REG - Kainos Group plc - Interim results
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RNS Number : 7685G Kainos Group plc 10 November 2025
10 November 2025
Kainos Group plc ('Kainos' or the 'Group')
Interim results for the six months ended 30 September 2025
Strong sales performance across the Group underpins positive outlook
Kainos Group plc (KNOS), a UK-headquartered IT provider with expertise across
three divisions - Digital Services, Workday Services and Workday Products - is
pleased to announce its results for the six months ended 30 September 2025.
Financial highlights
H1 26 H1 25 Change
Revenue £196.1m £183.1m +7%
Statutory profit before tax £28.4m £34.2m -17%
Adjusted pre-tax profit(( 1 (#_ftn1) )) £32.0m £38.2m -16%
Diluted earnings per share 16.7p 20.1p -17%
Adjusted diluted earnings per share 18.9p 22.5p -16%
Interim dividend per share 9.8p 9.3p +5%
Bookings £227.9m £179.5m +27%
Product annual recurring revenue (ARR) £77.5m £65.1m +19%
Contracted backlog £396.9m £354.1m +12%
Cash(( 2 (#_ftn2) )) £105.5m £151.6m -30%
Very strong sales execution drives revenue growth, with full-year profit
expectations maintained despite the previously anticipated first-half cost
increases
= Revenue increased 7% (7% organic, 9% ccy) to £196.1 million (H1 25: £183.1
million).
= Adjusted pre-tax profit declined by 16% (-12% ccy) to £32.0 million, with an
adjusted profit margin of 16% (H1 25: 21%), in part due to a full period of
investment to support our Workday partnership, increased National Insurance
costs and the use of contractors and third-party suppliers to provide
short-term delivery capacity.
= Very strong sales performance drove bookings 27% higher to £227.9 million (H1
25: £179.5 million), with excellent performance across all three divisions.
= Contracted backlog at the period end increased 12% to £396.9 million (H1 25:
£354.1 million).
= Robust period-end cash((2)) of £105.5 million (H1 25: £151.6 million), with
cash conversion at 48% (H1 25: 75%), reflecting the payment of restructuring
costs provided for in FY25 and the return to revenue growth resulting in an
increase in working capital.
= Board announces intention to launch a further share buyback programme of
£30.0 million, with effect from the end of the current buyback programme on
19 November, to be executed over a period of six months.
Operational highlights
Workday Products continued its strong revenue growth and remains firmly on
track to reach our ARR targets of £100 million by the end of 2026 and £200
million by the end of 2030
= Workday Products' ARR increased by 19% (19% ccy) to £77.5 million (H1 25:
£65.1 million), resulting in revenue growing by 14% (19% ccy) to £39.2
million (H1 25: £34.3 million).
= We reached the important industry milestone of $100 million of ARR in July
2025, which only around 1% of all SaaS companies achieve.
= Workday Products now has more than 600 customers (H1 25: more than 500), with
an average annual customer value of £128k (H1 25: £127k) and around 40%
taking two or more products (H1 25: around 33%).
= We continued to invest in our product portfolios, with research &
development expenditure rising by 12% to £8.6 million (H1 25: £7.7 million),
all of which was expensed in the period. Sales & marketing spend increased
by 61% to £10.0 million (H1 25: £6.2 million), including £2.6 million of
additional costs associated with a full six months of our Workday partnership
costs.
= We deepened our Workday partnership with an exclusive resell arrangement,
shortly after the period end. Workday has chosen our newly developed Pay
Transparency product to launch a "Pay Transparency Analyzer powered by Kainos"
solution for its customers, ahead of the European Pay Transparency Directive
coming into force from June 2026.
Digital Services revenue growth driven by an excellent performance in the
healthcare sector and continued growth in North America. The division secured
several significant healthcare and public sector contracts in the UK
= Digital Services' revenue increased by 6% (7% ccy) to £103.5 million (H1 25:
£97.3 million).
= Revenue in healthcare grew by 33% to £29.6 million (H1 25: £22.3( 3
(#_ftn3) ) million), while public sector revenue reduced by 3% to £59.7
million (H1 25: £61.4(3) million). New contracts secured in H1 26 are
expected to lead to meaningful revenue growth in both sectors in the second
half of the financial year.
We deprioritised new customer acquisition in the commercial sector to
concentrate on supporting existing commercial customers and invest in the
growth opportunities in other parts of Digital Services. As a result, revenue
was 39% lower at £6.4 million (H1 25: £10.5(3) million).
= Our North American business continued to grow rapidly, with revenue growth of
152% (139% organic) to £7.8 million (H1 25: £3.1 million).
= Canada is our primary North American market and is highly attractive to us, as
it is investing to catch up in digital government and looking to the UK for
examples of success. We have significantly bolstered our position with the
acquisition of Davis Pierrynowski Limited (Davis Pier) on 15 September 2025.
Davis Pier is a consultancy specialising in addressing complex challenges for
public sector and community organisations. We have successfully partnered with
Davis Pier since 2022 and we are delighted to welcome its 120 colleagues to
our team.
Strong sales performance in Workday Services returned the business to growth
in the first half, with further progress expected in the second half
= We are the leading pan-European Workday consulting specialist and the seventh
largest globally by certified consultant numbers.
= Revenue in the period was 4% higher than H1 25 (6% ccy) at £53.4 million (H1
25: £51.5 million), as growth in the Americas outperformed a slower recovery
in EMEA.
= We continued to make good progress in new markets, with revenue in Australia
and New Zealand growing quickly and opportunities emerging in Latin America.
= Bookings increased by 35% to £54.0 million (H1 25: £39.9 million), with a
contracted backlog of £62.1 million at the period end (H1 25: £61.1
million).
We continue to benefit from our geographical breadth, with international
markets now generating 43% of Group revenue (H1 25: 41%)
= International revenue was £84.9 million, up 13% (H1 25: £75.4 million).
= Workday Services and Workday Products have a particularly strong international
client base, with 83% of their aggregate revenues coming from these
international customers (H1 25: 82%).
Excellent customer service drives customer satisfaction and retention
= Our customers continued to rate our services as 'excellent', with a Net
Promoter Score of 70((( 4 (#_ftn4) ))) (H1 25: 58).
= Existing customers generated revenue of £166.6 million (H1 25: £148.9
million), up 12%.
= Our total customer numbers increased to 1,169 (H1 25: 1,022).
The commitment and engagement of our colleagues underpins our business
performance
= We have 3,132 people (H1 25: 3,029) across 18 countries, with our employee
retention remaining strong at 92% (H1 25: 93%).
= Engagement levels remain high, measuring 75% (H1 25: 76%) in our internal
surveys.
= We were again rated one of the '50 Best Places to Work in the UK' by
Glassdoor, improving our ranking to 14th (2024: 32nd), and achieved 'Great
Places to work in the Americas' for the second year in a row.
Continued growth in our AI business, with revenues increasing 6%, as we help
customers harness the potential of AI
= Revenues for AI and related projects increased 6% to £15.3 million (H1 25:
£14.4 million).
= AI adoption is well-embedded with over 65% of our Digital Services project
teams now fully enabled. For our customers, we have delivered over 300 AI
& Data projects across the public, healthcare, and commercial sectors,
including 48 in the period.
= Since 2018, Kainos has been the fourth largest supplier of AI to the UK Public
Sector, with over £65 million in awarded contracts.
= Kainos has three of the 41 AI solutions currently available on the Workday
Marketplace, reflecting our leadership in delivering trusted, Workday-approved
innovation, and we launched our first Agentic AI solution on the Workday Agent
Marketplace in the period.
= Our recently launched Microsoft AI Centre of Excellence is advancing the
development of an AI-first business model and working closely with Microsoft
to develop and extend agentic technologies.
Continued to refresh and strengthen the Board
= Shruthi Chindalur was appointed as an independent Non-Executive Director with
effect from 24 September 2025, bringing 25 years' experience in the
technology, SaaS, and AdTech sectors.
Current trading and outlook
With our strong sales performance in the first half creating excellent revenue
visibility for the remainder of the year, we expect the following in H2 26:
= Continued growth in Workday Products and further progress towards our ARR
targets, supported by the recent launch of our Pay Transparency Analyzer
solution.
= A meaningful revenue increase in Digital Services, as we deliver the
healthcare and public sector contract wins from the first half and continue to
grow our North American business, including the first full period of
contribution from Davis Pier.
= A return to revenue growth in Workday Services, driven by improved results in
our core European and North American markets as well as further progress in
Australia, New Zealand and Latin America.
We are maintaining a prudent outlook for profitability and expect Adjusted PBT
to be in line with current consensus forecasts.
Looking further ahead, we operate in markets with clear long-term structural
drivers, including the emerging opportunities from wider AI adoption and
customers' continued focus on deploying digitisation to improve efficiency and
effectiveness. We remain confident in our strategy to capture and deliver on
these opportunities. Backed by a robust backlog, healthy pipeline, solid
balance sheet, disciplined capital allocation, and strong cash flow, we have a
firm foundation from which to drive long-term shareholder value.
Commenting on the results, CEO Brendan Mooney said:
"This was a positive six months for Kainos, underpinned by our success in
securing several new contracts with new and existing customers. This positions
us for accelerated growth in the second half, with each of our divisions set
to increase revenue. We therefore anticipate a strong performance for Kainos
as a whole.
"We continue to be excited by the potential for Workday Products, with rising
demand for our existing products and the recent launch of our Pay Transparency
product, in partnership with Workday. We remain on track to achieve our ARR
targets of £100 million by the end of 2026 and £200 million by the end of
2030.
"The UK Government sees technology as central to its mission to improve the
quality and efficiency of public services, while making them easier for
citizens to access. The significant programme wins in the period are testament
to our capabilities in the public and healthcare sectors. We also look forward
to continued progress in North America, reinforced by our newly acquired Davis
Pier business in Canada.
"Workday Services has returned to revenue growth, as our core European and
North American markets improve and we grow further in other international
markets.
"Our success depends on nurturing long-term customer relationships and
ensuring our people remain engaged and committed. We are deeply grateful for
our customers' continued trust in us and for the energy and talent of our
colleagues."
For further information, please contact:
Kainos via FTI Consulting LLP
Brendan Mooney, Chief Executive Officer
Richard McCann, Chief Financial Officer
Investec Bank plc +44 20 7597 5970
Patrick Robb / Nick Prowting / Arnav Kapoor
FTI Consulting LLP +44 20 3727 1000
Dwight Burden / Kwaku Aning
About Kainos Group plc
Kainos Group plc is a UK-headquartered provider of sophisticated IT services
to major public sector, commercial and healthcare customers and a developer of
software applications. Our shares are listed on the London Stock Exchange
(LSE: KNOS).
Our expertise spans three divisions: Digital Services, Workday Services, and
Workday Products.
Digital Services
Our Digital Services customers face a range of business challenges, including
the need to improve their customer service, reduce costs and increase
productivity. We help them to solve these problems by developing and
supporting custom digital service platforms. Our solutions enable customers
and their users to work smarter, faster and better, while ensuring the
platforms are secure, accessible and cost effective.
Workday Services
We are a respected partner to Workday Inc., providing a comprehensive range of
services to support customers deploying Workday's Finance, HR and Planning
products. Our experience in complex deployments means we are trusted to
launch, test, expand and support Workday systems.
Workday Products
We have developed proprietary software products that complement Workday by
enhancing our customers' system security and compliance and improving their
document generation and storage. Over 600 global customers now use one or more
of our products, with adoption growing rapidly.
Our people
Our people are central to our success. We employ more than 3,100 people in 18
countries across Europe, Asia and the Americas.
Find out more
You can discover more about us at www.kainos.com (http://www.kainos.com) .
Cautionary statement
This report includes statements that are, or may be deemed to be,
"forward-looking statements". These statements are made by the Directors in
good faith based on the information available to them up to the time of their
approval of this report, but such statements should be treated with caution
due to the inherent uncertainties, including both economic and business risk
factors, underlying any such forward-looking information.
Definition of terms
We use the following definitions for our key metrics:
Active customer: a customer who has signed a contract with us within the last
three months or has generated revenue in the last six months.
Adjusted earnings per share (basic and diluted): adjusted profit after tax
divided by the weighted average number of ordinary shares outstanding (basic)
or weighted average number of ordinary shares outstanding after adjustment for
the effects of all dilutive potential ordinary shares (diluted).
Adjusted EBITDA: adjusted pre-tax profit excluding interest, tax, depreciation
of property, plant and equipment and right-of-use assets, and amortisation of
intangible assets.
Adjusted pre-tax profit: profit before tax excluding the effect of share-based
payments expense, acquisition-related expenses including amortisation of
acquired intangible assets and deferred consideration (including post
combination remuneration expense).
Adjusted profit margin: adjusted profit as a percentage of revenue for the
period.
Agentic AI: refers to intelligent systems that can autonomously plan, decide,
and act to achieve defined goals, working across multiple steps and systems
with minimal human intervention. These agents combine reasoning, learning, and
action capabilities to deliver outcomes, not just insights, while operating
within clear ethical, governance, and organisational boundaries.
Annual recurring revenue (ARR): the total of the annualised committed
subscription value contracted at the end of the reporting period.
Bookings: the total value of sales contracted during the period.
Cash conversion: cash generated from operating activities as a percentage of
adjusted EBITDA.
Constant currency (ccy): excludes the effect of foreign currency exchange rate
fluctuations on period-on-period performance by translating the relevant prior
period figure at current period average exchange rates.
Contracted backlog: the value of contracted revenue that has yet to be
recognised.
Existing customer revenue: total revenue recognised from customers in the
current period who were also customers in the preceding year.
International revenue: total revenue derived from locations outside of UK and
Ireland.
Net Promoter Score (NPS): a metric that organisations use to measure customer
loyalty toward their brand, product or service, which can range from -100 to
+100. Bain & Co, the creators of the metric, held that a score above 0 is
good; 20+ is favourable; 50+ is excellent and 80+ is world class.
Organic revenue: our revenue excluding revenue from acquisitions completed in
the current and comparative reporting periods.
Software as a service (SaaS): a software distribution model that delivers
application programmes over the internet, with users typically accessing the
programme through a web browser. Users pay an ongoing subscription to use the
software rather than purchasing it once and installing it.
Group business review
Our overall performance
In the first half of FY26 we built on our solid performance in the final
quarter of the prior year and delivered further sequential improvement, with
Group revenue up 7%. All three divisions achieved a strong sales outcome,
giving us high visibility of the revenue growth we expect to achieve in the
second half of FY26.
Workday Products continued to grow rapidly, passing $100m ARR and remains on
track to achieve our published ARR targets of £100 million by the end of 2026
and £200 million by the end of 2030.
Digital Services increased revenue by 6% because of an excellent performance
in the healthcare sector and continued momentum in North America. In the
public sector, revenues were modestly lower and commercial revenues were well
down, in a market that remained subdued and which we have strategically
deprioritised.
Revenue in Workday Services was 4% higher, with growth in North America and
further progress in Australia, New Zealand and Latin America, partially offset
by reduced revenue in Europe.
Adjusted pre-tax profit reduced by 16% (-12% ccy) to £32.0 million (H1 25:
£38.2 million), resulting in a 16% margin (H1 25: 21%). This reflected
several factors, including the first full period of investment to support our
Workday partnership (+£2.6 million, see below for further information),
higher employer National Insurance costs (+£1.5 million) and our short-term
usage of contractors (+£3.7 million) and third-party suppliers to enable us
to deliver our pipeline and achieve the growth we expect in the remainder of
the year. We are recruiting our own staff to fill these positions and expect
to displace some of these higher costs during FY27. Overall, we remain firmly
on track to achieve consensus for full-year adjusted pre-tax profit.
The strong sales performance resulted in bookings rising by 27% to £227.9
million (H1 25: £179.5 million). The contracted backlog at the period end was
12% higher at £396.9 million (H1 25: £354.1 million).
Total investment in our Workday software products was £18.6 million (H1 25:
£13.9 million), up 34%, as we invested in building Pay Transparency Analyzer
and continued to support the rapid growth in Workday Products and take
advantage of the scale of the opportunity. Within this, research &
development investment rose by 12% to £8.6 million (H1 25: £7.7 million),
all of which was expensed. Our product-related sales & marketing
investment (including £3.8 million of Workday partnership costs), was £10.0
million, up 61% (H1 25: £6.2 million).
Our business model is highly cash generative. However, cash conversion in the
period was lower than typical at 48% (H1 25: 75%), reflecting the payment of
restructuring costs provided for in FY25 and the return to revenue growth
resulting in an increase in working capital.
At 30 September 2025 we had a cash balance (including treasury deposits) of
£105.5 million (H1 25: £151.6 million), after returning £28.2 million to
shareholders through a share buyback in the period, beginning construction of
our new Belfast office and acquiring Davis Pier in Canada. Including the share
buyback we conducted in H2 25, we have returned £50.8 million to shareholders
since the end of H1 25.
Workday Products performance
ARR at the period end was £77.5 million (H1 25: £65.1 million), up 19% (19%
ccy). During the first half ARR passed $100 million, which is widely seen as a
significant milestone for a SaaS company, with only around 1% achieving this
milestone. Our momentum in the period keeps us firmly on track to achieve our
ARR targets of £100 million by the end of 2026 and £200 million by the end
of 2030.
As a result, Workday Products revenue increased by 14% (19% ccy) to £39.2
million (H1 25: £34.3 million), benefiting from continued good sales
execution across our product range. More than 600 customers now use our
products, with nearly 40% taking multiple products. The period-end backlog
increased 27% to £160.3 million (H1 25: £126.6 million).
We have continued to deepen our relationship with Workday, building on the
enhanced strategic partnership we agreed in FY25. Shortly after the period
end, Workday announced the launch of a new solution for customers, called "Pay
Transparency Analyzer powered by Kainos". This will see Workday exclusively
selling our newly developed Pay Transparency product through its own
salesforce, making it a highly cost-effective route to the broadest possible
market for our products. The product will support companies with meeting new
EU pay disclosure regulations, which come into force in 2026.
Our software products
In addition to Pay Transparency, we have four products, three of which sit
within our Smart Suite product offering:
= Smart Test (launched in 2014) is the leading platform for Workday customers to
automatically test and verify that their unique Workday configuration is
operating effectively.
= Smart Audit (2021) is a compliance-monitoring tool that allows Workday
customers to maintain operational security controls across their Workday
environments.
= Smart Shield (2022) is a data-masking tool that ensures sensitive data remains
controlled when Workday environments are made available to broader internal or
external teams.
Employee Document Management (2023) improves the experience of generating and
storing documents inside Workday, while supporting an organisation's global
compliance requirements.
Digital Services performance
Our Digital Services division builds highly cost-effective solutions that make
public-facing services more accessible and easier to use for citizens,
patients and customers.
Overall, Digital Services had a positive six months, with revenue increasing
by 6% (7% ccy) to £103.5 million (H1 25: £97.3 million). Bookings rose by
13% to £116.2 million (H1 25: £102.8 million), while the contracted backlog
was 5% up at £174.5 million (H1 25: £166.3 million).
Public sector
Revenue from public sector customers fell by 3% to £59.7 million (H1 25:
£61.4((3)) million) although we expect meaningful revenue growth in the
second half of the year, as the combination of strong sales execution and a
more-predictable market environment enabled us to secure several significant
new programmes in the period. These included new contracts with the Home
Office and the Driver and Vehicle Standards Agency (DVSA). We have now
partnered with DVSA for more than a decade and the new four-year contract,
worth up to £73 million, will see us deliver a platform making it easier for
learner drivers to schedule their tests.
The UK Government has an ambition to improve public services by using
technology and we were pleased that the quality of our work was recognised in
the period. In partnership with the Department for Environment, Food and Rural
Affairs, we won the Digital Transformation Project of the Year at the 2025
Digital Revolution Awards. The project created a robust new digital inspection
system, to protect the UK's biosecurity while maintaining the flow of vital
agricultural and food imports into the UK.
Healthcare sector
We currently partner with over 50 customers across the UK public healthcare
system, including national, regional and local bodies, and clinical research
institutes. Revenue was up 33% to £29.6 million (H1 25: £22.3((3)) million).
During H1 26 we won significant contracts with NHS England (NHSE), including a
Digital Health Checks project to encourage people to adopt healthier
lifestyles. These will contribute to further strong revenue growth in the
second half of the year.
We have not yet seen any disruption from the Government's plan to move NHSE
back into its direct control. Many of the new programmes we won in the first
half were the result of NHSE's long-term investments, which have continued. In
addition, the Government has announced its new 10 Year Health Plan for
England, which includes a commitment to make the NHS "the most digitally
accessible health system in the world". This has led to renewed focus and
investment in a number of areas, as the Government looks to shift the NHS
focus from treatment to prevention, and from analogue to digital. Kainos is
well positioned in these areas of investment, such as preventative healthcare,
genomics, health data and AI.
Commercial sector
Activity in the commercial sector has been muted for some time and the market
remained subdued in H1 26, resulting in revenue for our smallest segment
declining by 39% to £6.4 million (H1 25: £10.5((3)) million). This sector
now accounts for just 6% of divisional revenue (H1 25: 12%) and we are
deprioritising it to concentrate on our growth in the healthcare and public
sectors, including Canada. We will continue to support our existing commercial
customers, while we consider how to address the significant opportunity we
still see in this sector in the medium term.
North America
The UK was an early adopter of digital transformation, which provides us with
the opportunity to use our skills and credibility to replicate our home market
success in other regions.
International revenue more than doubled to £7.8 million (H1 25: £3.1
million). North America is our largest international market and we have
organically expanded our team to almost 60 colleagues, mainly located in
Canada.
In September 2025, we were pleased to announce the acquisition of Davis Pier,
a high-growth Canadian consultancy that specialises in addressing complex
challenges for public sector and community organisations across Canada. We
have partnered with Davis Pier since 2022 to accelerate digital transformation
for our shared clients and deliver solutions that create tangible social
impact for citizens. Its team of 120 people will join our Digital Services
division in Canada and continue to operate under the Davis Pier brand.
We see strong growth potential in Canada. It needs to invest in digital
government, where it currently ranks 47(th) globally versus seventh for the
UK. Canada looks to the UK for tangible examples of success and there is
frequent co-operative contact between the countries, at all levels. Kainos and
Davis Pier have strong shared values and cultures that prioritise customers,
people and impact. This, along with the continued commitment of Davis Pier's
CEO, Mike Davis, make us confident of achieving further growth.
Workday Services performance
We are Workday's leading partner in Europe and a full services partner in the
US, which is Workday's biggest market. At the end of the period, we had 822
accredited Workday consultants (H1 25: 788), ranking us seventh globally.
Workday Services' revenue in the period was 4% higher (6% ccy) at £53.4
million (H1 25: £51.5 million). Revenue in North America showed good growth,
with the region generating 54% of divisional revenue (H1 25: 50%). European
revenue was lower, with these customers contributing 44% of revenue (H1 25:
50%).
The strong sales performance in the period will drive further revenue growth
in the remainder of FY26. Sales bookings increased by 35% to £54.0 million
(H1 25: £39.9 million), contributing to a contracted backlog of £62.1
million at the period end (H1 25: £61.1 million). We have noted in previous
reports that the number of Workday partners has increased and we have
therefore been more selective about the projects we bid for, focusing on those
where the customer values our experience and capabilities, rather than those
seeking the lowest price.
Our businesses in Australia and New Zealand are growing rapidly from a small
base and exceeding our initial expectations. We are also exploring
opportunities in Latin America.
Our people
Our success is driven by our people's ability, energy and expertise. We are
therefore pleased that our employee retention remains high, at 92% over the
past 12 months (H1 2025: 93%). Our headcount at the period end was 3,132, up
from 2,865 at the start of the period and 3,029 at H1 25. The increase
reflects the 120 colleagues who joined us from Davis Pier and a temporary rise
in contractor numbers during H1 26, as they are generally quicker to recruit
than permanent employees. We intend to backfill these roles with permanent
employees, though the proportion of contractors still remains relatively low,
at 4% of our colleagues (H1 25: 2%).
We capture feedback each month through Workday Peakon. This shows employee
engagement remains strong, with their overall satisfaction and enthusiasm with
work being rated at 75% (H1 25: 76%). We also retained our top 50 ranking in
Glassdoor's Best Places to Work in the UK 2025. In September 2025, we had an
overall approval rating on Glassdoor of 78% and 72% of respondents would
recommend working at Kainos to a friend.
Our customers
Consistently delivering for our customers is at the heart of our business. It
creates strong relationships, which in turn generate high levels of repeat
business, while our reputation for delivery also helps us to win new work.
We continued to perform strongly during the period, as reflected by:
= Our Net Promoter Score (NPS) of 70 (H1 25: 58), maintaining our record of
consistently high customer satisfaction. A score above 50 is viewed as
'excellent';
= Existing customers generating 85% of our revenue (H1 25: 81%), as they
continue to trust us to deliver for them; and
= Further new customer wins, giving us 1,169 active customers at the period end
(H1 25: 1,022).
Artificial intelligence
Our vision for AI is to guide and deliver responsible adoption and to solve
real-world problems.
In H1 26, our AI-related revenue grew by 6% versus H1 25, as we continue to
work closely with our customers to help them realise value from AI. Many
engagements are at an early stage and modest in scale but they are already
delivering impact, particularly by using AI assistants to help people find the
right information more quickly and make better decisions. Aligned to this, we
are advancing the application of Agentic AI through our innovation
initiatives.
Workday remains a major focus for us and we are one of approximately 15 global
partners selected as a design partner for the Workday Agent System of Record
(ASoR)
(https://investor.workday.com/2025-06-03-Workday-Announces-New-AI-Agent-Partner-Network-and-Agent-Gateway-to-Power-the-Next-Generation-of-Human-and-Digital-Workforces)
.We have published our first agent to the Workday Agent Marketplace and
showcased five agents at Workday Rising in September 2025, to illustrate
Agentic AI's potential to transform how human and digital workers interact. We
also continue to have three products live on the Workday AI Marketplace
(https://marketplace.workday.com/en-US/listing#f-appdirect_partners_id=Kainos&cq=%40appdirect_ai%3Dtrue)
, all carrying Workday's Responsible AI designation.
Our Microsoft AI Centre of Excellence is advancing the development of an
AI-first business model. The team is working in close partnership with
Microsoft to extend the boundaries of agentic technologies, with a focus on
creating and commercialising agent-based solutions through the Microsoft
Commercial Marketplace. Recent customers include a regulatory intelligence
agent for a RegTech customer and an AI-enabled search capability for a UK
police force.
We continue to demonstrate thought leadership through events such as AICON,
the AI conference, and the Beyond Boundaries podcast. At AICON, we focused on
the implementation of advanced AI solutions, discussed the approach to
adoption across geographies, and explored the possible futures of
AI. Through our podcast, we discussed the future of AI and its impact on
business and society - responsible AI, agentic AI and the digital workforce of
the future. These activities reinforce our role as a trusted partner for
customers navigating the complexities of AI adoption.
Within our own business, we continue to adopt AI developer tools, with 65% of
our projects now using it to enhance productivity and delivery speed. We are
also working with customers to extend the responsible use of these tools
across remaining projects, recognising that adoption levels depend on our
customers' readiness and addressing their safety concerns.
Looking ahead, our focus is on helping customers scale from small, early
opportunities to broad enterprise adoption, as AI moves beyond the hype and
into real value creation. We see growing demand for AI agents that improve
decision-making, streamline access to information and unlock productivity
across sectors. We are positioned, through our Workday, Microsoft and AWS
partnerships, to help customers adopt AI responsibly and at scale.
Innovation, research and development
We innovate to stay ahead by enhancing existing solutions, creating new ideas
and exploring technologies that will shape our future and our clients'. This
work is driven by structured frameworks, targeted R&D investment and
horizon scanning, supported by specialist teams in AI, ethics and security.
R&D expenditure
Our research and development expenditure for the period, including product
investment, amounted to £8.6 million, up 12% (H1 25: £7.7 million), all of
which was expensed.
Workday Product Innovation: EU Pay Transparency
Among this period's highlights is the development of our EU Pay Transparency
solution, developed under the Workday Built on Workday programme and aligned
with the EU Pay Transparency Directive. This product enables organisations to:
= Analyse compensation, performance and demographic data to detect pay gaps and
inequities.
= Use AI to uncover root causes and provide recommendations for closing gaps.
= Deliver pre-built, country-specific reports and dashboards to simplify
compliance and audits.
The solution is being sold exclusively through Workday, giving customers
seamless access and alignment with its roadmap.
Assessing the technologies of the future
Our foresight programme focuses on four priority areas shaping next-generation
services and products:
= Artificial Intelligence - AI native teams, Small Language Models, Agentic AI,
Sustainable AI.
= Quantum - Applied Quantum Computing, Quantum Security, ecosystem partnerships.
= Autonomous Systems - Robotics & drones, autonomous agents, digital twins,
sensor and observation data.
= Future Healthcare - Preventative care, advanced sensing & diagnosis,
digital care models, genomics & life sciences.
These domains guide our R&D priorities, client innovation work and
investment decisions.
Financial review
Revenue
Group revenue for the period increased by 7% (9% ccy) to £196.1 million (H1
25: £183.1 million). Workday Products was the fastest-growing part of the
Group, with its revenue increasing by 14% (19% ccy) to £39.2 million (H1 25:
£34.3 million). Digital Services also had a positive six months overall, with
revenue up 6% (7% ccy) to £103.5 million (H1 25: £97.3 million). Workday
Services' revenue was 4% (6% ccy) higher at £53.4 million (H1 25: £51.5
million). The Group business review provides more information on divisional
revenue performance.
Gross margin
Our overall gross margin decreased to 48.0% (H1 25: 50.3%).
Workday Products' margin remained stable at 77.7% (H1 25: 78.4%).
Digital Services' gross margin reduced to 35.8% (H1 25: 38.4%), reflecting the
particular mix of business in the period. In this division, we increased the
proportion of engagements where we partnered with other organisations to
deliver for customers and this is typically at a lower margin.
While Workday Services' margin was lower at 49.8% (H1 25: 54.0%) due to rate
pressure, this showed sequential improvement on the 49.2% margin achieved in
H2 25.
Operating expenses
Operating expenses increased by 10% to £68.3 million (H1 25: £61.9 million).
Under the terms of our strategic partnership with Workday announced in July
2024, we pay annual fees of approximately £7.8 million. The total charge for
the period was £3.8 million (H1 25: £1.2 million), reflecting a full six
months of these costs, compared with two months in H1 25.
Our investment in product development increased to £8.6 million (H1 25: £7.7
million), all of which was expensed during the period. We recognised £2.1
million of Research & Development Expenditure Credit (RDEC) income during
the period (H1 25: £1.6 million).
Alternative performance measures (APMs)
We use several APMs to monitor our performance and assist management's
decision-making, including 'adjusted profit before tax', 'adjusted EBITDA',
'cash conversion' and 'adjusted diluted and basic earnings per share'.
We believe these measures are better indicators of trading performance, assist
comparison between periods and provide useful information for users of the
financial statements. However, our APMs are not defined in UK-adopted
International Accounting Standards and while they are similar to the metrics
used by comparable companies, our definitions may differ from similarly titled
performance measures and disclosures by other entities. As such, these
measures should not be considered in isolation but as supplementary
information to the financial statements.
In calculating our APMs, we consistently adjust for the following items:
Costs directly attributable to acquisitions
These include:
= amortisation of acquired intangible assets;
= deferred consideration, including compensation for post-combination services;
and
= acquisition-related expenses, such as legal and professional costs incurred
mainly in the period of acquisition.
These costs are unique to each acquisition and can vary significantly between
periods, depending on the timing and size of any transactions, the nature of
intangible assets acquired and the structure of the consideration. We
therefore consider that these costs do not reflect underlying operations.
Share-based payment costs
Although share-based payments are an important aspect of our employee
compensation, we believe excluding this expense aids understanding of our
business performance and comparison to our peers' results. Our arrangements
consist of both equity-settled and cash-settled schemes and the factors
influencing the expense, such as the market value of our shares, forfeiture
rates and volatility, are generally beyond our control and may not correlate
with the operation of the business.
Significant and non-recurring items
In previous periods we have excluded gains relating to the sale of property,
plant and equipment and fair value movements in investment property. We also
exclude any restructuring costs incurred. We consider that adjusting for these
costs enables more meaningful period-to-period comparisons.
Adjusted profit measures
Our adjusted profit measures reconcile to the reported numbers as follows
6 months to 6 months to 30 Sep 2024 12 months to 31 Mar 2025
30 Sep 2025 (£000s) (£000s)
(£000s)
Profit before tax 28,368 34,202 48,640
Share-based payment expense and related costs 2,872 3,104 5,930
Amortisation of acquired intangible assets 365 414 836
Restructuring costs - - 8,411
Compensation for post-combination services 285 414 877
Acquisition-related expenses 140 16 948
Adjusted profit before tax 32,030 38,150 65,642
6 months to 6 months to 30 Sep 2024 12 months to
30 Sep 2025 (£000s) 31 Mar 2025
(£000s) (£000s)
Profit after tax 20,580 25,425 35,560
After tax impact of:
Share-based payment expense and related costs 2,084 2,306 4,335
Amortisation of acquired intangible assets 271 324 645
Restructuring costs - - 6,194
Compensation for post-combination services 285 414 877
Acquisition-related expenses 140 16 693
Adjusted profit after tax 23,360 28,485 48,304
Adjusted EBITDA
6 months to 6 months to 30 Sep 2024 12 months to
30 Sep 2025 (£000s) 31 Mar 2025
(£000s) (£000s)
Adjusted profit before tax 32,030 38,150 65,642
Depreciation of property, plant and equipment 1,681 1,660 3,381
Depreciation of right-of-use assets 624 615 1,277
Finance expense 194 164 333
Finance income (2,474) (3,509) (6,440)
Adjusted EBITDA 32,055 37,080 64,193
Adjusted profit before tax decreased by 16% to £32.0 million (H1 25: £38.2
million). Profit before tax decreased by 17% to £28.4 million (H1 25: £34.2
million).
Corporation tax charge
The total tax charge for H1 26 is £7.8 million (H1 25: £8.8 million). This
equates to an effective tax rate of 27% (H1 25: 26%), which is higher than the
UK corporation tax rate, primarily due to the impact of higher tax rates in
the United States. The expected tax rate for FY26 is 27% (FY25: 26%).
Earnings per share
Adjusted diluted earnings per share declined by 16% to 18.9 pence (H1 25: 22.5
pence, while diluted earnings per share for the period was 16.7 pence (H1 25:
20.1 pence), a reduction of 17%. Further information is provided in note 8 to
the condensed consolidated financial statements.
Financial position
We continue to have a strong financial position, with a substantial cash
balance (see below), no debt and net assets of £104.6 million (31 March 2025:
£138.0 million).
The acquisition of Davis Pier resulted in goodwill increasing to £42.8
million (31 March 2025: £37.3 million) and intangible assets rising from
£4.2 million at 31 March 2025 to £11.4 million at the period end. More
information can be found in note 10 to the condensed consolidated financial
statements.
The combined underlying net trade receivables and accrued income balance
increased by 29% to £70.0 million (31 March 2025: £54.2 million) reflecting
the return to revenue growth in the period. Trade payables and accruals rose
to £57.6 million (31 March 2025: £54.3 million).
The final dividend for FY25 of £22.9 million has been included as a current
liability in these financial statements. This dividend was approved by
shareholders at the Annual General Meeting on 23 September 2025 and paid to
shareholders on 24 October 2025.
Cash and cash conversion
The Group is highly cash generative, with our Workday Products business in
particular having an attractive cash profile, as we receive payment from
customers annually in advance. However cash conversion, which is cash
generated by operating activities as a percentage of adjusted EBITDA, was
lower than usual at 48% (H1 25: 75%). The payment in the period of
restructuring costs provided for in FY25 impacted this by 13%, with a return
to revenue growth having a further negative impact on cash conversion.
At 30 September 2025, we held cash and treasury deposits of £105.5 million
(31 March 2025: £133.7 million). The movement in the period includes:
= £28.2 million returned to shareholders through a share buyback (see Capital
allocation policy below);
= £2.1 million of cash outflows relating to the start of construction of our
new Belfast office, which is set to open in 2027; and
= £7.7 million in relation to the acquisition of Davis Pier.
Interim dividend
The Board has declared an interim dividend of 9.8 pence per share for H1 26
(H1 25: 9.3 pence). This will be paid on 12 December 2025 to shareholders on
the register at the close of business on 21 November 2025, with an ex-dividend
date of 20 November 2025.
Capital allocation policy
Kainos has a strong unlevered balance sheet and continues to generate
significant operating cash flow. The Board's main priorities for utilising our
cash are to grow the business organically and through acquisition, and to
reward shareholders through increased earnings and our progressive dividend
policy, while retaining a robust capital base.
When the Group has surplus cash, the Board will consider returns of capital to
shareholders. During the period, we completed the share buyback of £30
million announced in November 2024, purchasing 1,054,544 shares at a cost of
£7.4 million. On 19 May 2025, we announced a further share buyback programme
of up to £30.0 million, under which we acquired a further 2,738,434 shares in
the period, at a cost of £20.9 million. Since the period end, we have
acquired an additional 741,111 shares at a cost of £7.1 million, bringing the
total returned to date to shareholders through both buyback programmes to
£57.8 million.
We continue to apply the Board's capital allocation framework and as announced
on 10 November 2025, we will launch a further share buyback programme of
£30.0 million, with effect from the end of the current share buyback
programme on 19 November, to be executed over a period of six months.
Further information can be found in notes 14 and 16 to the condensed
consolidated financial statements.
As a result of the two share buyback programmes, we cancelled 3,952,667 shares
during the period, with 43,490 shares purchased but not cancelled at the
period end.
The Board will continue to review its capital allocation policy and further
distributions to shareholders, taking into account other potential uses of
capital that may drive value for shareholders over the medium term.
Related party transactions
There have been no new, nor material changes in related party transactions
from those described in the last annual report.
Risks & Uncertainties
There are several potential risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of
the financial year and could cause actual results to differ materially from
forecast and historic results.
The Directors do not consider that the principal risks and uncertainties
described in the Annual Report for the year ended 31 March 2025 have changed,
although we continue to ensure that these risks are effectively managed. A
detailed explanation of the risks summarised below, and how the Group seeks to
mitigate the risks, can be found on pages 60 - 65 of the Annual Report for the
year ended 31 March 2025 (available on the Group's website www.kainos.com
(https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.kainos.com%2F&data=04%7C01%7CM.Paul%40kainos.com%7Cf88a48f36eb84e5a6fb408d99494e8aa%7C7ed9bdc7964d4dc09084812b90e05c6d%7C0%7C0%7C637704189543670863%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=ILhveiNiGWlSVQroj4uMseRe7HzPgnaEhijCAbFWF0s%3D&reserved=0)
).
Risk Description
1. Cyber and information security Cyber threats are constantly adapting and increasing in number, frequency and
sophistication. We must maintain appropriate controls and protective measures
to ensure the confidentiality, integrity and availability of our IT systems,
both internally and as part of our service offerings to customers.
2. Global macro-economic events We may be affected by:
• the instability of the financial system, market disruptions or
suspensions;
• a material downturn in the financial markets or an economic recession;
• the insolvency, closure, consolidation or rationalisation of parts of
our customer base;
• increased geopolitical instability; or
• major changes in UK Government structure, such as the reorganisation
of key public sector bodies (e.g. the merger of NHS England into the
Department of Health and Social Care).
3. Exchange rate fluctuations There is a risk of material detrimental movement in foreign exchange rates.
4. Partner relationships Our partner arrangements may include access to proprietary materials such as
training, know-how or branding, which we require to deliver or enhance our
services. A deterioration in strategic partner relationships could result in
us losing access to essential intellectual property or services, which could
impact partner-influenced sales.
5. Increasing complexity of global data protection laws We need to comply with legal, regulatory and contractual information security
and data privacy requirements. In Europe, GDPR mandates a suite of data
privacy controls to mitigate the risk of unauthorised disclosure of personal
information. Other jurisdictions have similar measures and as we expand into
new regions, it is imperative that we understand and adhere to the applicable
controls.
6.Long-term climate change and sustainability With investors and other stakeholders increasingly focusing on sustainability
and climate, there is reputational risk for us if we decide not to act or act
too slowly.
7. Non-compliance with laws and regulations We must comply with laws and regulations applicable to us and design our
products and services to comply with laws and regulations applicable to our
customers.
8. Unsafe use of AI Using AI technology without appropriate safeguards or ethical considerations
could lead to the mishandling of sensitive data, privacy violations and
reputational damage through bias, discrimination or use of technology which
does not consider ethical concerns.
9. Increasing customer demands in a competitive skills market Demand for skills in areas such as business development, low code, data and
AI, cyber security and application development may introduce challenges when
recruiting new people and retaining our current skilled employees.
Going concern
As further outlined in note 2 to the condensed consolidated financial
statements, the Directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, which is a
period of not less than 12 months from the date of this report. Accordingly,
they continue to adopt the going concern basis in preparing the condensed
consolidated financial statements.
Condensed consolidated income statement for the six months ended 30 September 2025
Continuing operations Note 6 months to 6 months to 12 months to
30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
Revenue 5 196,135 183,113 367,246
Cost of sales 5 (101,970) (91,065) (191,337)
Gross profit 94,165 92,048 175,909
Operating expenses
Restructuring costs - - (8,411)
Other operating expenses (68,292) (61,929) (125,643)
Total operating expenses (68,292) (61,929) (134,054)
Impairment gain (including amounts recovered) on trade receivables and accrued 215 738 678
income
Operating profit 26,088 30,857 42,533
Finance income 2,474 3,509 6,440
Finance expense (194) (164) (333)
Profit before tax 28,368 34,202 48,640
Income tax expense 6 (7,788) (8,777) (13,080)
Profit for the period 20,580 25,425 35,560
Profit attributable to equity holders of the parent Company
Condensed consolidated statement of comprehensive income for the six months ended 30 September 2025
6 months to 6 months to 12 months to 31 Mar 2025
30 Sep 2025 30 Sep 2024 (audited)
(unaudited) (unaudited) (£000s)
(£000s) (£000s)
Profit for the period 20,580 25,425 35,560
Items that may be reclassified subsequently to profit or loss:
Foreign operations - foreign currency translation differences 464 (2,110) (1,595)
Total comprehensive income for the period 21,044 23,315 33,965
Total comprehensive income attributable to equity holders of the parent
Company
Earnings per share
Basic 8 17.0p 20.3p 28.4p
Diluted 8 16.7p 20.1p 28.2p
Condensed consolidated statement of financial position as at 30 September 2025
Note 30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
Non-current assets
Goodwill 42,778 36,415 37,313
Other intangible assets 11,364 4,507 4,239
Property, plant and equipment 13,599 12,156 12,145
Right-of-use assets 4,370 5,356 4,718
Investments in equity instruments 1,299 1,299 1,299
Deferred tax asset 4,550 5,406 4,911
77,960 65,139 64,625
Current assets
Trade and other receivables 9 42,232 36,588 38,520
Prepayments 7,671 5,419 7,553
Accrued income 35,726 31,422 22,673
Cash and cash equivalents 100,001 137,141 128,288
Treasury deposits 5,498 14,435 5,399
191,128 225,005 202,433
Total assets 269,088 290,144 267,058
Current liabilities
Trade payables and accruals (57,578) (38,407) (54,269)
Dividend payable 7 (22,935) (24,027) -
Share buyback liability 14 (9,158) - -
Deferred income (49,803) (40,980) (46,358)
Current tax liabilities (4,792) (8,094) (2,526)
Lease liabilities (1,229) (1,201) (1,246)
Provisions (1,070) - (5,388)
Other tax and social security (8,541) (10,041) (11,452)
(155,106) (122,750) (121,239)
Non-current liabilities
Provisions (1,579) (1,524) (1,546)
Deferred tax liability (3,731) (1,738) (1,976)
Lease liabilities (4,056) (4,838) (4,312)
(9,366) (8,100) (7,834)
Total liabilities (164,472) (130,850) (129,073)
Net assets 104,616 159,294 137,985
Equity
Share capital 598 629 618
Share premium account 9,511 9,503 9,481
Other reserves 7,358 3,548 3,562
Share-based payment reserve 39,183 34,323 36,907
Shares held to be cancelled 14 (9,552) - (1,431)
Translation reserve (1,166) (2,145) (1,630)
Retained earnings 58,684 113,436 90,478
Total equity 104,616 159,294 137,985
Condensed consolidated statement of changes in equity for the six months ended 30 September 2025
Share Shares held Share Other Share-based Translation reserve Retained Total
capital to be cancelled premium reserves payment earnings equity
(£000s)(( 5 (#_ftn5) )) reserve
(£000s) (£000s) (£000s) (£000s) (£000s) (£000s) (£000s)
Balance at 31 March 2024 (audited) 629 - 9,419 3,548 31,228 (35) 112,024 156,813
Profit for the period - - - - - - 25,425 25,425
Other comprehensive income - - - - - (2,110) - (2,110)
Total comprehensive income for the period - - - - - (2,110) 25,425 23,315
Equity settled share-based payments - - - - 3,095 - - 3,095
Current tax for equity-settled share-based payments - - - - - - 14 14
Issue of share capital - share options exercised - - 84 - - - - 84
Dividends - - - - - - (24,027) (24,027)
Balance at 30 September 2024 (unaudited) 629 - 9,503 3,548 34,323 (2,145) 113,436 159,294
Profit for the period - - - - - - 10,135 10,135
Other comprehensive income - - - - - 515 - 515
Total comprehensive income for the period - - - - - 515 10,135 10,650
Equity settled share-based payments - - - - 2,584 - - 2,584
Current tax for equity-settled share-based payments - - - - - - 7 7
Deferred tax for equity-settled share-based payments - - - - - - (25) (25)
Issue of share capital - share options exercised 3 - (22) - - - - (19)
Share buyback programme - (22,785) - - - - - (22,785)
Shares cancelled (14) 21,354 - 14 - - (21,354) -
Dividends - - - - - - (11,721) (11,721)
Balance at 31 March 2025 (audited) 618 (1,431) 9,481 3,562 36,907 (1,630) 90,478 137,985
Profit for the period - - - - - - 20,580 20,580
Other comprehensive income - - - - - 464 - 464
Total comprehensive income for the period - - - - - 464 20,580 21,044
Equity settled share-based payments - - - - 2,276 - - 2,276
Issue of share capital - share options exercised - - 30 - - - - 30
Share buyback programme - (37,560) - - - - - (37,560)
Shares cancelled (20) 29,439 - 20 - - (29,439) -
Issue of shares as purchase consideration - - - 3,776 - - - 3,776
Dividends - - - - - - (22,935) (22,935)
Balance at 30 September 2025 (unaudited) 598 (9,552) 9,511 7,358 39,183 (1,166) 58,684 104,616
Condensed consolidated statement of cash flows for the six months ended 30 September 2025
6 months to 6 months to 12 months to
30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
Cash flows from operating activities
Profit for the period 20,580 25,425 35,560
Adjustments for:
Finance income (2,474) (3,509) (6,440)
Finance expense 194 164 333
Tax expense 7,788 8,777 13,080
Share-based payment expense 2,872 3,104 5,930
Depreciation of property, plant and equipment 1,681 1,660 3,381
Depreciation of right-of-use assets 624 615 1,277
Gain on disposal of property, plant and equipment (117) - -
Amortisation of intangible assets 365 414 836
Post-acquisition remuneration to be settled by shares 34 - -
(Decrease)/increase in provisions (4,312) (18) 5,392
Operating cash flows before movements in working capital 27,235 36,632 59,349
(Increase)/decrease in trade and other receivables (including accrued income) (14,769) 6,654 10,912
Decrease/(increase) in trade and other payables (including deferred income) 2,766 (15,392) 1,513
Cash generated from operating activities 15,232 27,894 71,774
Income taxes paid (5,745) (8,753) (12,967)
Net cash from operating activities 9,487 19,141 58,807
Cash flows from investing activities
Interest received 2,251 3,202 6,027
Purchases of property, plant and equipment (2,976) (1,531) (3,369)
Proceeds from sale of investment property - 6,200 6,200
Proceeds from sale of property, plant and equipment 125 - -
Acquisition of subsidiaries net of cash acquired (7,720) - -
Amounts placed on treasury deposit (99) (10,032) (996)
Net cash (used in)/from investing activities (8,419) (2,161) 7,862
Cash flows from financing activities
Dividends paid - - (35,748)
Share buyback programme (28,235) - (22,552)
Interest paid (194) (164) (333)
Repayment of lease liabilities (752) (739) (1,121)
Proceeds on issue of shares 30 84 65
Net cash used in financing activities (29,151) (819) (59,689)
Net (decrease)/increase in cash and cash equivalents (28,083) 16,161 6,980
Cash and cash equivalents at start of period 128,288 121,558 121,558
Effect of exchange rate fluctuations on cash held (204) (578) (250)
Cash and cash equivalents at end of period 100,001 137,141 128,288
Notes to the condensed consolidated financial statements
1. Corporate information
Kainos Group plc ("Company") is a public company limited by shares
incorporated in the United Kingdom under the Companies Act 2006 and is
registered in England and Wales (Company registration number 09579188), having
its registered office at 21 Farringdon Road, 2nd Floor, London, EC1M 3HA. The
Company is listed on the London Stock Exchange.
These condensed consolidated financial statements for the six months ended 30
September 2025 comprise the Company and its subsidiaries (together the
"Group"). The nature of the Group's operations and its principal activities
are set out in the Group business review.
These statements have not been audited but have been reviewed by the Group's
auditor pursuant to International Standard on Review Engagements (UK) 2410
"Review of Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council.
These condensed consolidated financial statements were approved for issue on 7
November 2025.
2. Basis of preparation
The condensed consolidated financial statements for the six months ended 30
September 2025 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and with IAS 34 "Interim
Financial Reporting" under UK-adopted International Accounting Standards and
should be read in conjunction with the Group's last annual consolidated
financial statements as at and for the year ended 31 March 2025 ('last annual
financial statements'). They do not include all of the information required
for a complete set of financial statements prepared in accordance with
UK-adopted International Accounting Standards and in conformity with the
requirements of the Companies Act 2006. However, selected explanatory notes
are included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance
since the last annual financial statements.
These condensed consolidated financial statements do not constitute statutory
accounts of the Group within the meaning of Section 434 of the Companies Act
2006. The statutory accounts for the year ended 31 March 2025 have been filed
with the registrar of companies and can be found on the Group's website. The
auditor's report on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under Section
498(2) or (3) of the Companies Act 2006.
The annual statements of Kainos Group plc are prepared in accordance with
UK-adopted International Accounting Standards.
Going concern
Having reviewed the future plans and projections for our business and our
current financial position, the Directors believe that we are well placed to
manage our business risks successfully. We have adequate financial resources,
no borrowings, a good level of recurring revenue, and a broad spread of
customers.
At 31 March 2025, the Directors assessed the Group's viability over a longer
period to March 2028. The review included sensitivity analysis on the future
performance and solvency over three years and for the principal and emerging
risks facing the business in severe but reasonable scenarios.
In performing this assessment, our long-term strategy and focus, the demand
for our products and services, the level of recurring revenue and strong
customer retention, the track record of strong cash generation and a healthy
cash balance with no debt from financial institutions were all taken into
consideration. Consideration was also given to the risks of regional and
political changes in our main markets.
Based on the results of this assessment, the Directors had a reasonable
expectation that should these risks, either all or in part manifest
themselves, the resulting adverse outcomes can be managed and mitigated such
that, the Group and Company will be able to continue in operation and meet
their liabilities as they fall due over the period of their assessment. In
doing so, we note that such future assessments are subject to a level of
uncertainty that increases with time and, therefore, future outcomes cannot be
guaranteed or predicted with certainty.
As a consequence of these factors and having reviewed the forecasts for the
coming year, the Directors have a reasonable expectation that we have adequate
resources to continue in operational existence for the foreseeable future, a
period of not less than 12 months from the date of this Interim Report. For
this reason, we continue to adopt the going concern basis of accounting in
preparing our financial statements.
3. Material accounting policies
Except for as detailed below, the accounting policies, presentation and
methods of computation applied by the Group in these condensed consolidated
financial statements are the same as those applied in the Group's latest
audited annual consolidated financial statements for the year ended 31 March
2025.
UK- adopted IFRS
Adoption of new UK-adopted IFRS Standards, interpretations and amendments
effective in the current financial period have not had a material impact on
the condensed consolidated interim financial statements. The Group has not
applied any other standards, interpretations or amendments that have been
issued but are not yet effective.
The impact of the following is under assessment:
IFRS18 Presentation and disclosure in financial statements
IFRS18 Primary Financial Statements, will replace IAS1 Presentation of
Financial Statements, and will become effective in the Group financial
statements for the financial year ending 31 March 2028, subject to UK
endorsement.
The new standard introduces the following key new requirements.
- Entities are required to classify all income and expenses into five categories
in the statement of profit or loss, namely the operating, financing,
discontinued operations and income tax categories. Entities are also required
to present a newly-defined operating profit subtotal. Entities' net profit
will not change.
- Management defined performance measures (MPMs) are disclosed in a single note
in the financial statements.
- Enhanced guidance is provided on how to group information in the financial
statements.
In addition, all entities are required to use the operating profit subtotal as
the starting point for the statement of cash flows when presenting operating
cash flows under the indirect method.
The Group is still in the process of assessing the impact of the new standard,
particularly with respect to the structure of the Group's consolidated income
statement, the statement of cash flows and the additional disclosures required
for MPMs. The Group is also assessing the impact on how information is grouped
in the financial statements, including for items currently labelled as
'other'.
Other standards, interpretations and amendments issued but not yet effective
are not expected to have a material impact.
Income tax
The policy for recognising and reassessing income taxes in the interim period
is consistent with that applied in the previous period as described in note 6.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, the
significant judgements made by management in applying the Group's accounting
policies and key sources of estimation uncertainty were the same as those
applied to the statutory accounts for the year ended 31 March 2025.
5. Segment reporting
All our revenue for the six-month period to 30 September 2025 was derived from
continuing operations.
The Group's Executive Directors are considered to be the Chief Operating
Decision Maker ('CODM') of the Group. They use internal management reports to
assess both performance and strategy of the Group and the three specialist
business areas: Digital Services, Workday Services and Workday Products.
The following is an analysis of the Group's revenue and results by reportable
segment:
Digital Services Workday Services Total
2025 (£000s) (£000s) Workday (£000s)
6 months to 30 September (unaudited) Products
(£000s)
Revenue 103,531 53,376 39,228 196,135
Cost of sales (66,431) (26,798) (8,741) (101,970)
Gross profit 37,100 26,578 30,487 94,165
Direct expenses(( 6 (#_ftn6) )) (13,651) (17,523) (19,362) (50,536)
Contribution 23,449 9,055 11,125 43,629
Depreciation of property, plant and equipment (1,681)
Central overheads(()(6)) (12,198)
Net finance income 2,280
Adjusted profit before tax 32,030
Share-based payment expense and related costs (2,872)
Amortisation of acquired intangible assets (365)
Compensation for post-combination services (285)
Acquisition-related expenses (140)
Profit before tax 28,368
Digital Workday Services Total
2024 Services (£000s) Workday (£000s)
6 months to 30 September (unaudited) (£000s) Products
(£000s)
Revenue 97,271 51,542 34,300 183,113
Cost of sales (59,967) (23,693) (7,405) (91,065)
Gross profit 37,304 27,849 26,895 92,048
Direct expenses((6)) (11,208) (17,401) (15,761) (44,370)
Contribution 26,096 10,448 11,134 47,678
Depreciation of property, plant and equipment (1,660)
Central overheads((6)) (11,213)
Net finance income 3,345
Adjusted profit before tax 38,150
Share-based payment expense and related costs (3,104)
Amortisation of acquired intangible assets (414)
Compensation for post-combination services (414)
Acquisition-related expenses (16)
Profit before tax 34,202
2025 Digital Services Workday Workday
12 months to 31 March (£000s) Services Products Total
(audited) (£000s) (£000s) (£000s)
Revenue 197,173 98,725 71,348 367,246
Cost of sales (125,438) (47,647) (18,252) (191,337)
Gross profit 71,735 51,078 53,096 175,909
Direct expenses((6)) (21,546) (33,491) (33,615) (88,652)
Contribution 50,189 17,587 19,481 87,257
Depreciation of property, plant and equipment (3,381)
Central overheads((6)) (24,341)
Net finance income 6,107
Adjusted profit before tax 65,642
Share-based payments expense and related costs (5,930)
Amortisation of acquired intangible assets (836)
Compensation for post-combination services (877)
Acquisition-related expenses (948)
Restructuring costs (8,411)
Profit before tax 48,640
The Group's revenue from external customers by geographic location is detailed
below:
6 months to 6 months to 12 months to
30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
United Kingdom & Ireland 111,267 107,679 217,374
North America 66,236 55,752 114,392
Central Europe 16,583 19,072 33,710
Rest of world 2,049 610 1,770
196,135 183,113 367,246
Disaggregation of the Group's revenue is presented in the following tables:
Digital Services Workday Services Workday Total
6 months to (£000s) (£000s) Products (£000s)
30 September 2025 (unaudited) (£000s)
Type of revenue
Services 99,301 51,141 1,168 151,610
Subscriptions - - 38,060 38,060
Third party & other 4,230 2,235 - 6,465
103,531 53,376 39,228 196,135
Digital Services Workday Services Workday Total
6 months to (£000s) (£000s) Products (£000s)
30 September 2024 (unaudited) (£000s)
Type of revenue
Services 93,004 50,139 1,990 145,133
Subscriptions - - 32,310 32,310
Third party & other 4,267 1,403 - 5,670
97,271 51,542 34,300 183,113
Digital Services Workday Services Workday Total
12 months to (£000s) (£000s) Products (£000s)
31 March 2025 (audited) (£000s)
Type of revenue
Services 188,451 95,047 4,061 287,559
Subscriptions - - 67,287 67,287
Third party & other 8,722 3,678 - 12,400
197,173 98,725 71,348 367,246
6 months to 6 months to 12 months to
30 Sep 2025 30 Sep 2024 31 Mar 2025 (audited)
(unaudited) (unaudited) (£000s)
(£000s) (£000s)
Digital Services
Public 65,088 62,046 125,502
Commercial 7,624 11,643 21,030
Healthcare 30,819 23,582 50,641
103,531 97,271 197,173
Workday Services
Public - 53 35
Commercial 53,376 51,480 98,575
Healthcare - 9 115
53,376 51,542 98,725
Workday Products
Public - - -
Commercial 39,209 34,260 71,267
Healthcare 19 40 81
39,228 34,300 71,348
Group
Public 65,088 62,099 125,537
Commercial 100,209 97,383 190,872
Healthcare 30,838 23,631 50,837
Total 196,135 183,113 367,246
Revenue for Digital Services is now shown separately for the North America
region, reflecting its increasing strategic and operational importance:
6 months to 6 months to 12 months to
30 Sep 2025 30 Sep 2024 31 Mar 2025 (unaudited)
(unaudited) (unaudited) (£000s)
(£000s) (£000s)
Digital Services
Public 59,719 61,368 122,145
Commercial 6,399 10,522 17,965
Healthcare 29,616 22,255 48,210
North America 7,797 3,126 8,853
103,531 97,271 197,173
6. Income tax expense
The estimate of the provision of income taxes which is determined in the
interim financial statements uses the estimated average annual effective
income tax rate applied to the profit before tax of the interim period,
adjusted for the tax effect of certain items recognised in full in the interim
period. As such, the effective tax rate in the interim financial statements
may differ from management's estimate of the effective tax rate for the annual
financial statements.
The total tax charge for the six months ended 30 September 2025 is £7.8
million (H1 25: £8.8 million). This tax charge equates to an effective tax
rate of 27% (H1 25: 26%).
The expected annual tax rate for the year to 31 March 2026 is 27% (31 March
2025: 26%), which is higher than the UK corporation tax rate, primarily due to
the impact of higher tax rates in the United States.
7. Dividends
The dividends declared in the periods covered by these condensed consolidated
financial statements are detailed below:
6 months to 6 months to 30 Sep 2024 12 months to
30 Sep 2025 (unaudited) 31 Mar 2025
(unaudited) (£000s) (audited)
(£000s) (£000s)
Amounts recognised as distributions to equity holders in the period:
Final dividend for 2025 of 19.1p per share 22,935 - -
Interim dividend for 2025 of 9.3p per share - - 11,721
Final dividend for 2024 of 19.1p per share - 24,027 24,027
22,935 24,027 35,748
A final dividend of 19.1 pence per share for the year ended 31 March 2025 was
paid on 24 October 2025 to shareholders on the register at the close of
business on 3 October 2025, with an ex-dividend date of 2 October 2025. This
dividend was declared following approval by the shareholders of the Company by
ordinary resolution at the Company's Annual General Meeting on 23 September
2025 and a liability for payment of the dividend of £22.9 million has
therefore been recognised in these condensed consolidated financial
statements.
An interim dividend of 9.8 pence per share has been declared on 7 November
2025 for the six months to 30 September 2025 which amounts to £11.7 million.
This will be paid on 12 December 2025 to shareholders on the register at the
close of business on 21 November 2025, with an ex-dividend date of 20 November
2025. These condensed consolidated financial statements do not reflect the
interim dividend payable.
8. Earnings per share
Basic
The calculation of basic earnings per share (EPS) has been based on the
following profit attributable to ordinary shareholders and weighted-average
number of ordinary shares outstanding.
6 months to 6 months to 12 months to 31 Mar 2025
30 Sep 2025 30 Sep 2024 (audited)
(unaudited) (unaudited) (£000s)
(£000s) (£000s)
Profit for the period 20,580 25,425 35,560
Thousands Thousands Thousands
Issued ordinary shares at 1 April 123,620 125,788 125,788
Effect of shares held in trust (921) (826) (882)
Effect of share options vested and exercised 391 396 418
Effect of shares issued related to a business combination 35 32 58
Effect of shares issued related to free share awards - - 122
Effect of share buyback programme (2,036) - (468)
Weighted average number of ordinary shares 121,089 125,390 125,036
Basic earnings per share 17.0p 20.3p 28.4p
Diluted
The calculation of diluted EPS has been based on the following profit
attributable to ordinary shareholders and the weighted-average number of
ordinary shares outstanding after adjustments for the effects of all dilutive
potential ordinary shares.
6 months to 30 Sep 2025 6 months to 30 Sep 2024 12 months to 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
Profit for the period 20,580 25,425 35,560
Thousands Thousands Thousands
Weighted average number of ordinary shares (basic) 121,089 125,390 125,036
Effect of share options in issue 1,579 275 228
Effect of shares held in trust 921 826 882
Effect of potential shares to be issued related to a business combination 12 131 -
Weighted average number of ordinary shares (diluted) 123,601 126,622 126,146
Diluted earnings per share 16.7p 20.1p 28.2p
The average market value of the Company's shares for the purpose of
calculating the dilutive effect of share options was based on quoted market
prices for the period during which the options were outstanding.
At 30 September 2025, no options (H1 25: 1,464,231) were excluded from the
diluted weighted average number of ordinary shares calculation because their
effect would have been anti-dilutive.
Adjusted
Adjusted basic and adjusted diluted earnings per share is calculated using the
adjusted profit after tax for the period measure. The calculation of adjusted
profit after tax for the period is detailed in the Financial review section of
this report.
6 months to 6 months to 12 months to
30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (unaudited)
(£000s) (£000s) (£000s)
Adjusted profit after tax for the period 23,360 28,485 48,304
Thousands Thousands Thousands
Weighted average number of ordinary shares for the purposes of basic earnings 121,089 125,390 125,036
per share
Weighted average number of ordinary shares for the purposes of diluted 123,601 126,622 126,146
earnings per share
Adjusted basic earnings per share 19.3p 22.7p 38.6p
Adjusted diluted earnings per share 18.9p 22.5p 38.3p
9. Trade and other receivables
30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
Trade receivables 34,280 28,587 31,481
Other receivables 7,952 8,001 7,039
42,232 36,588 38,520
10. Acquisitions
On 15 September 2025, the Group acquired 100% of the share capital of Davis
Pierrynowski Limited ("Davis Pier"), a Canadian consultancy company known for
its work in the Canadian public sector.
Founded in Halifax, Nova Scotia in 2014, Davis Pier brings deep expertise in
policy, service design and change management. This acquisition marks a
significant step in Kainos' North American growth strategy, strengthening its
presence in Canada and expanding its capabilities in delivering transformation
across public, healthcare and community services.
From 15 September 2025, Davis Pier has contributed revenue of £0.4 million
and £0.1 million profit for the period. If the acquisition had occurred on 1
April 2025, management estimates that consolidated revenue for the six months
ended 30 September 2025 would have been £202.3 million and consolidated
profit for the period would have been £21.7 million.
The following table summarises the recognised amounts of assets and
liabilities assumed at the acquisition date. Due to the close proximity of the
acquisition date and the reporting date, the quantification of the fair value
of the assets acquired and liabilities assumed at the acquisition date,
including fair value of intangible assets and any associated deferred tax, has
not been finalised at the reporting date. Accordingly, the amounts in the
table below have been determined on a provisional basis and amounts including
goodwill are subject to change following completion of the fair value
assessment.
Fair value of identifiable net assets acquired Provisional
fair value
(unaudited)
(£000s)
Property, plant and equipment 167
Right-of-use asset 390
Cash and cash equivalents 931
Trade and other receivables 1,004
Intangible assets 7,617
Deferred tax liability (2,210)
Lease liability (364)
Deferred income (423)
Trade and other payables (2,120)
Fair value of net identifiable assets 4,992
Goodwill 6,086
Total consideration 11,078
(unaudited)
Satisfied by: (£000s)
Cash 7,302
Deferred consideration: issue of 426,691 shares 3,776
Total consideration 11,078
Outflow of cash and cash equivalents (unaudited)
(£'000s)
Cash consideration 7,302
Repayment of existing debt 1,349
Less cash and equivalents acquired (931)
Net cash outflow 7,720
Deferred consideration
Under the terms of the acquisition, the Group has agreed to issue a fixed
number of ordinary shares (426,691 ordinary shares) as purchase consideration.
As detailed in note 13, these ordinary shares were not issued and allotted
until subsequent to the period end, on 2 October 2025. The instrument has been
classified as equity as it represents an obligation to deliver a fixed number
of shares to settle the purchase consideration and has been recognised in
equity in the 'shares to be issued' reserve.
The fair value of the ordinary shares to be issued was determined based on the
listed share price of the Company on 15 September 2025 (£8.86 per share), the
effective date of control. Following initial recognition, the value of the
ordinary shares to be issued is not remeasured and its subsequent settlement
is accounted for within equity.
Goodwill
Goodwill has arisen on the acquisition and reflects the future economic
benefits arising from assets that are not capable of being identified
individually and recognised as separate assets and is pending finalisation of
the fair value of the assets acquired and liabilities assumed at the
acquisition date. The goodwill reflects the skilled and assembled workforce of
the acquired entity and the anticipated profitability and synergistic benefits
arising from the combination. None of the goodwill recognised is expected to
be deductible for tax purposes.
Acquisition related costs
The Group incurred acquisition related costs of £0.1 million on legal and due
diligence costs. These costs have been included in operating expenses.
ompensation for post combination remuneration
In connection with the Group's current and prior acquisitions, additional
compensation for post-combination services of up to £5.5 million (H1 25:
£3.1 million) will be payable in future periods to September 2028, subject to
future service conditions being met. Amounts relating to compensation for
post-combination services are recognised as an expense over the service
period. During the period, a charge of £0.3 million (H1 25: £0.4 million)
has been recognised within operating expenses for compensation for
post-combination services.
11. Financial Instruments
The Directors consider that the carrying amounts for all financial assets and
liabilities is a reasonable approximation of their fair value.
12. Related party transactions
There have been no related party transactions during the six months to 30
September 2025 that have materially affected the financial position or
performance of the Group.
No share options were exercised by Directors during the period (H1 25: nil
options).
All related party transactions are materially consistent with those disclosed
by the Group in its financial statements for the year ended 31 March 2025.
13. Issue of ordinary shares
During the six months ended 30 September 2025, the Group issued 51,577
ordinary shares (H1 25: 24,505 shares) due to the exercise of vested options.
The weighted average exercise price of options exercised in the period was
£0.97 per share (H1 25: £2.51 per share).
The Group issued no ordinary shares in respect of post-acquisition
remuneration in the period (H1 25: 32,382). 426,691 ordinary shares were
agreed to be issued as purchase consideration on the acquisition of Davis Pier
which occurred on 15 September 2025 (note 10). These ordinary shares were not
issued and allotted until subsequent to the period end, on 2 October 2025. The
fair value of the shares has been determined based on the acquisition date
(£3.8 million) and recognised in equity in the 'shares to be issued' reserve.
All ordinary shares were issued with a nominal value of £0.005 each.
14. Share buyback programme
On 9 May 2025, the Group completed the share buyback programme announced on 11
November 2024. As part of this programme, a total of 3,993,382 shares were
bought back for consideration of £30.2 million, including transaction costs
(£0.2 million), of which 1,054,544 shares were purchased during the period
for consideration of £7.4 million, including transaction costs.
On 19 May 2025, the Board announced a further £30.0 million share buyback
programme to be executed over a period of six months. As at 30 September 2025,
a total of 2,738,434 shares have been purchased for consideration of £20.9
million, including transaction costs of £0.1 million. However, due to timing,
only 2,694,944 were cancelled at 30 September 2025 and the remaining 43,490
shares purchased for £0.4 million were cancelled in October 2025. The share
buyback programme is due to complete on the earlier of reaching the maximum of
£30.0 million or 18 November 2025. The Group entered into an irrevocable and
non-discretionary arrangement with its broker, Investec Bank plc, to execute
the share buyback programme. A financial liability of £9.2 million has been
recognised at 30 September 2025, representing the remaining irrevocable
obligation to acquire shares under the buyback agreement to 18 November 2025.
Details of shares bought back since 30 September 2025 are included in note 16.
The sole purpose of the share buyback programmes is to reduce the share
capital of the Company, with all shares subsequently cancelled.
The table below presents the reconciliation of own shares purchased for
cancellation between the consolidated statement of changes in equity and the
consolidated statement of cash flows:
30 Sep 2025 30 Sep 2024 31 Mar 2025
(unaudited) (unaudited) (audited)
(£000s) (£000s) (£000s)
Own shares purchased for cancellation
Included in the consolidated statement of changes in equity (ab) (37,560) - (22,785)
Payments in relation to prior year financial liabilities (233) - -
Outstanding amount recognised as financial liabilities (c) 9,558 - 233
Included in the consolidated statement of cash flows (d) (28,235) - (22,552)
(a) 3,792,978 (H1 25: nil) ordinary shares were purchased, representing
approximately 3.2% of the called-up share capital as at 30 September 2025 (H1
25: £Nil). This includes 43,490 ordinary shares purchased but not cancelled
as at 30 September 2025 and a liability of £9.2 million representing the
remaining, committed purchase of shares to the completion of the programme.
Expenses of £0.2 million (H1 25: £Nil), were incurred and recognised in the
shares held to be cancelled reserve.
(b) During the period, the aggregate nominal value of shares cancelled and
transferred to the capital redemption reserve was £20.0 thousand (H1 25:
£Nil).
(c) Comprises £0.4 million (H1 25: £Nil, 31 March 2025 £0.2 million) as
consideration for shares purchased at period end, not yet settled, included in
trade and other payables; together with share buyback liability of £9.2m for
the remaining irrevocable obligation to acquire shares under the buyback
agreement.
(d) 3,749,488 (2024: nil) ordinary shares purchased at an average price of
£7.41 per share.
Details of shares bought back since 30 September 2025 are included in note 16.
15. Contractual commitments
During FY25, the Group entered into a strategic partnership agreement with
Workday, Inc. under which the Group is committed to incurring a total minimum
expenditure of £23.6 million over three years. £12.4 million remains
committed as at 30 September 2025 (H1 25: £21.8 million)
£34.3 million of capital commitments exist at 30 September 2025 (H1 25: £0.8
million) in connection with the construction of the Group's new headquarters
in Belfast.
16. Subsequent events
Subsequent to 30 September 2025, the Company paid the final dividend of £22.9
million in respect of the year ended 31 March 2025. As detailed in note 7,
this dividend was declared at the Annual General Meeting on 23 September 2025
and paid to shareholders on 24 October 2024.
The Company bought back, for cancellation, 741,111 ordinary shares at a cost
of £7.1 million between 1 October 2025 and 7 November 2025.
Furthermore, on 7 November 2025, the Board of Directors approved the
commencement of another £30.0 million share buyback programme, with effect
from the end of the current buyback programme on 19 November, to be executed
over a period of six months. The sole purpose of the programme is to reduce
the Company's share capital, and any shares purchased for this purpose will be
cancelled.
Statement of Directors responsibilities
The Directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA").
In preparing the condensed set of consolidated financial statements included
within the half-yearly financial report, the Directors are required to:
· prepare and present the condensed set of consolidated financial
statements in accordance with IAS 34 Interim Financial Reporting as adopted
for use in the UK and the DTR of the UK FCA;
· ensure the condensed set of consolidated financial statements has
adequate disclosures;
· select and apply appropriate accounting policies;
· make accounting estimates that are reasonable in the circumstances;
and
· assess the entity's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the entity or to cease operations, or have no realistic alternative
but to do so.
The Directors are responsible for designing, implementing and maintaining such
internal controls as they determine is necessary to enable the preparation of
the condensed set of consolidated financial statements that is free from
material misstatement whether due to fraud or error.
We confirm that to the best of our knowledge:
(1) the condensed set of consolidated financial statements included within
the half-yearly financial report of Kainos Group plc for the six months ended
30 September 2025 ("the interim financial information") which comprises the
condensed consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated statement of financial
position, the condensed consolidated statement of changes in equity, the
condensed consolidated statement of cash flows and the related explanatory
notes, have been presented and prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted for use in the UK, and the DTR of the UK FCA.
(2) The interim financial information presented, as required by the DTR of
the UK FCA, includes:
a. an indication of important events that have occurred during the first six
months of the financial year, and their impact on the condensed set of
consolidated financial statements;
b. a description of the principal risks and uncertainties for the remaining
six months of the financial year;
c. related parties' transactions that have taken place in the first six
months of the current financial year and that have materially affected the
financial position or the performance of the enterprise during that period;
and
d. any changes in the related parties' transactions described in the last
annual report that could have a material effect on the financial position or
performance of the enterprise in the first six months of the current financial
year.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Entity's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
On behalf of the Board
Richard McCann
Chief Financial Officer/Chief Operating Officer
7 November 2025
Independent Review Report to Kainos Group plc ("the Entity").
Conclusion
We have been engaged by the Entity to review the Entity's condensed set of
consolidated financial statements in the half-yearly financial report for the
six months ended 30 September 2025 which comprises the condensed consolidated
statement of comprehensive income, the condensed consolidated statement of
financial position, the condensed consolidated statement of changes in equity,
the condensed consolidated statement of cash flows, a summary of significant
accounting policies and other explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of consolidated financial statements in the
half-yearly financial report for the six months ended 30 September 2025 is not
prepared, in all material respects in accordance with International Accounting
Standard 34 Interim Financial Reporting ("IAS 34") as adopted for use in the
UK and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's
Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the UK.
A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Entity to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Entity will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
The directors are responsible for preparing the condensed set of consolidated
financial statements included in the half-yearly financial report in
accordance with IAS 34 as adopted for use in the UK.
As disclosed in note 2, the annual financial statements of the Entity for the
period ended 31 March 2025 are prepared in accordance with UK-adopted
International Accounting Standards.
In preparing the condensed set of consolidated financial statements, the
directors are responsible for assessing the Entity's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend
to liquidate the Entity or to cease operations, or have no realistic
alternative but to do so.
Our responsibility
Our responsibility is to express to the Entity a conclusion on the condensed
set of consolidated financial statements in the half-yearly financial report
based on our review.
Our conclusion, including our conclusions relating to going concern, are based
on procedures that are less extensive than audit procedures, as described in
the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Entity in accordance with the terms of our
engagement to assist the Entity in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Entity
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Entity for our review work, for this
report, or for the conclusions we have reached.
KPMG
7 November 2025
Chartered Accountants
The Soloist Building
1 Lanyon Place
Belfast
BT1 3LP
(#_ftnref1) (( 1 )) The Financial review section reconciles adjusted and
statutory profit measures. See also the definition of terms section for more
information on adjusted measures and other key terms and metrics used in this
report.
(#_ftnref2) ((( 2 ))) Includes £5.5 million (H1 25: £14.4 million) of
treasury deposits which do not meet the definition of cash and cash
equivalents.
(#_ftnref3) (( 3 )) Digital Services' sectoral revenues for H1 25 have been
represented to exclude North America, which we now report separately.
(#_ftnref4) ((( 4 ))) See the definition of terms for more information on how
Net Promoter Score is calculated.
(( 5 (#_ftnref5) ))()) Shares purchased not yet cancelled plus shares
irrevocably committed to be purchased as part of the current share buyback
programme.
(#_ftnref6) ( 6 ) Direct expenses plus central overheads (including
depreciation) plus balances below adjusted profit equals the sum of operating
expenses plus impairment gain/(loss) and reversals on trade receivables and
accrued income. Direct expenses are expenses that are directly attributable to
each division.
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. END IR UKRKRVKUARRA
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