Kainos Group PLC (LON:KNOS) said it expects continued strong demand for its products as companies implement their digital transformation in the light of COVID-19.
The FTSE 250-listed software provider doubled its profit in its half-year after the pandemic exacerbated ongoing trends towards greater digitisation across its markets, especially within the UK government, while cutting operating expenses.
In the medium-term, the firm is “optimistic” about the future of digitisation in both the UK public sector and within the NHS and believes it is well-positioned to harness these changes, while it is building a reputation outside of the UK public sector.
Meanwhile, its Workday Practice arm is seeing a larger customer base and growth momentum in international markets for its consulting activity.
In the six months to September 30, revenue jumped 23% to £107mln while profit before tax doubled to £24mln. Cash at the end of the period was £62mln.
Gross margin increased to 52.1% from 46.5% due to reduced expenditure on costs such as training, recruitment, facilities and travel during the lockdown, though these savings are not expected to recur.
Broker Shore Capital forecast revenue and adjusted profit before tax will grow 16% and 88% respectively in the full year.
"While Covid-19 uncertainty remains a feature, it is clearly not derailing the company’s extraordinary progress. Indeed, in our view Kainos remains a high-quality and relatively ‘Covid secure’ company exhibiting ample operational and financial resilience," analysts commented.
Shares rose 1% to 1,200p on Monday at the opening bell.