- Title:
Trading Update and Special Dividend - Time:
07:00:09 - Date:
27 Jul 2020 - Category:
Corporate updates - ID:
0899U
Kainos Group plc ("Kainos" or "the Company")
Trading Update
Kainos Group plc (KNOS), a leading IT provider, operating across two specialist business areas, Digital Services and its Workday Practice, today issues a trading update for the period from 1 April 2020 to date.
Trading
Despite the impacts of Covid-19, trading in the period has been strong and we expect revenue to be well ahead and adjusted profit to be substantially ahead of current consensus forecasts for the full year ending 31 March 2021.
The resilience in our business has been driven by our long-term relationships with our customers, by on-going demand within the NHS, Public Sector and Workday segments and by our diversification of revenues across customers, end markets and geographic regions.
During the period, the pausing of recruitment has generated several one-off efficiencies in utilisation, recruitment costs and training costs and we have experienced reduced travel expenditure during the lockdown period. We view the majority of these efficiencies as non-recurring in nature and, post-lockdown, will reduce when our growth resumes.
Our People
When we invoked our COVID-19 response plan on 5 March, we implemented home working for over 1,700 colleagues, placing them in the safest possible environment from which to provide on-going support for all our customer engagements.
Our people have been remarkable in their response to the challenges that COVID-19 has presented and the seamless fashion in which they have supported our customers, delivering key programmes during the lockdown period, including the NHS Home Testing Service, the Companies House Appeals Service, Concardis SmartPay (Germany) and Workday deployments at Stibo (Denmark) and Frontiers (Switzerland).
We continue to ask all our people to work from home, which we believe represents the safest possible environment for them; and allows us to play our part in reducing the pressure on healthcare systems across all our locations.
UK Government Job Retention Scheme
As part of the precautionary cost containment measures implemented earlier this year, we made use of the UK Government Job Retention Scheme and placed 131 colleagues on furlough.
In light of our performance, we have withdrawn from the scheme and will be repaying the UK Government for all previously claimed support payments.
As well as returning all payments, we are pleased to confirm that we have ensured employment for all our people during this period.
Liquidity and Dividends
As at 24 July 2020, Kainos had net cash of over £62m (31 March 2020: £40.8m) and no debt.
As part of the COVID-19 related cost reduction measures the board had previously elected not to declare a final dividend for the year ended 31 March 2020.
Having assessed the Company's ongoing cash requirements under a range of scenarios, the board has elected to declare a special dividend, in lieu of the final dividend.
The special dividend will be 6.7 pence per share, which will be paid on 4 September 2020 to shareholders on the register as at the close of business on 7 August 2020 with an ex-div date of 6 August 2020.
We also expect to return to our normal interim and final year dividend cycle for the current financial year.
Outlook
We recognise that the strong business performance during this period has been a result of the hard work and flexibility of our people, and the support and trust of our customers. We would like to take this opportunity to, once again, thank our people and our customers for their ongoing engagement.
During the early stages of COVID-19, we successfully adapted to the changing business environment and we remain confident that we will be able to respond to any future challenges in the wider macro-economic backdrop.
However, we maintain our view that it is too early to predict the duration or the severity of the COVID-19 economic disruption and any impact it will have on our customers.
We remain focused on supporting our customers, ensuring the safety of our people and responding appropriately to the changing business landscape.
In line with our normal schedule, a further update will be issued in September 2020.
For further information, please contact:
Kainos via FTI Consulting LLP
Brendan Mooney, Chief Executive Officer
Richard McCann, Chief Financial Officer
Investec Bank plc +44 20 7597 5970
Patrick Robb / Ben Griffiths
Canaccord Genuity +44 20 7523 4606
Simon Bridges / Andrew Potts
FTI Consulting LLP +44 20 3727 1000
Matt Dixon / Dwight Burden
About Kainos
Kainos Group plc is a UK-headquartered IT provider, across two specialist business areas,
Digital Services and Workday Practice.
The Group's Digital Services include full lifecycle development and support of customised
Digital Services for public sector, healthcare and commercial customers. These
transformative solutions encompass a range of services from experience design to Artificial
Intelligence and Cloud to deliver truly intelligent solutions that are secure, accessible and
cost-effective.
The Group's Workday Practice is one of Workday's most respected partners. As a full-service partner, we are experienced in complex deployment and integrations, and the leader in Workday test automation. We're trusted by our customers to launch, test, expand and safeguard their Workday systems.
Kainos has over 1,700 people across 15 offices in Europe and North America.
Kainos is listed on the London Stock Exchange (LSE: KNOS).
For further information, please visit www.kainos.com.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
The person responsible for arranging the release of this announcement on behalf of Kainos is Gillian Poole, Corporate Manager.
Trading Update and Special Dividend07:00:0927 Jul 2020Corporate updates0899U