Investment Case
We are at the heart of sustainability
We focus on three key strategic pillars, all of which ensure we are well placed to meet the long-term macro-economic drivers of our customers that are underpinned by Government legislation and policy.
Regulation
Ensuring safety and regulatory compliance in homes and workplaces.
Regeneration
Creating and enhancing dwellings and workplaces to support sustainability and resilient communities.
Renewables
Providing energy-efficient solutions that reduce carbon footprints.
The Kinovo plc Group operates through three long-established and complementary subsidiaries: Dunhams, Purdy and Spokemead. By bringing together key business functions such as Finance, HR, IT, Bids, Sales, and Marketing within a centralised framework, we create a collaborative and efficient working environment. This structure allows our companies to benefit from the strength and resources of a larger organisation while maintaining their agility and independence.
Our governance framework ensures the highest standards of compliance, operational efficiency, and service consistency. Through streamlined processes and a strategic approach to resource management, we create efficiencies that deliver value to our housing association and local authority clients while supporting sustainable growth.
Government-backed social value and net-zero targets provide macro-economic drivers for the future
The growing movement to balance society and care for the environment is underpinned by the Government’s commitment to invest in these areas. This combination creates significant opportunities for growth in exactly the areas our business focuses on:
- Over 1 million people are stuck on local authority housing lists, some for more than a decade. An estimated 380,000 affordable homes per year are needed for the next 15 years, of which 100,000 have been earmarked for social rent. The amount of capital investment needed is estimated at over £10 billion per year.
- The UK Regulator for Social Housing forecasts £2.7 billion will be spent on capitalised repairs and property maintenance expenditure in the twelve months to 31 March 2022.
- In November 2020, the UK Government updated its ten-point plan to achieve net-zero carbon emissions by 2050. The plan will mobilise £12 billion of Government investment, with the potential for three times as much from the private sector.
- The Government estimates £11 billion in private investment during the 2020s and has pledged over £1 billion in funding for greener buildings, including 600,000 heat pump installations per year by 2028.
- Additional funding has been committed to the Social Housing Decarbonisation Fund to upgrade the least efficient social housing.
- £1.3 billion has been allocated to accelerate the roll-out of electric vehicle charging points across UK councils.
Regulated and compliance-led markets with strong and steady growth prospects
The business is founded on specialist compliance-led and regulatory-driven requirements. These vital, essential services are non-discretionary and non-cyclical, ensuring consistent demand through economic cycles.
These regulated services require significant investment in training, skills, and qualifications, creating higher barriers to entry. This presents opportunities for consolidation through acquisitions and integration. Adding value to our customer base allows us to achieve higher premiums compared to standard building and facilities management contracting. Expanding our scale, both organically and through acquisitions, will drive efficiencies and operational excellence.
With increasing public awareness around safety and compliance standards, and more stringent legislation, the reputational risk for organisations is growing. This places greater responsibility on companies to ensure safety and compliance in their properties and workplaces.
The transition towards green technologies will introduce new regulatory requirements, for which we are well positioned to provide specialist services.
Long-term service contracts and recurring revenues offer resilience and good future visibility
Our service contracts typically span three years or more. Due to increasing regulatory requirements for health, safety, and environmental compliance, there is a consistent need for our services to keep our customers safe and warm.
This demand generates steady recurring revenues, fostering robust, long-term relationships with our customers. This stability enables us to plan ahead and provides visibility for future earnings expectations.
Additionally, our involvement in critical workstreams creates further opportunities to generate additional revenue from complementary services.
Strong cash generation creates earnings-enhancing opportunities: both organically and acquisitively
By focusing on working capital efficiencies, the business maintains strong cash-generative qualities.
This allows us to increase investment in our business and people, broadening and deepening our skills and expertise. This, in turn, drives efficiencies and supports growth, including green accreditations, which will further expand our organic revenue streams.
Furthermore, our cash generation enables strategic acquisitions that expand our expertise, geographic reach, and position within fragmented markets. Successful integration will deliver synergies through collaboration, efficiency improvements, and cost savings, while also driving revenue growth and market share expansion.
While we temporarily postponed our dividend policy to strengthen our financial position, our strong cash generation has allowed us to reduce debt levels ahead of schedule. The Group remains committed to reinstating and reintroducing a progressive dividend policy when conditions allow.
