Interim results
Summary by AI BETAClose X
9 November 2026
Kainos Group plc (‘Kainos’ or the ‘Group’)
Interim results for the six months ended 30 September 2026
Kainos Group plc (KNOS), a UK-headquartered IT provider with expertise across three divisions – Digital Services, Workday Services and Workday Products – is pleased to announce its results for the six months ended 30 September 2026.
Financial highlights
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H1 27 |
H1 26 |
Change |
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Revenue |
£268.8m |
£196.1m |
37% |
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Statutory profit before tax |
£35.8m |
£28.4m |
26% |
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Adjusted pre-tax profit([1]) |
£41.7m |
£32.0m |
30% |
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Diluted earnings per share |
23.1p |
16.7p |
38% |
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Adjusted diluted earnings per share |
27.4p |
18.9p |
45% |
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Interim dividend per share |
10.4p |
9.8p |
6% |
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Bookings([2]) |
£402.3m |
£317.0m |
27% |
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Product annual recurring revenue (ARR) |
£96.0m |
£77.5m |
24% |
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Contracted backlog(2) |
£853.0m |
£679.3m |
26% |
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Cash([3]) |
£86.5m |
£105.5m |
-18% |
Continued momentum, with strong sales performance across the Group driving growth in adjusted pre-tax profit
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Revenue increased 37% (36% organic, 37% ccy) to £268.8 million (H1 26: £196.1 million). |
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Adjusted pre-tax profit grew by 30% (30% ccy) to £41.7 million, with the adjusted profit margin broadly unchanged at 16% (H1 26: 16%).
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Robust period-end cash(3) of £86.5 million (31 March 2026: £89.1 million), with cash conversion of 62% (H1 26: 48%). |
Sales performance driving significant increase in bookings and contracted backlog
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Strong sales momentum, driven by the award of several large, multi-year contracts, most notably in Digital Services, has delivered a significant step-up in bookings and contracted backlog, providing enhanced visibility of future revenue. |
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At the same time, bookings and backlog calculations(2) have been updated to align with industry practice and reflect the full value of contracts secured by Digital Services. The revised methodology does not affect the value of bookings and backlog for Workday Products and Workday Services. |
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On this basis, Group bookings grew 27% to £402.3 million (H1 26: £317.0 million), contributing to a contracted backlog of £853.0 million (30 September 2025: £679.3 million; 31 March 2026: £716.6 million). |
Operational highlights
Digital Services had an excellent six months, with revenue growth driven by significant contract wins during FY26 and during the period
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Digital Services’ revenue increased by 57% (57% ccy, 54% organic) to £162.5 million (H1 26: £103.5 million). |
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Revenue in healthcare grew by 85% to £54.7 million (H1 26: £29.6 million), while public sector revenue increased by 55% to £76.0 million (H1 26: £49.1 million([4])). Revenue in defence increased by 44% to £15.3 million (H1 26: £10.6 million). |
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Bookings(2) were 44% higher at £296.5 million (H1 26: £205.3 million) and the contracted backlog(2) at the period end was £599.9 million, up from £456.9 million at H1 26. |
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Gross margin declined by 3.9% to 31.9%, largely reflecting the ongoing use of contractors and supply partners to support rapid growth. As noted previously, this is a short-term staffing decision, and we expect margins to normalise as we replace third parties with employed staff as revenue growth moderates. Further detail is provided in the Financial Review section. |
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Kainos was one of the top performing suppliers to the UK Government since the start of April 2026, by the total contract value of digital framework wins. Major awards included contracts worth up to £150 million with Defra signed during the period and £111 million with the Home Office and £84 million with the Foreign, Commonwealth & Development Office, due to be signed in H2. |
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North America continued to grow well, with revenue up 50% (51% ccy, 13% organic) to £11.7 million (H1 26: £7.8 million). This primarily reflected a full period of ownership of Davis Pier, acquired in September 2025. |
Workday Products firmly on track to reach our ARR targets of £100 million by the end of 2026 and £200 million by the end of 2030
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Workday Products’ ARR increased by 24% (23% ccy) to £96.0 million (H1 26: £77.5 million), resulting in revenue growing by 22% (22% ccy) to £48.0 million (H1 26: £39.2 million). |
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The division now has over 750 customers (H1 26: more than 600), with around 40% taking two or more products (H1 26: around 40%). |
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As noted in our FY26 results, we have recruited several highly experienced leaders for Workday Products, to ensure we have the skillsets and capacity to scale the business. This included Derek Brown, who joined us from Quantexa to be our Workday Products’ CEO in June 2026. |
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We have continued to invest in our product portfolios, with research & development expenditure rising by 33% to £11.4 million (H1 26: £8.6 million), all of which was expensed in the period. Sales & marketing spend increased by 11% to £11.1 million (H1 26: £10.0 million). |
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Gross margin declined by 3.4%, of which 1.1% reflected the reclassification of attributable bonus costs to cost of sales. Most of the remaining decline reflected negative margins on implementation services for Pay Transparency Analyzer and Employee Document Management. We expect these implementation margins to turn positive as our delivery approach matures. We launched a Conflict of Interest product in the period, to allow customers to use Workday to manage conflicts of interest, with further products in the pipeline. |
Workday Services delivered good revenue growth, driven by North America
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Revenue in the period was 9% higher (9% ccy) at £58.3 million (H1 26: £53.4 million). |
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North America grew revenue by 10%, while revenue in EMEA (including Australia) increased by 8%. |
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Bookings were steady at £54.3 million (H1 26: £54.0 million), with a contracted backlog of £73.4 million at the period end (30 September 2025: £62.1 million). |
We continue to benefit from our geographical breadth, with international markets generating £101.4 million of revenue (H1 26: £84.9 million), up 19%
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Workday Services and Workday Products have a particularly strong international client base, with 84% of their aggregate revenues coming from these international customers (H1 26: 83%). |
Excellent customer service drives customer satisfaction and retention
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Our customers continued to rate our services as ‘excellent’, with a Net Promoter Score([5]) of 61([6]) (H1 26: 70). |
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Existing customers generated revenue of £219.3 million (H1 26: £166.6 million), up 32%. |
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Our total customer numbers increased to 1,371 (30 September 2025: 1,169). |
The commitment and engagement of our colleagues underpins our business performance
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Rapid growth in our team, with 3,885 people at period end (30 September 2025: 3,132, 31 March 2026: 3,475). |
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The number of employed staff rose from 3,216 at 31 March 2026 to 3,569 at the period end. |
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Engagement levels remain high at 79% (H1 26: 75%) in our internal surveys, supporting continuing strong employee retention of 91% (H1 26: 92%). |
Demand for AI services continues to grow, as we help customers implement solutions responsibly
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Revenues for AI and data-related projects increased 40% to £28.5 million (H1 26: £20.4 million([7])). |
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We have delivered over 475 AI & Data projects across the public, healthcare, and commercial sectors, including 75 in the period. |
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During the period, we joined the Cosine coalition to support the development of a UK sovereign AI model for organisations needing frontier capabilities in a secure environment. |
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We have launched Actonomy, a new business dedicated to helping customers overcome the challenge of moving AI projects from pilot into production, with four customers already signed. |
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We are now certified in the Claude Partner Network, Anthropic's programme for firms that put Claude into production for customers. |
Current trading and outlook
Following the strong performance in FY26 and H1 27, we expect further growth in revenue and adjusted profit before tax in the second half of FY27, in line with current market expectations.
In Digital Services, a stronger second half comparative will result in the revenue growth rate moderating from the exceptional level achieved in the first half. Workday Products will surpass our £100 million ARR target in this quarter, while Workday Services is also set to perform well.
Beyond FY27, we see excellent opportunities for Kainos. Customers in each of our markets remain focused on deploying technology to improve their efficiency and effectiveness. AI is augmenting our capabilities, enabling us to accelerate productivity improvements for us and our customers. The Group has a substantial, multi-year backlog, a robust balance sheet and a proven strategy, giving us a solid platform for further success.
Commenting on the results, CEO Brendan Mooney said:
“This was an excellent six months for Kainos, building on our strong performance last year.
“Technology is central to the UK Government’s plans to transform public services and this is reflected in the outstanding growth in Digital Services, particularly across our public sector and healthcare clients. Industry data shows that we were one of the largest winners of Government digital contracts in the period, showing that we are one of the most-trusted suppliers to the UK Government and have a strong track record of delivering value.
“Workday Products reached £96.0 million of annual recurring revenue at 30 September 2026 and will pass our initial target of £100 million by the end of 2026. This is a significant achievement, with its ARR having nearly tripled since we set the target in May 2022. It remains firmly on track to achieve £200 million of ARR by the end of 2030.
“Workday Services had a good first half, with revenue growth driven by North America and our newer regions such as Australia. This reflects our focus on larger and more complex deployments, which play to our strengths.
“As always, I want to thank our customers for the trust they place in us and our people for their hard work and dedication. We look forward with confidence to the remainder of FY27.”
For further information, please contact:
Kainos via FTI Consulting LLP
Brendan Mooney, Chief Executive Officer
Richard McCann, Chief Financial Officer/Chief Operating Officer
Investec Bank plc +44 20 7597 5970
Patrick Robb / Nick Prowting / Arnav Kapoor
FTI Consulting LLP +44 20 3727 1000
Dwight Burden / Kwaku Aning
About Kainos Group plc
Kainos Group plc is a UK-headquartered provider of sophisticated IT services to major public sector, commercial and healthcare customers and a developer of software applications. Our shares are listed on the London Stock Exchange (LSE: KNOS).
Our expertise spans three divisions:
Digital Services develops and supports custom digital service platforms, which help customers solve key business problems such as the need to improve their service, reduce costs and increase productivity.
Workday Services is a respected Workday partner, providing a comprehensive range of services to support customers deploying Workday's Finance, HR and Planning products.
Workday Products develops proprietary software products that complement Workday, by enhancing our customers' system security and compliance and improving their document generation and storage.
Our purpose
Our purpose is to help our customers with their most challenging projects and, together with our partners, help them build the capability to succeed in the digital age.
Find out more
You can discover more about us at www.kainos.com.
Cautionary statement
This report includes statements that are, or may be deemed to be, "forward-looking statements". These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report, but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
Definition of terms
We use the following definitions for our key metrics:
Active customer: a customer who has signed a contract with us within the last three months or has generated revenue in the last six months.
Adjusted earnings per share (basic and diluted): adjusted profit after tax divided by the weighted average number of ordinary shares outstanding (basic) or weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares (diluted).
Adjusted EBITDA: adjusted pre-tax profit excluding interest, tax, depreciation of property, plant and equipment and right-of-use assets, and amortisation of intangible assets.
Adjusted pre-tax profit: profit before tax excluding the effect of share-based payments expense, acquisition-related expenses including amortisation of acquired intangible assets and deferred consideration (including post combination remuneration expense).
Adjusted profit margin: adjusted profit as a percentage of revenue for the period.
Agentic AI: refers to intelligent systems that can autonomously plan, decide, and act to achieve defined goals, working across multiple steps and systems with minimal human intervention. These agents combine reasoning, learning, and action capabilities to deliver outcomes, not just insights, while operating within clear ethical, governance, and organisational boundaries.
Annual recurring revenue (ARR): the total of the annualised committed subscription value contracted at the end of the reporting period.
Bookings: The total contract value (TCV) of customer contracts signed during the period.
Cash conversion: cash generated from operating activities as a percentage of adjusted EBITDA.
Constant currency (ccy): excludes the effect of foreign currency exchange rate fluctuations on period-on-period performance by translating the relevant prior period figure at current period average exchange rates.
Contracted backlog: the value of revenue under signed customer contracts that has yet to be recognised.
Existing customer revenue: total revenue recognised from customers in the current period who were also customers in the preceding year.
International revenue: total revenue derived from locations outside of UK and Ireland.
Net Promoter Score (NPS): a metric that organisations use to measure customer loyalty toward their brand, product or service, which can range from -100 to +100. Bain & Co, the creators of the metric, held that a score above 0 is good; 20+ is favourable; 50+ is excellent and 80+ is world class.
Organic revenue: our revenue excluding revenue from acquisitions completed in the current and comparative reporting periods.
Software as a service (SaaS): a software distribution model that delivers application programmes over the internet, with users typically accessing the programme through a web browser. Users pay an ongoing subscription to use the software rather than purchasing it once and installing it.
Group business review
Our overall performance
After achieving double-digit revenue growth in FY26, the Group has accelerated in the first half of FY27. Group revenue increased by 37% (37% ccy) to £268.8 million (H1 26: £196.1 million), with a particularly strong performance from Digital Services. Its revenue grew by 57%, supported by contract wins in the prior year and during H1 27. The public and healthcare sectors were the main contributors to this performance. Defence and North America also grew, with North America’s growth primarily due to a full period of ownership of Davis Pier, which we acquired in September 2025.
Workday Products made further good progress, with revenue up 22% in the period. It is firmly on track to achieve our near-term ARR target of £100 million by the end of 2026 and our end-2030 target of £200 million.
Workday Services continued to benefit from our focus on larger and more complex deployments, where we have particular strengths. Revenue was 9% higher in the period, with good growth in North America.
Adjusted pre-tax profit rose by 30% (30% ccy) to £41.7 million (H1 26: £32.0 million). Profit growth was driven by increased revenues, with operating margins slightly lower. See the Financial Review for further information.
Total investment in our Workday software products was £22.5 million (H1 26: £18.6 million), up 21%. Within this, research & development investment rose by 33% to £11.4 million (H1 26: £8.6 million), all of which was expensed. Our product-related sales & marketing investment was £11.1 million, up 11% (H1 26: £10.0 million).
Cash conversion in the period was 62% (H1 26: 48%), which is in line with average cash conversion rates for H1. The Group’s strong financial performance in FY26 also resulted in higher bonuses, which we paid during H1 27.
At 30 September 2026, we had a strong cash balance (including treasury deposits) of £86.5 million (30 September 2025: £105.5 million). Uses of cash in the period included the ongoing construction of our new Belfast office (£7.1 million) and the share buyback programme we began in November 2025, which concluded in May 2026 (£12.5 million).
Bookings and backlog
We have revised how we calculate bookings and contracted backlog, to provide better insight into the level of business secured and the longer-term revenue profile, while also aligning our disclosures more closely with industry practice.
While we are applying the new methodology across the Group, it does not affect the value of bookings and backlog for Workday Services or Workday Products, and there is no impact on revenue recognition.
In Digital Services, customers typically award us a contract and then draw-down that contract through statements of work. Contract lengths and values have significantly increased in recent years, such as the £150 million, five-year contract we secured with Defra during the period (see below).
Under the revised methodology, bookings and contracted backlog for Digital Services now reflect the total contract values secured. Previously, we only reflected committed customer spend under agreed statements of work. Our experience also shows that the value of orders we receive under a contract tends to grow over time, meaning that the stated contract value at award provides a reasonable baseline for the revenue we expect to generate over its lifetime.
On the revised basis, bookings for the Group were 27% higher at £402.3 million (H1 26: £317.0 million) and the period-end backlog was £853.0 million (30 September 2025: £679.3 million). On the previous basis, bookings rose by 34% to £304.7 million (H1 26: £227.9 million) and the backlog at the period end was 19% higher at £472.6 million (30 September 2025: £396.9 million). A comparison to the previous methodology can be found in the Financial Review.
Digital Services performance
Digital Services builds highly cost-effective solutions that make public-facing services more accessible and easier to use for citizens, patients and customers.
The division had an excellent six months, with revenue increasing by 57% (57% ccy) to £162.5 million (H1 26: £103.5 million). Organic revenue growth, excluding the impact of acquiring Davis Pier in September 2025, was 54%. On the new basis described above, bookings were 44% higher at £296.5 million (H1 26: £205.3 million) and the period-end contracted backlog was £599.9 million (30 September 2025: £456.9 million).
The defence sector is now shown separately from public sector, reflecting its increasing strategic and operational importance.
Public sector
Revenue from public sector customers increased by 55% to £76.0 million (H1 26: £49.1 million(4)). We continue to benefit from our strategic focus on high-value opportunities, with revenue driven by significant contract wins in the prior year and during the period.
New awards in H1 27 included a five-year contract worth up to £150 million with the Department for Environment, Food and Rural Affairs, to support digital delivery and transformation across the organisation.
Other notable awards in the period included:
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a £30 million contract with the Department for Transport to support its Street Manager Digital Service (signed in H1 27), | ||
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a £111 million, four-year contract with the Home Office’s Environment, Build, Support and Administration platform (signing in H2 27); and | ||
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an £84 million contract to act as Consular Digital and Data Delivery Partner, for the Foreign, Commonwealth & Development Office (signing H2 27). |
Note: contracts signed in H1 27 are included in the reported bookings and backlog figures, contracts awarded and signing in H2 27 will be included in future reporting periods.
Healthcare sector
Technology has a key role to play in improving patient outcomes and making the National Health Service more efficient and cost effective.
Revenue in healthcare increased by 85% to £54.7 million (H1 26: £29.6 million), supported by existing major contracts, such as the Digital Health Checks project for NHS England, and new wins in the period.
Contract wins in H1 27 included a £9.9 million contract with the NHS for virtual hospital development and related services. We are involved in several programmes to reduce the pressure on patients to travel long distances for care, while also helping the NHS to manage its capacity more effectively.
Defence sector
Technology is increasingly central to military capability, with data, AI and secure digital platforms playing a critical role in delivering operational advantage in the defence sector.
Our work with the Ministry of Defence has continued to grow strongly, although the delayed publication of the Defence Investment Plan has slowed the pace of procurement. In H1 27, revenue in defence increased by 44% to £15.3 million (H1 26: £10.6 million), reflecting strong demand for digital services, cloud and data services across the defence sector. Key contracts in the MOD include Data Services and Secure Cloud Platform.
We continue to support defence organisations in developing sovereign digital capabilities, modernising critical systems and improving interoperability across complex operational environments. Our expertise in secure cloud, data and AI is helping customers accelerate decision-making and deliver mission outcomes more effectively.
North America
Our North American business is primarily in Canada, where there is substantial growth potential as public sector bodies invest in digital governance. We bolstered our position in Canada in the prior year with the acquisition of Davis Pier, a consultancy focused on addressing complex challenges for public sector and community organisations.
Revenue in North America increased by 50% to £11.7 million (H1 26: £7.8 million), reflecting a full period of ownership of Davis Pier and organic growth of 13%. Notable developments include the award of a multi-million multi-year contract with Nova Scotia Health Authority to be their Digital and Data Delivery Partner.
Commercial sector
We continue to support existing commercial sector customers but we are not currently targeting new opportunities, as we focus our attention on the public and healthcare sectors. Revenue in the period was £4.9 million (H1 26: £6.4 million).
We are reviewing options for regrowing our commercial sector presence over time. Historically, this business has provided a range of services to different types of customers, and we believe more focused engagements will support improved performance.
Actonomy
During the period we launched Actonomy, a new business to help customers move their AI projects from pilot into production. We have deliberately targeted a range of sectors, securing initial customers in specialist lending, utilities, healthcare and academic research. See the Artificial Intelligence section for further information.
Workday Products performance
Workday Products had another positive six months, with revenue increasing by 22% (22% ccy) to £48.0 million (H1 26: £39.2 million). ARR at the period end was £96.0 million (H1 26: £77.5 million), up 24% (23% ccy). We are therefore on track to achieve our ARR targets of £100 million by the end of 2026 and £200 million by the end of 2030.
Over 750 customers now use our products, with 40% taking multiple products. The period-end backlog increased 12% to £179.7 million (H1 26: £160.3 million).
Growth in the period was primarily driven by our Smart Audit, Smart Test and Employee Document Management products, as well as take-up of the Pay Transparency Analyzer product launched in FY26, which Workday is exclusively selling to its customers as part of our strategic partnership. Nearly 70 customers were using the product at the period end.
We continue to invest in our product development and introduced a Conflict of Interest product during the period. This enables customers to use Workday to track and manage employee and contractor conflicts of interest, pending approvals and employee form submissions, with real-time reporting.
We have expanded the divisional leadership team, to ensure we have the experience, skillsets and capacity to continue to scale the business. In addition to CEO Derek Brown, who joined from Quantexa during the period, key recruitment during 2026 includes a Chief Marketing Officer, Chief Product Officer and Chief Customer Officer.
Workday Services performance
We are Workday's leading partner in Europe and a full services partner in the US, which is Workday's biggest market. At the period end, we had 996 accredited Workday consultants (30 September 2025: 822, 31 March 2026: 944).
Workday Services’ revenue was 9% higher (9% ccy) at £58.3 million (H1 26: £53.4 million). Revenue in North America was 10% up and accounted for 55% of divisional revenue (H1 26: 54%), while EMEA (including Australia) revenues increased by 8% and represented 45% of divisional revenue (H1 26: 46%). Our business in Australia continues to grow strongly and we now have around 35 people based there.
Our performance in the period reflects our strategic focus on larger and more-complex deployments, as noted above, and Workday’s continued success. It reported revenue growth of more than 13% in the six months to 31 July 2026.
Sales bookings were steady at £54.3 million (H1 26: £54.0 million), contributing to a contracted backlog of £73.4 million at the period end (30 September 2025: £62.1 million). Notable contracts included projects with CorVel (USA), World Wildlife Fund (Switzerland) and Aware Super (Australia).
In addition to deploying Workday for our customers, we continue to support customers with maximising the benefits of their platforms. For example, in recent months we have run more than 200 individual sessions for customers to help them use the native AI features within Workday. See the Artificial Intelligence section for more information on our Workday AI Centre of Excellence.
Our people
Our success is driven by our people’s ability, energy and expertise. To support our business growth, our headcount increased rapidly during the period and stood at 3,885 at 30 September 2026 (30 September 2025: 3,132; 31 March 2026: 3,475).
Within this, the number of employed staff grew to 3,569 (30 September 2025: 2,993; 31 March 2026: 3,216). We continue to use contractors to provide short-term capacity, enabling us to deliver customer projects while keeping the proportion of contractors in our total headcount relatively low at 8% (H1 26: 4%). We remain highly disciplined in recruiting permanent employees to backfill these roles. On average, we make an offer to one in 100 applicants.
Against this backdrop, it is more important than ever that we retain our existing colleagues. We were therefore pleased that retention remains high at 91% over the last 12 months (H1 26: 92%). This is supported by continued strong engagement at 79% (H1 26: 75%), which we measure regularly through Workday Peakon. In addition to our internal engagement metrics, we also monitor third-party ratings such as Glassdoor. In September 2026 we had an overall approval rating on Glassdoor of 78% (H1 26: 78%) and 76% of respondents would recommend working at Kainos to a friend (H1 26: 72%).
People Development and Succession Planning
People development and succession planning remain important priorities for us. We continuously review the skills needed to support our future development and this led to a series of new appointments and leadership changes during 2025 and early 2026.
We have also continued to strengthen our management structures and invest further in leadership development. This included establishing an 11-member Executive Committee, which is responsible for Group-wide strategy, priorities and decision-making, while individual business units remain responsible for operational delivery. This brings a broader range of expertise and experience into Group-wide decision-making and reduces reliance on individual leaders.
Additionally, we established a dedicated Strategy function reporting to the CEO, staffed with a combination of external recruitment and internal appointments. As part of this initiative, we partnered with Ulster University Business School to develop a bespoke executive education programme focused on strategy. More than 70 of our most senior leaders have now completed this programme across three cohorts in February, June and October.
Our customers
Consistently delivering for our customers is at the heart of our business. It creates strong relationships, which in turn generate high levels of repeat business, while our reputation for delivery also helps us to win new work.
We continued to perform strongly during the period, as reflected by:
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Our Net Promoter Score (NPS) of 61 (H1 26: 70), maintaining our record of consistently high customer satisfaction. A score above 50 is viewed as ‘excellent’; |
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Existing customers generating 82% of our revenue (H1 26: 85%), as they continue to trust us to deliver for them; and |
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Further new customer wins, giving us 1,371 active customers at the period end (30 September 2025: 1,169). |
Artificial intelligence
Our revenue from AI and data-related projects grew by 40% to £28.5 million (H1 26: £20.4 million(7)), representing 18% of Digital Services’ revenue.
As the largest UK-headquartered supplier of AI to Government, we were pleased to announce in September 2026 that we had joined a coalition shaping sovereign AI for government and critical public sector use cases. The coalition has been created by Cosine, a UK-based AI research lab developing a sovereign AI model for organisations needing frontier capability in a secure environment.
For our customers, our role is to bring a practitioner’s view of what it takes to move AI from pilot projects into trusted service delivery, sharing insights from deploying AI in government, wider public sector and regulated environments. This includes input on the practical requirements around governance, assurance, security, deployment and adoption.
To help our customers address the challenge of moving AI projects from pilot to production, we have launched a dedicated business called Actonomy. It specialises in production AI, drawing on our experience of delivering hundreds of scaled enterprise AI deployments spanning machine learning, generative AI and now agentic AI.
The Actonomy platform is built on Microsoft and Anthropic, and includes proprietary small language models for domain-specific tasks and evaluations of accuracy and reliability. It reduces AI production deployment time by up to 75%, helping organisations realise value faster at a lower long-term cost.
Following its July 2026 soft launch, Actonomy has four signed enterprise customers. Early deployments include a UK specialist lender targeting a reduction in non-performing loans and a leading UK water utility seeking AI-driven efficiencies.
We are now certified in the Claude Partner Network, the programme through which Anthropic works with firms that put Claude into production for customers. This complements the Actonomy platform, which is built on Microsoft and Anthropic.
Running legacy systems costs the Government billions of pounds each year in direct costs and lost productivity. However, there are cases where a full transformation programme is not commercially viable or where the customer wants a simple, interim solution until a full transformation becomes affordable. We see an opportunity to bring an AI-native way of working to certain legacy modernisation opportunities and have begun to work with a small number of customers on their projects.
Our Workday AI Centre of Excellence is supporting customers by building AI agents to help with labour-intensive back-office functions, such as timesheet management, absence management and regulatory change tracking. We are also helping customers to integrate AI into their wider workflows across their enterprise, building on top of Workday as the source of key data.
Within Workday Products, AI is an integral part of our Product Engineering lifecycle, improving productivity across development, testing and support. This has helped us accelerate product development and, in certain areas, deliver features that were previously impractical or uneconomic to develop.
Innovation, research and development
We focus our innovation function on the areas where we see the greatest potential for customer impact and long-term strategic potential. We then work with our businesses to translate the insights we gain into practical solutions for customer challenges. These are tested with customers to determine whether there is a scalable opportunity, with successful solutions being rolled out more widely. Our current focus areas include Agentic AI, Sovereign AI, Enterprise Digital Twins and Quantum.
Financial review
Revenue
Group revenue increased by 37% (37% ccy) to £268.8 million (H1 26: £196.1 million), with all three divisions generating strong growth:
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Digital Services’ revenue rose 57% to £162.5 million (H1 26: £103.5 million), with particularly strong performances in the public sector and healthcare, and further growth in North America and defence. |
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Workday Products grew by 22% to £48.0 million (H1 26: £39.2 million), driven by the Smart Audit, Smart Test and Employee Document Management products, and take-up of the Pay Transparency Analyzer product launched in the prior year. |
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Workday Services increased revenue by 9% to £58.3 million (H1 26: £53.4 million), with North America and Australia both contributing good growth. |
The Group Business Review provides more information on divisional revenue performance.
Bookings and backlog
As described in the Group Business Review, we have revised how we calculate bookings and contracted backlog, to provide better insight into the level of business secured and the longer-term revenue profile, while also aligning our disclosures more closely with industry practice. The new methodology applies across the Group but does not affect bookings and backlog for Workday Services or Workday Products, and there is no impact on revenue recognition.
The tables below present the Group bookings and backlog figures by division under the new methodology alongside the previous methodology.
Bookings: new methodology
|
|
|
|
|
|
|
| ||||||
|
|
|
|
H1 27 (£000s) |
FY 26 (£000s) |
H1 26 (£000s) |
Change H1 vs. H1 |
| |||||
|
Digital Services |
|
|
296,489 |
351,009 |
205,301 |
44% |
| |||||
|
Workday Services |
|
|
54,291 |
121,754 |
53,963 |
1% |
| |||||
|
Workday Products |
|
|
51,565 |
122,187 |
57,737 |
(11%) |
| |||||
|
Total |
|
|
402,345 |
594,950 |
317,001 |
27% |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings: previous methodology
|
|
|
|
H1 27 (£000s) |
FY 26 (£000s) |
H1 26 (£000s) |
Change H1 vs. H1 |
|
Digital Services |
|
|
198,802 |
261,314 |
116,197 |
71% |
|
Workday Services |
|
|
54,291 |
121,754 |
53,963 |
1% |
|
Workday Products |
|
|
51,565 |
122,187 |
57,737 |
(11%) |
|
Total |
|
|
304,658 |
505,255 |
227,897 |
34% |
Backlog: new methodology
|
|
|
|
|
|
|
| ||||||
|
|
|
|
H1 27 (£000s) |
FY 26 (£000s) |
H1 26 (£000s) |
Change H1 vs. H1 |
| |||||
|
Digital Services |
|
|
599,880 |
462,992 |
456,883 |
31% |
| |||||
|
Workday Services |
|
|
73,442 |
74,928 |
62,106 |
18% |
| |||||
|
Workday Products |
|
|
179,727 |
178,685 |
160,264 |
12% |
| |||||
|
Total |
|
|
853,049 |
716,605 |
679,253 |
26% |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog: previous methodology
|
|
|
|
H1 27 (£000s) |
FY 26 (£000s) |
H1 26 (£000s) |
Change H1 vs. H1 |
|
Digital Services |
|
|
219,421 |
180,287 |
174,545 |
26% |
|
Workday Services |
|
|
73,442 |
74,928 |
62,106 |
18% |
|
Workday Products |
|
|
179,727 |
178,685 |
160,264 |
12% |
|
Total |
|
|
472,590 |
433,900 |
396,915 |
19% |
Gross margin
Our overall gross margin was 43.1% (H1 26: 48.0%). The fall was driven mainly by Digital Services and Workday Products as outlined below.
Digital Services gross margin fell significantly to 31.9% (H1 26: 35.8%); the vast majority of this fall (3.4%) related to the increased use of contractors and partners. Revenues delivered through partners and contractors rose from £15.1 million in H1 26 to £49.2 million in the current period. Both contractors and partners have much lower margins than Kainos staff. There are two drivers of this growth, one structural and one timing related. Of the £49.2 million approximately 60% relates to the need to respond to rapid growth by using capacity partners and contractors to scale up major new projects. We consider this to be a timing issue and would expect this level to reduce as growth moderates. Approximately 40% is structural in nature as Kainos increasingly uses partners strategically to win larger contracts where we act as prime contractor. This strategy leads to lower gross margins but much higher total contract value wins as evidenced in the booking figures.
It is worth noting that gross profit in Digital Services increased by 40% from £37.1 million in H1 26 to £51.9 million this period partially in relation to the higher volume of revenue generated through the use of contactors and partners.
Contractors and partners, while incurring much lower gross margins than Kainos staff, also have much lower overhead costs relating to training, holidays, unutilised time etc. This is part of the reason why Digital Services direct expenses only grew by 23% compared to revenue growth of 57% from H1 26.
Workday Products’ gross margin was 74.3% (H1 26: 77.7%). SaaS gross margins fell by 1.3%, most of which was related to a calculation change to bring bonuses relating to staff attributable to this area into cost of sales. This is partially responsible for direct expenses growing more slowly than revenue during the period.
The remainder of the gross margin reduction relates mainly to negative margins on the implementation of Employee Document Management and Pay Transparency Analyzer. Both products have been released relatively recently and are more complex to implement than previous products. Again, we consider this to be a timing issue which will reverse as the products, and particularly product implementation, become more mature.
While Workday Services’ gross margin was lower than the comparable period at 48.5% (H1 26: 49.8%), it was ahead of the 45.8% achieved in FY26 as a whole.
Operating expenses
Operating expenses increased by 18% to £80.4 million (H1 26: £68.3 million), well below the rate of growth in revenue. Digital Services was the main driver of this performance, with its direct expenses increasing by 23% against a 57% increase in revenue.
Our investment in product development increased to £11.4 million (H1 26: £8.6 million), all of which was expensed during the period. We recognised £4.1 million of Research & Development Expenditure Credit (RDEC) income during the period (H1 26: £2.1 million).
Alternative performance measures (APMs)
We use alternative performance measures to monitor day-to-day performance and to assist management’s financial, strategic and operating decisions.
We believe these adjusted measures provide a clearer view of trading performance, enable meaningful period-to-period comparisons and offer useful insight for users of our financial statements. The items we adjust are consistent with those used by comparable companies.
Specifically, we exclude the following:
Costs directly attributable to acquisitions. This includes amortisation of acquired intangible assets, deferred consideration including compensation for post-combination services, and acquisition-related expenses such as legal and professional costs incurred mainly in the period of acquisition. These costs are unique to each acquisition and can vary significantly between periods depending on the timing and size of acquisitions, the nature of intangible assets acquired and the structure of consideration. We therefore consider that these costs do not reflect underlying operations.
Share-based payment costs. Share-based payment is an important aspect of employee compensation. However, we believe it is useful to exclude this expense to better understand our core business performance and facilitate comparison of our results to those of peer companies. Our arrangements consist of both equity-settled and cash-settled schemes and the expense incurred will be influenced by factors including the market value of our shares, forfeiture rates and volatility, which are generally beyond our control and may not correlate to the operation of the business.
Significant and non-recurring items. We consider adjusting these costs provides more meaningful period-to-period comparisons.
We adjust for the above items consistently across all our adjusted measures, namely ‘adjusted profit before tax’, ‘adjusted EBITDA’, ‘cash conversion’ and ‘adjusted diluted and basic earnings per share’.
The adjusted profit measures we use are not defined in UK-adopted International Accounting Standards and our definitions may not be comparable with similarly-titled performance measures and disclosures by other entities. As such, these measures should not be considered in isolation but as supplementary information to the financial statements.
The adjusted profit measures reconcile to the reported numbers as follows:
Adjusted profit measures
|
|
6 months to 30 Sep 2026 (£000s) |
6 months to 30 Sep 2025 (£000s) |
12 months to 31 Mar 2026 (£000s) | |
|
Profit before tax |
35,807 |
28,368 |
58,111 | |
|
Share-based payment expense and related costs |
3,787 |
2,872 |
5,373 | |
|
Amortisation of acquired intangible assets |
765 |
365 |
1,302 | |
|
Compensation for post-combination services |
1,383 |
285 |
2,132 | |
|
Acquisition-related expenses |
- |
140 |
145 | |
|
Adjusted profit before tax |
41,742 |
32,030 |
67,063 | |
|
|
|
|
|
|
|
|
6 months to 30 Sep 2026 (£000s) |
6 months to 30 Sep 2025 (£000s) |
12 months to 31 Mar 2026 (£000s) | |
|
Profit after tax |
27,131 |
20,580 |
42,500 | |
|
After tax impact of: |
|
|
| |
|
Share-based payment expense and related costs |
2,869 |
2,084 |
3,930 | |
|
Amortisation of acquired intangible assets |
709 |
271 |
1,116 | |
|
Compensation for post-combination services |
1,383 |
285 |
2,132 | |
|
Acquisition-related expenses |
- |
140 |
145 | |
|
Adjusted profit after tax |
32,092 |
23,360 |
49,823 | |
|
|
|
|
|
|
Adjusted EBITDA
|
|
6 months to 30 Sep 2026 (£000s) |
6 months to 30 Sep 2025 (£000s) |
12 months to 31 Mar 2026 (£000s) | |
|
Adjusted profit before tax |
41,742 |
32,030 |
67,063 | |
|
Depreciation of property, plant and equipment |
1,534 |
1,681 |
3,278 | |
|
Depreciation of right-of-use assets |
650 |
624 |
1,287 | |
|
Finance expense |
188 |
194 |
383 | |
|
Finance income |
(1,053) |
(2,474) |
(3,722) | |
|
Adjusted EBITDA |
43,061 |
32,055 |
68,289 | |
|
|
|
|
|
|
Adjusted profit before tax increased by 30% to £41.7 million (H1 26: £32.0 million). Profit before tax was 26% higher at £35.8 million (H1 26: £28.4 million).
Corporation tax charge
The total tax charge for the six months ended 30 September 2026 was £8.7 million (H1 26: £7.8 million), representing an effective tax rate of 24% (H1 26: 27%). The decrease in the effective tax rate primarily reflects a higher deferred tax credit arising from the increase in the Company’s share price.
The expected annual tax rate for the year to 31 March 2027 is 26% (31 March 2026: 27%), which is slightly higher than the UK corporation tax rate, mainly due to the impact of higher tax rates in North America.
Earnings per share
Adjusted diluted earnings per share increased by 45% to 27.4 pence (H1 26: 18.9 pence), while diluted earnings per share for the period was 23.1 pence (H1 26: 16.7 pence), up 38%. Further information is provided in note 8 to the condensed consolidated financial statements.
Financial position
We continue to have a strong financial position, with a substantial cash balance (see below), no debt and net assets of £96.0 million (31 March 2026: £100.5 million).
The combined underlying net trade receivables and accrued income balance increased by 10% to £91.9 million (31 March 2026: £83.4 million) reflecting the substantial revenue growth in the period. Trade payables and accruals were £74.1 million (31 March 2026: £76.5 million).
During the period, we continued to invest in the construction of our new Belfast premises, resulting in a £7.1 million increase in non-current assets, comprising £4.0 million of property, plant and equipment and £3.1 million in investment property.
The final dividend for FY26 of £23.0 million has been included as a current liability in these financial statements. This dividend was approved by shareholders at the Annual General Meeting on 22 September 2026 and paid to shareholders on 23 October 2026.
Cash and cash conversion
The Group is highly cash generative, with our Workday Products business in particular having an attractive cash profile, as we receive payment from customers annually in advance.
Cash conversion, which is cash generated by operating activities as a percentage of adjusted EBITDA, was 62% (H1 26: 48%) and is in line with average cash conversion rates for H1. The rate also reflects higher bonuses paid in the period following the Group’s strong financial performance in FY26.
At 30 September 2026, we held cash and treasury deposits of £86.5 million (31 March 2026: £89.1 million). The movement in the period includes:
|
|
£7.1 million of cash outflows relating to the construction of our new Belfast office; and |
|
|
£12.5 million returned to shareholders between 1 April and 15 May 2026, as we completed the £30.0 million share buyback programme that began in November 2025. |
Since November 2024, we have returned a total of £90.0 million to shareholders, through three buyback programmes. The Board has no current plans to launch a further share buyback programme but will keep future capital returns under review, alongside other uses of capital, in light of market conditions and the Group's strategic priorities, to maximise shareholder value.
Interim dividend
The Board has declared an interim dividend of 10.4 pence per share for H1 27 (H1 26: 9.8 pence). This will be paid on 11 December 2026 to shareholders on the register at the close of business on 20 November 2026, with an ex-dividend date of 19 November 2026.
Related party transactions
There have been no new or material changes in related party transactions from those described in the last annual report.
Risks & Uncertainties
There are several potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from forecast and historic results.
The Directors do not consider that the principal risks and uncertainties described in the Annual Report for the year ended 31 March 2026 have changed, although we continue to ensure that these risks are effectively managed. A detailed explanation of the risks summarised below, and how the Group seeks to mitigate the risks, can be found on pages 60 - 65 of the Annual Report for the year ended 31 March 2026 (available on the Group’s website www.kainos.com).
|
Risk |
Description |
|
1. Cyber and information security |
Cyber threats are constantly adapting and increasing in number, frequency and sophistication. We must maintain appropriate controls and protective measures to ensure the confidentiality, integrity and availability of our IT systems, both internally and as part of our service offerings to customers. |
|
2. Global macro-economic events |
We may be affected by: • the instability of the financial system, market disruptions or suspensions; • a material downturn in the financial markets or an economic recession; • the insolvency, closure, consolidation or rationalisation of parts of our customer base; • increased geopolitical instability; or • major changes in UK Government structure, such as the reorganisation of key public sector bodies (e.g. the merger of NHS England into the Department of Health and Social Care). |
|
3. Exchange rate fluctuations |
There is a risk of material detrimental movement in foreign exchange rates. |
|
4. Partner relationships |
Our partner arrangements may include access to proprietary materials such as training, know-how or branding, which we require to deliver or enhance our services. A deterioration in strategic partner relationships could result in us losing access to essential intellectual property or services, which could impact partner-influenced sales. |
|
5. Increasing complexity of global data protection laws |
We need to comply with legal, regulatory and contractual information security and data privacy requirements. In Europe, GDPR mandates a suite of data privacy controls to mitigate the risk of unauthorised disclosure of personal information. Other jurisdictions have similar measures and as we expand into new regions, it is imperative that we understand and adhere to the applicable controls. |
|
6. Long-term climate change and sustainability |
With investors and other stakeholders increasingly focusing on sustainability and climate, there is reputational risk for us if we decide not to act or act too slowly. |
|
7. Non-compliance with laws and regulations |
We must comply with laws and regulations applicable to us and design our products and services to comply with laws and regulations applicable to our customers. |
|
8. Unsafe use of AI |
Using AI technology without appropriate safeguards or ethical considerations could lead to the mishandling of sensitive data, privacy violations and reputational damage through bias, discrimination or use of technology which does not consider ethical concerns. |
|
9. Increasing customer demands in a competitive skills market |
Demand for skills in areas such as business development, low code, data and AI, cyber security and application development may introduce challenges when recruiting new people and retaining our current skilled employees. |
Going concern
As further outlined in note 2 to the condensed consolidated financial statements, the Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, which is a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated financial statements.
Condensed consolidated income statement for the six months ended 30 September 2026
|
|
|
|
|
|
|
Continuing operations |
Note |
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) |
|
Revenue |
5 |
268,802 |
196,135 |
431,098 |
|
Cost of sales |
5 |
(152,953) |
(101,970) |
(232,190) |
|
Gross profit |
|
115,849 |
94,165 |
198,908 |
|
Operating expenses |
|
(80,397) |
(68,292) |
(144,291) |
|
Impairment (loss)/gain (including amounts recovered) on trade receivables and accrued income |
|
(510) |
215 |
155 |
|
Operating profit |
|
34,942 |
26,088 |
54,772 |
|
Finance income |
|
1,053 |
2,474 |
3,722 |
|
Finance expense |
|
(188) |
(194) |
(383) |
|
Profit before tax |
|
35,807 |
28,368 |
58,111 |
|
Income tax expense |
6 |
(8,676) |
(7,788) |
(15,611) |
|
Profit for the period |
|
27,131 |
20,580 |
42,500 |
Profit attributable to equity holders of the parent Company
Condensed consolidated statement of comprehensive income for the six months ended 30 September 2026
|
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) | |||
|
Profit for the period |
|
27,131 |
20,580 |
42,500 | |||
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
| |||
|
Foreign operations - foreign currency translation differences |
|
(77) |
464 |
869 | |||
|
Total comprehensive income for the period |
|
27,054 |
21,044 |
43,369 | |||
|
Total comprehensive income attributable to equity holders of the parent Company
| |||||||
|
Earnings per share |
|
|
|
| |||
|
Basic |
8 |
23.5p |
17.0p |
35.5p | |||
|
Diluted |
8 |
23.1p |
16.7p |
35.1p | |||
|
|
|
|
|
|
|
|
|
Condensed consolidated statement of financial position as at 30 September 2026
|
|
Note |
30 Sep 2026 (unaudited) (£000s) |
30 Sep 2025 (unaudited) (£000s) |
31 Mar 2026 (audited) (£000s) |
|
Non-current assets |
|
|
|
|
|
Goodwill |
|
43,890 |
42,778 |
44,255 |
|
Other intangible assets |
|
7,976 |
11,364 |
8,869 |
|
Investment property |
|
7,051 |
- |
3,904 |
|
Property, plant and equipment |
|
17,284 |
13,599 |
13,139 |
|
Right-of-use assets |
|
5,128 |
4,370 |
5,182 |
|
Investments in equity instruments |
|
1,299 |
1,299 |
1,299 |
|
Deferred tax asset |
|
6,135 |
4,550 |
4,890 |
|
|
|
88,763 |
77,960 |
81,538 |
|
Current assets |
|
|
|
|
|
Trade and other receivables |
9 |
56,731 |
42,232 |
55,732 |
|
Prepayments |
|
8,334 |
7,671 |
7,660 |
|
Accrued income |
|
50,808 |
35,726 |
39,530 |
|
Cash and cash equivalents |
|
77,133 |
100,001 |
82,806 |
|
Treasury deposits |
|
9,363 |
5,498 |
6,247 |
|
|
|
202,369 |
191,128 |
191,975 |
|
Total assets |
|
291,132 |
269,088 |
273,513 |
|
Current liabilities |
|
|
|
|
|
Trade payables and accruals |
|
(74,125) |
(57,578) |
(76,495) |
|
Dividend payable |
7 |
(23,006) |
(22,935) |
- |
|
Share buyback liability |
13 |
- |
(9,158) |
(761) |
|
Deferred income |
|
(60,107) |
(49,803) |
(60,793) |
|
Current tax liabilities |
|
(10,815) |
(4,792) |
(8,706) |
|
Lease liabilities |
|
(1,257) |
(1,229) |
(1,239) |
|
Provisions |
|
- |
(1,070) |
- |
|
Other tax and social security |
|
(16,400) |
(8,541) |
(15,456) |
|
|
|
(185,710) |
(155,106) |
(163,450) |
|
Non-current liabilities |
|
|
|
|
|
Provisions |
|
(1,610) |
(1,579) |
(1,582) |
|
Deferred tax liability |
|
(2,935) |
(3,731) |
(3,125) |
|
Lease liabilities |
|
(4,858) |
(4,056) |
(4,897) |
|
|
|
(9,403) |
(9,366) |
(9,604) |
|
Total liabilities |
|
(195,113) |
(164,472) |
(173,054) |
|
Net assets |
|
96,019 |
104,616 |
100,459 |
|
Equity |
|
|
|
|
|
Share capital |
|
581 |
598 |
589 |
|
Share premium account |
|
10,827 |
9,511 |
10,647 |
|
Other reserves |
|
7,380 |
7,358 |
7,372 |
|
Share-based payment reserve |
|
44,234 |
39,183 |
41,823 |
|
Shares held to be cancelled |
13 |
- |
(9,552) |
(2,612) |
|
Translation reserve |
|
(838) |
(1,166) |
(761) |
|
Retained earnings |
|
33,835 |
58,684 |
43,401 |
|
Total equity |
|
96,019 |
104,616 |
100,459 |
Condensed consolidated statement of changes in equity for the six months ended 30 September 2026
|
|
Share capital
|
Shares held to be cancelled
(£000s)([8]) |
Share
premium
(£000s) |
Other
reserves
(£000s) |
Share-based payment reserve (£000s) |
Translation reserve
(£000s) |
Retained
earnings
(£000s) |
Total
equity
(£000s) |
|
Balance at 31 March 2025 (audited) |
618 |
(1,431) |
9,481 |
3,562 |
36,907 |
(1,630) |
90,478 |
137,985 |
|
Profit for the period |
- |
- |
- |
- |
- |
- |
20,580 |
20,580 |
|
Other comprehensive income |
- |
- |
- |
- |
- |
464 |
- |
464 |
|
Total comprehensive income for the period |
- |
- |
- |
- |
- |
464 |
20,580 |
21,044 |
|
Equity settled share-based payments |
- |
- |
- |
- |
2,276 |
- |
- |
2,276 |
|
Issue of share capital – share options exercised |
- |
- |
30 |
- |
- |
- |
- |
30 |
|
Share buyback programme |
- |
(37,560) |
- |
- |
- |
- |
- |
(37,560) |
|
Shares cancelled |
(20) |
29,439 |
- |
20 |
- |
- |
(29,439) |
- |
|
Issue of shares as purchase consideration |
- |
- |
- |
3,776 |
- |
- |
- |
3,776 |
|
Dividends |
- |
- |
- |
- |
- |
- |
(22,935) |
(22,935) |
|
Balance at 30 September 2025 (unaudited) |
598 |
(9,552) |
9,511 |
7,358 |
39,183 |
(1,166) |
58,684 |
104,616 |
|
Profit for the period |
- |
- |
- |
- |
- |
- |
21,920 |
21,920 |
|
Other comprehensive income |
- |
- |
- |
- |
- |
405 |
- |
405 |
|
Total comprehensive income for the period |
- |
- |
- |
- |
- |
405 |
21,920 |
22,325 |
|
Equity settled share-based payments |
- |
- |
- |
- |
2,640 |
- |
- |
2,640 |
|
Current tax for equity-settled share-based payments |
- |
- |
- |
- |
- |
- |
84 |
84 |
|
Issue of share capital – share options exercised |
3 |
- |
1,136 |
- |
- |
- |
- |
1,139 |
|
Issue of shares as purchase consideration |
2 |
- |
- |
- |
- |
- |
- |
2 |
|
Share buyback programme |
- |
(18,650) |
- |
- |
- |
- |
- |
(18,650) |
|
Shares cancelled |
(14) |
25,590 |
- |
14 |
- |
- |
(25,590) |
- |
|
Dividends |
- |
- |
- |
- |
- |
- |
(11,697) |
(11,697) |
|
Balance at 31 March 2026 (audited) |
589 |
(2,612) |
10,647 |
7,372 |
41,823 |
(761) |
43,401 |
100,459 |
|
Profit for the period |
- |
- |
- |
- |
- |
- |
27,131 |
27,131 |
|
Other comprehensive income |
- |
- |
- |
- |
- |
(77) |
- |
(77) |
|
Total comprehensive income for the period |
- |
- |
- |
- |
- |
(77) |
27,131 |
27,054 |
|
Equity settled share-based payments |
- |
- |
- |
- |
2,411 |
- |
- |
2,411 |
|
Current tax for equity-settled share-based payments |
- |
- |
- |
- |
- |
- |
236 |
236 |
|
Deferred tax for equity-settled share-based payments |
- |
- |
- |
- |
- |
- |
411 |
411 |
|
Issue of share capital – share options exercised |
- |
- |
180 |
- |
- |
- |
- |
180 |
|
Share buyback programme |
- |
(11,726) |
- |
- |
- |
- |
- |
(11,726) |
|
Shares cancelled |
(8) |
14,338 |
- |
8 |
- |
- |
(14,338) |
- |
|
Dividends |
- |
- |
- |
- |
- |
- |
(23,006) |
(23,006) |
|
Balance at 30 September 2026 (unaudited) |
581 |
- |
10,827 |
7,380 |
44,234 |
(838) |
33,835 |
96,019 |
Condensed consolidated statement of cash flows for the six months ended 30 September 2026
|
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited)([9]) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) | ||
|
Cash flows from operating activities |
|
|
|
| ||
|
Profit for the period |
27,131 |
20,580 |
42,500 | |||
|
Adjustments for: |
|
|
| |||
|
Finance income |
(1,053) |
(2,474) |
(3,722) | |||
|
Finance expense |
188 |
194 |
383 | |||
|
Tax expense |
8,676 |
7,788 |
15,611 | |||
|
Research & Development Expenditure Credit |
(4,090) |
(2,059) |
(6,032) | |||
|
Share-based payment expense |
3,787 |
2,872 |
5,373 | |||
|
Depreciation of property, plant and equipment |
1,534 |
1,681 |
3,278 | |||
|
Depreciation of right-of-use assets |
650 |
624 |
1,287 | |||
|
Loss/(gain) on disposal of property, plant and equipment |
10 |
(117) |
(121) | |||
|
Amortisation of intangible assets |
765 |
365 |
1,302 | |||
|
Post-acquisition remuneration settled by shares |
393 |
34 |
445 | |||
|
Increase/(decrease) in provisions |
28 |
(4,312) |
(5,379) | |||
|
Operating cash flows before movements in working capital |
38,019 |
25,176 |
54,925 | |||
|
Increase in trade and other receivables (including accrued income) |
(8,441) |
(12,710) |
(26,316) | |||
|
(Decrease)/increase in trade and other payables (including deferred income) |
(2,901) |
2,766 |
38,818 | |||
|
Cash generated from operating activities |
26,677 |
15,232 |
67,427 | |||
|
Income taxes paid |
(7,579) |
(5,745) |
(9,684) | |||
|
Net cash from operating activities |
19,098 |
9,487 |
57,743 | |||
|
Cash flows from investing activities |
|
|
| |||
|
Interest received |
1,121 |
2,251 |
3,455 |
| ||
|
Purchases of property, plant and equipment |
(5,689) |
(2,976) |
(8,041) |
| ||
|
Expenditure on investment property |
(3,147) |
- |
- |
| ||
|
Proceeds from sale of property, plant and equipment |
- |
125 |
125 |
| ||
|
Acquisition of subsidiaries net of cash acquired |
- |
(7,720) |
(7,859) |
| ||
|
Amounts placed on treasury deposit |
(3,116) |
(99) |
(848) |
| ||
|
Net cash used in investing activities |
(10,831) |
(8,419) |
(13,168) |
| ||
|
Cash flows from financing activities |
|
|
|
| ||
|
Dividends paid |
- |
- |
(34,632) |
| ||
|
Share buyback programme |
(12,487) |
(28,235) |
(55,682) |
| ||
|
Interest paid |
(188) |
(194) |
(383) |
| ||
|
Repayment of lease liabilities |
(854) |
(752) |
(1,183) |
| ||
|
Proceeds on issue of shares |
180 |
30 |
1,169 |
| ||
|
Net cash used in financing activities |
(13,349) |
(29,151) |
(90,711) |
| ||
|
Net decrease in cash and cash equivalents |
(5,082) |
(28,083) |
(46,136) |
| ||
|
Cash and cash equivalents at start of period |
82,806 |
128,288 |
128,288 |
| ||
|
Effect of exchange rate fluctuations on cash held |
(591) |
(204) |
654 |
| ||
|
Cash and cash equivalents at end of period |
77,133 |
100,001 |
82,806 |
| ||
|
|
|
|
|
|
|
|
Notes to the condensed consolidated financial statements
1. Corporate information
Kainos Group plc (“Company”) is a public company limited by shares incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales (Company registration number 09579188), having its registered office at 21 Farringdon Road, 2nd Floor, London, EC1M 3HA. The Company is listed on the London Stock Exchange.
These condensed consolidated financial statements for the six months ended 30 September 2026 comprise the Company and its subsidiaries (together the “Group”). The nature of the Group’s operations and its principal activities are set out in the Group Business Review.
These statements have not been audited but have been reviewed by the Group's auditor pursuant to International Standard on Review Engagements (UK) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Financial Reporting Council.
These condensed consolidated financial statements were approved for issue on 6 November 2026.
2. Basis of preparation
The condensed consolidated financial statements for the six months ended 30 September 2026 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34 “Interim Financial Reporting” under UK-adopted International Accounting Standards and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 March 2026 ('last annual financial statements'). They do not include all of the information required for a complete set of financial statements prepared in accordance with UK-adopted International Accounting Standards and in conformity with the requirements of the Companies Act 2006. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.
These condensed consolidated financial statements do not constitute statutory accounts of the Group within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2026 have been filed with the registrar of companies and can be found on the Group’s website. The auditor's report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498(2) or (3) of the Companies Act 2006.
The annual statements of Kainos Group plc are prepared in accordance with UK-adopted International Accounting Standards.
Going concern
Having reviewed the future plans and projections for our business and our current financial position, the Directors believe that we are well placed to manage our business risks successfully. We have adequate financial resources, no borrowings, a good level of recurring revenue, and a broad spread of customers.
At 31 March 2026, the Directors assessed the Group’s viability over a longer period to March 2029. The review included sensitivity analysis on the future performance and solvency over three years and for the principal and emerging risks facing the business in severe but reasonable scenarios.
In performing this assessment, our long-term strategy and focus, the demand for our products and services, the level of recurring revenue and strong customer retention, the track record of strong cash generation and a healthy cash balance with no debt from financial institutions were all taken into consideration. Consideration was also given to the risks of regional and political changes in our main markets.
Based on the results of this assessment, the Directors had a reasonable expectation that should these risks, either all or in part manifest themselves, the resulting adverse outcomes can be managed and mitigated such that, the Group and Company will be able to continue in operation and meet their liabilities as they fall due over the period of their assessment. In doing so, we note that such future assessments are subject to a level of uncertainty that increases with time and, therefore, future outcomes cannot be guaranteed or predicted with certainty.
As a consequence of these factors and having reviewed the forecasts for the coming year, the Directors have a reasonable expectation that we have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this Interim Report. For this reason, we continue to adopt the going concern basis of accounting in preparing our financial statements.
3. Material accounting policies
Except for as detailed below, the accounting policies, presentation and methods of computation applied by the Group in these condensed consolidated financial statements are the same as those applied in the Group's latest audited annual consolidated financial statements for the year ended 31 March 2026.
UK-adopted IFRS
Adoption of new UK-adopted IFRS Standards, interpretations and amendments effective in the current financial period have not had a material impact on the condensed consolidated interim financial statements. The Group has not applied any other standards, interpretations or amendments that have been issued but are not yet effective.
The impact of the following is under assessment:
IFRS 18 Presentation and disclosure in financial statements
IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 and is effective for annual reporting periods beginning on or after 1 January 2027. The standard has been endorsed for use in the UK and will therefore first apply to the Group’s financial statements for the year ending 31 March 2028.
The new standard introduces the following key new requirements.
- Entities are required to classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, income taxes and discontinued operations categories. Entities are also required to present a newly-defined operating profit subtotal. Entities’ net profit will not change.
- Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements.
- Enhanced guidance is provided on how to group information in the financial statements.
In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method.
The Group is still in the process of assessing the impact of the new standard, particularly with respect to the structure of the Group’s consolidated income statement, the statement of cash flows and the additional disclosures required for MPMs. The Group is also assessing the impact on how information is grouped in the financial statements, including for items currently labelled as ‘other’.
Other standards, interpretations and amendments issued but not yet effective are not expected to have a material impact.
Income tax
The policy for recognising and reassessing income taxes in the interim period is consistent with that applied in the previous period as described in note 6.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the Group’s accounting policies and key sources of estimation uncertainty were the same as those applied to the statutory accounts for the year ended 31 March 2026.
5. Segment reporting
All our revenue for the six-month period to 30 September 2026 was derived from continuing operations.
The Group’s Executive Directors are considered to be the Chief Operating Decision Maker (‘CODM’) of the Group. They use internal management reports to assess both performance and strategy of the Group and the three specialist business areas: Digital Services, Workday Services and Workday Products.
The following is an analysis of the Group's revenue and results by reportable segment:
|
2026 6 months to 30 September (unaudited) |
Digital Services (£000s) |
Workday Services (£000s) |
Workday Products (£000s) |
Total (£000s) | ||
|
Revenue |
162,496 |
58,328 |
47,978 |
268,802 | ||
|
Cost of sales |
(110,606) |
(30,026) |
(12,321) |
(152,953) | ||
|
Gross profit |
51,890 |
28,302 |
35,657 |
115,849 | ||
|
Direct expenses([10]) |
(16,907) |
(19,117) |
(22,986) |
(59,010) | ||
|
Contribution |
34,983 |
9,185 |
12,671 |
56,839 | ||
|
Depreciation of property, plant and equipment |
|
|
|
(1,534) | ||
|
Central overheads(10) |
|
|
|
(14,428) | ||
|
Net finance income |
|
|
|
865 | ||
|
Adjusted profit before tax |
|
|
|
41,742 | ||
|
Share-based payment expense and related costs |
(3,787) | |||||
|
Amortisation of acquired intangible assets |
(765) | |||||
|
Compensation for post-combination services |
(1,383) | |||||
|
Profit before tax |
35,807 | |||||
|
|
|
|
|
|
|
|
|
2025 6 months to 30 September (unaudited) |
Digital Services (£000s) |
Workday Services (£000s) |
Workday Products (£000s) |
Total (£000s) |
| ||||
|
Revenue |
103,531 |
53,376 |
39,228 |
196,135 |
| ||||
|
Cost of sales |
(66,431) |
(26,798) |
(8,741) |
(101,970) |
| ||||
|
Gross profit |
37,100 |
26,578 |
30,487 |
94,165 |
| ||||
|
Direct expenses(10) |
(13,651) |
(17,523) |
(19,362) |
(50,536) |
| ||||
|
Contribution |
23,449 |
9,055 |
11,125 |
43,629 |
| ||||
|
Depreciation of property, plant and equipment |
|
|
|
(1,681) | |||||
|
Central overheads(10) |
|
|
|
(12,198) |
| ||||
|
Net finance income |
|
|
|
2,280 |
| ||||
|
Adjusted profit before tax |
|
|
|
32,030 |
| ||||
|
Share-based payment expense and related costs |
(2,872) |
| |||||||
|
Amortisation of acquired intangible assets |
(365) |
| |||||||
|
Compensation for post-combination services |
(285) |
| |||||||
|
Acquisition-related expenses |
(140) |
| |||||||
|
Profit before tax |
28,368 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
2026 12 months to 31 March (audited) |
Digital Services (£000s) |
Workday Services (£000s) |
Workday Products (£000s) |
Total (£000s) | ||||||||
|
Revenue |
241,737 |
107,612 |
81,749 |
431,098 | ||||||||
|
Cost of sales |
(155,732) |
(58,313) |
(18,145) |
(232,190) | ||||||||
|
Gross profit |
86,005 |
49,299 |
63,604 |
198,908 | ||||||||
|
Direct expenses(10) |
(30,403) |
(36,490) |
(39,968) |
(106,861) | ||||||||
|
Contribution |
55,602 |
12,809 |
23,636 |
92,047 | ||||||||
|
Depreciation of property, plant and equipment |
|
|
|
(3,278) | ||||||||
|
Central overheads(10) |
|
|
|
(25,045) | ||||||||
|
Net finance income |
|
|
|
3,339 | ||||||||
|
Adjusted profit before tax |
|
|
|
67,063 | ||||||||
|
Share-based payments expense and related costs |
|
|
|
(5,373) | ||||||||
|
Amortisation of acquired intangible assets |
|
|
|
(1,302) | ||||||||
|
Compensation for post combination services |
|
|
|
(2,132) | ||||||||
|
Acquisition-related expenses |
|
|
|
(145) | ||||||||
|
Profit before tax |
|
|
|
58,111 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group’s revenue from external customers by geographic location is detailed below:
|
|
|
|
| ||||
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) | ||||
|
United Kingdom |
162,927 |
105,923 |
243,551 | ||||
|
Republic of Ireland |
4,477 |
5,344 |
10,387 | ||||
|
Total United Kingdom & Ireland |
167,404 |
111,267 |
253,938 | ||||
|
|
|
|
| ||||
|
United States of America |
63,643 |
55,592 |
112,568 | ||||
|
Canada |
18,088 |
10,644 |
25,168 | ||||
|
Total Americas |
81,731 |
66,236 |
137,736 | ||||
|
|
|
|
| ||||
|
Central Europe |
15,099 |
16,583 |
34,055 | ||||
|
Rest of world |
4,568 |
2,049 |
5,369 | ||||
|
|
268,802 |
196,135 |
431,098 | ||||
|
|
|
|
|
|
|
|
|
Disaggregation of the Group’s revenue is presented in the following tables:
|
6 months to 30 September 2026 (unaudited) |
Digital Services (£000s) |
Workday Services (£000s) |
Workday Products (£000s) |
Total (£000s) |
|
Type of revenue |
|
|
|
|
|
Services |
159,137 |
56,157 |
1,601 |
216,895 |
|
Subscriptions |
- |
- |
46,377 |
46,377 |
|
Third party & other |
3,359 |
2,171 |
- |
5,530 |
|
|
162,496 |
58,328 |
47,978 |
268,802 |
|
6 months to 30 September 2025 (unaudited) |
|
|
Digital Services (£000s) |
Workday Services (£000s) |
Workday Products (£000s) |
Total (£000s) | |
|
Type of revenue |
| ||||||
|
Services |
|
|
99,301 |
51,141 |
1,168 |
151,610 |
|
|
Subscriptions |
|
|
- |
- |
38,060 |
38,060 |
|
|
Third party & other |
|
|
4,230 |
2,235 |
- |
6,465 |
|
|
|
|
|
103,531 |
53,376 |
39,228 |
196,135 |
|
|
|
|
|
|
|
|
|
|
|
12 months to 31 March 2026 (audited) |
|
|
Digital Services (£000s) |
Workday Services (£000s) |
Workday Products (£000s) |
Total (£000s) |
|
Type of revenue | ||||||
|
Services |
|
|
234,390 |
103,575 |
2,222 |
340,187 |
|
Subscriptions |
|
|
- |
- |
79,527 |
79,527 |
|
Third party & other |
|
|
7,347 |
4,037 |
- |
11,384 |
|
|
|
|
241,737 |
107,612 |
81,749 |
431,098 |
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) |
|
Group |
|
|
|
|
Public |
97,699 |
65,088 |
150,378 |
|
Commercial |
111,956 |
100,209 |
201,554 |
|
Healthcare |
59,147 |
30,838 |
79,166 |
|
Total |
268,802 |
196,135 |
431,098 |
Revenue for Digital Services is further disaggregated as set out in the table below. Defence revenue is included within Public in the Group-wide sector analysis above, but is presented separately within Digital Services, reflecting its increasing strategic and operational importance.
|
|
|||
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (unaudited) (£000s) |
|
Digital Services |
|
|
|
|
Public |
75,962 |
49,102 |
110,167 |
|
Defence |
15,262 |
10,617 |
25,879 |
|
Commercial |
4,894 |
6,399 |
10,656 |
|
Healthcare |
54,728 |
29,616 |
74,881 |
|
North America |
11,650 |
7,797 |
20,154 |
|
|
162,496 |
103,531 |
241,737 |
6. Income tax expense
The estimate of the provision of income taxes which is determined in the interim financial statements uses the estimated weighted average annual effective income tax rate applied to the profit before tax of the interim period, adjusted for the tax effect of certain items recognised in full in the interim period. As such, the effective tax rate in the interim financial statements may differ from management’s estimate of the effective tax rate for the annual financial statements.
The total tax charge for the six months ended 30 September 2026 was £8.7 million (H1 26: £7.8 million), representing an effective tax rate of 24% (H1 26: 27%). The decrease in the effective tax rate primarily reflects a higher deferred tax credit arising from the increase in the Company’s share price.
The expected annual tax rate for the year to 31 March 2027 is 26% (31 March 2026: 27%), which is slightly higher than the UK corporation tax rate, primarily due to the impact of higher tax rates in North America.
7. Dividends
The dividends declared in the periods covered by these condensed consolidated financial statements are detailed below:
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) | |
|
Amounts recognised as distributions to equity holders in the period: |
|
|
| |
|
Final dividend for 2026 of 19.8p per share |
23,006 |
- |
- | |
|
Interim dividend for 2026 of 9.8p per share |
- |
- |
11,697 | |
|
Final dividend for 2025 of 19.1p per share |
- |
22,935 |
22,935 | |
|
|
23,006 |
22,935 |
34,632 | |
|
|
|
|
|
|
A final dividend of 19.8 pence per share for the year ended 31 March 2026 was paid on 23 October 2026 to shareholders on the register at the close of business on 2 October 2026, with an ex-dividend date of 1 October 2026. This dividend was declared following approval by the shareholders of the Company by ordinary resolution at the Company’s Annual General Meeting on 22 September 2026 and a liability for payment of the dividend of £23.0 million has therefore been recognised in these condensed consolidated financial statements.
An interim dividend of 10.4 pence per share has been declared on 6 November 2026 for the six months to 30 September 2026 which amounts to £12.1 million. This will be paid on 11 December 2026 to shareholders on the register at the close of business on 20 November 2026, with an ex-dividend date of 19 November 2026. These condensed consolidated financial statements do not reflect the interim dividend payable.
8. Earnings per share
Basic
The calculation of basic earnings per share (EPS) has been based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding.
|
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) | |
|
Profit for the period |
27,131 |
20,580 |
42,500 | ||
|
|
Thousands |
Thousands |
Thousands | ||
|
Issued ordinary shares at 1 April |
117,854 |
123,620 |
123,620 | ||
|
Effect of shares held in trust |
(983) |
(921) |
(983) | ||
|
Effect of share options vested and exercised |
283 |
391 |
428 | ||
|
Effect of shares issued related to a business combination |
4 |
35 |
210 | ||
|
Effect of shares issued related to free share awards |
- |
- |
121 | ||
|
Effect of share buyback programme |
(1,509) |
(2,036) |
(3,635) | ||
|
Weighted average number of ordinary shares at 30 September |
115,649 |
121,089 |
119,761 | ||
|
Basic earnings per share |
23.5p |
17.0p |
35.5p | ||
|
|
|
|
|
|
|
Diluted
The calculation of diluted EPS has been based on the following profit attributable to ordinary shareholders and the weighted-average number of ordinary shares outstanding after adjustments for the effects of all dilutive potential ordinary shares.
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (audited) (£000s) |
|
Profit for the period |
27,131 |
20,580 |
42,500 |
|
|
Thousands |
Thousands |
Thousands |
|
Weighted average number of ordinary shares (basic) |
115,649 |
121,089 |
119,761 |
|
Effect of share options in issue |
535 |
1,579 |
248 |
|
Effect of shares held in trust |
983 |
921 |
983 |
|
Effect of potential shares to be issued related to a business combination |
35 |
12 |
99 |
|
Weighted average number of ordinary shares (diluted) at 30 September |
117,202 |
123,601 |
121,091 |
|
Diluted earnings per share |
23.1p |
16.7p |
35.1p |
The average market value of the Company’s shares for the purpose of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding.
At 30 September 2026, 546,158 options (H1 26: no options) were excluded from the diluted weighted average number of ordinary shares calculation because their effect would have been anti-dilutive.
Adjusted
Adjusted basic and adjusted diluted earnings per share is calculated using the adjusted profit after tax for the period measure. The calculation of adjusted profit after tax for the period is detailed in the Financial Review section of this report.
|
|
|
6 months to 30 Sep 2026 (unaudited) (£000s) |
6 months to 30 Sep 2025 (unaudited) (£000s) |
12 months to 31 Mar 2026 (unaudited) (£000s) | |
|
Adjusted profit after tax for the period |
32,092 |
23,360 |
49,823 | ||
|
|
Thousands |
Thousands |
Thousands | ||
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
115,649 |
121,089 |
119,761 | ||
|
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
117,202 |
123,601 |
121,091 | ||
|
Adjusted basic earnings per share |
27.7p |
19.3p |
41.6p | ||
|
Adjusted diluted earnings per share |
27.4p |
18.9p |
41.1p | ||
|
|
|
|
|
|
|
9. Trade and other receivables
|
|
30 Sep 2026 (unaudited) (£000s) |
30 Sep 2025 (unaudited) (£000s) |
31 Mar 2026 (audited) (£000s) | |
|
Trade receivables |
41,053 |
34,280 |
43,820 | |
|
Other receivables |
15,678 |
7,952 |
11,912 | |
|
|
56,731 |
42,232 |
55,732 | |
|
|
|
|
|
|
10. Financial Instruments
The Directors consider that the carrying amounts for all financial assets and liabilities are reasonable approximations of their fair value.
11. Related party transactions
There have been no related party transactions during the six months to 30 September 2026 that have materially affected the financial position or performance of the Group.
57,403 share options were exercised by Directors during the period (H1 26: no options). The total gain arising on the exercise of options was £0.5 million.
All related party transactions are materially consistent with those disclosed by the Group in its financial statements for the year ended 31 March 2026.
12. Share capital
At 30 September 2026, the Company had 116,263,722 issued ordinary shares (31 March 2026 : 117,854,417 shares) with a nominal value of £0.005 each.
A total of 207,873 shares were allotted during the period.
- 160,462 ordinary shares (H1 26: 51,577 shares) were issued due to the exercise of vested options. The weighted average exercise price of options exercised in the period was £1.06 per share (H1 26: £0.97 per share).
- 47,411 ordinary shares were issued in respect of post-acquisition remuneration in the period (H1 26: no shares).
In connection with the share buyback programme a total of 1,798,568 shares were cancelled during the period (note 13). This includes 1,437,024 purchased during the period and 361,544 shares purchased but not cancelled at 31 March 2026.
13. Share buyback programme
On 15 May 2026, the Group completed the share buyback programme which commenced on 19 November 2025. As part of this programme, a total of 3,729,068 shares were bought back for consideration of £30.2 million, including transaction costs (£0.2 million), of which 1,437,024 shares were purchased during the period for consideration of £11.7 million, including transaction costs.
The sole purpose of the share buyback programmes is to reduce the share capital of the Company, with all shares subsequently cancelled.
The table below presents the reconciliation of own shares purchased for cancellation between the consolidated statement of changes in equity and the consolidated statement of cash flows:
|
|
30 Sep 2026 (unaudited) (£000s) |
30 Sep 2025 (unaudited) (£000s) |
31 Mar 2026 (audited) (£000s) |
| |
|
Own shares purchased for cancellation |
|
|
|
| |
|
Included in the consolidated statement of changes in equity ab |
(11,726) |
(37,560) |
(56,210) |
| |
|
Payments in relation to prior year financial liabilities |
(761) |
(233) |
(233) | ||
|
Outstanding amount recognised as financial liabilities c |
- |
9,558 |
761 |
| |
|
Included in the consolidated statement of cash flows d |
(12,487) |
(28,235) |
(55,682) |
| |
|
|
|
|
|
|
|
(a) 1,437,024 (H1 26: 3,792,978) ordinary shares were purchased, representing approximately 1.2% of the called-up share capital as at 30 September 2026 (H1 26: 3.2%). All shares purchased during the period were cancelled by 30 September 2026. Total consideration of £11.7 million was incurred during the period, including transaction costs. At 30 September 2025, 43,490 ordinary shares purchased had not yet been cancelled, with £0.4 million of consideration outstanding and included within trade and other payables. A further liability of £9.2 million was recognised in respect of the remaining obligation to acquire shares under the agreement with Investec Bank plc, which could not be terminated while the Company was in a closed period.
(b) During the period, the aggregate nominal value of shares cancelled and transferred to the capital redemption reserve was £8.0 thousand (H1 26: £20.0 thousand).
(c) At 30 September 2026, there was no outstanding consideration in respect of shares purchased but not yet settled and no remaining liability under the share buyback agreement (H1 26: £0.4 million and £9.2 million, respectively).
(d) 1,437,024 (H1 26: 3,749,488) ordinary shares purchased at an average price of £8.10 per share (H1 26: £7.41).
14. Contractual commitments
During FY25, the Group entered into a strategic partnership agreement with Workday, Inc., under which the Group is committed to minimum expenditure of £23.6 million over a three-year period. At 30 September 2026, £5.0 million of the commitment remained outstanding (H1 26: £12.4 million).
At 30 September 2026, the Group had capital commitments of £26.0 million (H1 26: £34.3 million), relating mainly to the construction of the Group’s new headquarters in Belfast.
15. Subsequent events
Subsequent to 30 September 2026, the Company paid the £23.0 million final dividend in respect of the year ended 31 March 2026. As detailed in note 7, the dividend was approved at the Annual General Meeting on 22 September 2026 and paid on 23 October 2026.
Statement of Directors responsibilities
The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules (“the DTR”) of the UK’s Financial Conduct Authority (“the UK FCA”).
In preparing the condensed set of consolidated financial statements included within the half-yearly financial report, the Directors are required to:
- prepare and present the condensed set of consolidated financial statements in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK and the DTR of the UK FCA;
- ensure the condensed set of consolidated financial statements has adequate disclosures;
- select and apply appropriate accounting policies;
- make accounting estimates that are reasonable in the circumstances; and
- assess the entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the entity or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for designing, implementing and maintaining such internal controls as they determine is necessary to enable the preparation of the condensed set of consolidated financial statements that is free from material misstatement whether due to fraud or error.
We confirm that to the best of our knowledge:
- the condensed set of consolidated financial statements included within the half-yearly financial report of Kainos Group plc for the six months ended 30 September 2026 (“the interim financial information”) which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related explanatory notes, have been presented and prepared in accordance with IAS 34, Interim Financial Reporting, as adopted for use in the UK, and the DTR of the UK FCA.
-
The interim financial information presented, as required by the DTR of the UK FCA, includes:
- an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of consolidated financial statements;
- a description of the principal risks and uncertainties for the remaining six months of the financial year;
- related parties’ transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the enterprise during that period; and
- any changes in the related parties’ transactions described in the last annual report that could have a material effect on the financial position or performance of the enterprise in the first six months of the current financial year.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Entity’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
Richard McCann
Chief Financial Officer/Chief Operating Officer
6 November 2026
Independent Review Report to Kainos Group plc (“the Entity”)
Conclusion
We have been engaged by the Entity to review the Entity’s condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 September 2026 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows, a summary of significant accounting policies and other explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 September 2026 is not prepared, in all material respects in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) as adopted for use in the UK and the Disclosure Guidance and Transparency Rules (“the DTR”) of the UK’s Financial Conduct Authority (“the UK FCA”).
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity (“ISRE (UK) 2410”) issued for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention that causes us to believe that the directors have inappropriately adopted the going concern basis of accounting, or that the directors have identified material uncertainties relating to going concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the Entity to cease to continue as a going concern, and the above conclusions are not a guarantee that the Entity will continue in operation.
Directors’ responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
The directors are responsible for preparing the condensed set of consolidated financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted for use in the UK.
As disclosed in note 2, the annual financial statements of the Entity for the period ended 31 March 2026 are prepared in accordance with UK-adopted International Accounting Standards.
In preparing the condensed set of consolidated financial statements, the directors are responsible for assessing the Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Entity or to cease operations, or have no realistic alternative but to do so.
Our responsibility
Our responsibility is to express to the Entity a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.
Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Entity in accordance with the terms of our engagement to assist the Entity in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Entity those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Entity for our review work, for this report, or for the conclusions we have reached.
KPMG 6 November 2026
Chartered Accountants
The Soloist Building
1 Lanyon Place
Belfast
BT1 3LP
([1]) The Financial Review section reconciles adjusted and statutory profit measures. See also the Definition of Terms section for more information on adjusted measures and other key terms and metrics used in this report.
([2]) Calculations now include the full value of contracts won in Digital Services. Previously, bookings and backlog for Digital Services only included orders received under those contracts by the period end. For comparative purposes, bookings calculated on the prior basis were £304.7 million (H1 26: £227.9 million), an increase of 34% and the contracted backlog at the period end was £472.6 million (30 September 2025: £396.9 million; 31 March 2026: £433.9 million), an increase of 19% from 30 September 2025. See the Definition of Terms section, the Group Business Review and the Financial Review for further information.
([3]) Includes £9.4 million (H1 26: £5.5 million) of treasury deposits which do not meet the definition of cash and cash equivalents.
([4]) Digital Services’ H1 26 public sector revenue has been represented to exclude defence, which is now reported separately.
([5]) See the definition of terms for more information on how Net Promoter Score is calculated.
([6]) Group NPS score as at 31 March 2026. H1 27 survey currently in progress.
([7]) The H1 26 figure was previously understated. It has been revised from £15.3m to £20.4m.
([8]) Shares purchased as part of the share buyback programme due to be cancelled.
([9]) The consolidated statement of cash flows for H1 26 did not correctly include research & development expenditure credit of £2.1 million as an adjustment (add back) to profit to arrive at operating cash flows before movements in working capital. Previously this amount was presented within movements in working capital. The impact is to increase operating cash flows before movements in working capital by £2.1 million by increasing movement in trade and other receivables by £2.1 million.
([10]) Direct expenses plus central overheads (including depreciation) plus balances below adjusted profit equals the sum of operating expenses plus impairment gain/(loss) and reversals on trade receivables and accrued income. Direct expenses are expenses that are directly attributable to each division.
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