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Kainos shares rise 23% as the IT company behind the NHS app posts strong results

Kainos shares jump 23% as IT firm behind new NHS app posts 12th straight year of growth

  • Full year revenue to the end of March rose 29% to £302.6m
  • Pre-tax profit fell 9% to £46m due to expenses related to the acquisition, the firm said.
  • CEO Brendan Mooney said demand for his services “has never been higher”

Kainos Actions jumped more than 20 percent on Monday to the top of the FTSE 250 winners list as the IT and software company reported strong annual results.

The Belfast-based company, which helped develop the new NHS app and counts Home Office, Netflix and Booking.com among its clients, revealed its 12th consecutive year of growth.

Full year revenue to the end of March rose 29% to £302.6m. Adjusted pre-tax profit was up 3 per cent less to £58.8 million, reflecting higher salary costs and higher investments.

Digital push: Kainos is an IT and software company that has helped develop the new NHS app

Digital push: Kainos is an IT and software company that has helped develop the new NHS app

The unadjusted figure shows a 9 per cent drop to £46m, which Kainos says is due to expenses related to the acquisition.

Despite the drop in profits, CEO Brendan Mooney said demand for his services “has never been higher” as government agencies and businesses go digital.

Kainos offers cloud and automation services, helping organizations in various industries make sense of data through analytics, artificial intelligence, and machine learning.

Additionally, it is a partner with Workday, a California-based business software provider.

Kainos Actions it rose 23 percent to £12.68 in late afternoon trading on Monday, making it the best performer on the FTSE 250.

The stock has lost about 10 percent of its value over the past year and remains well below its peak. around £20 in November last year, but has increased by more than 400 per cent in the last five years.

The company has benefited from high demand from the healthcare sector during the pandemic.

Bookings rose 35% to £349.8m last year, and its order book ended the year 26% higher at £260m, up from £206m a year earlier .

But operating expenses rose 37 per cent to £93.6m.

The company, which employs about 2,700 people in 22 countries, said it has continued to retain staff despite a much-publicized global shortage of digital skills.

He said: ‘The digital transformation market has been growing rapidly over the last decade and the pandemic has further demonstrated how important it is for organizations to invest in their digital capabilities, both internally and externally.

“Our clients have responded and continue to prioritize their critical digital programs and we continue to help them deliver these ambitious projects.

‘As expected, our earnings growth moderated as hiring, training and marketing costs returned to normal levels and we experienced increased salary costs and higher use of contract staff.

“During the year we also accelerated our investment in our Smart products, both in research and development and sales and marketing, all of which were spent in the year.”

The group went on an acquisition spree last year, acquiring Cloudator, Une Consulting and Blackline, a US design software firm that helps companies track spending and acquisitions.

Kainos cut its dividend payments by a fifth to 22.2 pence after profits fell.

Mooney added, “Looking ahead, we remain confident in our business as demand for our services has never been higher, our reputation for delivery continues to flourish, while the scale and capacity of our organization continues to grow apace.”

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