REG - Kainos Group plc - Year-end Trading Update

KainosAnnouncement

14/04/2025 07:00

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RNS Number : 7947E  Kainos Group plc  14 April 2025

14 April 2025

Kainos Group plc

("Kainos" or the "Company")

 

Year-end Trading Update

 

Kainos Group plc (KNOS), a UK-headquartered IT provider with expertise across
three divisions, Digital Services, Workday Services, and Workday Products,
today issues a trading update for the year ended 31 March 2025.

 

Following a solid Q4 performance, underpinned by a disciplined approach to
costs, the Board expects to deliver revenues and adjusted PBT in line with
consensus forecasts*.

 

·      Overall, our business improved in the final quarter of the
financial year, recording low-single-digit percentage growth. We believe that
given the volatile macro-economic environment, we have maintained an
appropriate balance between growth, international expansion, investment for
the future and profitability.

 

·      Once again, our Workday Products division delivered a very strong
financial performance, achieving Annual Recurring Revenue (ARR) in excess of
£72m at period end. Our Built on Workday partnership continues to progress
well and positions Kainos strongly to meet our initial ARR goal of £100
million by 2026 and advance toward our ambitious target of £200m ARR by 2030.

 

·      In Digital Services, following the election-related hiatus, our
public sector revenues returned to growth in H2 and our team continues to work
hard to position Kainos to benefit from the UK Government's commitment to
improving public services through digital transformation. Our healthcare
revenues continued to grow strongly, and we recorded very strong growth in our
international-related revenues.  Within commercial sector, activity remained
well below prior-year levels.

 

·      As previously noted, demand in our Workday Services division has
remained subdued, leading to further reductions in H2.  As market-related
pressures have started to moderate, we are cautiously encouraged by signs of
recovery and increasing activity across our international customer base,
including recent wins in Australia and New Zealand.

 

Kainos continues to operate in markets where there are clear long-term
structural drivers, including the emerging opportunities presented by the
wider adoption of AI.  We remain confident in our strategy to deliver against
these opportunities.

 

Our long-term customer relationships and the commitment of our people continue
to drive valuable outcomes. As always, we are grateful for the trust our
customers place in us and the support and resilience of our colleagues -
particularly in the wake of the recent restructuring, which saw 190 people
leave Kainos as part of the organisational changes.

 

We continue to be supported by a robust backlog and pipeline, along with a
strong balance sheet and a disciplined approach to capital allocation.
Combined with healthy cash flow, these provide a solid foundation as we focus
on driving long-term value for shareholders.

 

Our results for the full year ended 31 March 2025 will be announced on 19 May
2025.

 

* Note: Company compiled range is based on known sell side analyst estimates
that have been updated since 01 November 2024. The ranges are: Revenue
£363.3m - £366.8m and Adjusted PBT £64.1m - £68.2m. The respective
consensus figures are £365.6m and £65.4m.

 

Kainos Group plc Legal Entity Identifier: 213800H2PQMIF3OVZY47

 

Ends

 

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 / Ben Griffiths / Nick Prowting

 

FTI Consulting
LLP
+44 20 3727 1000

Matt Dixon / Dwight Burden / Kwaku Aning

 

About Kainos

Kainos Group plc is a UK-headquartered provider of sophisticated IT services
to major public sector, commercial and healthcare customers.  Our expertise
spans three divisions:  Digital Services, Workday Services, and Workday
Products.

 

Digital Services: We develop and support custom digital service platforms that
transform service delivery in public, commercial, and healthcare sectors. Our
solutions ensure security, accessibility, cost-effectiveness, and improved
user outcomes.

 

Workday Services: Specialising in deploying Workday, Inc.'s Finance, HR, and
Planning products, we are a respected partner in Europe and North America.
Experienced in complex deployments, we are trusted to launch, test, expand,
and support Workday systems.

 

Workday Products: Our established product suite, incorporating Smart Test,
Smart Audit, and Smart Shield, complements Workday by enhancing system
security and compliance. Our Employee Document Management product, launched in
October 2023, improves document generation and storage within Workday while
supporting global compliance requirements. Over 450 global customers use one
or more of our products.

 

Our people are central to our success. We have more than 2,800 people in 20
countries across Europe, Asia, and the Americas.

 

We are listed on the London Stock Exchange (LSE: KNOS) and you can discover
more about us at www.kainos.com
(https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.kainos.com%2F&data=05%7C02%7CG.Poole%40kainos.com%7C99267121c31a49c8927908dc710fce0f%7C7ed9bdc7964d4dc09084812b90e05c6d%7C0%7C0%7C638509559890524754%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=HjbxpvmkdkY3EZWLoWMCMMrpxWfrEJkj6Rwmjx3luE4%3D&reserved=0)
.

 

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