Trading Update
31/10/2024 07:00
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RNS Number : 3193K Kainos Group plc 31 October 2024
31 October 2024
Kainos Group plc
("Kainos" or the "Company")
Trading Update
Kainos Group plc (KNOS), a UK-headquartered IT provider with expertise across
three divisions - Digital Services, Workday Services, and Workday Products,
today issues an update on trading since 2 September 2024 and updated guidance
for the year ending 31 March 2025.
Whilst the Workday Products business continues to grow very strongly, our
Digital Services and Workday Services divisions continue to be affected by the
macro-economic environment and related delays in client decision-making.
Considering these factors, the Board has moderated its expectations for the
second half of the year and now expects that for the year ending 31 March
2025, we will deliver revenues moderately below current market consensus with
the majority of the reduction flowing through to adjusted PBT.
Divisional performance and outlook
· Our Workday Products division continues to deliver growth, with a
very strong performance recorded in the first half of the year. The July
announcement
(https://kainos2024eutfm.q4web.com/news/news-details/2024/Kainos-Group-plc---Workday-Partnership--Co-Sell-drives-200m-Target/default.aspx)
of our expanded Workday partnership has further enhanced our growth prospects,
reflected in our increased ARR target of £200m by 2030.
· In Digital Services, there is sustained demand from our Public Sector
clients, but there has been continuing delays around decision-making as our
clients await clarity on the new government's spending priorities. These
delays have been more pronounced in the last few weeks in anticipation of the
publication of the new budget. Although we anticipate heightened levels of
activity in the weeks ahead, we are dependent on decisions being made before
the main mobilisation phases for these contracts.
· As outlined in our September Trading Statement
(https://kainos2024eutfm.q4web.com/news/news-details/2024/Kainos-Group-plc---Trading-Statement/default.aspx)
, our Workday Services division has continued to win new contracts, however,
the number and value of these new contracts have been lower than in previous
periods and has resulted in a decline in revenue during the last six months.
We continue to anticipate increased activity in the second half of the year
but are being more cautious around the timing which will impact recovery.
Proactive Management
Whilst these changes to our expectations are about delays rather than
cancellations, we nonetheless continue to be focused on maintaining prudent
cost control measures, reducing discretionary spending, minimising our level
of contractors, while reallocating staff to our current high growth areas in
Workday Products and in the Healthcare Sector of Digital Services.
Share Buyback Programme
Given the strength of the Company's balance sheet, the Board intends to
approve a share buyback programme, full details of which will be given
alongside the interim results for the six months ended 30 September 2024 which
will be announced on 11 November 2024.
Outlook Summary
Notwithstanding this backdrop for FY2025, the Board continues to believe that
we are well positioned in our core markets, which offer substantial growth
opportunities in all our divisions and that we are maintaining the appropriate
balance between investment for future growth, international expansion and
profitability.
* Note: Company compiled consensus is based on known sell side analyst
estimates that were updated following the Trading Update in September 2024.
The ranges are: Revenue £375.5m - £392.0m and Adjusted PBT £75.0m -
£79.7m. The respective consensus figures are £388.8m and £78.8m. FY2024
reported revenue was £382.4m and adjusted PBT was £77.2m.
ENDS
For further information, please contact:
Kainos via FTI Consulting LLP
Russell Sloan, Chief Executive Officer
Richard McCann, Chief Financial Officer
Investec Bank plc +44 20 7597 5970
Patrick Robb / Nick Prowting / Ben Griffiths
FTI Consulting LLP +44 20 3727 1000
Dwight Burden / Kwaku Aning
About Kainos Group plc
Kainos Group plc is a UK-headquartered IT provider with expertise across three
divisions: Digital Services, Workday Services, and Workday Products.
· Digital Services develops and supports custom digital service
platforms for public sector, commercial, and healthcare customers. Our
solutions transform the delivery of these services, ensuring they are secure,
accessible, and cost-effective, and provide better outcomes for users.
· Workday Services specialises in the deployment of Workday, Inc.'s
Finance, HR and Planning products to leading organisations across Europe and
North America. We are one of Workday's most respected partners, experienced in
complex deployment and trusted by our customers to launch, test, expand, and
support their Workday systems.
· Workday Products develops products that complement Workday. Our
Smart product suite, including Smart Test (for automated testing), Smart Audit
(for compliance monitoring), and Smart Shield (for data masking), and Employee
Document Management, are used by more than 500 customers globally.
Our people are central to our success. We employ more than 2,900 people in 22
countries across Europe and the Americas.
We are listed on the London Stock Exchange (LSE: KNOS) and you can discover
more about us at www.kainos.com (http://www.kainos.com/) .
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