continue as a going concern. During the period, contracts have been signed on two projects and discussions are at an advanced stage on the others and the Board is confident they will be executed. For this reason, the Board continues to adopt the going concern basis in preparing the consolidated financial statements.

Publication of non-statutory financial statements

The results for the six months ended 30 September 2022 and 30 September 2021 are unaudited and have not been reviewed by the auditor. Statutory accounts for the year ended 31 March 2022 were filed with the Registrar of Companies in September 2022.

The interim financial information has been prepared on the basis of the same accounting policies as published in the audited financial statements for the year ended 31 March 2022. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements as adopted by the United Kingdom. Comparative figures for the year ended 31 March 2022 have been extracted from the statutory financial statements for that period.

   2.         Corporate governance, principal risks and uncertainties 

The Corporate Governance Report included with our Annual Report and Financial Statements for 2022 detailed how we embrace governance. The Kinovo Board recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its shareholders.

The Quoted Companies Alliance has published a corporate governance code for small and mid-sized quoted companies, which includes a standard of minimum best practice for AIM companies, and recommendations for reporting corporate governance matters (the "QCA Code"). Kinovo has adopted the QCA Code.

The nature of the principal risks and uncertainties faced by the Group have not changed significantly from those set out within the Kinovo Plc annual report and accounts for the year ended 31 March 2022.

   3.         Segmental analysis 

The Board of Directors has determined an operating management structure aligned around the three core activities of the Group, being Mechanical services, Building services and Electrical services. Operating profit before non-underlying items has been identified as the key performance measure. The following is an analysis of the performance by segment:

 
                       Unaudited      Unaudited      Audited 
                        6 months       6 months         year 
                           ended          ended        ended 
                    30 September   30 September     31 March 
                            2022           2021         2022 
Continuing operations    GBP'000        GBP'000    GBP'000 
 
Mechanical services        7,524          7,100     15,418 
Building services         10,389          7,999     18,057 
Electrical services       11,848          8,661     19,850 
Total revenue             29,761         23,760     53,325 
                         -------  -------------  --------- 
 
 

Reconciliation of operating profit before non-underlying items to profit before taxation.

 
                                             Unaudited      Unaudited      Audited 
                                              6 months       6 months         year 
                                                 ended          ended        ended 
                                          30 September   30 September     31 March 
                                                  2022           2021         2022 
                                               GBP'000        GBP'000    GBP'000 
Continuing operations 
Mechanical services                                740            884      1,981 
Building services                                  816            713      1,576 
Electrical services                              1,585            793      1,903 
Unallocated central costs                        (830)          (632)    (1,369) 
Operating profit before non-underlying 
 items                                           2,311          1,758      4,091 
Amortisation of acquisition intangibles          (383)          (517)      (940) 
Share-based payment charge                        (55)           (43)       (90) 
Restructuring costs                                  -              -          - 
Operating profit                                 1,873          1,198      3,061 
Finance costs                                    (212)          (152)      (269) 
                                               -------  -------------  --------- 
Profit before tax                                1,661          1,046      2,792 
Income tax expense                               (317)          (212)      (530) 
                                               -------  -------------  --------- 
Total profit for the period from continuing 
operations                                       1,344            834      2,262 
 
Loss from discontinued operations              (3,486)          (279)   (13,144) 
 
Total comprehensive income/(loss) 
 for the period attributable to the 
 equity holders of the parent company          (2,142)            555   (10,882) 
                                               -------  -------------  --------- 
 
 

Only the Group Consolidated Statement of Comprehensive Income is regularly reviewed by the chief operating decision maker and consequently no segment assets or liabilities are disclosed under IFRS 8.

   4.         Non-underlying items 

Operating profit includes the following items which are considered by the Board to be exceptional in size, one off in nature or non-trading related.

 
                                          Note      Unaudited      Unaudited      Audited 
                                                     6 months       6 months   Year ended 
                                                           to             to     31 March 
                                                 30 September   30 September         2022 
                                                         2022           2021 
                                                      GBP'000        GBP'000      GBP'000 
Amortisation of customer relationships     (a)            383            517          940 
Share based payment charge                 (b)             55             43           90 
                                                          438            560        1,030 
                                                -------------  -------------  ----------- 
 
 

All non-underlying items have been charged to other operating expenses.

(a) Amortisation of customer relationships

Amortisation of acquisition intangibles was GBP0.38 million for the period (H1 2022: GBP0.52 million) and relates to amortisation of the customer relationships identified by the Directors on the acquisition of Purdy, Spokemead and R. Dunham. Amortisation relating to DCB is presented in discontinued operations as set out in note 11.

(b) Share based payment charge

A number of share option schemes are in place and new options have been granted during the period relating to the Share Incentive Plan amounting to 289,954 (H1 2022: 582,494) Ordinary shares and CSOP 50,000 (H1 2022: None). The share-based payment charge has been separately identified as it is a non-cash expense. The share-based payment charge relating to DCB is presented in discontinued operations as set out in note 11.

   5.         Cash flows from operating activities 
 
                                                Unaudited      Unaudited      Audited 
                                                 6 months       6 months   Year ended 
                                                       to             to     31 March 
                                             30 September   30 September         2022 
                                                     2022           2021 
                                                  GBP'000        GBP'000      GBP'000 
 
Profit/(loss) before income tax                   (2,643)            696     (11,558) 
Adjusted for: 
Finance costs                                         212            157          275 
Loss/(profit) on disposal of property, 
 plant and equipment                                    -              1          (1) 
Depreciation                                          287            384          636 
Amortisation of intangible assets                     416            652        1,139 
Loss on disposal of intangible assets                   -              -        2,296 
Share based payments                                   55             46           90 
Movement in receivables                           (1,364)        (1,640)        6,101 
Movement in payables                                  925          1,969        4,670 
Movement in provisions                              4,000              -            - 
Movement in inventories                           (1,074)          (384)           12 
Tax reclaimed                                           -             45            - 
                                            -------------  -------------  ----------- 
Net cash from operating activities*                   814          1,926        3,660 
                                            -------------  -------------  ----------- 
 
  * Includes all activities of the Group. 
  Cash flows from discontinued operations 
  are set out in note 11 
 
 
   6.         Earnings/(loss) per share 

The calculation of basic earnings per share is based on the result attributable to shareholders divided by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated under the same method adjusted for the weighted average share options outstanding during the period as well as ordinary shares in issue.

Basic earnings per share amounts are calculated by dividing net profit for the year or period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Basic and diluted earnings per share is calculated as follows:

 
                                              Unaudited      Unaudited      Audited 
                                               6 months       6 months   Year ended 
                                                     to             to     31 March 
                                           30 September   30 September         2022 
                                                   2022           2021 
                                                GBP'000        GBP'000      GBP'000 
 
Profit/(loss) used in calculating 
 basic and diluted earnings 
 per share 
Continuing operations                             1,344            834        2,262 
Discontinued activities                         (3,486)          (279)     (13,144) 
                                          -------------  -------------  ----------- 
Total operations                                (2,142)            555     (10,882) 
                                          -------------  -------------  ----------- 
Weighted average number of shares 
 for the purpose of basic earnings 
 per share                                   62,137,757     61,376,111   61,755,891 
Weighted average number of shares 
 for the purpose of diluted earnings 
 per share                                   62,264,963     64,116,798   62,637,298 
 
Continuing operations 
Basic earnings per share (pence)                   2.16           1.36         3.66 
Diluted earnings per share (pence)                 2.16           1.30         3.61 
 
Discontinued activities 
Basic loss per share (pence)                     (5.61)         (0.45)      (21.28) 
Diluted loss per share (pence)                   (5.59)         (0.43)      (21.23) 
 
Total operations 
Basic earnings/(loss) per share (pence)          (3.45)           0.90      (17.62) 
Diluted earnings/(loss) per share 
 (pence)                                         (3.43)           0.87      (17.62) 
 
 

Adjusted earnings per share

Profit after tax is stated after deducting non-underlying items totalling GBP0.44 million (H1 2022: GBP0.56 million). Non-underlying items are either exceptional in size, one off in nature or non-trading related. These are shown separately on the face of the Consolidated Statement of Comprehensive Income.

The calculation of adjusted basic and adjusted diluted earnings per share is based on the result attributable to shareholders, adjusted for non-underlying items, divided by the weighted average number of ordinary shares in issue during the year.

 
                                              Unaudited             Unaudited                   Audited 
                                               6 months              6 months                Year ended 
                                                     to                    to                  31 March 
                                           30 September          30 September                      2022 
                                                   2022                  2021 
                                                GBP'000               GBP'000                   GBP'000 
Continuing activities 
Profit after tax                                  1,344                   834                     2,262 
Add back: 
Amortisation of acquisition intangible 
 assets                                             383                   517                       940 
Share based payment charge                           55                    43                        90 
                                                  1,782                 1,394                     3,292 
                                          -------------  --------------------  ------------------------ 
 
 
Discontinued operations 
Loss after tax                                  (3,486)                 (279)                  (13,144) 
Add back: 
Amortisation of acquisition intangible 
 assets                                               -                   115                       155 
Share based payment charge                            -                     3                         - 
                                                (3,486)                 (161)                  (12,989) 
                                          -------------  --------------------  ------------------------ 
 
Total activities 
Profit/(loss) after tax                         (2,142)                   555                  (10,882) 
Add back: 
Amortisation of acquisition intangible 
 assets                                             383                   632                     1,095 
Share based payment charge                           55                    46                        90 
                                                (1,704)                 1,233                   (9,697) 
                                          -------------  --------------------  ------------------------ 
 
Weighted average number of shares 
 for the purpose of basic adjusted 
 earnings per share                          62,137,757            61,376,111         61,755,891 
Weighted average number of shares 
 for the purpose of diluted adjusted 
 earnings per share                          62,264,963            64,116,798         62,637,298 
 
Continuing operations 
Basic adjusted earnings per share 
 (pence)                                           2.87                  2.27                      5.33 
Diluted adjusted earnings per share 
 (pence)                                           2.86                  2.17                      5.25 
 
Discontinued activities 
Basic adjusted loss per share (pence)            (5.61)                (0.26)                   (21.03) 
Diluted adjusted loss per share (pence)          (5.59)                (0.25)                   (20.73) 
 
Total activities 
Basic adjusted earnings/(loss) per 
 share (pence)                                   (2.74)                  2.01                   (15.70) 
Diluted adjusted earnings/(loss) per 
 share (pence)                                   (2.73)                  1.92                   (15.48) 
 
 
   7.         Borrowings 
 
                                    Unaudited      Unaudited    Audited 
                                 30 September   30 September   31 March 
                                         2022           2021       2022 
                                      GBP'000        GBP'000    GBP'000 
Non-current borrowings 
Bank and other borrowings; 
Term loans                                  -          1,534          - 
Mortgage loan                             114            167        143 
Other loans                                 -             80         34 
                                -------------  -------------  --------- 
Total non-current borrowings              114          1,781        177 
                                -------------  -------------  --------- 
Current borrowings; 
Bank and other borrowings; 
Term loans                              1,534          2,000      2,534 
Mortgage loans                             57             57         57 
Other loans                                72             68         75 
Total current borrowings                1,663          2,125      2,666 
                                -------------  -------------  --------- 
Bank and other borrowings; 
Term loans                              1,534          3,533      2,534 
Mortgage loans                            171            224        200 
Other loans                                72            148        109 
Total borrowings                        1,777          3,905      2,843 
                                -------------  -------------  --------- 
 

The fair value of the borrowings outstanding as at 30 September 2022 is not materially different to its carrying value since interest rates applicable on the loans are close to market rates.

At 30 September 2022, GBP1.53 million remained outstanding on the HSBC term loan, a reduction of GBP1.0 million since the year end. On 30 September 2022, the Term loan was refinanced, extending the repayment of the loan for 12 months. Interest is charged at 4.0% above SONIA.

During September 2022 the GBP2.50 million HSBC overdraft facility, which was unutilised at 30 September 2022, was renewed for 12 months. Interest is charged at 3.0% above Bank of England base rate.

   8.         Share capital 
 
Ordinary shares of GBP0.10 each        Unaudited      Unaudited    Audited 
                                    30 September   30 September   31 March 
                                            2022           2021       2022 
                                         GBP'000        GBP'000    GBP'000 
At the beginning of the period             6,213           6121      6,121 
Issued in the period                           -            92*         92 
At the end of the period                   6,213          6,213      6,213 
                                   -------------  -------------  --------- 
 

* Funds received into SIP trust in September 2021 and remitted to Company in October 2021.

 
Number of shares                      Unaudited      Unaudited     Audited 
                                   30 September   30 September    31 March 
                                           2022           2021        2022 
At the beginning of the period       62,137,757     61,214,703  61,214,703 
Issued in the period                          -        923,054     923,054 
At the end of the period             62,137,757     62,137,757  62,137,757 
                                  -------------  -------------  ---------- 
 
   9.         Dividends 

The Company did not pay a final dividend for the year ended 31 March 2022 (2021: 0.50 pence per ordinary share totalling GBP0.29 million). The Board do not recommend an interim dividend for the year ending 31 March 2023.

   10.        Taxation 

The income tax charge for the six months ended 30 September 2022 is calculated based upon the effective tax rates expected to apply to the Group for the full year of 19% (2022: 19%). Differences between the estimated effective rate and the statutory rate of 19% are due to non-deductible expenses.

   11.        Discontinued operations 

(a) Description

Following the disposal of the non-core DCB Kent Ltd (DCB) in January 2022, the business subsequently entered administration in May 2022, as detailed in the Kinovo plc 2022 annual report. Under parent company guarantees, signed prior to the disposal of DCB, Kinovo has a commitment to complete the DCB construction projects. The Kinovo plc 2022 annual report set out the expected costs to complete the projects amounting to GBP4.30 million. It is still considered that this represents the best estimate of the future obligation under the guarantees. GBP0.30 million of costs have been incurred since the year end and GBP4.00 million has been provided for the future loss on these contracts.

(b) Financial performance and cash flow information from discontinued operations

 
                                                 Unaudited      Unaudited      Audited 
                                                  6 months       6 months   Year ended 
                                                        to             to     31 March 
                                              30 September   30 September         2022 
                                                      2022           2021 
                                                   GBP'000        GBP'000      GBP'000 
Revenue                                                  -         11,420       13,432 
Cost of sales                                            -       (10,011)     (11,780) 
Gross Profit                                             -          1,409        1,652 
Underlying administrative expenses                       -        (1,635)      (2,168) 
                                             -------------  -------------  ----------- 
Operating loss before non-underlying 
 items                                                   -          (226)        (516) 
Non-underlying administrative expenses 
Amortisation of customer relationships                   -          (115)        (155) 
Share based payment charge                               -            (3)            - 
Loss on disposal                                   (4,304)              -     (12,595) 
Total non-underlying administrative 
 expenses                                          (4,304)          (118)     (12,750) 
Operating loss                                     (4,304)          (344)     (13,266) 
Finance costs                                            -            (5)          (6) 
Loss before taxation                               (4,304)          (349)     (13,272) 
Income tax credit                                      818             70          128 
                                             -------------  -------------  ----------- 
Loss for the period/year                           (3,486)          (279)     (13,144) 
                                             -------------  -------------  ----------- 
Operating profit excludes allocation 
 of Corporate costs in accordance with 
 IFRS 5, which states that only costs 
 clearly identifiable as directly relating 
 to the discontinued operations can 
 be included. 
 
Loss per share from discontinued 
 operations 
Basic (pence)                                       (5.61)         (0.45)      (21.28) 
Diluted (pence)                                     (5.59)         (0.43)      (21.28) 
 
 
  Cash flows from discontinued operations 
Net cash outflow from operating activities               -          (614)      (1,453) 
Net cash outflow from investing activities               -           (10)         (10) 
Net cash outflow from financing activities               -           (18)         (16) 
                                             -------------  -------------  ----------- 
Net reduction in cash generated by 
 the subsidiary                                          -          (642)      (1,479) 
                                             -------------  -------------  ----------- 
 
 

In the period to 30 September 2022, GBP1.65 million cash payments were made relating to the disposal of DCB, consisting of working capital payments required under the disposal agreement (prior to DCB entering administration) and construction project costs. These have not been included in the table above as not considered to be operating cashflow of the operations.

(c) Assets and liabilities of subsidiary classified as held for sale

 
                                          Unaudited      Unaudited    Audited 
                                       30 September   30 September   31 March 
                                               2022           2021       2022 
                                            GBP'000        GBP'000    GBP'000 
Assets classified as held for 
 sale 
Intangible - Goodwill                             -          1,351          - 
Intangible - Customer relationship                -          1,048          - 
Intangible - Computer software                    -             73 
Property, plant and equipment                     -            268          - 
Inventory                                         -            303          - 
Trade and other receivables                       -          6,671          - 
Cash                                              -            206          - 
Total assets held for sale                        -          9,920          - 
                                      -------------  -------------  --------- 
 
Liabilities directly associated 
 with assets classified as held 
 for sale 
Trade and other payables                          -          6,105          - 
Finance leases                                    -             41          - 
Income tax liabilities                            -             44          - 
Deferred tax                                      -             88          - 
Total liabilities classified 
 as held for sale                                 -          6,278          - 
                                      -------------  -------------  --------- 
 

At 30 September 2021 the assets and liabilities of DCB (Kent) Limited were included as held for sale at their carrying value, as the full assessment of the fair value had not been completed.

   12.        Forward-Looking statements 

This report contains certain forward-looking statements with respect to the financial condition of Kinovo Plc. These statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There could be a number of factors which influence the actual results and developments. These could impact on the forward-looking statements included in this report.

   13.        Interim Report 

Copies of this Interim Report will be available to download from the investor relations section on the Group's website www.kinovoplc.com .

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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