Trading Update and Management Succession
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
For immediate release
20 July 2022
Kin and Carta plc Trading Update
Strong Performance and Momentum
Management Succession
Kin and Carta plc (the "Company" or "Kin + Carta"), the international digital transformation ("DX") company, provides the following update ahead of publishing its audited results for the year ended 31 July 2022 (FY22).
Current trading
Kin + Carta is continuing to execute on its growth strategy. For FY22, the Company now expects net revenue of c. £191 million (£128.9 million FY21) for total growth of c. 48% and total growth at constant currency of c. 45%. On a like for like comparison to last year, the Company expects organic net revenue growth in constant currency of c. 38%, in line with market expectations and recently raised guidance in February. Adjusted operating profit is expected to grow by c.50% (£12.2m FY21) at constant currency, with margins in line with market expectations.
Current trading performance coupled with a strong backlog of orders - a record high of £104 million for the end of June (+44% compared to last year) - plus the largest digital transformation contract Kin + Carta has signed to date, worth up to $90 million over two years, demonstrate continued momentum in the business and underpin medium term growth expectations. This existing-client expansion further shows Kin + Carta's continued trend towards longer term and larger sized contracts with our clients.
The triennial valuation of the legacy St Ives defined benefit pension scheme is nearly complete and subject to audit, is in a modest technical surplus at the April 2022 valuation date compared to a £28.4 million deficit at the previous technical valuation (April 2019). As a result, the Company expects that no further statutory deficit repair contributions will be required once the valuation is finalised.
The balance sheet remains strong with net debt expected to be in the single digit millions of pounds sterling at 31 July 2022. Kin + Carta continues to pursue accretive acquisitions and organic growth opportunities while investing in operations to profitably scale the business over the next several years.
The Group expects to report its audited preliminary results for the year ended 31 July 2022 in October 2022. Management will host a presentation and Q&A session, details of which will be circulated ahead of the event.
Management succession
J Schwan has informed the Board of his intention to retire as CEO and member of the Board at the end of the current financial year. He will be succeeded by Kelly Manthey, Group Chief Executive, Americas, which is Kin + Carta's largest trading region representing approximately 70% of the Company's net revenue. Kelly has been with the company for sixteen years, serving previously as the CEO of Solstice (the Americas anchor business and headquarters) since 2018 when she succeeded J in that position.
The Board proposes to appoint Kelly as CEO, and to the Kin + Carta Board, effective from 01 August 2022. J will continue as a special adviser for six months to assist with the transition. The Board has appointed CFO Chris Kutsor to the additional role of COO to oversee the scaling of operations in pursuit of further financial and operational effectiveness. Group Chief Executive, Europe, David Tuck and Chief Strategy Officer Richard Neish complete an unchanged leadership team.
John Kerr, Chairman, commented: "Kin + Carta is unrecognisable from 2018 when J took over as CEO, a period that delivered total shareholder return (TSR) of 115%. With sterling support from Kelly and Chris among others, J has been the architect of this transformation, and on behalf of the Board, I would like to thank him for his dedication and contribution. J has successfully steered the business through this period of unparalleled change as he shaped a growing pure-play digital transformation consultancy with purpose at the heart of the business.
"The Board is delighted to appoint Kelly Manthey as J's successor. Kelly has been alongside J since 2006, including the evolution of Kin + Carta as Group Chief Executive for the Americas since August 2018. During that time, Kelly has been instrumental in profitably scaling the Americas business, including organic revenue growth of over 110% in addition to four acquisitions in the world's largest and fastest paced digital transformation market. This next phase of Kin + Carta will be defined by continued growth, and we are confident and excited that the profitable growth that Kelly has successfully executed in the Americas, evident in the strength of this trading update, will be replicated at a global scale."
J Schwan commented: "Kin + Carta's transformation is now complete, and a new, exciting growth chapter is under way. I'm incredibly proud to have played a role in building Kin + Carta and I'm delighted to be handing leadership to Kelly whom I have worked with for over 20 years and who has been central to our progress. After a fulfilling and rewarding 25-year journey it's time for me to retire from consulting and pursue projects in different domains. I will continue to be a happy and supportive advisor, shareholder and advocate for Kin + Carta during its next exciting phase of growth. I wish Kelly and the business every success as the company scales, and I'd like to thank my colleagues for their hard work, drive and belief."
Kelly Manthey commented: "I am incredibly humbled and honoured to lead the next chapter of Kin + Carta's growth story as we scale globally from a strong trading position, building on firm foundations, with an excellent leadership group, bound by a commitment to using business as a force for good. I am excited to continue serving our valued clients, shareholders and the fantastic Kin + Carta team as we build a world that works better for everyone."
- Ends -
Enquiries:
|
Kin + Carta J Schwan CEO Kelly Manthey CEO-Elect Chris Kutsor CFO & COO |
+44 (0) 207 928 8844 |
|
Powerscourt Elly Williamson / Jane Glover |
+44 (0)771 324 6126 |
|
Numis Securities Limited Nick Westlake / Tejas Padalkar
Peel Hunt LLP Edward Knight / John Welch |
+44 (0)07 260 1345
+44 (0) 20 7418 8900 |
Additional Information
J was appointed CEO of St Ives in August of 2018, following the acquisition of Solstice, the business he founded in 2001, and led the transformation of the Company over his 4-year tenure. Under J's leadership, St Ives rebranded to Kin + Carta and restructured a portfolio of digital marketing services acquisitions into a purpose-led, growing and integrated pure-play digital transformation consultancy with a strong social responsibility commitment, becoming the first certified B Corporation traded on the London Stock Exchange.
Kelly Manthey began her career as a software engineer at Accenture's emerging technologies lab, joining Solstice as employee number one in 2006, and rising to CEO in 2018. Kelly then led Kin + Carta's Americas region, building a growth-minded business with a strong, diverse and progressive culture which she then grew from c.400 people to c.1100 today. Along the way, Kelly led the Americas to earn acknowledgement as Fast Company's Best Workplaces for Innovators, Consulting Magazine's Best Large Firms to Work For and Fortune Magazine's Best Places to Work. Kelly has been recognised in The Consulting Report's Top 25 Women Leaders in IT Services, Crain's Chicago Business Tech 50, and is an active advocate for inclusion, diversity and raising the visibility of women in the technology sector.
The Company confirms that there is no additional information which is required to be disclosed relating to Kelly under paragraph 9.6.13 of the Listing Rules of the Financial Conduct Authority
Important notices
This announcement contains inside information and is issued on behalf of the Company by Daniel Fattal, Company Secretary.
Cautionary statement regarding forward-looking statements
This Announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they are based on numerous assumptions regarding the Company's present and future business strategies, relate to future events and depend on circumstances which are or may be beyond the control of the Company which could cause actual results or trends to differ materially from those made in or suggested by the forward-looking statements in this Announcement, including, but not limited to, domestic and global economic business conditions; market-related risks such as fluctuations in interest rates; the policies and actions of governmental and regulatory authorities; the effect of competition, inflation and deflation; the effect of legislative, fiscal, tax and regulatory developments in the jurisdictions in which the Company and its respective affiliates operate; the effect of volatility in the equity, capital and credit markets on profitability and ability to access capital and credit; a decline in credit ratings of the Company; the effect of operational and integration risks; an unexpected decline in sales for the Company; inability to realise anticipated synergies; any limitations of internal financial reporting controls; and the loss of key personnel. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Save as required by the Market Abuse Regulation, the Disclosure Guidance and Transparency Rules, the Listing Rules or by law, the Company undertakes no obligation to update these forward-looking statements and will not publicly release any revisions it may make to these forward-looking statements that may occur due to any change in its expectations or to reflect events or circumstances after the date of this Announcement.
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