Digital transition services and software company Kainos (KNOS) closed its full year in style after telling investors that trading for the year to 31 March 2021 will come in towards the top current market expectations.

Consensus earnings before interest, tax, depreciation and amortisation forecasts had been pitched in a range of £57.6 million to £61 million on £229.6 million to £231.5 million of revenue. That implies growth of 132% and 29% at the top end respectively.

KNOCKOUT PERFORMANCE

This followed a January update that saw forecasts raised after Kainos flagged ‘continued momentum’ that pushed trading performance beyond the consensus expectations then. That followed several upgrades to revenues and earnings through a busy 2020, that saw the stock surge 63% last year.

Kainos was one of Shares top picks for 2020.

As Canaccord Genuity analysts Kai Korschelt and Steve Robertson headlined their January response note to clients, ‘beat, rinse, repeat.’

That the stock fell more than 3% on Friday implies some investors are taking judicious profit off the table after a stunning share price run to a record £16.97 yesterday.

Today’s news ‘tells us that the momentum outlined in the trading statement dated 22 January 2021 has been maintained,’ said Stifel analyst George O’Connor today.

BRIGHT FUTURE

Unsurprisingly, Kainos remains upbeat on its prospects, highlighting its ‘robust pipeline, strong balance sheet and significant contracted backlog.’

‘This suggests that the emphasis on estimates is on the upside,’ said the Stifel analyst. That looks likely to see O’Connor and other analysts increase current full year to 31 March 2022 sales and earnings estimates when the company reports detailed results for last year on 24 May.

Stifel’s estimates are currently pitched at £56.2 million earnings before interest, tax, depreciation and amortisation on £224 million revenue.

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Issue Date: 16 Apr 2021