Business

Northern Ireland software company Kainos grows revenue and profits

Group, established in 1986 as a spin-out company from Queen’s University Belfast, provides digital technology services

Kainos's international business grew 13% to £149.8m

Colin Gleeson
Mon May 20 2024 - 08:16

Northern Ireland software company Kainos grew revenues and pre-tax profit by 2 per cent and 14 per cent respectively last year, the group’s annual results show.

Kainos Group, established in 1986 as a spin-out company from Queen’s University Belfast, provides digital technology services and platforms to customers that include the National Health Service (NHS).

Its results for the year ended March 31st, 2024, show its revenue has grown to £382.4 million (€446.4m), while its adjusted pre-tax profit grew to £77.2 million.

“This strong profit increase in a more subdued growth environment is a demonstration of our business discipline,” the company’s chief executive Russell Sloan said.

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The group’s largest business areas – workday services, workday products and public sector within digital services – which together generate 80 per cent of revenue, delivered growth of 7 per cent.

Offsetting that, however, the group’s digital services division experienced a revenue reduction of 5 per cent as a result of the “macroeconomic environment”.

There was also an 11 per cent reduction in the company’s healthcare sector as there were no pandemic-related projects in the year.

The company’s international business grew 13 per cent to £149.8 million, while it also increased its investments in artificial intelligence (AI) and its product development 48 per cent to £13.5 million.

The group’s headcount of 2,995 people remained constant over the year, but it reduced the number of contractors in favour of long-term investment in permanent employees, which saw an increase of 172 people over the year.

The proposed final dividend recommended by directors is 19.1p, which will make the total dividend for the year 27.3p, which will represent a distribution of 58 per cent of adjusted profit after taxation.

“Our latest results record our 14th consecutive year of growth with disciplined execution in the current macroeconomic climate,” said Mr Sloan. “We have been focused on our operational performance, maintaining the appropriate balance between growth, international expansion, investment for the future and profitability.

“We work closely with over 900 customers, most of them global organisations. For many of our customers it has been another challenging year, often operating in uncertain and changeable markets conditions.”

Looking ahead Mr Sloan said growth opportunities in the company’s markets may have “reduced prominence”.

“In an uncertain economic climate it is understandable that the growth opportunities in our markets may have reduced prominence,” he said. “However, this lower profile does not diminish the scale of the opportunities that exist – digital transformation is a key foundation for organisations as they seek to reduce their costs and increase their agility.

“This has been, and will continue to be, a long-term trend as organisations redirect their spending from inefficient legacy systems to agile, modern systems. This momentum will be accelerated by the deployment of AI-enabled systems where high data quality is a prerequisite.

“The execution of our strategy has placed us in leading positions within our core markets, which allows us to look confidently to the future.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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