Slender budgets and sluggish procurement at NHS trusts weighed on Kainos (KNOS) in the first half. Sales at the software and IT consulting group rose by 9 per cent and adjusted pre-tax profits by just 3 per cent - both metrics had risen by more than a fifth in the previous comparable period. Unimpressed investors sent its shares down 7 per cent.
Sales were up by 13 per cent in the main digital services division as the Home Office tasked it with digitising information and management won work with Scottish courts, the Welsh treasury and Northern Irish fisheries. It also secured commercial work, including an extended engagement with easyJet.
Cash-strapped NHS trusts delayed investing in the group's electronic medical records software, Evolve, sending sales of digital platforms down 3 per cent. Order intake also shrunk more than 60 per cent, primarily due to the conclusion of a large contract with an NHS consortium. More positively, partner InTouch Health went live with the new Evolve integrated care platform, and two large US healthcare providers are trialling the offering. And nine customers joined automated testing platform Smart, taking the total number of client companies to 64.
Broker Investec expects adjusted pre-tax profits of £14.2m this financial year, giving EPS of 10p (£14.1m and 10.5p in FY2016).
| KAINOS (KNOS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 220p | MARKET VALUE: | £260m | |
| TOUCH: | 219-221p | 12-MONTH HIGH: | 260p | LOW: 123p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 27p | NET CASH: | £20.9m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015† | 37.2 | 5.2 | 3.5 | 1.80 |
| 2016 | 40.6 | 6.5 | 4.4 | 1.90 |
| % change | +9 | +24 | +26 | +6 |
Ex-div: 8 Dec Payment: 30 Dec †Kainos listed its shares in July 2015 | ||||
