11th Nov 2024 09:25
(Alliance News) - Kainos Group PLC on Monday said profit increased more than 10% in the first half of its current financial year amid reduced expenses, and announced the launch of a GBP30 million share buyback programme.
The London-based IT services company and partner of New York-listed Workday Inc said pretax profit for the six months that ended September 30 was GBP34.2 million, up 11% from GBP30.9 million the year before.
Revenue, however, fell 5.2% to GBP183.1 million from GBP193.2 million last year, as bookings fell 11% to GBP179.5 million from GBP201.9 million.
Cost of sales reduced 9.4% to GBP91.1 million from GBP100.5 million, whilst operating expenses decreased 3.1% to GBP61.9 million from GBP63.9 million.
Kainos declared an interim dividend of 9.3 pence per share, up 13% year-on-year from 8.2p.
Chief Executive Officer Russell Sloan said: "Our services business faced a tougher environment in the first half of the year in a generally soft market, and we remain cautious about our prospects for the remainder of the year. However, we continue to generate robust levels of profitability and looking to the medium term and beyond, we continue to see substantial growth opportunities across all our core markets.
"Our business is built on addressing markets with long-term structural growth drivers, and a self-reinforcing cycle of attracting and developing great people, who provide excellent customer service. This in turn creates the long-term customer relationships that generate the majority of our revenue each year. We can then invest for further growth and to expand internationally, while balancing this investment with near-term profitability."
At the end of October, Kainos reduced its full-year expectations, forecasting revenue "moderately below current market consensus, with the majority of the reduction flowing through to adjusted pretax profit". This was due to "poor macro-economic conditions and delayed UK government decision-making".
Kainos had cited a company-compiled consensus for revenue between GBP375.5 million and GBP392.0 million, and adjusted pretax profit between GBP75.0 million and GBP79.7 million. This compared to GBP382.4 million of revenue last year, and GBP77.2 million of adjusted pretax profit.
Kainos also on Monday announced its launch of a share buyback programme intended to raise up to GBP30 million. It will run until May 11, 2025, or until it reaches its targeted proceeds. Kainos appointed Investec Bank PLC to conduct the programme on its behalf.
Shares in Kainos were up 4.0% at 827.00 pence each in London on Monday morning.
By Emily Parsons, Alliance News reporter
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