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United Kingdom Economy

Kainos revenue rises 37% as public-sector digital work expands, but guidance is unchanged

2026-11-15

A glass office building, a general business illustration rather than a Kainos facility

UK technology services company Kainos reported a sharp increase in half-year revenue and profit, helped by public-sector digital projects and growth across its Workday businesses. Revenue for the six months to 30 September reached £268.8 million, up 37 percent from £196.1 million a year earlier. The strong result did not bring a further upgrade to full-year expectations.

Statutory pre-tax profit rose 26 percent to £35.8 million, while adjusted pre-tax profit increased 30 percent to £41.7 million. These are different profit measures and should not be interchanged. The interim dividend increased to 10.4 pence a share from 9.8 pence. Cash at the period end was £86.5 million, down from £105.5 million a year earlier and £89.1 million at the end of March.

Rapid delivery growth brings staffing costs

Digital Services revenue increased 57 percent to £162.5 million. Healthcare work grew 85 percent to £54.7 million and public-sector work 55 percent to £76.0 million. The division used contractors and supply partners to meet demand, which reduced its gross margin by 3.9 percentage points to 31.9 percent. Management expects that pressure to ease as employed staff replace third parties and growth moderates, but that remains an expectation.

Group bookings rose 27 percent to £402.3 million and contracted backlog 26 percent to £853 million. The company updated its methodology to reflect the full value of Digital Services contracts, with comparisons presented on that basis. Backlog provides visibility, but it is not revenue already recognised or cash already collected.

Workday Products annual recurring revenue reached £96 million, up 24 percent. Targets of £100 million by the end of 2026 and £200 million by the end of 2030 remain targets, not completed sales. Kainos expects second-half revenue and adjusted profit growth in line with market expectations, with Digital Services growth moderating against a stronger comparison. Shares fell on the results day despite the earnings increase, illustrating that investors also judge margins and future expectations, not revenue growth alone.

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