Kin and Carta PLC Trading Update and Capital Markets Day (8668B)
June 15 2021 - 1:00AM
UK Regulatory
TIDMKCT
RNS Number : 8668B
Kin and Carta PLC
15 June 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
For immediate release
15 June 2021
Kin and Carta plc
Trading Update and Capital Markets Day
Kin and Carta plc (the "Company" or "Kin + Carta"), the
international digital transformation ("DX") company, provides the
following update.
In line with the improving trends reported at the Half Year, Kin
+ Carta is executing on a strong resumption of growth with
accelerating demand for Digital Transformation continuing as the
effects of the pandemic begin to abate. For th e current financial
year ending 31 (st) July 2021, the Company now expects net revenue
growth of circa 10% to approximately GBP150 million (GBP137.8m FY
2020) and growth in underlying profit before tax of circa 35-40% to
approximately GBP14.5 million (GBP10.5m FY 2020), comfortably ahead
of market expectations for the current financial year.
Based on current performance and backlog of orders, the Company
anticipates accelerating growth in net revenue to circa 20% and
improving underlying operating margin of 12-13% for the following
financial year ending 31 (st) July 2022. In the medium term, the
Company anticipates continued organic net revenue growth of circa
15% compound annual growth rate along with increasing operating
margins as the Company continues to scale.
As announced last week, Kin + Carta has been notified by the US
government that a further GBP3.7 million of the GBP6.7 million
Paycheck Protection Program ("PPP") loan has been forgiven as
expected, in addition to the GBP0.8 million of forgiveness
recognised in January 2021. This will be recorded as other
operating income in H2. The remaining balance on the PPP loan of
GBP1.8 million after adjusting for foreign exchange movements will
be repaid in May 2022 as previously expected.
There has been a significant improvement in the value of the
Company's legacy defined benefits pension scheme's portfolio of
growth assets which, together with an increase in interest rates
used to discount the value of the liability, means that the
technical funding deficit, upon which the level of cash
contributions by the Company is based, has decreased from GBP28.4
million at 6 April 2019 to GBP8.8 million at 31 May 2021. This
actuarial update corresponds to a 98% technical funding level and a
full technical funding valuation will be carried out in April 2022
which will also consider mortality experience of the scheme. The
scheme had an accounting surplus under IAS19 at 31 January 2021 of
GBP4.9 million, and the accounting surplus is likely to have
increased since that date as a result of the changes in market
conditions described above.
The Company's operating cash flow generation continues to
improve with growth, and net debt at 31 July 2021 will be
substantially lower than the prior year with a resulting net debt
to EBITDA ratio of circa 1.0x. The Board does not intend to resume
dividend payments in the near term, electing instead to prioritise
the allocation of capital to the considerable organic and inorganic
growth opportunities it sees ahead.
Kin + Carta is today hosting a virtual Capital Markets Day event
with investors and equity analysts at 14:00 BST/08:00 CST details
of which are on the Company's website . The Company's senior
management team will be giving details of its operations and growth
prospects. These presentations will be available subsequently on
the Events & Presentations page of the Company's website.
Enquiries:
Kin + Carta
J Schwan CEO
Chris Kutsor CFO +44 (0) 207 928 8844
Powerscourt
Elly Williamson / Jane Glover +44 (0)7970 246 725
Numis Securities Limited
Nick Westlake / Matt Lewis +44 (0)207 260 1345
Peel Hunt LLP
Edward Knight/John Welch +44 (0) 20 7418 8900
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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