Kainos profit up 5% following international expansion

Revenue growth slowed slightly but performance in line with expectations, firm says

Brendan Mooney, chief executive of Kainos pictured in Belfast. Photograph: Colm Lenaghan/Pacemaker

Brendan Mooney, chief executive of Kainos pictured in Belfast. Photograph: Colm Lenaghan/Pacemaker

 

Kainos, a Belfast-based provider of digital services and platforms, reported a 5 per cent increase in profit as the company’s international expansion drives its “revenue diversification”.

Pre-tax profit increased from £6.5 million (€7.2 million) to £6.8 million (€7.6 million) for the six months to the end of September while revenue increased by just 2 per cent, or £800,000 (€895,000), to £41.4 million (€46.3 million).

Reporting interim results, the IT group said its performance was in-line with market expectations while its sales orders had almost doubled to £63.4 million (€70.9 million).

“It has been another successful period for Kainos and I am particularly pleased with our strong sales execution which provides a solid platform for further growth,” Brendan Mooney, Kainos chief executive, said.

Mr Mooney said that in order to support the company’s growth, it has expanded both nationally and internationally this year, “opening three new office in Birmingham, Frankfurt and Copenhagen”. The international expansion comes as the group report that international revenues now accounts for 26 per cent of total revenue.

International expansion

Mr Mooney also told The Irish Times that the company plans to hire 160 new staff over the next six months to deal with the international expansion.

As sales orders increased significantly, so too did the company’s software-as-a-service (SaaS) offering, which recorded orders of £5.3 million (€5.9 million). Mr Mooney said that side of the business was “heading in the right direction” and noted that two of the company’s 103 clients for this offering included EasyJet and Netflix.

Kainos’ cash pile continued to grow and by the end of September stood at £27.3 million (€30.5 million). Asked whether this was being grown with an eye on acquisitions, Mr Mooney said the company prefers an “organic growth strategy”. He noted that the company has no plans to return that cash to shareholders at the moment, but “if we find nothing to do with it we will return it to shareholders”, he said.

Significant shareholders in the group include management consultancy Qubis, which holds 16 per cent; Mr Mooney, with 11.92 per cent; and Kainos’ senior vice president for sales, Paul Gannon, who holds 7.46 per cent.