AIM Rule 26

Kinovo Plc (the Company) was formed in 2015 as a holding company to provide a platform for strategic acquisitions in the mechanical, electrical and general building services industries. Kinovo currently owns 100% of Purdy Contracts Ltd (Purdy), R. Dunham (UK) Ltd (Dunhams) and Spokemead Maintenance Ltd (Spokemead).

Kinovo acquired Purdy in July 2015. Purdy was established in 1984 as a building and property services contractor, and is now resourced with specialist teams in heating, electrical services, property services and microgeneration systems.

Kinovo acquired Spokemead in April 2016. Spokemead was established in 1974 and has a highly skilled and highly motivated workforce of fully qualified electricians, specialising in electrical installation and maintenance of local authority owned housing stock.

In November 2018, Kinovo acquired Dunhams which carries out electrical services and maintenance and building services work for local government organisations and the private sector.

The Group are focused on three strategic workflow pillars: Regulation, Regeneration and Renewables. These pillars are centred on compliance-driven, regulatory-led specialist services that offer long-term contracts, recurring revenue streams and strong cash generation. These three pillars are entirely complimentary and are supported by long-term market drivers, namely compliance and decarbonisation.

The Group predominately provides services to local authorities and housing associations across London and South East England. In December 2023 the Company opened an office in Norfolk after identifying the location as a natural opportunity to drive organic geographical expansion. The experienced management teams place emphasis on the provision of a high level of service through which they have developed long-standing relationships with customers. The Group is consolidating its position in the key markets of London and South East and expanding into East England.

The Directors anticipate that continuing to pursue a strategy of organic growth will be the best way to drive shareholder value. The primary objective of the Company at present is to demonstrate the cash generative qualities of the business by building cash reserves. The Company will continually evaluate the market and may consider acquisitions in the future which are the right strategic fit for the Group.

The Group continues to invest internally, including building business development, procurement and service support teams, as well as strengthening sales and marketing collateral. This is underpinned by rigorous and robust cost management. Additionally, the Directors ensure that we continuously develop our offering as a one stop shop to enable us to improve the quality of our proposals for new projects, as well as enhancing our offering for existing clients.

The Directors anticipate that continued growth will be underpinned by expanding opportunities in a growing market. Our services are benefiting from strong market fundamentals driven by government standards and legislation, such as the Social Housing (Regulation) Act, the Building Safety Act, the Fire Safety Act and Electrical Wiring legislation as well as the drive to Net Zero, supported by initiatives such as the Social Housing Decarbonisation Fund. These have meaningfully increased demand for, and frequency of, our range of works across our operating areas and the three strategic pillars. Such government policies and initiatives place compulsory obligations on landlords leading to potential legal liability requiring local authority and housing associations to meet a minimum standard in all social housing. These obligations fall on housing bodies regardless of budgetary pressures and demands they face in other areas.

Expenditure on existing housing stock continued to increase last year and is at record levels, according to the latest quarterly survey from the RSH (January to March 2024). A record £7.9 billion was spent in the 12 months to 31 March 2024 – a 15% increase on previous year – a further £9.1 billion is forecast over the next year.

The Directors remain focused on driving shareholder value, and will continue to focus on the three key strategic pillars of Regulation, Regeneration and Renewables.