2
September 2024
Kainos Group
plc
("Kainos"
or the "Company")
Trading
Update
Kainos Group plc (KNOS), a
UK-headquartered IT provider with expertise across three divisions
- Digital Services, Workday Services, and Workday Products,
today issues a trading update for the period from 1 April 2024 to
date and updated guidance for FY2025.
For the year ending 31 March 2025,
the Board expects to deliver adjusted PBT in line with current
market consensus forecasts, but due to the tougher trading
environment in services in the financial year to date, expects only
a small increase in overall revenues, which will be below current
market consensus forecasts.*
Given the current macro-economic
environment, the Board continues to believe that we are maintaining
the appropriate balance between profitability, investment for
future growth and international expansion.
Financial year to date divisional performance and
outlook
· In Digital
Services, there has been sustained demand from our Public Sector
clients offset by some delays around project mobilisation as result
of the short-term impact of the UK General Election.
Healthcare revenues continue to grow while the previously announced
weakness in demand within our commercial clients continues as
project related expenditure decision making is delayed.
Overall, there has been a subdued start to the year but expect to
see revenue growth over the remainder of this year.
· In
Workday Services, we remain a leading partner in the Workday
consulting sector. Our win rate has remained robust, but
contract wins and values have been lower than in previous periods,
and there has been more aggressive pricing amongst partners.
Cumulatively, this has impacted our divisional performance in
the short-term although we expect a return to growth in the second
half of the year.
· Our Workday
Products division continues to deliver very strong growth.
Our enhanced strategic partnership with Workday to co-sell our
products (announced on 25 July 2024) has meaningfully increased our
customer reach, increased our ARR target from £100m to £200m and
will accelerate the recurring software proportion of group revenue
beyond the previous 15% in FY2024. In the 5 weeks since
announcing the partnership, we have made excellent progress with
sales enablement and expect the upcoming Workday Rising event to be
a positive catalyst.
We look forward with confidence to
the remainder of the year, supported by a healthy pipeline, a
strong balance sheet and significant contracted backlog.
Looking further ahead we are well positioned in our core markets
which offer substantial growth opportunities in all our
divisions.
Our performance continues to be
underpinned by our long-term customer relationships, and the
calibre of our people, who continue to excel in delivering
high-impact solutions for our customers. As always, we are
grateful for the ongoing trust of our customers and the efforts of
our colleagues across the world.
The announcement of our results for
the six months ending 30 September 2024 will be made on 11 November
2024.
*
Note: Company compiled range is based on known sell side analyst
estimates that were updated following the announcement of the
Workday Strategic Partnership in July 2024. The ranges are:
Revenue £408.9m - £422.0m and Adjusted PBT £78.5m - £79.7m.
The respective consensus figures are £415.5m and £79.1m.
FY2024 reported revenue was £382.4m.
ENDS
For further information, please
contact:
Kainos via FTI Consulting LLP
Russell Sloan, Chief Executive
Officer
Richard McCann, Chief Financial
Officer
Investec Bank plc +44 20 7597
5970
Patrick Robb / Ben Griffiths / Nick
Prowting
FTI
Consulting LLP +44 20 3727 1000
Dwight Burden / Kwaku
Aning
About Kainos Group plc
Kainos Group plc is a
UK-headquartered IT provider with expertise across three divisions:
Digital Services, Workday Services, and Workday
Products.
·
Digital Services develops and
supports custom digital service platforms for public sector,
commercial, and healthcare customers. Our solutions transform the
delivery of these services, ensuring they are secure, accessible,
and cost-effective, and provide better outcomes for
users.
·
Workday Services specialises in
the deployment of Workday, Inc.'s Finance, HR and Planning products
to leading organisations across Europe and North America. We are
one of Workday's most respected partners, experienced in complex
deployment and trusted by our customers to launch, test, expand,
and support their Workday systems.
· Workday
Products develops products that complement Workday. Our Smart
product suite, including Smart Test (for automated testing), Smart
Audit (for compliance monitoring), and Smart Shield (for data
masking), and Employee Document Management, are used by more than
500 customers globally.
Our people are central to our
success. We employ more than 2,900 people in 22 countries across
Europe and the Americas.
We are listed on the London Stock
Exchange (LSE: KNOS) and you can discover more about us
at www.kainos.com.