IT services firm Kainos’ share price falls as it strikes cautious tone on political climate
Digital services company Kainos shares tanked this morning after it told markets it was tentative around the issue of government spending given the possibility of a no-deal Brexit.
Kainos’ market value had fallen to 8.6 per cent below the day’s opening price this afternoon.
Read more: UK economy close to recession after stagnant service sector data
The company, which claims to be “a key supplier” to the government, said in a trading update that it was “cautious about public sector spending in the current political environment”.
The FTSE 250 firm assured markets, however, that its results for this financial year are on course to be in line with market expectations.
Kainos said its digital transformation unit has “made progress within the commercial sector”, while its digital services business had put in a “solid … performance”.
“Digital Platforms growth has been driven by Smart, our Workday automated testing platform, where we have continued to win new clients and drive very strong growth,” it added.
“In Workday Services, the group continues to benefit from an increasing book of business in continental Europe and north America following geographic expansion.”
The firm is set to announce interim results in November.
Read more: Activists quieter in first half of the year as political uncertainty hits
Growth in the services industry lost momentum in August, indicating an overall contraction in the economy across all sectors and a drop in GDP, leaving the UK one step away from a recession.
The service sector’s all-sector purchasing managers’ index (PMI) dropped to 50.6 in August, down from 51.4 in July. Any figure under 50 indicates a contraction.
Main image: Getty