Trading Statement
02/09/2024 07:00
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RNS Number : 3827C Kainos Group plc 02 September 2024
2 September 2024
Kainos Group plc
("Kainos" or the "Company")
Trading Update
Kainos Group plc (KNOS), a UK-headquartered IT provider with expertise across
three divisions - Digital Services, Workday Services, and Workday Products,
today issues a trading update for the period from 1 April 2024 to date and
updated guidance for FY2025.
For the year ending 31 March 2025, the Board expects to deliver adjusted PBT
in line with current market consensus forecasts, but due to the tougher
trading environment in services in the financial year to date, expects only a
small increase in overall revenues, which will be below current market
consensus forecasts.(*)
Given the current macro-economic environment, the Board continues to believe
that we are maintaining the appropriate balance between profitability,
investment for future growth and international expansion.
Financial year to date divisional performance and outlook
· In Digital Services, there has been sustained demand from our Public
Sector clients offset by some delays around project mobilisation as result of
the short-term impact of the UK General Election. Healthcare revenues
continue to grow while the previously announced weakness in demand within our
commercial clients continues as project related expenditure decision making is
delayed. Overall, there has been a subdued start to the year but expect to
see revenue growth over the remainder of this year.
· In Workday Services, we remain a leading partner in the Workday
consulting sector. Our win rate has remained robust, but contract wins and
values have been lower than in previous periods, and there has been more
aggressive pricing amongst partners. Cumulatively, this has impacted our
divisional performance in the short-term although we expect a return to growth
in the second half of the year.
· Our Workday Products division continues to deliver very strong
growth. Our enhanced strategic partnership with Workday to co-sell our
products (announced on 25 July 2024) has meaningfully increased our customer
reach, increased our ARR target from £100m to £200m and will accelerate the
recurring software proportion of group revenue beyond the previous 15% in
FY2024. In the 5 weeks since announcing the partnership, we have made
excellent progress with sales enablement and expect the upcoming Workday
Rising event to be a positive catalyst.
We look forward with confidence to the remainder of the year, supported by a
healthy pipeline, a strong balance sheet and significant contracted backlog.
Looking further ahead we are well positioned in our core markets which offer
substantial growth opportunities in all our divisions.
Our performance continues to be underpinned by our long-term customer
relationships, and the calibre of our people, who continue to excel in
delivering high-impact solutions for our customers. As always, we are
grateful for the ongoing trust of our customers and the efforts of our
colleagues across the world.
The announcement of our results for the six months ending 30 September 2024
will be made on 11 November 2024.
* Note: Company compiled range is based on known sell side analyst estimates
that were updated following the announcement of the Workday Strategic
Partnership in July 2024. The ranges are: Revenue £408.9m - £422.0m and
Adjusted PBT £78.5m - £79.7m. The respective consensus figures are
£415.5m and £79.1m. FY2024 reported revenue was £382.4m.
ENDS
For further information, please contact:
Kainos via FTI Consulting LLP
Russell Sloan, Chief Executive Officer
Richard McCann, Chief Financial Officer
Investec Bank plc +44 20 7597 5970
Patrick Robb / Ben Griffiths / Nick Prowting
FTI Consulting LLP +44 20 3727 1000
Dwight Burden / Kwaku Aning
About Kainos Group plc
Kainos Group plc is a UK-headquartered IT provider with expertise across three
divisions: Digital Services, Workday Services, and Workday Products.
· Digital Services develops and supports custom digital service
platforms for public sector, commercial, and healthcare customers. Our
solutions transform the delivery of these services, ensuring they are secure,
accessible, and cost-effective, and provide better outcomes for users.
· Workday Services specialises in the deployment of Workday, Inc.'s
Finance, HR and Planning products to leading organisations across Europe and
North America. We are one of Workday's most respected partners, experienced in
complex deployment and trusted by our customers to launch, test, expand, and
support their Workday systems.
· Workday Products develops products that complement Workday. Our
Smart product suite, including Smart Test (for automated testing), Smart Audit
(for compliance monitoring), and Smart Shield (for data masking), and Employee
Document Management, are used by more than 500 customers globally.
Our people are central to our success. We employ more than 2,900 people in 22
countries across Europe and the Americas.
We are listed on the London Stock Exchange (LSE: KNOS) and you can discover
more about us at www.kainos.com (http://www.kainos.com/) .
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