Kainos, the London-listed software provider and key supplier to the NHS, has reported a five per cent year-on-year drop in revenue for the first half of the year, totalling £183.1m.
Despite the challenging trading environment and delays to public investment following the general election, the company saw an 11 per cent rise in pre-tax profit to £34.2m and a two per cent increase in adjusted diluted earnings per share to 22.5p, as reported by .
Following the announcement, Kainos' shares rose by over five per cent.
CEO Russell Sloan commented on the tough market conditions, stating: "Our services businesses faced a tougher environment in the first half of the year in a generally soft market, and we remain cautious about our prospects for the remainder of the year," The company had previously warned in April of reduced demand from commercial clients and a slow recovery in healthcare sales after a peak during the Covid-19 pandemic.
The post-election hiatus resulted in delayed project mobilisations and a 15 per cent fall in public sector revenue to £62.0m in the first half of the year. Kainos also noted that the sluggish economy continued to impact commercial sector revenue, with investment down 27 per cent year-on-year at £11.6m.
Despite these challenges, Sloan remained optimistic about the company's future, saying that Kainos "continues to generate robust levels of profitability and looking to the medium term and beyond, we continue to see substantial growth opportunities across all our core markets."
Kainos also reaffirmed its support for the NHS' digital transformation programme.
Last month, Health Secretary Wes Streeting announced initiatives for digital patient records to make health data accessible across NHS hospitals, GPs, and ambulance services in England. He also initiated a significant consultation on the government's ambitions to modernise the NHS from "analogue to digital".
"The new º£½ÇÊÓƵ Government is determined to improve public services and healthcare provision, while delivering efficiencies and leveraging the potential of AI. Digital transformation will have a key part to play in achieving these goals," Sloan commented.
However, he noted that Kainos remains "cautious about the timing of future growth" as it anticipates the Government "moving out of the delayed decision-making phase".
