The Lemon Fool

Here's a little company with a green angle which looks interesting to me at the current price.

A word of caution, they were until recently the remarkably accident prone Bilby but changed their name probably in the hope that people would forget.

However, they seem to have turned the corner and the most recent results were really quite good for a small company.

https://www.kinovoplc.com/

As I understand it they are a property services contractor working mainly for local authorities and after the recent disposal of their construction division have three businesses and operate in three divisions: Regulation, Regeneration and Renewables.

https://www.kinovoplc.com/

The reason I have posted about them in the Green room is because of the Renewables Division which specialises in amongst other things installation of solar panels and heat pumps and they also seem to be moving into the area of EV charging points. I think there is a fair chance that this side of the company has scope for significant growth in coming years.

On the ratios front the market cap at the current price is about £23.5m. At the half year stage the continuing businesses made a profit after tax of £834k so if this performance is repeated in the second half the multiple is reasonable.

The balance sheet is not too bad with modest net debt which should be cleared if they receive all of the cash from the disposal of the Construction Division.

The things that really impressed me about the interims was the cashflow which was excellent. Adding back dividends paid as an indication of how much cash there is for shareholders they generated about £1.2m in the first half, annualised that could be £2.4m which looks pretty good against the market cap.

They seems to have good revenue visibility but margins are not great and I guess there may be the possibility of mispricing contracts that leads to losses.

I have no position in the shares but think they are worth investigating.

Anyone have a view?

Well this hasn't proved to be one of my better ideas. I did buy some in the end for around 33p but news on Friday that there are significant and costly problems with the disposal of their construction business has sent the shares tumbling, although the ongoing businesses seem to be performing quite well.

The shares have tumbled a long way now but I resisted the urge to buy more until the picture is clearer on just what that disposal is going to do to the balance sheet.

I'm working something of a reverse midas touch myself right now.

It's not my thing but kudos for revisiting it.

Well I did say in my original post that they had been remarkably accident prone and that theme seems to have continued. I sold the other day, probably the fastest I have ever lost 70% of my investment.

WickedLester wrote:Well I did say in my original post that they had been remarkably accident prone and that theme seems to have continued. I sold the other day, probably the fastest I have ever lost 70% of my investment.

But well done for saving 30%. I have this destructive tendency to hang on in there, until all is lost.

There's been some interesting developments here and the price has recovered so well that I'd actually be in profit if I'd held on.

Firstly Tipacs2 (don't know who they are) upped their stake to over 25% at a large premium to the prevailing share price, then the finals were published and the company claims they can cap their liabilities on the disposal to an amount manageable from cashflow so the company's future seems like it might be secure.

The continuing ops performed well and seem to be growing strongly.

It might be worth revisiting these.

https://www.investegate.co.uk/kinovo-pl ... 00085398W/

These haven't done as badly as it looked like they were going to when the problems first emerged with that business disposal. It looks like the parent company guarantees they gave when selling DCB are not going to prove so costly that they company can't fund them out of cashflow and they shouldn't go broke which looked a possibility at one point and won't need to raise new equity.

I actually think these are worth revisiting, although IMO there is an issue with management credibility which puts me off.