Kainos shares jump 23% as IT firm behind new NHS app posts twelfth consecutive year of growth
- Revenues for the full year to the end of March rose 29% to £302.6m
- Pre-tax profit fell 9% to £46m due to acquisition-related expenses, the firm said
- CEO Brendan Mooney said demand for its services ‘has never been higher’
Kainos shares jumped over 20 per cent on Monday to the top of the FTSE 250 winners list as the IT and software firm reported strong annual results.
The Belfast-based company, which has helped develop the new NHS app, and counts the Home Office, Netflix and Booking.com among its clients, revealed its twelfth consecutive year of growth.
Revenues for the full year to the end of March rose 29 per cent to £302.6million. Adjusted pre-tax profit rose by a smaller 3 per cent to £58.8million, reflecting rising salary costs and higher investments.
Digital boost: Kainos is an IT and software firm that has helped develop the new NHS app
The non-adjusted figure shows a fall of 9 per cent to £46million, which Kainos said is down to acquisition-related expenses.
Despite the drop in profits, chief executive Brendan Mooney said demand for its services ‘has never been higher’ as public bodies as well as companies push ahead with digitalisation.
Kainos offers cloud and automation services, and helps organisations across various industries make sense of data through analytics, AI and machine learning.
In addition, it is a partner of Workday, a California-based provider of software for businesses.
Kainos shares surged 23 per cent to £12.68 in afternoon trading on Monday, making it the best FTSE 250 performer.
The stock has lost around 10 per cent of its value over the past year and remains well below its peak of around £20 in November last year, but has surged by over 400 per cent over the last five years.
The company has benefited from high demand from the healthcare sector during the pandemic.
Bookings were up 35 per cent to £349.8million last year, with its contracted backlog ending the year 26 per cent higher at £260million, from £206million the previous year.
But operating expenses rose 37 per cent to £93.6million.
The company, which employs around 2,700 people across 22 countries, said it has continued to retain staff despite the well publicised global shortage in digital skills.
It said: ‘The digital transformation market has been growing quickly for the past decade and the pandemic has further demonstrated how important it is for organisations to invest in their digital capabilities, both internally and externally.
‘Our customers have responded and continue to prioritise their critical digital programmes and we continue to help them deliver these ambitious projects.
‘As expected, our profit growth moderated as recruitment, training and marketing costs returned to normal levels and as we experienced increased salary costs and the increased use of contract staff.
‘During the year we also accelerated our investment in our Smart products, both in research and development and in sales and marketing, all of which was expensed in the year.’
The group went on an acquisition spree last year, snapping up Cloudator, Une Consulting and Blackline – a US designs software firm that help companies track spending and procurement.
Kainos lowered its dividend payouts by a fifth to 22.2p following the drop in profit.
Mooney added: ‘Looking forward, we remain confident in our business as the demand for our services has never been higher, our reputation for delivery continues to flourish, while the scale and capability of our organisation continues to grow at pace.’