Zenova reports solid momentum as interim loss narrows

Fire safety and heat management technology specialist Zenova Group reported significant first-half strides in its interim results on Friday, despite a challenging financial backdrop.

The AIM-traded firm said it started generating revenue from previously-announced international sales contracts, recording sales of £51,000 for the period, compared to £108,000 in the same period last year.

It recorded an operating loss of £617,000, an improvement from the £709,000 loss at the same time in 2023.

The loss after tax was reduced to £478,000, down from £709,000 in the prior year, reflecting a decrease in loss per share to 40p, from 76p.

Key contracts signed during the period reportedly bolstered Zenova’s market position, with the company deepening its partnership with Gracewood/Drips and Sparks/Zensafe, securing a £2.4m order over two years for its FP fire-resistant paint.

The initial returns from that contract were starting to materialise as the construction season progressed.

Additionally, Zenova expanded its global presence with successful client demonstrations in Mallorca, Spain, and Albania, and established a sales footprint in Latin America, India, and Romania.

Zenova said its research and development efforts yielded significant certifications for its products.

The Zenova FX extinguisher range received UK Kitemark BS-EN3 certification and Marine Equipment Directive (MED) certifications.

Independent testing also confirmed that the trace elements of forever chemicals in Zenova's FX fluid were well below current and upcoming EU PFAS regulations.

The company also noted that Fiona Rodford was appointed non-executive chair in March, replacing Don Nicolson.

Zenova successfully raised £677,000 through a subscription for new shares to fund its growth, and appointed Peterhouse Capital as its new broker and Gravita as its new auditor.

Additionally, Zenova discontinued a director working capital loan facility of £350,000, as it was no longer required.

Since the end of the period, Zenova said it had continued to build on its momentum.

The University of Sheffield placed a trial order through ESP, with advanced negotiations underway to replace its entire installed base of fire extinguishers with Zenova's products.

It also secured its first order from its newly-appointed sub-distributor in Albania, valued at £83,000, and closed a substantial inaugural order for 1,500 FX500 units from O Heap and Sons, one of the UK’s largest fire safety distributors.

Zenova's directors said they believed the company had sufficient cash to meet its near-term working capital requirements.

“Zenova has made significant progress over the first half of the financial year but realised sales have been lower than expected, with the group recording £51,000 to the half-year ended 31 May,” said chief executive officer Thomas Melchior.

“This revenue undershoot was due largely to delays in advanced product certification awards required to enter key market segments and weather-related delays at a major customer.

“Closing recently on additional major sales and distribution agreements further enhances my confidence in the ability of Zenova to scale up and deliver on the increased international interest in Zenova products.”

At 0921 BST, shares in Zenova Group were down 4.35% at 1.1p.

Reporting by Josh White for Sharecast.com.