26th May 2020 09:10
(Alliance News) - Kainos Group PLC on Tuesday suspended its shareholder payout to save cash in the face of the Covid-19 pandemic and said that financial 2020 represented a tenth consecutive year of revenue and adjusted pretax profit growth.
The information technology services company said revenue for the year ended March 31 grew by 18% to GBP178.8 million from GBP151.3 million a year ago. Digital Services division saw a 4% rise in revenue to GBP122.5 million, while Workday Practice unit saw 66% revenue growth to GBP56.3 million.
Annual pretax profit rose 10% to GBP23.2 million from GBP21.1 million. Adjusted pretax profit increased by 9% year-on-year to GBP25.5 million, which also included GBP3.9 million in research and development expenses in the year versus GBP4.3 million.
Kainos said it has implemented several cost and cash containment measures, including placing staff on furlough, pausing recruitment and reducing all non-essential expenditure. These measures are expected to result in significant cost savings on the prior year cost run-rate.
The company also has decided to defer pay rises until 2021 and curtail bonuses. Additionally, for a period of six months from April 1, the company's senior managers and executive directors have elected to take no salary or bonus. The remaining members of the executive team have reduced their compensation by 50% and the non-executive board members have reduced their fees by 20%.
Kainos has further decided not to declare a final payout for financial 2020 and intends to take the opportunity to review its dividend position later in financial 2021, when the impact of the Coronavirus pandemic becomes clearer. The total payout for the period amounted to 3.5 pence per share, down 62% from 9.3p.
Chief Executive Brendan Mooney said: "While not having a significant impact on financial 2020, during March 2020 we started to see the impact of the coronavirus pandemic on the global economy.
"It is too early to predict the duration or the severity of the economic disruption and the impact it will have on our customers. We maintain confidence in our strategy and believe that we have reacted to the uncertainty of the current situation swiftly and prudently, leaving us well positioned when the economic impacts of the Coronavirus on the broader economy begin to recede".
Shares in Kainos were down 1.2% at 875.58 pence each in London on Tuesday morning.
By Tapan Panchal; [email protected]
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