TIDMKCT
RNS Number : 7371A
Kin and Carta PLC
26 May 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
For immediate release
26 May 2023
Kin and Carta plc
Trading Update
Kin and Carta plc ("Kin + Carta" or the "Company"), the global
digital transformation ("DX") consultancy, provides a trading
update covering the year ending 31 July 2023 ("FY23").
Current trading
Following our interim results on 15 March 2023, a number of
external factors have combined to reduce our expectations for the
year. The market is even more cautious than we expected. As widely
reported throughout our industry, there remains hesitance among
enterprise clients to commit to large programmes of work in this
environment, which has slowed new business growth. Furthermore,
several contracts have commenced later than we forecast.
As a result, FY23 net revenue growth is expected to be flat to
+2% over FY22 (like-for-like growth c. -11%). The revised FY23 net
revenue guidance also reflects r ecent currency movements which
results in net revenue headwinds in H2 of c. GBP3 million vs the
previous market forecast.
H2 adjusted operating margin is expected to improve over H1 as a
result of prior operating cost reductions and FY23 adjusted
operating margin is expected to be c.8-9% with adjusted EBITDA
margin c. 10-11%.
Despite the persistent macroeconomic challenges and currency
headwinds, the Company has returned to sequential quarterly growth
on steady backlog conversion. Net revenue stabilised in Q3 with
continued sequential growth expected in Q4, albeit at a slower rate
than we had previously forecast.
Q2 FY23 Q3 FY23 Q4 FY23 forecast
Net Revenue GBP44m GBP46m c. GBP47 - 49m
-------- -------- -----------------
The Company has continued to win significant new contracts in
the past 90 days which are expected to ramp up materially in FY24.
The resulting backlog for FY24 continues to build and is now GBP133
million, compared to GBP105 million a year ago. Some of the new
wins include:
-- UK Public Sector contract wins in Q3:
-- GBP16 million, 2-year contract with the UK Department for Education
-- GBP12.5 million, 5-year contract with the BBC
-- Demand remains strong totalling c.GBP50 million of contract
wins year to date, with less than 25% being recognised in this
financial year
-- Financial Services continues to grow with existing clients in
US and UK markets signing extensions totalling c.GBP9 million
The Company continues to execute on its global data and AI
strategy including:
-- The 9 May 2023 acquisition of Forecast Data, deepening global
data and AI capabilities and adding a strong portfolio of financial
services clients
-- Close collaboration with technology partners securing early
access to Microsoft and Google's generative AI platforms and
enabling Kin + Carta to launch generative AI assessments for our
clients
-- Commencement of data and AI focused 'FWD' live event series in America and Europe
Kin + Carta's Chief Executive Officer, Kelly Manthey,
commented:
"Although we're maintaining a pattern of quarter by quarter net
revenue growth, it isn't as strong as we'd expected. The market is
more difficult with clients cautious about committing to large
programme spends. Normally we see a significant acceleration in our
second half revenue growth, but this has not materialised.
Nonetheless, we have recorded some major contract wins, the
majority of which will commence in our new financial year. These,
combined with a backlog that is as strong as ever, gives me
confidence that once our market normalises, Kin + Carta can get
back to its previous rates of growth. We remain focussed on the
right business-critical disciplines and we retain a tight control
on costs. The company is well positioned to take advantage of a
return of confidence in our market."
- Ends -
Enquiries:
Kin + Carta
Kelly Manthey CEO
Chris Kutsor CFO & COO +44 (0) 207 928 8844
Powerscourt
Elly Williamson / Jane Glover +44 (0) 771 324 6126
Numis Securities Limited +44 (0) 207 260 1345
Nick Westlake / Tejas Padalkar
Peel Hunt LLP +44 (0) 207 418
John Welch / Paul Gillam 8900
About Kin + Carta
Kin + Carta is a London Stock Exchange listed global digital
transformation consultancy committed to working alongside clients
to build a world that works better for everyone.
Kin + Carta's 2,000 consultants, engineers and data scientists
around the world bring the connective power of technology, data and
experience to the world's most influential companies - helping them
to accelerate their digital roadmap, rapidly innovate, modernise
their systems, enable their teams and optimise for continued
growth. Headquartered in London and Chicago with offices across
three continents, the borderless model of service allows for the
best minds to be connected to collaborate on client challenges.
With purpose at its core, Kin + Carta became the first company
listed on the London Stock Exchange to achieve B Corp
certification. It meets high standards of verified social and
environmental performance, public transparency and accountability
to balance the triple bottom line of people, planet and profit.
For more information, please visit
https://www.kinandcarta.com.
Important notices
This announcement contains inside information and is issued on
behalf of the Company by Daniel Fattal, Company Secretary.
Cautionary statement regarding forward-looking statements
This Announcement may contain "forward-looking statements" with
respect to certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they are based on numerous
assumptions regarding the Company's present and future business
strategies, relate to future events and depend on circumstances
which are or may be beyond the control of the Company which could
cause actual results or trends to differ materially from those made
in or suggested by the forward-looking statements in this
Announcement, including, but not limited to, domestic and global
economic business conditions; market-related risks such as
fluctuations in interest rates; the policies and actions of
governmental and regulatory authorities; the effect of competition,
inflation and deflation; the effect of legislative, fiscal, tax and
regulatory developments in the jurisdictions in which the Company
and its respective affiliates operate; the effect of volatility in
the equity, capital and credit markets on profitability and ability
to access capital and credit; a decline in credit ratings of the
Company; the effect of operational and integration risks; an
unexpected decline in sales for the Company; inability to realise
anticipated synergies; any limitations of internal financial
reporting controls; and the loss of key personnel. Any
forward-looking statements made in this Announcement by or on
behalf of the Company speak only as of the date they are made. Save
as required by the Market Abuse Regulation, the Disclosure Guidance
and Transparency Rules, the Listing Rules or by law, the Company
undertakes no obligation to update these forward-looking statements
and will not publicly release any revisions it may make to these
forward-looking statements that may occur due to any change in its
expectations or to reflect events or circumstances after the date
of this Announcement.
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