REG - Kin and Carta PLC - Trading Update and Management Succession

Kin and CartaAnnouncement

20/07/2022 07:00

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RNS Number : 0441T  Kin and Carta PLC  20 July 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

20 July 2022

Kin and Carta plc Trading Update

Strong Performance and Momentum

Management Succession

Kin and Carta plc (the "Company" or "Kin + Carta"), the international digital
transformation ("DX") company, provides the following update ahead of
publishing its audited results for the year ended 31 July 2022 (FY22).

Current trading

Kin + Carta is continuing to execute on its growth strategy. For FY22, the
Company now expects net revenue of c. £191 million (£128.9 million FY21) for
total growth of c. 48% and total growth at constant currency of c. 45%. On a
like for like comparison to last year, the Company expects organic net revenue
growth in constant currency of c. 38%, in line with market expectations and
recently raised guidance in February. Adjusted operating profit is expected to
grow by c.50% (£12.2m FY21) at constant currency, with margins in line with
market expectations.

Current trading performance coupled with a strong backlog of orders - a record
high of £104 million for the end of June (+44% compared to last year) - plus
the largest digital transformation contract Kin + Carta has signed to date,
worth up to $90 million over two years, demonstrate continued momentum in the
business and underpin medium term growth expectations. This existing-client
expansion further shows Kin + Carta's continued trend towards longer term and
larger sized contracts with our clients.

The triennial valuation of the legacy St Ives defined benefit pension scheme
is nearly complete and subject to audit, is in a modest technical surplus at
the April 2022 valuation date compared to a £28.4 million deficit at the
previous technical valuation (April 2019). As a result, the Company expects
that no further statutory deficit repair contributions will be required once
the valuation is finalised.

The balance sheet remains strong with net debt expected to be in the single
digit millions of pounds sterling at 31 July 2022. Kin + Carta continues to
pursue accretive acquisitions and organic growth opportunities while investing
in operations to profitably scale the business over the next several years.

The Group expects to report its audited preliminary results for the year ended
31 July 2022 in October 2022. Management will host a presentation and Q&A
session, details of which will be circulated ahead of the event.

 

Management succession

J Schwan has informed the Board of his intention to retire as CEO and member
of the Board at the end of the current financial year. He will be succeeded by
Kelly Manthey, Group Chief Executive, Americas, which is Kin + Carta's largest
trading region representing approximately 70% of the Company's net revenue.
Kelly has been with the company for sixteen years, serving previously as the
CEO of Solstice (the Americas anchor business and headquarters) since 2018
when she succeeded J in that position.

The Board proposes to appoint Kelly as CEO, and to the Kin + Carta Board,
effective from 01 August 2022. J will continue as a special adviser for six
months to assist with the transition. The Board has appointed CFO Chris Kutsor
to the additional role of COO to oversee the scaling of operations in pursuit
of further financial and operational effectiveness. Group Chief Executive,
Europe, David Tuck and Chief Strategy Officer Richard Neish complete an
unchanged leadership team.

John Kerr, Chairman, commented: "Kin + Carta is unrecognisable from 2018 when
J took over as CEO, a period that delivered total shareholder return (TSR) of
115%. With sterling support from Kelly and Chris among others, J has been the
architect of this transformation, and on behalf of the Board, I would like to
thank him for his dedication and contribution. J has successfully steered the
business through this period of unparalleled change as he shaped a growing
pure-play digital transformation consultancy with purpose at the heart of the
business.

"The Board is delighted to appoint Kelly Manthey as J's successor. Kelly has
been alongside J since 2006, including the evolution of Kin + Carta as Group
Chief Executive for the Americas since August 2018. During that time, Kelly
has been instrumental in profitably scaling the Americas business, including
organic revenue growth of over 110% in addition to four acquisitions in the
world's largest and fastest paced digital transformation market. This next
phase of Kin + Carta will be defined by continued growth, and we are confident
and excited that the profitable growth that Kelly has successfully executed in
the Americas, evident in the strength of this trading update, will be
replicated at a global scale."

J Schwan commented: "Kin + Carta's transformation is now complete, and a new,
exciting growth chapter is under way. I'm incredibly proud to have played a
role in building Kin + Carta and I'm delighted to be handing leadership to
Kelly whom I have worked with for over 20 years and who has been central to
our progress. After a fulfilling and rewarding 25-year journey it's time for
me to retire from consulting and pursue projects in different domains. I will
continue to be a happy and supportive advisor, shareholder and advocate for
Kin + Carta during its next exciting phase of growth. I wish Kelly and the
business every success as the company scales, and I'd like to thank my
colleagues for their hard work, drive and belief."

Kelly Manthey commented: "I am incredibly humbled and honoured to lead the
next chapter of Kin + Carta's growth story as we scale globally from a strong
trading position, building on firm foundations, with an excellent leadership
group, bound by a commitment to using business as a force for good. I am
excited to continue serving our valued clients, shareholders and the fantastic
Kin + Carta team as we build a world that works better for everyone."

 

 

- Ends -

 

Enquiries:

 Kin + Carta                      +44 (0) 207 928 8844

 J Schwan CEO

 Kelly Manthey CEO-Elect

 Chris Kutsor CFO & COO
 Powerscourt                      +44 (0)771 324 6126

 Elly Williamson / Jane Glover
 Numis Securities Limited         +44 (0)07 260 1345

 Nick Westlake / Tejas Padalkar

 Peel Hunt LLP                         +44 (0) 20 7418 8900

 Edward Knight / John Welch

Additional Information

J was appointed CEO of St Ives in August of 2018, following the acquisition of
Solstice, the business he founded in 2001, and led the transformation of the
Company over his 4-year tenure. Under J's leadership, St Ives rebranded to Kin
+ Carta and restructured a portfolio of digital marketing services
acquisitions into a purpose-led, growing and integrated pure-play digital
transformation consultancy with a strong social responsibility commitment,
becoming the first certified B Corporation traded on the London Stock
Exchange.

Kelly Manthey began her career as a software engineer at Accenture's emerging
technologies lab, joining Solstice as employee number one in 2006, and rising
to CEO in 2018. Kelly then led Kin + Carta's Americas region, building a
growth-minded business with a strong, diverse and progressive culture which
she then grew from c.400 people to c.1100 today. Along the way, Kelly led the
Americas to earn acknowledgement as Fast Company's Best Workplaces for
Innovators, Consulting Magazine's Best Large Firms to Work For and Fortune
Magazine's Best Places to Work. Kelly has been recognised in The Consulting
Report's Top 25 Women Leaders in IT Services, Crain's Chicago Business Tech
50, and is an active advocate for inclusion, diversity and raising the
visibility of women in the technology sector.

The Company confirms that there is no additional information which is required
to be disclosed relating to Kelly under paragraph 9.6.13 of the Listing Rules
of the Financial Conduct Authority

Important notices

This announcement contains inside information and is issued on behalf of the
Company by Daniel Fattal, Company Secretary.

Cautionary statement regarding forward-looking statements

This Announcement may contain "forward-looking statements" with respect to
certain of the Company's plans and its current goals and expectations relating
to its future financial condition, performance, strategic initiatives,
objectives and results. Forward-looking statements sometimes use words such as
"aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "seek", "may", "could", "outlook" or other words of similar
meaning. By their nature, all forward-looking statements involve risk and
uncertainty because they are based on numerous assumptions regarding the
Company's present and future business strategies, relate to future events and
depend on circumstances which are or may be beyond the control of the Company
which could cause actual results or trends to differ materially from those
made in or suggested by the forward-looking statements in this Announcement,
including, but not limited to, domestic and global economic business
conditions; market-related risks such as fluctuations in interest rates; the
policies and actions of governmental and regulatory authorities; the effect of
competition, inflation and deflation; the effect of legislative, fiscal, tax
and regulatory developments in the jurisdictions in which the Company and its
respective affiliates operate; the effect of volatility in the equity, capital
and credit markets on profitability and ability to access capital and credit;
a decline in credit ratings of the Company; the effect of operational and
integration risks; an unexpected decline in sales for the Company; inability
to realise anticipated synergies; any limitations of internal financial
reporting controls; and the loss of key personnel. Any forward-looking
statements made in this Announcement by or on behalf of the Company speak only
as of the date they are made. Save as required by the Market Abuse Regulation,
the Disclosure Guidance and Transparency Rules, the Listing Rules or by law,
the Company undertakes no obligation to update these forward-looking
statements and will not publicly release any revisions it may make to these
forward-looking statements that may occur due to any change in its
expectations or to reflect events or circumstances after the date of this
Announcement.

 

 

 

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