Kainos has warned markets that its full-year revenues for 2023 will fall below analyst forecasts. In a market update published this morning, the Belfast-based software firm said that while it expected to report “solid growth in revenues,” these will fall below average analyst expectations of £400.7m for the previous financial year. Pre-tax profit, meanwhile, will meet forecasts of £76.3m, added the firm, which intends to publish the final figures in May.
“Overall, our business has continued to prove resilient in the current economic climate, particularly in our Workday Products and Services segments,” said Kainos. “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 revenues below expectations
Kainos alluded to faltering sales within its digital services branch to commercial clients as one reason its full-year revenues had fallen below market expectations. This mimicked the firm’s previous trading update in November, where it partly attributed its reduced performance among commercial clients to the disappearance of pandemic-fuelled IT spending.
This was despite a “solid revenue performance” among Kainos’ public sector clients. The UK’s National Health Service has continued to be an important partner, recently enlisting the software firm to work on a digital health check scheme and choosing to extend its existing delivery partnership for the organisation’s “Our Future Health” project. Kainos also reported that its Workday Services and Workday Products divisions recorded strong growth in 2023, with the debut of its “Employee Document Management” service proving to be its “most successful product launch to date.”
2023 busy year for Northern Irish IT firm
Founded as a joint enterprise between Queen’s University of Belfast and Fujitsu in 1986, Kainos (from the ancient Greek meaning “fresh”) has grown to employ some 3,000 people and become a valued provider of IT services across the UK public and private sectors. 2023 was a busy year for the firm. In addition to investing £10m in generative AI, embarking on the construction of a new headquarters and buying the US-based software firm RapidIT-Cloudbera, Kainos also began to concentrate heavily on winning new clients in the Canadian public sector.
“Despite the economic uncertainty, there is an urgency for our customers about extending existing projects and starting new projects, as they change the ways they deliver essential services to citizens, patients, customers and employees,” Kainos CEO Brendan Mooney said in May 2023. “From our UK base we have expanded globally, with over one-third of our revenues now generated internationally.”
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