Kainos announces special dividend after strong trading period
IT provider Kainos has declared a special dividend after a resilient year of trading in the face of the coronavirus pandemic.
The group said annual profit and revenue will be ahead of expectations as trading has been strong despite the impact of Covid-19.
The figures
Kainos said revenue for the year to the end of March will be “well ahead” of current consensus forecasts, while adjusted profit will be “substantially ahead”.
As at 24 July, Kainos had net cash of over £62m and no debt. The group said having assessed its ongoing cash requirements, the board has declared a special dividend in lieu of its final dividend.
The special dividend will be 6.7p per share, and the firm said it expects to return to its normal interim and final year dividend cycle for the current financial year.
Why it’s interesting
The IT firm had previously elected not to declare a final dividend for the year ended 31 March 2020. However, Kainos today seemed upbeat in its outlook given the “strong business performance during this period”.
The firm has helped to support key programmes during the pandemic, including the NHS Home Testing Service.
Given the nature in which Kainos has adapted it has decided to withdraw from the government’s job retention scheme after placing 131 colleagues on furlough.
The group said “in light of our performance… [we] will be repaying the UK Government for all previously claimed support payments.” The group added it had “ensured employment for all our people during this period”.
Kainos said the pausing of recruitment has “generated several one-off efficiencies in utilisation, recruitment costs and training costs and we have experienced reduced travel expenditure during the lockdown period.” However it does not anticipate this to recur and anticipates this to reduce when Kainos’ growth resumes post-lockdown.
What Kainos said
In a trading update the firm said: “During the early stages of COVID-19, we successfully adapted to the changing business environment and we remain confident that we will be able to respond to any future challenges in the wider macro-economic backdrop.”
“However, we maintain our view that it is too early to predict the duration or the severity of the COVID-19 economic disruption and any impact it will have on our customers.”