TIDMKNOS
RNS Number : 1144A
Kainos Group plc
22 May 2023
22 May 2023
Full year results for the year ended 31 March 2023
Kainos Group plc 'Kainos' or the 'Group'
Kainos Group plc (KNOS), a UK-headquartered IT provider with
expertise across three divisions - Digital Services, Workday
Services, and Workday Products, is pleased to announce its results
for the year ended 31 March 2023.
Financial highlights
2023 2022 Change
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Revenue GBP374.8m GBP302.6m +24%
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Statutory profit before tax GBP54.3m GBP46.0m +18%
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Adjusted pre-tax profit GBP67.6m GBP58.8m +15%
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Cash GBP108.3m GBP76.6m +41%
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Bookings GBP427.8m GBP349.8m +22%
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Product Annual Recurring Revenue (ARR) GBP47.9m GBP34.3m +40%
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Contracted backlog GBP322.9m GBP259.7m +24%
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Diluted earnings per share 33.1p 28.5p +16%
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Adjusted diluted earnings per share 42.5p 38.1p +12%
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Total dividend per share 23.9p 22.2p +8%
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Operational highlights
We have recorded our 13th consecutive year of growth across a
wide range of key metrics. Our very strong business performance
reflects robust underlying market demand, high levels of customer
engagement and the ongoing commitment of our colleagues.
-- Revenue growth of 24% (22% organic) to GBP374.8 million (2022: GBP302.6 million).
-- Adjusted pre-tax profit increased by 15% to GBP67.6 million
(2022: GBP58.8 million) reflecting strong underlying performance
and increased investment in Workday Products, where product
development and sales & marketing expenditure increased by
GBP9.3 million.
-- Workday Products revenues ARR increased by 40% to GBP47.9
million (2022: GBP34.3 million) representing significant progress
towards our 2026 target of GBP100 million ARR.
-- Bookings up 22% to GBP427.8 million (2022: GBP349.8 million).
-- Contracted backlog growth of 24% to GBP322.9 million (2022: GBP259.7 million).
-- Cash at 31 March 2023 was GBP108.3 million (2022: GBP76.6
million), with cash conversion at 104% (2022: 83%).
We continue to grow as a global business with over one-third of
revenues generated internationally.
-- Very strong international growth, up 52% to GBP132.0 million
(2022: GBP87.0 million), and now representing 35% of total
revenue.
Commercial sector customers now generate half our revenues.
-- Commercial revenues are up 51% to GBP186.4 million (2022:
GBP123.8 million), representing 50% of total revenue.
-- Public sector revenues up 24% to GBP138.0 million (2022: GBP111.0 million) or 37% of revenue.
-- Healthcare revenues, as anticipated, have reduced by 26% to
GBP50.4 million (2022: GBP67.9 million), which is 13% of total
revenue.
We continue to grow a global, talented and engaged team.
-- We now have 2,990 people (2022: 2,692) based across 22 countries.
-- Our employee retention has increased to 88% (2022: 86%), and
engagement levels remain high, measuring 81% on our internal
surveys, and we were again awarded '50 Best Places To Work in the
UK' by Glassdoor.
Excellent customer service drives customer satisfaction and
retention, underpinning revenue growth.
-- Customer approval rating ( [1]) remains high at 99 % (2022: 98%).
-- Existing customer revenue increased by 26% to GBP337.6
million (2022: GBP267.7 million), which represents a Net Revenue
Retention of 126%.
-- Customer numbers increased to 821 (2022: 731), an increase of 12%.
We continue with our ambition to be a responsible
organisation.
-- We retained our carbon neutral status in 2023 and remain on
track to achieve carbon net zero by 2025.
-- Our gender balance improved, with the proportion of women in
Kainos increasing to 34% (2022: 33%), well above the industry
average of 22%( [2]) and we remain committed to further
improvement.
-- We hosted over 1,800 young people on our outreach programmes,
including targeted programmes aimed at improving gender diversity,
supporting social mobility and for those students with special
educational needs .
In Digital Services, we continue to deliver significant digital
transformation programmes across the public sector, commercial
sector and healthcare.
-- This extensive project portfolio has driven strong revenue
growth of 12%, with Digital Services revenues increasing to
GBP224.4 million (2022: GBP199.8 million).
-- Customer demand remains strong as digital transformation
continues to be a business and political priority.
We continue to be the leading pan-European Workday specialist
and during the year we were appointed Workday Phase 1 Prime partner
in the US market.
-- Workday Services recorded very strong revenue growth of 49%
(41% organic) to GBP105.7 million (2022: GBP70.9 million).
-- Our international expansion continues with North America now
representing over half of Workday Services revenues at GBP55.9
million (2022: GBP30.4 million) an increase of 84%.
(1) Data from all completed customer surveys in the year. There
are five possible designations: 'Poor', 'Satisfactory', 'Good',
'Very Good' or 'Excellent'; the rating reflects the percentage of
customers that rate our performance 'Good' or better.
(2) BCS diversity report 2022: Women in IT.
Our Workday-related products, Smart Test, Smart Audit and Smart
Shield delivered very strong growth, and we remain on track to
achieve our target of GBP100 million ARR by 2026.
-- Workday Products revenues grew 40% to GBP44.7 million (2022:
GBP31.9 million) and ARR increased by 40% to GBP47.9 million (2022:
GBP34.3 million).
-- We continued to invest in our Workday Products, increasing
research & development expenditure by 52%, to GBP9.1 million
(2022: GBP6.0 million) and sales & marketing spend increased
135% to GBP10.8 million (2022: GBP4.6 million).
Commenting on the results, CEO Brendan Mooney said:
"Our latest results, the eighth as a public company, outline
another excellent performance as we once again achieved strong
growth in terms of people, customers, revenue and
profitability.
Our performance as a business is influenced by many factors, but
it is our relationships with our customers and the talents of our
colleagues that are the key drivers. The strength and depth of both
have continued to grow this year and we are grateful for the trust
and confidence that our customers continue to place in Kainos and
the expertise, experience, and energy of our colleagues, who have
been the driving force behind all that we have achieved.
These results describe our performance over the past twelve
months. While we draw a sense of satisfaction from the consistency
of our performance, representing the thirteenth consecutive year of
growth, our attention is firmly fixed on the future.
The digital transformation market continues to grow in
importance for organisations operating in government, in healthcare
and in the commercial sector.
This importance is translating into continued demand for the
work we do for our customers. 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.
In addition to responding to the needs of our customers we have
also been focused on building solid foundations for our business -
across the services we offer, the sectors within which we operate
and in the regions where we are based.
As a result, our business is becoming increasingly resilient. We
work with over 800 organisations, many of whom are international in
scale and who operate across a range of industries including
healthcare, public sector, banking, insurance, pharmaceuticals and
education. From our UK base we have expanded globally, with over
one-third of our revenues now generated internationally.
It is all these factors combined - our customers, our people,
our consistent performance, the opportunity and the scale and
resilience of our business - that underpin the confidence that we
have about the future.
Alongside our confidence, we also have a sense of excitement -
technology continues to develop at pace and the positive impact it
can have on people's lives increases. It is energising to be at the
forefront of these developments."
For further information, please contact:
Kainos via FTI Consulting LLP
Brendan Mooney, Chief Executive Officer
Richard McCann, Chief Financial Officer
Investec Bank plc +44 20 7597 5970
Patrick Robb / Ben Griffiths
FTI Consulting LLP +44 20 3727 1000
Matt Dixon / Dwight Burden / Kwaku Aning
About Kainos Group plc
Kainos Group plc is a UK-headquartered IT provider with
expertise across three divisions: Digital Services, Workday
Services, and Workday Products.
-- Digital Services develops and supports custom digital service
platforms for public sector, commercial, and healthcare customers.
Our solutions transform the delivery of these services, ensuring
they are secure, accessible, and cost-effective, and provide better
outcomes for users.
-- Workday Services specialises in the deployment of Workday,
Inc.'s Finance, HR and Planning products to leading organisations
across Europe and North America. We are one of Workday's most
respected partners, experienced in complex deployment and trusted
by our customers to launch, test, expand, and support their Workday
systems.
-- Workday Products develops products that complement Workday.
Our Smart product suite, including Smart Test (for automated
testing), Smart Audit (for compliance monitoring), and Smart Shield
(for data masking), are used by more than 350 customers globally to
safeguard their Workday systems.
Our people are central to our success. We employ more than 2,900
people in 22 countries across Europe and the Americas.
We are listed on the London Stock Exchange (LSE: KNOS) and you
can discover more about us at www.kainos.com .
Definition of terms
We use the following definitions for our key metrics:
Active customer: a customer who has paid us to deliver a product
or service within the current financial year.
Adjusted EBITDA: calculated as being adjusted pre-tax profit
excluding interest, tax, depreciation of property, plant and
equipment and right-of-use assets, and amortisation of intangible
assets.
Adjusted pre-tax profit: profit before tax excluding the effect
of share-based payment expense, acquisition-related expenses
including amortisation of acquired intangible assets and
post-combination remuneration expense (relating to contingent
deferred consideration subject to future service conditions).
Annual Recurring Revenue (ARR): the value at the end of the
accounting period of the software and subscription recurring
revenue annualised.
Bookings: the total value of sales contracted during the
period.
Carbon net zero: any CO(2) , released into the atmosphere from a
company's entire value chain is reduced as much as possible and the
rest is removed.
Carbon neutral: any CO(2) released into the atmosphere from a
company's entire value chain activities is balanced by an
equivalent amount being removed.
Cash conversion: cash generated from operating activities as a
percentage of adjusted EBITDA.
Constant currency (ccy) : Excludes the effect of foreign
currency exchange rate fluctuations on year-on-year performance by
translating the relevant prior year figure at current year average
exchange rates.
Contracted backlog: the value of contracted revenue that has yet
to be recognised.
Compound annual growth rate (CAGR): annual growth rate over a
specified period of time.
Net revenue retention (NRR): is the percentage of recurring
revenue from existing customers we retained over the year. This
considers increases or reductions in customer spending and those
customers where the engagement has ended; it does not include
revenue from new customers. NRR therefore shows how our business
could continue to grow solely from our current customer base alone,
without acquiring any new ones.
Organic revenue: our revenue excluding revenue from acquisitions
completed in the current and comparative reporting periods.
Software as a service (SaaS): is a software distribution model
that delivers application programs over the Internet, with users
typically accessing the program through a web browser. Users pay an
ongoing subscription to use the software rather than purchasing it
once and installing it.
Science Based Targets initiative (SBTi) - partnership between
Carbon Disclosure Project (CDP), the United Nations Global Compact,
World Resources Institute (WRI) and the World Wide Fund for Nature
(WWF) created to encourage companies to design clearly defined
emission reduction plans in line with the Paris Agreement
goals.
Kainos at a glance
We are a UK-headquartered IT provider, operating through three
specialist business areas: Digital Services , Workday Services and
Workday Products.
Purpose
Our purpose is to help our customers with their most challenging
projects and, together with our partners, help them build the
capability to succeed in the digital age.
Our operating divisions
Digital Services
FY23 revenue: GBP224.4 million, 60% of Group total, 5-year
growth: 18% CAGR.
Our Digital Services division helps our customers to solve their
business problems by using technology, enabling them and their
users to work smarter, faster and better.
Working collaboratively with customers around the world, our
innovative and transformative solutions are secure, accessible,
cost-effective, and take a user-first approach. We leverage the
benefits of the public cloud and enable customers to utilise their
data to drive better decision-making.
In the public sector, we have delivered projects helping more
than 60 million citizens, while saving our customers hundreds of
millions of pounds.
In the commercial sector, customers trust us to provide digital
transformation programmes that evolve their services, deliver
efficiencies, increase their capabilities and future-proof their
businesses.
In healthcare, we help providers deliver a service that is
faster, more cost-effective and patient-centric.
We deliver services to over 160 clients, including Allied Irish
Bank, NHS Digital, and the Department for Environment Food and
Rural Affairs, and new clients including the London Mayor's Office
for Policing and Crime and the NHS Business Services Authority.
Workday Services
FY23 revenue: GBP105.7 million, 28% of Group total, 5-year
growth: 47% CAGR.
In our Workday Services business we provide consulting, project
management, integration and post-deployment services for Workday's
software suite. We work with clients globally and have an
outstanding relationship with Workday, Inc.
With over 300 international clients, we are proud to work with
customers such as Kion Group (Germany), Shopify (Canada), Novozymes
(Denmark), Kone (Finland), ASOS plc (UK), Takeaway.com
(Netherlands) and Match.com (USA).
Workday Products
FY23 revenue: GBP44.7 million, 12% of Group total, 5-year
growth: 41% CAGR.
We have developed three proprietary software tools, Smart Test,
Smart Audit and Smart Shield.
Smart Test allows Workday customers to automatically test and
verify that their unique Workday configuration is operating
effectively, both during implementation and in live operation.
Smart Test is the leading automated testing platform specifically
designed for Workday.
Smart Audit is our compliance monitoring tool that allows
Workday customers to maintain operational controls over their
Workday HCM and Financials environments, particularly in the areas
of Segregation of Duties, Privileged Access Controls and Personal
and Sensitive employee data protection.
Smart Shield is a data masking tool that can easily and
seamlessly mask sensitive data without impacting the Workday user
experience. It ensures that sensitive data remains controlled when
Workday environments are made available to broader internal or
external teams, for instance, during support and maintenance
activities, or for ongoing internal Workday training and onboarding
programmes.
These tools are implemented as cloud-based Software as a Service
(SaaS) solutions and customers utilise them on a subscription
basis.
Smart Test was launched in 2014 and is now used by over 350
clients, including Webhelp (France), AT&T (USA), State of
Oregon (USA), Veolia ES (UK), Werner Enterprises (USA), University
of Miami (USA) and Sentara Healthcare (USA) .
Smart Audit was launched in 2021 and is now used by over 70
clients, including Booking.com (Netherlands), Metropolitan Museum
of Art (USA), Magna International (Canada) and Whole Foods
(USA).
Smart Shield was launched in 2022 and is now used by over 40
clients including Ohio State University (USA), Loews Corporation
(USA), John Lewis (UK) and Netflix (USA).
FY23 key statistics
People
-- Number of staff and contractors: 2,990 (2022: 2,692).
-- Employee retention: 88% (2022: 86%).
-- People by region: UK & Ireland (71%), Central Europe (16%), Americas (13%).
-- Offices: (14) Antwerp, Atlanta, Belfast, Birmingham, Buenos
Aires, Copenhagen, Derry, Dublin, Gdansk, Hamburg, Indianapolis,
London, Paris, and Toro nto.
Customers
-- Active customers: 821 (2022: 731).
-- Customers who rated our service as good or better: 99% (2022: 98%).
-- Revenue from existing cu stomers: 90% (2022: 88%).
Financial
-- Revenue: GBP374.8 million (2022: GBP302.6 million).
-- Adjusted pre-tax profit: GBP67.6 million (2022: GBP58.8 million).
-- Bookings: GBP427.8 million (2022: GBP349.8 million).
-- Contracted sales backlog: GBP322.9 million (2022: GBP259.7 million).
-- Revenue by sector:
-- Commercial sector: 50% (2022: 41%),
-- Public sector: 37% (2022: 37%), and
-- Healthcare: 13% (2022: 22%).
-- Revenue by region:
-- UK & Ireland; 65% (2022: 71%),
-- North America: 25% (2022: 19%),
-- Central Europe: 9% (2022: 9%), and
-- Rest of World: 1% (2022: 1%).
Chief Executive Officer's statement
Consistency in a turbulent environment
This is our eighth annual report as a public company. On review
of our previous seven reports, it is obvious that we have recycled
many of the adjectives that we have used to describe our business
performance - with 'consistency' amongst the most reused terms.
Those same seven reports also describe an economic environment
that has been subject to significant volatility. From localised
events such as Brexit to global impacts from the pandemic,
organisations have needed to respond urgently to rapidly changing
circumstances.
That theme of turbulence is repeated in this report. The ebb of
the pandemic has been followed by war in Ukraine, the energy
crisis, inflation, interest rate rises, recession fears and, more
recently, concerns about the global banking sector.
Despite the volatility seen throughout the year, our execution
has remained consistent, and we have again recorded strong growth
and robust financial performance, alongside pleasing customer
satisfaction and employee engagement levels.
An excellent business performance
The digital transformation market has been growing quickly for
over a decade, initially with a focus on the replacement of ageing
and inefficient legacy systems. This driver has been augmented by
organisations striving for greater agility, to allow them to react
quickly to changes, whether accelerating new opportunities or, more
typically, responding to challenges. As a result, our customers
continue to prioritise their critical digital programmes and we
continue to help them deliver these ambitious projects.
This strong demand has resulted in our revenues growing to
GBP374.8 million, a 24% increase, and our adjusted pre-tax profit
growing 15% to GBP67.6 million. Our moderated profit growth is
mainly because of increased investment in our Workday Products,
both in research and development and in sales and marketing, an
increase of GBP9.3 million, all of which was expensed in the
year.
We continued to add to the talents of our global team, as
numbers increased by 11% to 2,990 colleagues. Despite the high
demand for digital talent and the global shortage of the same
people, our retention increased to 88%, with further improvements
in recent weeks as people became increasingly cautious about
changing jobs. Our teams are now based in 22 countries.
Our Digital Services division recorded revenue growth of 12% to
GBP224.4 million. We continued to deliver significant programmes in
partnership with the UK Government and with leading healthcare and
commercial clients. As always, our growth is a result of demand
from existing clients, such as Allied Irish Bank, NHS Digital, and
the Department for Environment Food and Rural Affairs, and new
clients including the Mayor's Office for Policing and the NHS
Business Services Authority.
We are keen to open new opportunities for Digital Services and
our investments continue to make progress. Our international
engagements in Central Europe and Canada have continued to grow,
with our revenues now GBP9.6 million, from GBP5.5 million a year
ago. Collectively, our Cloud, Data and AI and Intelligent
Automation practices now generate GBP41.9 million, representing an
increase of 47% in the past year.
Our Workday Services team continues to help forward-thinking
organisations such as Kone, Kion Group and Takeaway.com deploy
Workday's innovative Software as a Service (SaaS) platform to
support their people and finance requirements. We remain the
leading European partner within the Workday ecosystem and in July
we were appointed Workday Phase 1 Prime Status Partner for the US
market, accelerating our access to the single largest global market
for Workday consulting services.
Over the course of the year our Workday Product revenues grew
40% to GBP44.7 million. Our products, Smart Test (automated
testing), Smart Audit (compliance monitoring) and Smart Shield
(data masking) are used by organisations like Netflix, Salesforce
and match.com. We believe that there is an opportunity to grow our
Workday Product revenues to GBP100 million by 2026 and as a result
we invested further in product development (increased by GBP3.1
million to GBP9.1 million) and in our sales & marketing
capacity during the year (increased by GBP6.2 million to GBP10.8
million).
Being a responsible business
We have maintained our focus on positive climate action. We have
been carbon-neutral for the past two years and remain firmly on
track to achieve carbon net zero by 2025. Our climate targets have
now been certified by SBTi, with our actual Scope 1, 2 and 3
emissions significantly below the corresponding SBTi target. We are
increasingly able to record the carbon and cost savings that our
solutions deliver to our customers, for instance the United Nations
International Organisation for Migration where the carbon saving of
594 tonnes per year, represented a 92% reduction in emission of
IOM's IT estate.
Gender diversity remains a challenge within the wider technology
sector, where just 22% of roles are undertaken by women. During the
year, the proportion of women in Kainos increased from 33% to 34%
reflecting focused recruitment campaigns and we recognise that a
sustained effort is required to make further improvements.
We seek to inspire the next generation of digital talent and to
improve the diversity of the sector. Last year over 1,800 young
people participated in our outreach programmes, where we had
targeted programmes aimed at improving gender diversity and social
mobility for young people and for students with special educational
needs. Our digital bursaries will support 60 young people from
backgrounds that are traditionally under-represented at
university.
Maintaining a confident outlook
The ongoing economic volatility means that the pressure on our
customers remains intense. In response they are looking to reduce
their costs and increase their organisation's agility. Digital
transformation is a key foundation in achieving both these
ambitions and the market will continue its growth, especially as
organisations redirect their spending from inefficient legacy
systems to agile, modern systems. The execution of our strategy has
placed us in leading positions within our core markets, which allow
us to look confidently to the future.
Our confidence is strengthened with the success of our
additional growth initiatives:
Within Digital Services, our international expansion and our
Cloud, Data and AI and Intelligent Automation practices already
generates revenues in excess of GBP51 million; together these
provide a platform for further growth.
Workday's focus on international expansion creates a strong
backdrop for our European growth plans; at the same time our
appointment as a Workday Prime Partner in the US market provides
accelerated access to the largest Workday services market
globally.
With our Workday Products, we can accelerate the adoption of our
software across the Workday ecosystem, creating a significant
software business.
We can be certain that the economic uncertainty will continue.
While it is sensible to be confident about our markets, our
customers and our abilities, it is equally sensible to remain
vigilant and be responsive to any changes. That too is a sentiment
that has been reflected in our previous seven annual reports.
A sense of gratitude
In each of our previous reports, the final words of this
statement have focused on thanking our customers and our
colleagues; and this year we continue to observe this important
tradition.
Our performance as a business is influenced by many factors, but
it is our relationships with our customers and the talents of our
colleagues that truly shape our future.
The strength and depth of both have continued to grow this year
and we are grateful for the trust and confidence that our customers
continue to place in Kainos and the expertise, experience, and
energy of our colleagues, who have been the driving force behind
all that we have achieved.
Brendan Mooney
Chief Executive Officer
Our strategy
We are a growth-orientated business and while we are always
confident of growing our market share in subdued markets, we
naturally orientate towards higher growth, dynamic markets. It is
in these markets where the talents of our people shine the
brightest and opportunities for growth are the strongest.
Our ambition is to be a global, independent company operating
towards the disruptive end of technology, that will thrive not just
today, but for generations. In building for the long-term, we
aspire to provide our people with rewarding and fulfilling
long-term careers.
As part of this ambition, we believe that we can achieve
sustained growth in terms of revenue, adjusted pre-tax profit and
cash flow.
We have, deliberately, developed from a national to an
international organisation, both internally and in the customers
and markets that we serve. We expect our international presence to
continue to expand in terms of locations, people and customers.
It is our preference to grow organically; we will undertake
acquisitions only in exceptional circumstances, for instance, where
we need to obtain unique skills.
We also look to ensure that we have a well-balanced business,
which is not overly reliant on any one customer, market or sector.
This occasionally requires us to prioritise smaller, early-stage
opportunities ahead of established market growth. We are
comfortable with taking this long-term view.
People
The fundamental component of our strategy is our people. Our
business is successful because of the talent, skill and motivation
of our colleagues as they deliver on commitments to internal and
external customers.
We will add to our existing talented workforce by recruiting
high calibre people from school, college and industry; we will
continue to invest in developing their skills and careers; and we
will continue to strive to be a great employer.
Progress in FY23 Priorities for FY24
* Headcount increased by 298, to a total of 2,990 * Maintain high standards when recruiting new
colleagues (2022: 2,692). This included 184 early applicants.
careers colleagues.
* Ongoing investment in skills and career development
* Invested over 18,000 days of technical and skills of all colleagues in Kainos.
development in our people.
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* Employee retention increased to 88%. * Maintain our high levels of employee retention
(achieve over 85%).
* We were ranked in the '50 Best Places to Work in the
UK' by Glassdoor. * Maintain or improve our scores for employee
engagement, D&I and wellbeing.
* As measured through Workday Peakon, we have
maintained high levels of employee engagement (81%),
and high ratings for diversity and inclusion (D&I)
(84%) and wellbeing (78%).
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* Involved over 1,800 young people and those from * Continue to inspire and educate young people and
under-represented groups in our outreach programmes. those from under-represented groups for potential
careers in IT.
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Customers
Our business model is based on the conviction that by delivering
consistently to our customers we will build long-lasting, mutually
beneficial relationships that will see us thrive as a business.
These relationships are built on our reputation for delivery and
exemplary customer service. By being responsive to and supportive
of our customers' complex and changing business needs, we reinforce
the strength of our relationships.
Therefore, our purpose is to help our customers with their most
challenging projects and, together with our partners, help them
build the capability to succeed in the digital age.
Progress in FY23 Priorities for FY24
* Customer satisfaction levels recorded as 99% (2022: * Maintain high levels of customer satisfaction,
98%). resulting in high levels of net revenue retention.
* Net revenue retention recorded as 126% (2022: 134%)
.
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Markets
Digital Services
Our focus is to:
-- c ontinue to grow within the public and healthcare sectors,
being engaged in ambitious transformation projects across UK
Government and the NHS;
-- repeat our digital transformation success within the UK
commercial sector, with a focus on financial services; and
-- expand internationally, focused initially within Germany and
Canada where we already have established delivery teams, have built
business development expertise and have an existing Workday
Services and Products client base.
Progress in FY23 Priorities for FY24
* Public sector revenues increased by 26% to GBP137.0 * Grow our business in both sectors, supporting
million (2022: GBP108.4 million). existing clients and projects, and adding new
long-term clients in line with our delivery capacity.
* Following the easing of pandemic-related spending,
healthcare revenues decreased by 25% to GBP49.7
million (2022: GBP66.3 million).
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* Commercial sector revenues increased by 51% to * Continue to build reputation and references in the
GBP37.8 million (2022: GBP25.1 million). sector to maintain our accelerated growth.
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* International revenues from Central Europe and North * Continue to build reputation and references within
America increased by 75% to GBP9.6 million (2022: both regions.
GBP5.5 million).
* Refine sales and marketing approach as market
penetration increases.
* Build in-region delivery capability in line with
success.
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Workday Services
Our focus is to:
-- continue to grow in our existing, established markets as
Workday continues to expand within these markets;
-- gain market share, replacing incumbent providers to existing
Workday customers through a reputation for higher service levels;
and
-- expand internationally, establishing operations in countries
with large and growing numbers of Workday customers.
Progress in FY23 Priorities for FY24
* Workday Services revenues increased by 49% to * Maintain growth trajectory in all regions, supporting
GBP105.7 million (2022: GBP70.9 million). existing clients and projects, and adding new
long-term clients in line with capacity.
===============================================================
* We were appointed by 40+ customers where earlier * Continue to excel in customer service.
phases of the project were undertaken by a different
partner.
===============================================================
* International revenues increased by 60% to GBP81.1 * Maintain growth trajectory in all regions, in
million (2022: GBP50.7 million). particular develop the Phase 1 opportunity in the US
market.
* Achieved Workday Phase 1 Prime Partner status in US,
the largest market for Workday consulting services
globally.
===============================================================
Workday Products
Our focus is to:
-- increase the number of Workday's customers who use our software;
-- ensure high levels of customer satisfaction driving strong Net Revenue Retention (NRR); and
-- invest in our existing products, and develop additional
products within the Workday ecosystem, where our blend of software
skills and Workday experience makes us uniquely positioned.
Progress in FY23 Priorities for FY24
* Our customer numbers increased, with 350+ customers * Increase the total number of customers using our
using Smart Test, 70+ using Smart Audit and 40+ usin software.
g
Smart Shield.
* Increase the adoption of multiple products by each
customer.
* R evenues increased by 40 % to GBP 44.7 million (
2022 : GBP 31.9 million).
=========================================================
* NRR is over 100%, driven by customer satisfaction * Maintain our high levels of customer satisfaction.
levels of 99%.
=========================================================
* We successfully launched Smart Shield (August 2022). * Ensure that customer adoption and revenues reflect
the very strong increase in investment.
* Overall investment, spanning product development and
sales & marketing, increased by 88% to GBP19.9 * Develop and launch one new product.
million (2022: GBP10.6 million).
=========================================================
New opportunities
In addition to the investment we make in our Workday Products,
our focus also includes:
-- continue to invest in our Cloud (launched 2017), Data and
Artificial Intelligence (2019) and Intelligent Automation (2020)
practices, further building capability and creating international,
high-growth businesses;
-- through our innovation process, identify and promote new
ideas that have the potential to become sizeable revenue streams in
the future.
Progress in FY23 Priorities for FY24
* Our practices continued to grow in scale, achieving * Maintain growth trajectory, embedding our new
combined revenues of GBP41.9 million (2022: GBP28.5 activities across several of our digital
million) an increase of 47%, and with 360 colleague transformation projects.
s
involved in the three areas (2022: 305).
* Manage investment levels in line with total 'new
opportunities' investments.
===========================================================
* Our innovation process evaluated several new ideas, * Increase the number of submissions to the innovation
however none were approved for further investment. process.
===========================================================
Operational review
Our overall performance
The level of digital transformation undertaken by ambitious
organisations continues to increase as the industry enters its
second decade. Our established track record in guiding and
supporting customers to deliver their large-scale digital
transformation programmes, as they respond to the changing demands
in their organisations, continues to provide the bedrock for our
own growth .
Our high levels of activity with our customers have translated
into an excellent set of results for our financial year.
Revenue for the year grew by 24% (20% ccy) to GBP374.8 million
(2022: GBP302.6 million) with adjusted pre-tax profit( [3])
increasing by 15% (increased 4% ccy) to GBP67.6 million (2022:
GBP58.8 million). Adjusted pre-tax profit would have been c.GBP6.1
million lower under constant currency exchange rates.
In line with our previous guidance, we have increased investment
in our software products, representing a total of GBP9.3 million.
Research & development investment increased to GBP9.1 million
(2022: GBP6.0 million) and our product-related sales &
marketing investment increased to GBP10.8 million (2022: GBP4.6
million).
Our sales performance underlines our success in winning business
- extensions to existing contracts, additional projects placed by
existing customers and winning new customers. Bookings for the year
increased by 22% (20% ccy) to GBP427.8 million (2022: GBP349.8
million), which resulted in a 24% increase in the contracted
backlog to GBP322.9 million (2022: GBP259.7 million).
As at 31 March 2023, we had a very strong cash balance of
GBP108.3 million (2022: GBP76.6 million), representing 104% cash
conversion (2022: 83%).
Our people
We are clear that our success is driven by the ability, energy
and expertise of the people in Kainos.
Since last year, our headcount has grown by 298 to 2,990 people
(2022: 2,692). Of our colleagues, 7% are contractors (2022: 12%).
By region, UK & Ireland increased to 2,130 people (+190),
Central Europe increased to 465 people (+50) and the Americas
increased to 395 people (+58).
Our employee engagement levels remain high. We now utilise
Workday Peakon to continuously assess employee engagement and have
achieved a rating of 81%. For the second consecutive year, we were
awarded '50 Best Places to Work For in the UK' by Glassdoor, the
online career community.
During the year, 88% of our colleagues made the choice to stay
and develop their career within Kainos (2022: 86%). For much of the
year, the global shortage of digital skills created recruitment and
retention challenges, however these eased during the last weeks of
the financial year.
(3) The Financial Review section includes reconciliations
between adjusted pre-tax profit and profit before tax numbers.
Our customers
We believe that by delivering consistently to our customers we
build long-term relationships. This is a perspective shared by our
customers, who continue to have a very positive view of our
performance - 99% of respondents to our customer surveys rated our
service as 'good' or above (2022: 98%).
Existing customers continue to trust us to deliver their most
challenging projects, and this is reflected in our revenues, with
90% of revenues coming from our existing clients (2022: 88%). We
have also gained new customers during the year, and we now work
with 821 customers (2022: 731).
From a sector perspective we have a well-diversified business,
with 50% of our revenues from commercial clients (2022: 41%), 37%
from public sector organisations (2022: 37%), and 13% from
healthcare customers (2022: 22%).
Our international client base has also expanded and as a result
our international revenues have grown by 52% to GBP132.0 million
(2022: GBP87.0 million). Regionally, UK & Ireland accounts for
65% of our business (2022: 71%), North America for 25% (2022: 19%),
Central Europe for 9% (2022: 9%), with the rest of the world
representing 1% (2022: 1%).
Digital Services performance
Our Digital Services division builds solutions that are highly
cost-effective and make public-facing services more accessible and
easier to use for the citizen, patient and customer.
Revenues grew by 12% (12% ccy) to GBP224.4 million (2022:
GBP199.8 million). Bookings, at GBP238.2 million (2022: GBP215.0
million), represented an increase of 11% (11% ccy) and as a result,
contracted backlog increased by 6% to GBP140.9 million (2022:
GBP132.7 million).
During the year our healthcare revenues decreased as
pandemic-related expenditure reduced. With strong opportunities in
both the public sector and commercial sector we reallocated a
number of teams to projects in these larger sectors.
Overall, public sector now represents 61% of divisional revenues
(2022: 54%), healthcare 22% (2022: 33%) and commercial sector 17%
(2022: 13%).
Public sector
Our public sector customers have remained committed to their
digital transformation programmes and they remain ambitious in the
scope of services that they wish to digitise, which is underpinned
by a new digital transformation policy which outlines 50 of 75
services to be digitised by 2025. As a result of this commitment,
our revenues increased by 26% to GBP137.0 million (2022: GBP108.4
million).
Within central government, we continue to consolidate our strong
position across key accounts, securing new contracts to deliver
digital programmes in Driver and Vehicle Standards Agency and
Foreign Commonwealth & Development Office. Beyond our existing
accounts, we are also delivering projects with new areas, in
Defence (Defence Science & Technology Laboratory - Artificial
Intelligence Delivery Partner) and the Mayor's Office for Policing
( Cloud Migration Partner).
Commercial sector
In the UK, the commercial sector total expenditure on IT is over
three times that of the public sector. While this represents
significant opportunity, to increase our likelihood of success, we
have initially chosen to focus our activity on financial services
customers.
Like all large organisations post-pandemic, those within banking
and insurance are increasing their levels of investment in digital
transformation. This, coupled with our growing references in the
sector, has driven a rapid increase in activity as we have helped
established customers like Nets Group and New Ireland and new
customers such as Investment Management Corporation of Ontario
(IMCO) , Danske Bank and Allied Irish Bank.
Reflecting these higher activity levels, our revenues increased
by 51% to GBP37.8 million (2022: GBP25.1 million).
Healthcare sector
As flagged in our November update, our healthcare revenues
reduced during the year to GBP49.7 million (2022: GBP66.3 million),
a reduction of 25%.
The reduction in revenue is largely attributable to the easing
of pandemic-related spending, although the merging of our customers
NHS Digital and NHS X to form NHS England's new Transformation
Directorate has also had an impact .
More positively, excluding pandemic-related expenditure, our
healthcare revenues have been rising steadily, increasing by 85%
from GBP19.4 million in 2019 to current levels. This year, our
customers have included the Department for Health and Care Wales,
where we delivered their Patient App, Genomics England and Our
Future Health.
International expansion outside of UK and Ireland
With the UK as an early adopter of digital transformation, we
believe that there is a significant opportunity to replicate our
home market success internationally. Our initial focus is primarily
on commercial customers in Germany and Switzerland, with
organisations such as Hello Fresh and Nets Group and in the
commercial and public sector in Canada with IMCO and Government of
Canada.
Our international revenues are reported in the figures in the
sectors listed above, but for clarity, international revenues for
the division have increased by 75% to GBP9.6 million (2022: GBP5.5
million).
Digital Services outlook
We remain extremely positive about the future of digitisation in
the UK public sector both immediately and over the long-term. We
are confident that based upon our strong reputation and successful
track record, we are well positioned to maintain a central role in
this transformation drive.
The digitisation pressures and opportunities within the
commercial sector are similar, and therefore the growth prospects
for us are substantial. Our progress in the past eighteen months
provides confidence that we will deliver significant growth in the
years ahead.
We are similarly optimistic about the international opportunity,
utilising the skills and expertise gained as a leading digital
transformation specialist in the UK and focusing on international
regions where we already have established delivery teams, sales
expertise and a strong Workday client base.
Workday Services performance
Revenue for the year grew by 49% (40% ccy) to GBP105.7 million
(2022: GBP70.9 million); contracted backlog increased by 42% to
GBP72.8 million (2022: GBP51.1 million); and bookings increased by
56% (50% ccy) to GBP121.7 million (2022: GBP78.2 million).
The number of accredited Workday consultants at Kainos increased
by 27% to 808 (2022: 638).
Having first engaged with Workday in 2011, we are now one of
their most experienced partners. We are the only specialist Workday
partner headquartered in the UK and one of only 49 partners
globally accredited to implement Workday's innovative SaaS
platform.
From our initial strong base in UK & Ireland, we expanded
internationally - into Northern and Central Europe in 2015 and into
the North American market in 2018. Within Europe, we are the
leading Workday partner - this leadership position is the result of
high satisfaction levels within our customer base, coupled with our
geographic expansion in the region. Our European customers,
including those in the UK & Ireland, generated 47% of total
revenue (2022: 57%).
A similar focus on customer success in our North American market
has resulted in our appointment, in mid-2022, as a Phase 1 Prime
partner for the US market - which remains the largest market
globally for Workday services. Our North American customers
generated 53% of total revenue (2022: 43%).
In addition to the delivery of Workday for new customers, we are
increasingly involved in supporting customers already live on the
Workday platform. We describe this annuity-style revenue stream as
Post Deployment Services.
Workday Extend
Alongside these typical consulting activities, there is a
growing opportunity linked to Workday Extend, Workday's
Platform-as-a-Service offering which became generally available to
customers in May 2020. Kainos has been part of the Workday Extend
early adopter programme since 2017.
Workday Extend allows organisations to build additional,
specialised functionality on the Workday platform to further
enhance customers' Workday deployment. As experts in Workday
Extend, we have helped organisations such as Universal Music Group,
Groupon and Cardinal Health build Workday Extend applications
specific to their requirements.
Workday Services outlook
Our strong performance provides further evidence of the strength
of the Workday market. With Workday's main competitors, Oracle and
SAP, soon to mark 50 years in the ERP market, we believe that
Workday's more innovative product suite can continue to gain
significant market share for many years to come. This is reflected
in Workday Inc's bold target of achieving $10 billion revenue by
2026( [4]), up from c.$6 billion today.
(4) Workday, Inc.
In addition, we believe that we can outpace this rapid market
growth by continuing our international expansion, especially within
the US market, and by replacing other Workday partners in
engagements where they are underserving their customers.
Workday Products performance
Our Workday Products revenue increased by 40% (26% ccy) to
GBP44.7 million (2022: GBP31.9 million); the Annual Recurring
Revenue was GBP47.9 million (2022: GBP34.3 million), an increase of
40% (33% ccy) and backlog increased by 44% to GBP109.3 million
(2022: GBP75.9 million).
Workday is a comprehensive SaaS platform, but we have identified
opportunities to develop our own software products that are
complementary to the platform and that enable customers to further
increase the benefit that they can realise from their investment in
Workday.
In 2014, Kainos launched Smart Test which is used by
organisations to automatically verify their Workday configurations.
Smart Test is used by over 350 global enterprise customers,
including Salesforce, Capital One and Whole Foods.
Our second product, Smart Audit, became generally available in
August 2021 and has already been deployed to over 70 customers
including Chanel, Arcbest and QBE Insurance. Smart Audit is a
compliance monitoring tool that allows Workday customers to
maintain operational security controls across their Workday
environments. Our pre-built controls focus on safeguarding against
Segregation of Duties conflicts, providing robust Privileged Access
Controls and protecting Personal and Sensitive employee data.
In August 2022, we launched our third product, Smart Shield, a
data-masking tool that can easily and seamlessly mask sensitive
data without impacting the Workday user experience. It ensures that
sensitive data remains controlled when Workday environments are
made available to broader internal or external teams, for instance,
during support and maintenance activities, or for ongoing internal
Workday training and onboarding programmes. Although just released,
Smart Shield is now used by over 40 customers, including Match.com
and LKAB.
Workday Extend
In addition to the consulting services opportunity linked to
Workday Extend, and described in the previous section, the platform
provides us further opportunity to build products that are embedded
inside Workday. During 2023 we have developed a new product,
Employee Document Management, to help customers manage and simplify
the full lifecycle of employee documents. Although not yet
generally available, it is gaining traction with Workday
customers.
Workday Products outlook
For our existing Workday products, our growth will be powered by
the increase in Workday clients and by higher penetration of our
products into the Workday client base.
We believe that we are well positioned to identify and develop
additional products for the Workday ecosystem. Our growth will
initially be determined by the product-market fit of our new
products, followed by the penetration into the Workday client
base.
Innovation, research and development
Successful businesses continue to challenge themselves and we
are keen to improve our existing offerings, develop new business
ideas and assess business and technology concepts that are likely
to impact our clients in the future.
Including our product investment, our research and development
expenditure for the year amounted to GBP9.1 million (2022: GBP6.2
million), which was wholly expensed in the year.
Innovation framework
We take the view that our people, who are often deeply engaged
with our customers, are best placed to identify interesting
problems. To support them, we have developed an innovation
framework that is used across Kainos and comprises a body of
knowledge, tools, methods and approaches for innovating, and
processes to develop opportunities and ideas.
a) Spark & Scale
We create the conditions for our staff to identify interesting
problems (finding the Spark) and support the development of ideas
from conception through to launch (creating the Scale). This can
range from applying cutting-edge technologies to existing customer
problems, to identifying and testing a potential partnership or a
new business offering.
Our dedicated innovation services team are on hand to explore
the idea, developing an informed judgement of its early commercial
potential. The Spark & Scale process is typically an investment
of up to 20 days, with some external expenditure.
b) Practice Incubator
Through our dedicated incubator, we accelerate the creation of
new practices, which focus on bringing new technologies to
customers through dedicated, highly skilled practitioners.
Proposals for new practices are evaluated by a panel composed of
experienced Kainos leaders. If successful, new practices are given
a formal investment package, typically composed of development
time, specialist recruitment and external expenditure.
For example, our Intelligent Automation practice, graduated from
this process and was launched in August 2020. The team, now 32
people, including externally recruited experts, has allowed us to
undertake small, focused engagements for existing and new clients.
We have every belief that our Intelligent Automation practice will
follow the success of our Data and Artificial Intelligence
practice, which is now over 120 specialists.
c) Technical and market research
To support innovation activities and strategic decision making
across Kainos, we have invested in a team dedicated to technical
and market research. The team's activities include providing
foresight and research into emerging technologies, interpreting
developing trends and identifying market insights.
The team is continuing research into: the advances of machine
learning and AI, such as reinforcement learning; sustainability,
including green technology and applying sustainable models to our
services; fog, edge and distributed systems for the creation of
smart environments, devices and places; the ethical use of data and
AI; advances and emerging concepts in the development of healthcare
technology; and a range of other emerging concepts, including
quantum computing and ambient intelligence, with a goal of
understanding when they should approach a level of maturity and the
impact they will have on our business and clients.
Partnerships
In addition to internally sourced ideas, we nurture
relationships with a broad network of partner organisations. We are
active in start-up ecosystems, working with entrepreneurial young
companies. Our people mentor and support their teams, helping to
increase success prospects for their business, and with the
aspiration of identifying and developing joint commercial
opportunities.
We also work with academic research partners and leading
industry organisations, such as the Turing Institute, Digital
Catapult and the Institution of Engineering and Technology as well
as working with our strategic partners on further-from-market
technology and research.
Close-to-customer innovation
Technology continues to develop at pace, and we look to
continuously improve our delivery approach for our customers. These
improvements reflect our most recent experience in delivering
projects, as well as using the improvements in the platforms from
Workday, Microsoft, AWS, UI Path, and other partners.
Within Digital Services, our continued investment makes us
leaders in cloud native software and data engineering, delivering
technology, practices and principles that enable our customers to
achieve long-term success with digital and data transformation.
Through our Digital Advisory Practice, we work on customer
innovation, bringing our leading technical expertise and wide
network of partners to bear on real-world problems, quickly
delivering value for users.
Workday frequently releases software and functionality updates
for their platform, and we ensure that these latest developments
are reflected in our delivery approach and methodology. We also
assess new modules, particularly Workday Extend, which allows
customers to add unique functionality to their Workday system.
Financial review
FY23 was another year of excellent financial performance.
In summary, we grew revenue by 24% (20% ccy) to GBP374.8 million
(2022: GBP302.6 million). Digital Services revenue rose by 12% to
GBP224.4 million (2022: GBP199.8 million), reflecting increased
demand for digital transformation, primarily across the public and
commercial sectors. Workday Services revenue grew 49% (40% ccy) to
GBP105.7 million (2022: GBP70.9 million) driven by growth in North
America. Workday Products revenue increased to GBP44.7 million
(2022: GBP31.9 million), representing growth of 40% (26% ccy)
(2022: 32%). The Operating Review provides more information on our
revenue performance.
Our overall gross margin was 47.3% (2022: 46.3%). Digital
Services' gross margin decreased to 38.1% (2022: 38.7%), mainly due
to the two additional UK bank holidays in the period. Workday
Services margin remained consistent at 54.2% (2022: 54.3%). Workday
Products margin increased to 76.6% (2022: 76.3%).
Operating expenses
Operating expenses increased by 33% to GBP124.6 million (2022:
GBP93.6 million). The growth in operating expenses is higher than
revenue growth due to the increased investment in Workday Products
in both sales and product development.
Our investment in product development increased to GBP9.1
million (2022: GBP6.0 million), all of which was expensed during
the period. We recognised GBP4.2 million of Research &
Development Expenditure Credit (RDEC) income during the year (2022:
GBP3.2 million).
Alternative performance measures
We use underlying results to manage the business and measure
performance day-to-day. We believe that 'adjusted profit before
tax', 'adjusted EBITDA' and 'adjusted diluted and basic earnings
per share' better represent the Group's underlying performance and
make it easier to compare the Group's performance between
periods.
Our adjusted results exclude the effect of share-based payment
expense, acquisition-related expenses, including amortisation of
acquired intangible assets, and compensation for post-combination
services.
The adjusted profit measures we use are not defined in
UK-adopted International Accounting Standards and our definitions
may not be comparable with similarly titled performance measures
and disclosures in other entities. The adjusted profit measures
reconcile to the reported numbers as follows:
Adjusted profit measures
2023 2022
(GBP000s) (GBP000s)
=========== ==========
Profit before tax 54,338 45,993
============================================== =========== ==========
Share-based payment expense and related costs 6,346 3,727
============================================== =========== ==========
Amortisation of acquired intangible assets 2,642 1,890
============================================== =========== ==========
Compensation for post-combination services 4,176 5,520
============================================== =========== ==========
Acquisition-related expenses 57 1,641
============================================== =========== ==========
Adjusted profit before tax 67,559 58,771
============================================== =========== ==========
2023 2022
(GBP000s) (GBP000s)
=========== ==========
Profit after tax 41,645 35,768
============================================== =========== ==========
Share-based payment expense and related costs 4,886 2,907
============================================== =========== ==========
Amortisation of acquired intangible assets 2,642 1,890
============================================== =========== ==========
Compensation for post-combination services 4,176 5,520
============================================== =========== ==========
Acquisition-related expenses 57 1,641
============================================== =========== ==========
Adjusted profit after tax 53,406 47,726
============================================== =========== ==========
Adjusted EBITDA
2023 2022
(GBP000s) (GBP000s)
=========== ==========
Adjusted profit before tax 67,559 58,771
============================================== =========== ==========
Depreciation of property, plant and equipment 2,249 1,538
============================================== =========== ==========
Depreciation of right-of-use assets 1,163 1,654
============================================== =========== ==========
Finance expense 71 74
============================================== =========== ==========
Finance income (1,463) (52)
============================================== =========== ==========
Adjusted EBITDA 69,579 61,985
============================================== =========== ==========
Adjusted pre-tax profit increased by 15% to GBP67.6 million
(2022: GBP58.8 million). Profit before tax increased by 18% to
GBP54.3 million (2022: GBP46.0 million).
Corporation tax charge
The effective tax rate for the year was 23% (2022: 22%). This is
higher than the UK tax rate of 19% as we earn profits in countries
with higher corporation tax rates than the UK.
Financial position
We continue to have a strong financial position, with GBP108.3
million of cash (2022: GBP76.6 million), no debt and net assets of
GBP129.3 million (2022: GBP107.7 million). Underlying trade
receivables and accrued income balance is similar to last year at
GBP74.5 million (2022: GBP74.7 million), despite the growth in
revenue, due to very strong cash conversion in the period.
Property, plant and equipment decreased to GBP9.5 million at the
year end (2022: GBP14.9 million). During the year GBP5.2 million
was transferred from property, plant and equipment to investment
property, reflecting our agreement to sell part of the site
acquired in 2019 for the development of our future headquarters in
Belfast. Furthermore, we listed property located in Belfast for
sale in February 2023. The carrying value of this property (GBP0.3
million) has been transferred to assets held for sale within
current assets.
Cash flow and cash conversion
Cash conversion, which is cash generated by operating activities
as a percentage of adjusted EBITDA, remained strong at 104% (2022:
83%).
Dividend
Our progressive dividend policy maximises shareholder returns,
while ensuring we have sufficient funds to invest in long-term
growth. The proposed final dividend recommended by Directors is
16.1p and, if approved by shareholders, will be paid on 20 October
2023 to shareholders on the register on 29 September 2023, with an
ex-dividend date of 28 September 2023. This will make the total
dividend for the year 23.9p (2022: 22.2p) which will represent a
distribution of 56% of adjusted profit after taxation (2022:
58%).
Consolidated income statement for the year ended 31 March
2023
Continuing operations Note 2023 2022
(GBP000s) (GBP000s)
========================================= ===== =========== ==========
Revenue 2 374,807 302,632
========================================= ===== =========== ==========
Cost of sales 2 (197,652) (162,386)
========================================= ===== =========== ==========
Gross profit 2 177,155 140,246
========================================= ===== =========== ==========
Operating expenses (124,597) (93,625)
========================================= ===== =========== ==========
Impairment gain/(loss) (including
amounts recovered) on trade receivables
and accrued income 388 (606)
========================================= ===== =========== ==========
Operating profit 52,946 46,015
========================================= ===== =========== ==========
Finance income 1,463 52
Finance expense (71) (74)
========================================= ===== =========== ==========
Profit before tax 54,338 45,993
========================================= ===== =========== ==========
Income tax expense 5 (12,693) (10,225)
========================================= ===== =========== ==========
Profit for the year 41,645 35,768
========================================= ===== =========== ==========
Earnings per share
Basic 733.6p 29.1p
=================== ===== =====
Diluted 733.1p 28.5p
=================== ===== =====
Consolidated statement of comprehensive income for the year
ended 31 March
2023
2023 2022
(GBP000s) (GBP000s)
================================================== === =========== ==========
Profit for the year 41,645 35,768
======================================================= =========== ==========
Items that may be reclassified subsequently to
profit or loss:
----------- ----------
Foreign operations - foreign currency translation
differences 779 728
=================================================== =========== ==========
Total comprehensive income for the year 42,424 36,496
======================================================= =========== ==========
Consolidated statement of financial position as at 31 March
2023
Note 2023 2022
(GBP000s) (GBP000s)
================================== ===== =========== ==========
Non-current assets
================================== ===== =========== ==========
Goodwill 19,007 18,765
Other intangible assets 3,816 5,993
Investment property 5,160 -
Property, plant and equipment 9,509 14,867
Right-of-use assets 1,261 3,166
Investments in equity instruments 1,299 1,343
Deferred tax asset 3,103 4,282
================================== ===== =========== ==========
43,155 48,416
================================== ===== =========== ==========
Current assets
================================== ===== =========== ==========
Trade and other receivables 8 38,970 38,358
Prepayments 8 3,656 4,377
Accrued income 8 38,808 39,462
Tax receivable 400 -
Cash and cash equivalents 108,302 76,609
Assets held for sale 310 -
================================== ===== =========== ==========
190,446 158,806
================================== ===== =========== ==========
Total assets 233,601 207,222
================================== ===== =========== ==========
Current liabilities
================================== ===== =========== ==========
Trade payables and accruals 9 (52,348) (49,199)
Deferred income 9 (37,087) (30,966)
Tax payable - (1,959)
Lease liabilities (794) (1,093)
Provisions (341) (872)
Other tax and social security 9 (12,068) (11,917)
================================== ===== =========== ==========
(102,638) (96,006)
================================== ===== =========== ==========
Non-current liabilities
----- ----------- ----------
Provisions (1,031) (1,258)
Lease liabilities (585) (2,268)
================================== ===== =========== ==========
(1,616) (3,526)
================================== ===== =========== ==========
Total liabilities (104,254) (99,532)
================================== ===== =========== ==========
Net assets 129,347 107,690
================================== ===== =========== ==========
Equity
================================== ===== =========== ==========
Share capital 623 619
================================== ===== =========== ==========
Share premium account 6,567 6,433
================================== ===== =========== ==========
Capital reserve 3,548 3,548
================================== ===== =========== ==========
Share-based payment reserve 23,394 15,171
================================== ===== =========== ==========
Translation reserve 1,030 251
================================== ===== =========== ==========
Retained earnings 94,185 81,668
================================== ===== =========== ==========
Total equity 129,347 107,690
================================== ===== =========== ==========
These financial statements were approved by the Board of
Directors and authorised for issue on 19 May 2023. They were signed
on its behalf by:
Richard McCann
Director
19 May 2023
Consolidated statement of changes in equity for the year ended
31 March 2023
Share Share Capital Share-based Translation Retained Total
capital premium reserve payment reserve earnings equity
reserve
(GBP000s)
(GBP000s) (GBP000s)
(GBP000s) (GBP000s) (GBP000s) (GBP000s)
======================== ========== ========== ========== =========== =========== ========== ==========
Balance at 31
March 2021 614 5,737 662 9,083 (477) 71,989 87,608
======================== ========== ========== ========== =========== =========== ========== ==========
Profit for the
year - - - - - 35,768 35,768
======================== ========== ========== ========== =========== =========== ========== ==========
Other comprehensive
income - - - - 728 - 728
======================== ========== ========== ========== =========== =========== ========== ==========
Total comprehensive
income for the
year - - - - 728 35,768 36,496
======================== ========== ========== ========== =========== =========== ========== ==========
Equity-settled
share-based payment - - - 6,088 - - 6,088
======================== ========== ========== ========== =========== =========== ========== ==========
Current tax for
equity-settled
share-based payments - - - - - 1,610 1,610
======================== ========== ========== ========== =========== =========== ========== ==========
Deferred tax
for equity-settled
share-based payments - - - - - (280) (280)
======================== ========== ========== ========== =========== =========== ========== ==========
Issue of share
capital - share
options exercised 5 2,296 - - - - 2,301
======================== ========== ========== ========== =========== =========== ========== ==========
Issue of shares
as purchase
consideration - - 1,286 - - - 1,286
======================== ========== ========== ========== =========== =========== ========== ==========
Transfer between
reserves( [5]
) - (1,600) 1,600 - - - -
======================== ========== ========== ========== =========== =========== ========== ==========
Dividends - - - - - (27,419) (27,419)
======================== ========== ========== ========== =========== =========== ========== ==========
Balance at 31
March 2022 619 6,433 3,548 15,171 251 81,668 107,690
======================== ========== ========== ========== =========== =========== ========== ==========
Profit for the
year - - - - - 41,645 41,645
======================== ========== ========== ========== =========== =========== ========== ==========
Other comprehensive
income - - - - 779 - 779
======================== ========== ========== ========== =========== =========== ========== ==========
Total comprehensive
income for the
year - - - - 779 41,645 42,424
======================== ========== ========== ========== =========== =========== ========== ==========
Equity-settled
share-based payment - - - 8,223 - - 8,223
======================== ========== ========== ========== =========== =========== ========== ==========
Current tax for
equity-settled
share-based payments - - - - - 237 237
======================== ========== ========== ========== =========== =========== ========== ==========
Deferred tax
for equity-settled
share-based payments - - - - - (931) (931)
======================== ========== ========== ========== =========== =========== ========== ==========
Issue of share
capital - share
options exercised 4 134 - - - - 138
======================== ========== ========== ========== =========== =========== ========== ==========
Dividends - - - - - (28,434) (28,434)
======================== ========== ========== ========== =========== =========== ========== ==========
Balance at 31 23,394(
March 2023 623 6,567 3,548 [6] ) 1,030 94,185 129,347
======================== ========== ========== ========== =========== =========== ========== ==========
(5) Premium on shares issued as consideration in FY20
reclassified from share premium account to capital reserve, in
accordance with the requirements of the Companies Act 2006,
S612.
(6) GBP12.1 million relates to exercised or lapsed options and
is considered distributable.
Consolidated statement of cash flows for the year ended 31 March
2023
2023 2022
(GBP000s) (GBP000s)
============================================== === ============ ===========
Cash flows from operating activities
============================================== === ============ ===========
Profit for the year 41,645 35,768
=================================================== ============ ===========
Adjustments for:
============================================== === ============ ===========
Finance income (1,463) (52)
=================================================== ============ ===========
Finance expense 71 74
=================================================== ============ ===========
Tax expense 12,693 10,225
=================================================== ============ ===========
Share-based payment expense 6,346 3,727
=================================================== ============ ===========
Depreciation of property, plant and equipment 2,249 1,538
=================================================== ============ ===========
Depreciation of right-of-use assets 1,163 1,654
=================================================== ============ ===========
Amortisation of intangible assets 2,642 1,890
=================================================== ============ ===========
Loss on disposal of property, plant and
equipment - 8
=================================================== ============ ===========
Post-acquisition remuneration settled
by shares 3,200 2,950
=================================================== ============ ===========
(Decrease)/increase in provisions (758) 395
=================================================== ============ ===========
Operating cash flows before movements
in working capital 67,788 58,177
=================================================== ============ ===========
Increase in trade and other receivables (3,380) (22,996)
=================================================== ============ ===========
Increase in trade and other payables 8,076 16,571
=================================================== ============ ===========
Cash generated from operating activities 72,484 51,752
=================================================== ============ ===========
Income taxes paid (10,585) (7,089)
=================================================== ============ ===========
Net cash from operating activities 61,899 44,663
=================================================== ============ ===========
Cash flows from investing activities
============================================== === ============ ===========
Interest received 1,463 52
=================================================== ============ ===========
Purchases of property, plant and equipment (2,499) (5,819)
=================================================== ============ ===========
Acquisition of other investments - (74)
=================================================== ============ ===========
Amounts withdrawn/(placed) on treasury
deposit - 18,028
=================================================== ============ ===========
Acquisition of subsidiaries net of cash
acquired - (16,768)
=================================================== ============ ===========
Net cash used in investing activities (1,036) (4,581)
=================================================== ============ ===========
Cash flows from financing activities
============================================== === ============ ===========
Dividends paid (28,434) (27,419)
=================================================== ============ ===========
Interest paid (71) (74)
=================================================== ============ ===========
Repayment of lease liabilities (1,075) (1,409)
=================================================== ============ ===========
Proceeds on issue of shares 138 2,301
=================================================== ============ ===========
Net cash used in financing activities (29,442) (26,601)
=================================================== ============ ===========
Net increase in cash and cash equivalents 31,421 13,481
=================================================== ============ ===========
Cash and cash equivalents at beginning
of year 76,609 62,896
=================================================== ============ ===========
Effect of exchange rate fluctuations on
cash held 272 232
=================================================== ============ ===========
Cash and cash equivalents at end of year 108,302 76,609
=================================================== ============ ===========
Notes to the consolidated financial information
1. General information and basis of preparation
Kainos Group plc ('the Company') is a public company limited by
shares incorporated in the United Kingdom under the Companies Act
2006 and is registered in England and Wales (company registration
number 09579188), having its registered office at 21 Farringdon
Road, 2nd Floor, London EC1M 3HA. The Company is listed on the
London Stock Exchange.
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the 'Group').
The Group financial statements have been prepared and approved
by the Directors in accordance with UK-adopted International
Accounting Standards ('UK-Adopted IFRS' ). The financial statements
are presented in Pounds Sterling, generally rounded to the nearest
thousand.
The financial information set out in this document does not
constitute the statutory accounts of the Group for the years ended
31 March 2023 or 31 March 2022 but is derived from those accounts.
Statutory accounts for the year ended 31 March 2022 have been
delivered to the registrar of companies, and those for 2023 will be
delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
This financial information was authorised for issue by the
Directors on 19 May 2023.
2. Segment reporting
All of the Group's revenue during the year ended 31 March 2023
and for the year ended 31 March 2022 was derived from continuing
operations.
The Group's Executive Directors are considered to be the Chief
Operating Decision Maker ('CODM') of the Group. They use internal
management reports to assess both performance and strategy of the
Group and the three specialist business areas: Digital Services,
Workday Services and Workday Products.
During the year, we opted to amend our divisional reporting
structure both internally to our CODM (Executive Directors) and
publicly. In prior years we reported results with respect to our
Digital Services and Workday Practice divisions. Due to the
continued growth of our Workday Services and Workday Products
businesses, we are now reporting these areas as separate operating
divisions. There is no change in reporting for our Digital Services
division.
The tables below present the results for current and prior year
in our current reporting structure. As such, the comparative
information below has been represented to reflect the new reporting
structure.
The following is an analysis of the Group's revenue and results
by reportable segment:
2023 Digital Workday Workday
Services Services Product Consolidated
12 months to 31 (GBP000s)
March (GBP000s) (GBP000s) (GBP000s)
================================= ==== ============ =========== =========== =============
Revenue 224,384 105,741 44,682 374,807
======================================== =========== =========== =========== =============
Cost of sales (138,798) (48,406) (10,448) (197,652)
======================================== =========== =========== =========== =============
Gross profit 85,586 57,335 34,234 177,155
======================================== =========== =========== =========== =============
Direct expenses(
[7]) (24,326) (36,439) (21,687) (82,452)
======================================== =========== =========== =========== =============
Contribution 61,260 20,896 12,547 94,703
======================================== =========== =========== =========== =============
Central overheads(7) (28,536)
======================================== =========== =========== =========== =============
Net finance income 1,392
======================================== =========== =========== =========== =============
Adjusted pre-tax
profit 67,559
======================================== =========== =========== =========== =============
Share-based payments expense and
related costs (6,346)
======================================== =========== =========== =========== =============
Amortisation of acquired intangible
assets (2,642)
======================================== =========== =========== =========== =============
Compensation for post-combination
remuneration (4,176)
======================================== =========== =========== =========== =============
Acquisition-related expenses (57)
======================================== =========== =========== =========== =============
Profit before tax 54,338
======================================== =========== =========== =========== =============
(7) Direct expenses plus central overheads plus share-based
payment expense and acquisition related expenses (including
amortisation of acquired intangible assets and compensation for
post-combination remuneration) equals the sum of operating expenses
plus impairment losses and reversals on trade receivables and
accrued income. Direct expenses are expenses that are directly
attributable to each division.
2022 Workday
12 months to 31 March Digital
Services Workday
(GBP000s) Services Products Consolidated
(GBP000s) (GBP000s) (GBP000s)
==================================== =========== =========== =========== =============
Revenue 199,831 70,868 31,933 302,632
==================================== =========== =========== =========== =============
Cost of sales (122,430) (32,388) (7,568) (162,386)
==================================== =========== =========== =========== =============
Gross profit 77,401 38,480 24,365 140,246
==================================== =========== =========== =========== =============
Direct expens e s( (7) () (21,723) (24,666) (12,932) (59,321)
==================================== =========== =========== =========== =============
Contr ibution 55,678 13,814 11,433 80,925
==================================== =========== =========== =========== =============
Central overheads( (7) (22,132)
==================================== =========== =========== =========== =============
Net finance expense (22)
==================================== =========== =========== =========== =============
Adjusted pre-tax profit 58,771
==================================== =========== =========== =========== =============
Share-based payments expense and
related costs (3,727)
==================================== =========== =========== =========== =============
Amortisation of acquired intangible
assets (1,890)
==================================== =========== =========== =========== =============
Compensation for post-combination
remuneration (5,520)
==================================== =========== =========== =========== =============
Acquisition-related expenses (1,641)
==================================== =========== =========== =========== =============
Profit before tax 45,993
==================================== =========== =========== =========== =============
The Group's revenue from external customers by geographic
location is detailed below:
2022 2022
(GBP000s) (GBP000s)
========= ================= =========== ==========
United Kingdom & Ireland 242,787 215,606
============================ =========== ==========
North America 95,505 58,712
============================ =========== ==========
Central Europe 35,262 27,125
============================ =========== ==========
Rest of world 1,253 1,189
============================ =========== ==========
374,807 302,632
============================ =========== ==========
Disaggregation of revenue by type
In line with the change in divisional reporting structure, the
Group considers the new revenue types as presented in the table
below to be a more informative representation. Subscription revenue
previously classed within 'SaaS and related' has been presented
separately with related revenues represented as 'Services' or
'Third party and other' as appropriate. The Group has represented
FY22 revenue categories in line with the current reporting
period.
Workday Total
Digital Workday Products
Services Services 2023
2023 2023 2023
----------
(GBP000s) (GBP000s) (GBP000s) (GBP000s)
================ ========= ========= ========== =========
Type of revenue
================ ========= ========= ========== =========
Services 217,490 98,961 1,625 318,076
================== ========= ========= ========== =========
Subscriptions - - 43,057 43,057
================== ========= ========= ========== =========
Third party and
other 6,894 6,780 - 13,674
================== ========= ========= ========== =========
224,384 105,741 44,682 374,807
================ ========= ========= ========== =========
Workday Total
Digital Workday Products
Services Services 2022
2022 2022 2022
----------
(GBP000s) (GBP000s) (GBP000s) (GBP000s)
================ ========= ========= ========== =========
Type of revenue
================ ========= ========= ========== =========
Services 192,662 64,475 2,990 260,127
================== ========= ========= ========== =========
Subscriptions - - 28,943 28,943
================== ========= ========= ========== =========
Third party and
other 7,169 6,393 - 13,562
================== ========= ========= ========== =========
199,831 70,868 31,933 302,632
================ ========= ========= ========== =========
Disaggregation of revenue by sector
Digital Services 2023 2022
(GBP000s) (GBP000s)
================== =========== ===========
Public 136,951 108,400
================== =========== ===========
Commercial 37,782 25,120
================== =========== ===========
Healthcare 49,651 66,311
================== =========== ===========
224,384 199,831
================== =========== ===========
Workday Services
================== =========== ===========
Public 167 1,311
================== =========== ===========
Commercial 105,423 68,948
================== =========== ===========
Healthcare 151 609
================== =========== ===========
105,741 70,868
================== =========== ===========
Workday Products
================== =========== ===========
Public 891 1,271
================== =========== ===========
Commercial 43,171 29,730
================== =========== ===========
Healthcare 620 932
================== =========== ===========
44,682 31,933
================== =========== ===========
Group
================== =========== ===========
Public 138,009 110,982
================== =========== ===========
Commercial 186,376 123,798
================== =========== ===========
Healthcare 50,422 67,852
================== =========== ===========
Total 374,807 302,632
================== =========== ===========
3. Profit for the year
Profit for the year has been arrived at after
charging/(crediting):
2023 2022
(GBP000s) (GBP000s)
================== ================================= =========== ==========
Total staff costs 232,033 168,395
===================================================== =========== ==========
Government grants (12) (479)
===================================================== =========== ==========
Research and development expensed as incurred 9,061 6,176
===================================================== =========== ==========
Research and Development Expenditure Credit (4,230) (3,205)
===================================================== =========== ==========
Depreciation of property, plant and equipment 2,249 1,538
===================================================== =========== ==========
Depreciation of right-of-use assets 1,163 1,654
===================================================== =========== ==========
Loss on disposal of property, plant and equipment - 8
===================================================== =========== ==========
Net foreign exchange (gain)/loss (873) 62
===================================================== =========== ==========
Amortisation of acquired intangibles 2,642 1,890
===================================================== =========== ==========
4. Staff numbers
The average number of employees during the year was:
2023 2022
Number Number
=============== ======= =======
Technical 2,107 1,705
================ ======= =======
Administration 311 234
================ ======= =======
Sales 188 158
================ ======= =======
2,606 2,097
================ ======= =======
5. Tax expense
2023 2022
(GBP000s) (GBP000s)
================================================== ============ ==========
Current tax expense:
=================================================== =========== ==============
Current year (UK) 7,793 7,882
=================================================== =========== ==============
Current year (overseas) 5,271 4,011
=================================================== =========== ==============
Adjustments in respect of prior years (385) (1,043)
=================================================== =========== ==============
12,679 10,850
=================================================== =========== ==============
Deferred tax:
=================================================== =========== ==============
Origination and reversal of temporary differences (1,130) (1,187)
=================================================== =========== ==============
Adjustments in respect of prior years 1,144 637
=================================================== =========== ==============
Change in tax rate - (75)
=================================================== =========== ==============
14 (625)
=================================================== =========== ==============
Total tax expense 12,693 10,225
=================================================== =========== ==============
In addition to the amount charged to the statement of
comprehensive income, the following amounts relating to tax have
been recognised directly in equity in relation to share based
payments:
2023 2022
(GBP000s) (GBP000s)
========================== ========================== =========== ===============
Current tax
====================================================== =========== ===============
Permanent element of share-based payment deduction 237 1,610
====================================================== =========== ===============
Deferred tax
====================================================== =========== ===============
Deferred tax on share-based payments (931) (883)
====================================================== =========== ===============
Effect of rate change - 603
====================================================== =========== ===============
(931) (280)
====================================================== =========== ===============
Total tax recognised directly in equity (694) 1,330
====================================================== =========== ===============
UK corporation tax has been calculated at 19% (2022: 19%) of the
estimated taxable profit for the year, the prevailing rate at the
balance sheet date. Taxation for other jurisdictions is calculated
at the rates prevailing in the respective jurisdictions. The
effective tax rate for 2023 was 23% (2022: 22%).
On 24 May 2021, the UK Finance Act 2021 was substantively
enacted, increasing the corporate tax rate to 25% effective from 1
April 2023. The change to the main rate of corporation tax was
substantively enacted as at 31 March 2022 and therefore included in
the prior year financial statements. Temporary differences were
remeasured in the prior year using these enacted tax rates that are
expected to apply when the liability is settled, or the asset
realised. The impact of this remeasurement, recognised in the year
ended 31 March 2022 resulted in an uplift in deferred tax assets of
GBP0.9 million.
We envisage our future effective tax rates to be broadly in line
with the main UK corporation tax rate.
The Group's tax charge can be reconciled to the profit in the
income statement and effective tax rate as follows:
2023 2022
(GBP000s) (GBP000s)
================== =================================== =========== ==========
Profit before tax on continuing operations 54,338 45,993
======================================================= =========== ==========
Tax at the UK corporation tax rate of 19% (2022:
19%) 10,324 8,739
======================================================= =========== ==========
Expenses not deductible for tax purposes 919 1,050
======================================================= =========== ==========
Tax exempt income (3) (35)
======================================================= =========== ==========
Effect of foreign exchange on consolidation (92) 214
======================================================= =========== ==========
Effect of tax rates in foreign jurisdictions 740 671
======================================================= =========== ==========
Adjustments to tax charge in respect of prior years 759 (406)
======================================================= =========== ==========
Change in UK tax rates 46 (8)
======================================================= =========== ==========
Tax expense for the year 12,693 10,225
======================================================= =========== ==========
Effective tax rate 23% 22%
======================================================= =========== ==========
6. Dividend
2023 2022
(GBP000s) (GBP000s)
================ =============================== =========== ==========
Amounts recognised as distributions to equity
holders in the period:
================================================= =========== ==========
Interim dividend for 2023 of 7.8p per share 9,702 -
================================================= =========== ==========
Final dividend for 2022 of 15.1p per share 18,732 -
================================================= =========== ==========
Interim dividend for 2022 of 7.1p per share - 8,774
================================================= =========== ==========
Final dividend for 2021of 15.1p per share - 18,645
================================================= =========== ==========
28,434 27,419
================================================= =========== ==========
The Board has proposed a final dividend in respect of the year
ended 31 March 2023 subject to approval by shareholders at the
Annual General Meeting. This dividend has not been recognised as a
liability in these financial statements and there are no tax
consequences. The proposed final dividend, if approved by
shareholders, will be 16.1p per share (GBP20.1 million in total)
and payable on 20 October 2023 to all shareholders on the Register
of Members on 29 September 2023, and with an ex-dividend date of 28
September 2023.
7. Earnings per share
Basic
The calculation of basic earnings per share (EPS) has been based
on the following profit attributable to ordinary shareholders and
weighted-average number of ordinary shares outstanding.
2023 2022
(GBP000s) (GBP000s)
================ =============================== ===========
Profit attributable to ordinary shareholders 41,645 35,768
================================================= =========== ==========
Thousands Thousands
================================================= =========== ==========
Issued ordinary shares at 1 April 124,078 122,785
================================================= =========== ==========
Effect of shares held in trust (786) (863)
================================================= =========== ==========
Effect of share options vested and exercised 392 802
================================================= =========== ==========
Effect of shares issued related to a business
combination 18 31
================================================= =========== ==========
Effect of shares issued related to free share
awards 99 49
================================================= =========== ==========
Weighted average number of ordinary shares
at 31 March 123,801 122,804
================================================= =========== ==========
Basic earnings per share 33.6p 29.1p
================================================= =========== ==========
Diluted
The calculation of diluted EPS has been based on the following
profit attributable to ordinary shareholders and weighted-average
number of ordinary shares outstanding after adjustment for the
effects of all dilutive potential ordinary shares.
2023 2022
(GBP000s) (GBP000s)
=================== =================================== ===========
Profit attributable to ordinary shareholders 41,645 35,768
======================================================== =========== ==========
Thousands Thousands
=================== ================================================ ==========
Weighted average number of ordinary shares (basic) 123,801 122,804
======================================================== =========== ==========
Effect of share options on issue 758 1,256
======================================================== =========== ==========
Effect of shares held in trust 786 863
======================================================== =========== ==========
Effect of potential shares to be issued related to
a business combination 299 410
======================================================== =========== ==========
Weighted average number of ordinary shares (diluted)
at 31 March 125,644 125,333
======================================================== =========== ==========
Diluted earnings per share 33.1p 28.5p
======================================================== =========== ==========
The average market value of the Company's shares for the purpose
of calculating the dilutive effect of share options was based on
quoted market prices for the year during which the options were
outstanding.
At 31 March 2023, 159,755 options (2022: 39,451) were excluded
from the diluted weighted average number of ordinary shares
calculation because their effect would have been anti-dilutive.
Adjusted
Adjusted basic earnings per share is calculated using the
adjusted profit for the year measure. The calculation of adjusted
profit for the year is detailed in the Financial Review
section.
2023 2022
(GBP000s) (GBP000s)
================= =============================== =========== ==========
Adjusted profit for the year 53,406 47,726
================================================== =========== ==========
Thousands Thousands
================================================== =========== ==========
Weighted average number of ordinary shares for
the purposes of basic earnings per share 123,801 122,804
================================================== =========== ==========
Weighted average number of ordinary shares for
the purposes of diluted earnings per share 125,644 125,333
================================================== =========== ==========
Adjusted basic earnings per share 43.1p 38.9p
================================================== =========== ==========
Adjusted diluted earnings per share 42.5p 38.1p
================================================== =========== ==========
8. Trade and other receivables
2023 2022
(GBP000s) (GBP000s)
======= ============ =========== ==========
Trade receivables 35,693 35,228
===================== =========== ==========
Other receivables 3,277 3,130
===================== =========== ==========
38,970 38,358
===================== =========== ==========
Prepayments 3,656 4,377
===================== =========== ==========
Accrued income 38,808 39,462
===================== =========== ==========
81,434 82,197
===================== =========== ==========
9. Trade and other payables
2023 2022
(GBP000s) (GBP000s)
Trade payables and accruals 52,348 49,199
=================================== =========== ==========
Deferred income 37,087 30,966
=================================== =========== ==========
Current tax liabilities - 1,959
=================================== =========== ==========
Other tax and social security 12,068 11,917
=================================== =========== ==========
101,503 94,041
=================================== =========== ==========
This information is provided by RNS, the news service of the
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END
FR EAESFADPDEAA
(END) Dow Jones Newswires
May 22, 2023 02:00 ET (06:00 GMT)
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