No Brexit downturn as Kainos increases revenue by 9%

Belfast IT services company remains confident despite ‘continued uncertainty’

Kainos chief executive Brendan Mooney: underlying market conditions for digital services “remain very positive”. Photographer: Colm Lenaghan/Pacemaker

Kainos chief executive Brendan Mooney: underlying market conditions for digital services “remain very positive”. Photographer: Colm Lenaghan/Pacemaker

 

Software firm Kainos Group increased its revenue by 9 per cent in the six months ended September 30th compared with the same period last year, its interim results show.

Kainos, based in Belfast, is the North’s largest locally owned IT services company and one of only two listed firms in Northern Ireland. Chief executive Brendan Mooney won this year’s EY Entrepreneur of the Year award last month.

The company’s revenue increased to £40.6 million (€47.8 million), compared with £37.2 million in 2015. Gross profit increased by 15 per cent, from £18.3 million to £21.1 million (€24.8 million), while adjusted ebitda increased by 4 per cent, from £7.1 million to £7.4 million (€8.7 million). Adjusted pre-tax profit grew by 3 per cent, from £6.8 million to £7 million (€8.2 million).

In terms of outlook, the Kainos board said that Britain’s decision to leave the European Union had “so far not resulted in any negative impact on the group’s work with UK central government”.

“Although market conditions in the National Health Service are expected to remain challenging in the short term, and there is potential for continued uncertainty because of the UK’s decision to leave the EU, the board is confident that overall group performance is on track to meet market expectations.

“Brexit has so far not resulted in any negative impact on the group’s work with UK central government, and the pipeline of work continues to build in both existing and new government departments.”

“However, the board also said it is too soon to assess the full impact of Brexit, which may lead to “medium-term macro-economic factors which act to change the pace of growth”.

Foreign currencies

In addition, the board said, Kainos had some “£7.3 million of revenue denominated in foreign currencies in the period. This was balanced by a similar amount of costs also denominated in currencies other than Sterling (mainly relating to staff costs in Poland).”

The company said it had grown its presence in the UK and “significantly expanded” its digital services footprint in commercial sectors in the region and overseas. The company also added a net 179 staff, bringing its total workforce to 967.

Kainos also “consolidated” its position as the largest boutique provider of workday services in Europe. There was “significant investment” in both research and development and sales and marketing in digital platforms.

According to chief executive Brendan Mooney, underlying market conditions for digital services “remain very positive”, supporting a growing sales pipeline and a good outlook for the remaining half of the year.

He said there would be “increasing opportunity” for growth in the UK, Ireland and Europe, particularly in commercial industry sectors.

“We are pleased with the group’s financial performance for the six months to September 2016,” Mr Mooney said. “We are confident that trading is in line with market expectations, and we see plenty of opportunities to continue to deliver growth in the future.”