Zenova Group (ZED) , a fire safety and thermal insulation provider, released its interim results for the 6 months ended 31 May 2023.
Zenova reported higher revenues of £108k from £75k in 2022 on the back of multiple new contracts that commenced sales during the period. Gross margin for the 6 months was largely unchanged at 52%, and operating loss narrowed to £709k from £1.04m in 2022, still driven by R&D, testing, and marketing.
Zenova reported significant R&D progress following an evaluation of its IP for use in retrofit applications by John Moores Liverpool University. Notable results included a 35% reduction to buildings' U-Value, a 25% reduction in heating energy consumption, a 19% reduction in CO2 emissions, an improvement of the buildings' SAP score of 24 points, and an EPC rating improvement from E to D.
Having completed major R&D efforts, the company said it has shifted focus from R&D, testing, and certification to sales growth and customer delivery. Zenova said scalable manufacturing was now in place in 3 separate jurisdictions (Europe, UK and Canada) to ensure supply of all its products to satisfy expected growth in demand while keeping shipping costs low.
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A positive interim update from Zenova, detailing a substantial increase in revenue and a much narrowed operating loss to £709k, though still significant as the company continued R&D efforts during the period, which are now largely finalised. Gross margin remained roughly unchanged at 52%.
Zenova's R&D has paid off as the abovementioned 3rd party evaluation showed a massive improvement in buildings' energy efficiency after being retrofit with Zenova's products. The EPC rating improvement is particularly notable and expected to open up large markets for energy efficiency, energy savings, cost savings, and reduced CO2 emissions in buildings.
In addition to its thermal insulation products, Zenova is currently selling its novel FX500 fire extinguisher in Canada and the UK. The extinguisher uses a proprietary fluid developed by Zenova that is highly efficient, making it particularly effective against Li-Ion battery fire.
The FX500 was first introduced in November 2022 with its first customer the military of Ukraine. Since then, Zenova has received a £1.2m order from European distributor Clastrom, a £300k order from Amazon UK, and an order for 500 units from Big Battery LLC, the US' largest Li-Ion battery supplier.
We expect revenues to continue climbing and the operating loss to turn into a profit in the near term as the company transitions from R&D to sales. Zenova said it has completed all of its major R&D/testing/certification milestones to open UK and European markets.
Notable contracts signed during the period include Clastrom, Omnis, Zensafe (for Amazon), Rawlins, Viridis, Housing Association Limited, and Melin Homes. More large orders are expected from new customers as well as increased uptake from existing customers and distributors, helped by recovering supply chains and increasing demand for energy efficient buildings.
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