By Joe Hoppe
Shares in Kinovo PLC fell Friday after the company said it has had to provide 3.7 million pounds ($4.6 million) to support its sold DCB Kent Ltd. construction business under disposal agreement terms, and expects to pay more in the short term.
Shares at 0714 GMT were down 14.5 pence, or 43% at 19.5 pence.
The U.K. property services group said under the terms of the disposal, it had agreed to provide a working capital facility to support DCB in completing active projects, and at the time expected the overall net outflow of cash to be minimal. It agreed to sell DCB for up to GBP5 million in January.
However, DCB has experienced delays in completing active projects and hasn’t secured levels of new work expected at the time of sale, and Kinovo has had to provide unanticipated working-capital support.
There remains significant uncertainty around the amount of future support required to be provided to DCB and Kinovo is pursuing a number of recoveries and claims, as well as reviewing its legal position.
The company also said it performed well in fiscal 2022, with revenue from continuing operations rising 36% to GBP53.5 million, and adjusted earnings before interest, taxes, depreciation and amortization doubling to GBP4.2 million.
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