Zenova warns on current-year revenues, launches fire extinguisher

The AIM-traded firm said an initial pre-order was received from a distributor in Ukraine, following internal testing of the Zenova FX500 over recent months.

It said the order would be used by the Ukraine military, and would be deployed by the end of the year, where it was expected that more orders would be made as the Zenova production ramped up to meet demand.

Given that the Zenova FX500 was “ideal” for use in a number of global sectors, and due to the “significant amount of interest”, production had begun in both the UK and the United States.

Looking at its trading, Zenova said its current focus remained on continued market penetration, which was “developing well” as a result of the “solid base programme” that research and development, certification and testing has provided.

Despite the Covid-19 pandemic and war in Europe, resulting in global resource and shipping delay issues affecting a number of sectors, the firm said it was making “good progress” across its product range, including those still in development.

The board said it believed Zenova was now positioned for a period of positive turnover growth, although it said current-year sales were impacted as sales cycles for new safety-critical products had lengthened as a result of the broader trading environment.

It said that as a result, revenues it previously expected to be recorded in 2022 would likely be pushed into the 2023 financial year.

Turnover for the period ending 30 November would thus be below that previously anticipated.

Zenova said its cash balance at the end of October totalled £0.88m, which it said was sufficient to meet its current working capital requirements.

“The company continues to make encouraging progress during 2022, and whilst revenue generation has been lower than expected to date, we are confident that the demand for Zenova products will continue to grow, with revenues increasing accordingly,” said chief executive officer Tony Crawley.

“The launch and first sale of the FX500 extinguisher is another significant milestone for Zenova and will add a further quality product to our fire safety range, benefiting our current sub-distributors and clients globally.

“The Zenova team has conducted thorough testing and demos to perfect a quality high performance product that extinguishes any type of fire.”

At 1008 GMT, shares in Zenova Group were down 10.67% at 13.4p.

Reporting by Josh White for Sharecast.com.