REG - Kin and Carta PLC - Trading Update

Kin and CartaAnnouncement

26/05/2023 07:00

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RNS Number : 7371A  Kin and Carta PLC  26 May 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

26 May 2023

Kin and Carta plc

Trading Update

Kin and Carta plc ("Kin + Carta" or the "Company"), the global digital
transformation ("DX") consultancy, provides a trading update covering the year
ending 31 July 2023 ("FY23").

Current trading

Following our interim results on 15 March 2023, a number of external factors
have combined to reduce our expectations for the year. The market is even more
cautious than we expected. As widely reported throughout our industry, there
remains hesitance among enterprise clients to commit to large programmes of
work in this environment, which has slowed new business growth. Furthermore,
several contracts have commenced later than we forecast.

As a result, FY23 net revenue growth is expected to be flat to +2% over FY22
(like-for-like growth c. -11%). The revised FY23 net revenue guidance also
reflects recent currency movements which results in net revenue headwinds in
H2 of c. £3 million vs the previous market forecast.

H2 adjusted operating margin is expected to improve over H1 as a result of
prior operating cost reductions and FY23 adjusted operating margin is expected
to be c.8-9% with adjusted EBITDA margin c. 10-11%.

Despite the persistent macroeconomic challenges and currency headwinds, the
Company has returned to sequential quarterly growth on steady backlog
conversion. Net revenue stabilised in Q3 with continued sequential growth
expected in Q4, albeit at a slower rate than we had previously forecast.

              Q2 FY23  Q3 FY23  Q4 FY23 forecast
 Net Revenue  £44m     £46m     c. £47 - 49m

 

The Company has continued to win significant new contracts in the past 90 days
which are expected to ramp up materially in FY24. The resulting backlog for
FY24 continues to build and is now £133 million, compared to £105 million a
year ago. Some of the new wins include:

●    UK Public Sector contract wins in Q3:

○    £16 million, 2-year contract with the UK Department for Education

○    £12.5 million, 5-year contract with the BBC

○    Demand remains strong totalling c.£50 million of contract wins year
to date, with less than 25% being recognised in this financial year

●    Financial Services continues to grow with existing clients in US and
UK markets signing extensions totalling c.£9 million

The Company continues to execute on its global data and AI strategy including:

●    The 9 May 2023 acquisition of Forecast Data, deepening global data
and AI capabilities and adding a strong portfolio of financial services
clients

●    Close collaboration with technology partners securing early access
to Microsoft and Google's generative AI platforms and enabling Kin + Carta to
launch generative AI assessments for our clients

●    Commencement of data and AI focused 'FWD' live event series in
America and Europe

Kin + Carta's Chief Executive Officer, Kelly Manthey, commented:

"Although we're maintaining a pattern of quarter by quarter net revenue
growth, it isn't as strong as we'd expected. The market is more difficult with
clients cautious about committing to large programme spends. Normally we see a
significant acceleration in our second half revenue growth, but this has not
materialised. Nonetheless, we have recorded some major contract wins, the
majority of which will commence in our new financial year. These, combined
with a backlog that is as strong as ever, gives me confidence that once our
market normalises, Kin + Carta can get back to its previous rates of growth.
We remain focussed on the right business-critical disciplines and we retain a
tight control on costs. The company is well positioned to take advantage of a
return of confidence in our market."

 

 

 

- Ends -

 

Enquiries:

 Kin + Carta                      +44 (0) 207 928 8844

 Kelly Manthey CEO

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

 Elly Williamson / Jane Glover
 Numis Securities Limited         +44 (0) 207 260 1345

 Nick Westlake / Tejas Padalkar

 Peel Hunt LLP                         +44 (0) 207 418 8900

 John Welch / Paul Gillam

 

About Kin + Carta

Kin + Carta is a London Stock Exchange listed global digital transformation
consultancy committed to working alongside clients to build a world that works
better for everyone.

Kin + Carta's 2,000 consultants, engineers and data scientists around the
world bring the connective power of technology, data and experience to the
world's most influential companies - helping them to accelerate their digital
roadmap, rapidly innovate, modernise their systems, enable their teams and
optimise for continued growth. Headquartered in London and Chicago with
offices across three continents, the borderless model of service allows for
the best minds to be connected to collaborate on client challenges.

With purpose at its core, Kin + Carta became the first company listed on the
London Stock Exchange to achieve B Corp certification. It meets high standards
of verified social and environmental performance, public transparency and
accountability to balance the triple bottom line of people, planet and profit.

For more information, please visit https://www.kinandcarta.com.

 

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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