31
October 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 an update on trading since 2 September 2024 and
updated guidance for the year ending 31 March 2025.
Whilst the Workday Products business
continues to grow very strongly, our Digital Services and Workday
Services divisions continue to be affected by the macro-economic
environment and related delays in client decision-making.
Considering these factors, the Board has moderated its expectations
for the second half of the year and now expects that for the year
ending 31 March 2025, we will deliver revenues moderately below
current market consensus with the majority of the reduction flowing
through to adjusted PBT.
Divisional performance and outlook
· Our Workday Products division
continues to deliver growth, with a very strong performance
recorded in the first half of the year. The
July announcement of our expanded Workday partnership has
further enhanced our growth prospects, reflected in our increased
ARR target of £200m by 2030.
· In Digital
Services, there is sustained demand from our Public Sector clients,
but there has been continuing delays around decision-making as our
clients await clarity on the new government's spending priorities.
These delays have been more pronounced in the last few weeks in
anticipation of the publication of the new budget. Although
we anticipate heightened levels of activity in the weeks ahead, we
are dependent on decisions being made before the main mobilisation
phases for these contracts.
·
As
outlined in our
September Trading Statement, our Workday Services division has
continued to win new contracts, however, the number and value of
these new contracts have been lower than in previous periods and
has resulted in a decline in revenue during the last six months.
We continue to anticipate increased activity in the second
half of the year but are being more cautious around the timing
which will impact recovery.
Proactive Management
Whilst these changes to our
expectations are about delays rather than cancellations, we
nonetheless continue to be focused on maintaining prudent cost
control measures, reducing discretionary spending, minimising our
level of contractors, while reallocating staff to our current high
growth areas in Workday Products and in the Healthcare Sector of
Digital Services.
Share Buyback Programme
Given the strength of the Company's
balance sheet, the Board intends to approve a share buyback
programme, full details of which will be given alongside the
interim results for the six months ended 30 September 2024 which
will be announced on 11 November 2024.
Outlook Summary
Notwithstanding this backdrop for
FY2025, the Board continues to believe that we are well positioned
in our core markets, which offer substantial growth opportunities
in all our divisions and that we are maintaining the appropriate
balance between investment for future growth, international
expansion and profitability.
*
Note: Company compiled consensus is based on known sell side
analyst estimates that were updated following the Trading Update in
September 2024. The ranges are: Revenue £375.5m - £392.0m and
Adjusted PBT £75.0m - £79.7m. The respective consensus
figures are £388.8m and £78.8m. FY2024 reported revenue was £382.4m
and adjusted PBT was £77.2m.
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 / Nick Prowting / Ben
Griffiths
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.