Kinovo Share Price (KINO)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Kinovo Plc	LSE:KINO	London	Ordinary Share	GB00BV9GHQ09	ORD 10P

	Price Change	% Change	Share Price	Shares Traded	Last Trade
	0.00	0.0%	33.50	147	08:00:00

Bid Price		Offer Price	High Price	Low Price	Open Price
33.00		34.00	33.50	33.50	33.50

Industry Sector	Turnover (m)	Profit (m)	EPS - Basic	PE Ratio	Market Cap (m)
Gas Water & Utilities	53.33	2.79	-17.62		20

Last Trade Time	Trade Type	Trade Size	Trade Price	Currency
11:08:10	O	147	33.94	GBX

Related Shares
National Grid (NG.), United Utilities (UU.), Armadale Capital (ACP), Modern Water (MWG)

Kinovo (KINO) Latest News

Kinovo News

Date	Time	Source	Headline
05/12/2022	07:00	RNSNON	Kinovo PLC Notice of Investor Presentation
28/11/2022	11:04	ALNC	Kinovo half-year profit jumps as regeneration and renewables grow
28/11/2022	07:00	UKREG	Kinovo PLC Interim Results
15/11/2022	07:00	UKREG	Kinovo PLC Notice of Results
05/10/2022	20:27	ALNC	TRADING UPDATES: Braveheart Investment ups stake in Aukett Swanke
05/10/2022	06:00	UKREG	Kinovo PLC Renewal of Debt Facilities
15/9/2022	16:57	ALNC	TRADING UPDATES: Supreme trades in line; Kinovo revenue up
15/9/2022	11:06	UKREG	Kinovo PLC Result of AGM and Directorate change
15/9/2022	06:00	UKREG	Kinovo PLC AGM Trading Update
13/9/2022	10:41	UKREG	Kinovo PLC Director/PDMR Shareholding

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Date	Time	Title	Posts
06/12/2022	19:01	Kinovo - public sector housing services under the radar	794

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Kinovo (KINO) Most Recent Trades

Trade Time	Trade Price	Trade Size	Trade Value	Trade Type
11:08:12	33.94	147	49.89	O
2022-12-06 15:53:09	34.00	10,000	3,400.00	O
2022-12-06 15:52:49	34.00	10,000	3,400.00	O
2022-12-06 15:40:51	33.00	3,000	990.00	O

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Kinovo (KINO) Top Chat Posts

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Posted at 07/12/2022 08:20 by Kinovo Daily Update Kinovo Plc is listed in the Gas Water & Utilities sector of the London Stock Exchange with ticker KINO. The last closing price for Kinovo was 33.50p. Kinovo Plc has a 4 week average price of 29p and a 12 week average price of 28.70p. The 1 year high share price is 49p while the 1 year low share price is currently 8.50p. There are currently 58,971,845 shares in issue and the average daily traded volume is 193,424 shares. The market capitalisation of Kinovo Plc is £19,755,568.08. Read Full Thread Reply
Posted at 28/11/2022 18:06 by dyor2 So I think the issue here is that it will take some time to regain investors’ trust in the company following the DCB debacle. In particular, potential investors may be sceptical of Kinovo’s £4.3m estimate of the cost to complete the remaining DCB construction contracts. There are 9 such contracts, work has re-started on 2, 3 are due to recommence in January 2023 and discussions “are at an advanced stage” on the others. I’ve no particular reason to doubt Kinovo’s estimates, but I can see that new investors might want the completion process to be further along before they take the £4.3m figure at face value! I think any potential bidders might also want to wait to see how the DCB project completions go. But by this time next year the greater part of completion works on these contracts should have been done, and at that stage (assuming the £4.3m estimate proves broadly correct) I would expect the shares to be much higher. Kinovo seems on track to make at least £5m operating profit in the year to March 23, and probably £6m in 2023/4. The key to valuing the business to me is its very attractive rate of cash generation, because Kinovo has consistently turned 100% or more of operating profit into cash. It currently has virtually no net debt, and whilst most of the cash generated by the core business over the next twelve months will be swallowed up in completing the DCB contracts, looking ahead to a year’s time hopefully by that time we’ll have a “clean” business generating £6m of annual profit and £6m plus in annual cash, with no debt and a huge forward order book, operating in a growth market. What might that be worth? At the current 36p share price Kinovo is valued at £22m. A bid at anywhere near that price seems like a no brainer. For example a 50p a share bid would cost £31m, and with £6m+ of annual cash generation the cash return to a bidder would be almost 20% p.a.! My best guess is that a bid this time next year would have to be 70p+ to have any hope of success, though of course it depends on the attitude of Tipacs2, who have 26% of the business. It could be substantially more. So in sum, I suspect it will take time to regain investor confidence but I’m happy to wait with my 1% or so because there looks to be very substantial upside from here. Read Full Thread Follow Reply
Posted at 19/8/2022 06:13 by masurenguy Results from ongoing business look very positive. I wonder what prompted the circa £2m share purchase by Tipacs2, at around a 50% shareprice premium at that time, just over 3 weeks ago? Still uncertainty over the final cost consequence of the DCB fiasco. The following comment, given the publicly available information on MCG Global, must raise questions on the credibility of management announcements. "We are confident that Kinovo undertook all necessary due diligence, with the deal being based on sound financial projections that, since completion, have not performed to our expectations." David Bullen The following statement also refers to conditions that related to the DCB disposal, which were never divulged in the original sale announcement on 12 January, to MCG Global ! "Agreed to provide working capital support to DCB, which was limited to a set time period and forecast to be cash neutral. At time of disposal, there were in existence certain pre-existing parent company guarantees from Kinovo in relation to the ongoing projects within DCB, which were to be transferred to MCG following the disposal and expire on completion of the projects" Final results for the year ended 31 March 2022 Financial highlights: -- Revenue from continuing operations increased by 35% to GBP53.3 million (2021: GBP39.4 million) -- Adjusted EBITDA from continuing operations up 102% to GBP4.2 million (2021: GBP2.1 million) -- Underlying operating profit from continuing operations increased by 95% to GBP4.1 million (2021: GBP2.1 million) -- Strong adjusted cash conversion from continuing operations of 223% with GBP9.4 million in cash generated -- Cash balance at year end of GBP2.5 million (2021: GBP1.3 million) -- Net debt significantly reduced by approximately GBP2.4 million to GBP0.34 million from GBP2.7 million in 2021 -- Adjusted earnings per share almost doubled from 2.76p in 2021 to 5.33p in 2022 Operating highlights: -- Strong performance from the underlying business despite considerable macro-economic pressures -- Streamlined operations focus on three core operations: o Regulation: delivered 59% of revenues and grew by 30% year-on-year o Regeneration: grew by 61% during the year, now contributing to 20% of total revenue o Renewables: accounts for 21% of total revenue, reporting 32% growth -- Investment in the business development team, contributed to winning a considerable number of new contracts during the period, diversifying the client base and increasing three-year visible revenues by 34% year-on-year from GBP105.0 million to GBP140.4 million -- Investment in the training and upskilling of employees led to an improved operational performance -- Full Microgeneration Certification Scheme (MCS) accreditation including PAS2030 installer certification, enables access to further government funding initiatives -- ESGM strategic report sets out our future commitments and key targets including being carbon neutral in relation to Scope 1 and 2 by March 2023 DCB (Kent) Limited ("DCB"): -- Disposal of DCB to MCG Global Limited ("MCG") for deferred consideration of up to GBP5 million -- Agreed to provide working capital support to DCB, which was limited to a set time period and forecast to be cash neutral -- At time of disposal, there were in existence certain pre-existing parent company guarantees from Kinovo in relation to the ongoing projects within DCB, which were to be transferred to MCG following the disposal and expire on completion of the projects -- DCB did not perform to Kinovo's expectations following the disposal and working capital support totalling GBP3.7 million was provided -- In May 2022, DCB went into administration and Kinovo has had to uphold certain parent company guarantees relating to the construction projects in existence at the time of the disposal -- Dialogue with DCB clients have been positive, outstanding DCB projects are under control with costs to complete expected to be approximately GBP4 million plus expenses, significantly lower than previous external expectations, and will be fulfilled by our current cashflow. Post-period End: -- 28% year-on-year increase in revenues from continuing operations during Q1 from GBP10.9 million to GBP14.0 million -- Adjusted EBITDA from continuing operations for Q1 grew by 24% on the previous year from GBP668,000 to GBP827,000 -- Net debt at the end of July 2022 remains comparable to year-end at GBP345,000 with a positive cash balance of GBP2.0 million -- Our banking partner, HSBC UK Bank plc, remains supportive of the Group; refinancing of HSBC GBP1.5 million term loan and current overdraft facilities have been credit committee approved and formal documentation is in the process of being completed David Bullen, Chief Executive Officer of Kinovo, commented:"While the last year has been challenging for Kinovo, we are delighted with the performance of the underlying business. Revenues increased by 35% and adjusted EBITDA more than doubled, a direct result of the repositioning announced last year to focus on three key areas: regulation, regeneration and renewables. This streamlining of operations has allowed the underlying business to prioritise what it does best and flourish. Coupled with the significant investment in our people, upskilling of employees and bringing in additional expertise, Kinovo is well positioned to negotiate this difficult macro-economic environment. A key challenge we faced this year was the fall-out from the disposal of DCB. We are confident that Kinovo undertook all necessary due diligence, with the deal being based on sound financial projections that, since completion, have not performed to our expectations. The outstanding DCB projects are now under Kinovo's control and we are pleased that the cost to complete will be significantly lower than previously speculated externally, at around GBP4 million plus costs, which will be fulfilled by Kinovo's current cashflow. This disposal was a key component of streamlining operations, and we look forward to finalising the DCB projects and focusing on the rest of the business, which is excelling. We are pleased to have received continued support from our banking partner HSBC, with our facilities in the process of being completed. Kinovo is in a strong position moving into FY23, with the revenue and EBITDA growth achieved last year continuing into Q1. We have complete confidence that the Group will continue to grow and develop as we reap the rewards of the team's hard work and investment during the last two years. I look forward to updating the market on this progress in due course." Read Full Thread Follow Reply
Posted at 31/7/2022 07:45 by masurenguy Good analytical post dyor2. However, your view on the MI Discretionary Unit Fund (MIDUF) sale and the Tipacs2 buy is subject to your caveat "Of course all this depends on the further DCB liability being £5m or less and no fund raising being required." If Kinovo had sounded out Tipacs about a potential fund raising then they would have had to provide them with some financial information or projections in order to determine how much and at what price rather than just a complete shot in the dark. Surely that is just the same criterion that you applied to MIDUF where you stated that "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." The main problem that we have at the moment is that no reliable information has been provided to determine the quantum of the DCB financial liability and if any figure has been provided to one or more major shareholders, and not disclosed in the public domain, then surely that would constitute insider trading ! There is still a significant Board credibility issue here which goes back to the January 12th disposal announcement where there was no reference whatsoever to the ongoing financial commitment to DCB up to outstanding project completion or the collateral PCG's that still applied to DCB customers. Had I known that at the time then I would most probably have completely exited my position here. In their last RNS relating to this, issued just 3 weeks ago, they divulged the following information 1. Kinovo continues to facilitate constructive discussions with HSBC regarding the refinancing of its existing facilities. With respect to its financial covenants, the EBITDA calculations are based on continuing EBITDA, which excludes adjustments related to DCB. 2. Kinovo is working with specialist consultants in order to establish the costs to complete for the relevant construction projects subject to parent company guarantees provided in respect of DCB. Kinovo notes that there has been speculation regarding the costs to complete, however, these will only be able to be determined once Kinovo has reached agreement with the respective clients under the relevant projects and the joint administrators of DCB, for the final costing to complete for each project. 3. Kinovo continues to strongly uphold its legal position that any claim from MCG Global Limited ("MCG") is without merit, whilst also continuing to pursue counter-claims, including claims for misrepresentation, against MCG and its associates. Just 2 weeks after that announcement MIFUD sold, and Tipacs bought, 6.1m at just under a 60% shareprice premium on that date. What information could have emerged in the 2 weeks following that RNS and if anything material had been determined why was it not disclosed into the public domain ? Furthermore, if Kinovo were to obtain any legal judgements against MCG what financial compensation could they obtain from a one man start up company with no discernable assets. Meanwhile legal fees will continue to mount wth little prospect of any recovery should they be successful ! Read Full Thread Follow Reply
Posted at 16/7/2022 10:41 by dyor2 cermrew, para 3.4 of the administrators report (published at Companies House: https://find-and-update.company-information.service.gov.uk/company/03532339/filing-history ) 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. Read Full Thread Follow Reply
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! Read Full Thread Follow Reply
Posted at 30/5/2022 16:00 by dyor2 GS99, The people who would sue Kinovo are the clients (mostly Housing Associations) who entered into building contracts with DCB. At the time they entered into those contracts DCB was a subsidiary of Kinovo, and Kinovo gave parent company guarantees to the end clients that if DCB became insolvent and couldn’t complete the contracts then Kinovo itself would indemnify the clients against loss. That’s a common practice in the construction industry. I don’t think there’s much doubt Kinovo has a liability here, the question we’re debating is how much is the potential liability? My guess is a maximum liability of c. £5m if Kinovo can take back the projects concerned and complete them itself, others think the figure could be much higher. FWIW my estimate isn’t completely plucked out of thin air, and I’ve done some detailed investigation into it, but of course I could be very wrong! I don’t think that from a legal point of view Kinovo can hide behind DCB to avoid its guarantee obligations, and anyway its reputation in the Housing Association and Local Authority housing market would suffer badly if it tried that. Nevertheless I bought more shares in Kinovo last week, because if my guess of a maximum £5m liability is right I think that’s affordable by Kinovo and the shares would then look very cheap. But I think the one certainty we can all have in a very uncertain situation is that the current 10p share price won’t be where it ends up when all the facts are known! Either Kinovo is bust as the bears fear, in which case they could be worthless, or the liability is manageable and Kinovo survives, in which case the shares are likely to be a lot higher than now. It’s a binary bet, but personally I like the odds. Time will tell…. Read Full Thread Follow Reply
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! Read Full Thread Follow Reply
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. Read Full Thread Follow Reply
Posted at 19/5/2022 13:16 by dyor2 I’ve been trying to look past the anger and mystification we’re all feeling at the DCB debacle, and the resultant collapse in the share price, to work out what Kinovo might out actually be worth in enterprise value. And my overriding feeling is that the underlying core business is worth very substantially more than any potential liability under the DCB guarantees. The core business made EBITDA of £4.2m in the year to March 22 and generated cash of over £500,000 per month. Kinovo had net cash of £0.4m at the end of April, despite having paid out £3.7m to DCB. Cash generative, and operating in a growth market, I’d say the core Kinovo business is worth a minimum £30m (7x EBITDA) to a private equity buyer, and possibly significantly more to the right trade buyer. Set against this, I can’t see the DCB guarantees resulting in a further liability of more than £10m, and possibly significantly less. It depends on the nature and enforceability of the guarantees and the state of the underlying DCB contracts, but the outstanding contracts can’t be much more than £20m now at original contact value, so even if it costs the end clients up to 50% more to get them completed and they can reclaim all of that from Kinovo in due course (both big “ifs”), that’s not more than £10m. So I just can’t foresee circumstances in which the value of the underlying business doesn’t very substantially exceed any potential liabilities relating to the DCB guarantees - to an extent that makes the present £7.5m market cap seem way too low. But getting that value reflected in the share price is another question. There’s also the problem that the year end audit is underway, and the auditors will want comfort that Kinovo can fund any likely DCB contract liabilities, as will Kinovo’s bankers. Capping the DCB liabilities would be a good start, even if it requires a share issue to fund a pay out to the DCB end clients. But with multiple end clients and complex contracts it might not be practicable to negotiate a cap in the short term, even if the liability ultimately turns out to less than investors currently fear. So what about soliciting a bid for the whole of Kinovo? The problem there is I can’t see anybody bidding for the whole of Kinovo while the DCB liabilities are uncertain, much though they might want the underlying business. Selling the underlying business? Not really a solution, because you’re left with a £30m+ cash shell which can’t distribute the cash until the DCB liabilities are sorted out. Hmm…..my best guess is that they’ll provide for a substantial (say £5m) potential DCB liability sum in the forthcoming full year figures, say that they hope it’ll be less than this, and do a quick ordinary share placing to raise £2m or so to give the bank and auditors comfort (£2m or so is the maximum they can raise at the current share price from a quick ordinary share placing without getting shareholder approval). This won’t be ideal, because it won’t give investors certainty on the DCB liabilities, but hopefully they’ll be able to give enough information on the potential liabilities and how they got into this mess in the first place, for investors to support it. Particularly if it’s accompanied by a strengthening of the Board, which I imagine the major shareholders will be insisting on. But I do have an alternative suggestion, which Kinovo and their advisers can have for free if they’re reading this board. It’s to issue £5m worth of convertible preference shares, convertible into ordinary shares at 20p, with a coupon of 9% and redeemable at par at the company’s option at any time after three years. This would provide a substantial equity cushion to cover any DCB liabilities, give the auditors and their bankers a lot of comfort, and it would minimise dilution for ordinary shareholders. I’d certainly subscribe for a substantial slug of such an instrument, because it would have first priority call (above ordinary shareholders) on the equity value of the underlying Kinovo business, the coupon would be attractive and easily funded from cash flow, and effectively investors in it would be getting a free option over ordinary shares at a price well under what they are likely to trade at when the DCB liability is eventually sorted out. The three year timescale before Kinovo could redeem it would give plenty of time for the DCB liabilities to be sorted out and for this to be reflected in a (hopefully) substantial uplift in the ordinary share price, which would result in the pref investors converting into ordinary shares before the end of the three year period. I’d get these pref shares quoted to make them even more attractive, and offer them to ordinary shareholders on a pro-rata basis, with a few major ordinary shareholders underwriting any not taken up. Canaccord, if you’re reading this, you’ll probably think WHAT??? But think about it - sometimes complex situations need creative thinking! Read Full Thread Follow Reply
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. TIDMKINO 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." 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 Andrew Potts Bobbie Hilliam Hudson Sandler (Financial PR) +44 (0)20 7796 4133 Dan de Belder Harry Griffiths Read Full Thread Follow Reply

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