Belfast IT group Kainos reveal revenue in last financial year fell below market forecasts

Digital services firm says 2023/24 profits will be in line with expectations as its lands two lucrative new NHS contracts

Kainos' current headquarters at Belfast's Upper Crescent.
Kainos' current offices at Belfast's Upper Crescent. The tech group is progressing plans to develop a major new headquarters on the Dublin Road.

Belfast IT group Kainos has announced its revenues in the year ending March 31 2024 came in lower than market analysts had forecast.

In a trading update issued on Monday, the London-listed company said while its pre-tax profit level will remain in line with a consensus forecast of £76.3 million, it’s revenue for the year will be “slightly below” what was expected.

Kainos’ revenue for the year to March was projected to range from £395.4m to £404.1m, while the consensus estimate was £400.7m.

The digital services group, which employs around 3,000 people worldwide, said its business had proved “resilient in the current economic climate”, but said it was offset by “weakness” within its commercial arm.

Kainos said its board still expects to deliver “solid growth” in revenues and “strong growth” in adjusted pre-tax profit for the year,

Its full end-of-year financial results are due to be published on May 20.

While its business has diversified down the years and now comprises three divisions, Kainos core revenue stream remains its digital transformation projects for the UK government.

Monday’s statement said its public sector team had delivered another solid revenue performance and a strong sales performance in the 2023/24 year.

It said healthcare revenues continued to recover following the pandemic-related peak.

But Kainos added: “This performance has been offset by weakness in demand within our commercial clients.”

Outside the digital services division, Kainos’ business is divided into its Workday services and Workday products divisions.

Workday, which is a suite of financial management and HR software, is a key aspect of Kainos’ growing business in the United States.

The latest trading update said the Workday services arm “continues to generate good growth”, while Workday products “recorded a very strong performance”.

Kainos said its employee document management (EDM) product launched for Workday in September 2023, had been its most successful product launch to date.

“Overall, our business has continued to prove resilient in the current economic climate,” said the company.

“We believe that given the macro-economic environment, we have maintained the appropriate balance between growth, international expansion, investment for the future and profitability.”

Kainos said it has “a robust pipeline and a strong balance sheet”, which it said “provide excellent visibility of the strength of our performance in the current financial year”.

The tech group has already kicked off the current financial year with two lucrative new NHS contracts in Britain.

It secured a four-year framework deal worth around £20m to support Digital Health and Care Wales on April 4, and last week landed a separate NHS digitisation contract worth £9.4m to develop and build a digital health check product for the Department of Health in England.

The company is also progressing its bid to develop a brand new Belfast headquarters on the Dublin Road.