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Wednesday 15 March 2023

A challenging H1 for Kin + Carta

Kin + Carta logoDigital transformation consultancy, Kin + Carta, had a challenging H1 with like-for-like sales declining and statutory losses widening. Kelly Manthey, CEO, described the performance as disappointing and said it was the result of market-wide macro headwinds triggering client spending caution.

Group net revenue from continuing operations was up 15% to £98.7m (H1 FY22: £85.6m), but this was driven by acquisitions and currency effects; on a like-for-like basis revenue declined by 6%. The company’s Americas operation, which accounted for 72% of total H1 net revenue, grew 22% year-on-year to £71.1m (H1 FY22: £58.5m). Its Europe region, of which the UK represented 81% of net revenue in the period, was up 2% year-on-year to £27.6m (H1 FY22: £27.1m), but down 16% on a like-for-like basis.

In the UK, Kin + Carta highlighted its recent £14m two-year contract with The Planning Inspectorate, its record public sector win. The contract, which will see the company help the executive agency reduce the time it takes to process appeals and applications, was secured during H1 and will ramp up in H2. Kin + Carta has now secured seven public sector clients and has a pipeline of over £60m in this part of the market.

Adjusted profit before tax was £6.5m (H1 FY22: £6.3m) and statutory net loss before tax was £15.1m (H1 FY22: loss of £3.3m). Adjusted operating margin came in at 7.6% (H1 FY22: 8.5%) following investments in systems and technology, which was partially offset by increased deployment of nearshore delivery resources and operating efficiencies.

Growth and profitability are expected to improve in H2. Kin + Carta’s sales pipeline was up 45% year-on-year to £166m (HY FY22: £115m) and it has an order backlog of £124m (HY FY22: £106m). Over the full year, management expects net revenue growth of 8-12%, with organic net revenue declining by a low single digit percentage, and adjusted EBITDA margin expected to be 12-13%.

Posted by: Dale Peters at 09:32

Tags: results   H1   consultancy   digital+transformation  

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