Kainos pulls final dividend until Covid-19 impacts become clearer

Digital services provider Kainos pulled its final dividend on Thursday as a result of the Covid-19 pandemic.

Kainos made the decision in order to preserve liquidity during the period of uncertainty but said it would review the decision later in the year as the impact of the outbreak became clearer.

The FTSE-250 listed firm also implemented severe cost and cash containment measures, including placing staff on furlough and pausing recruitment and all non-essential expenditure.

In terms of recent trading, Kainos said positive momentum seen throughout the first three quarters of the year had continued in the period ended 31 March, with full-year results expected to be in line with current forecasts.

"A clear focus on execution throughout the year has resulted in an excellent sales performance and a substantial backlog as the company enters FY21," said Kainos.

The group added that its "increasingly diversified and mainly recurring or repeating" revenue base had seen it only suffer a "limited impact" from Covid-19 so far but highlighted that it was simply "too early to predict" the duration or severity of the economic disruption the pandemic could cause on its customers.

"The board maintains confidence in its strategy, and believes that the group has acted quickly and prudently to the uncertainty of the current situation, which will leave it well-positioned when the economic impacts of the coronavirus begin to recede."

As of 0835 BST, Kainos shares were up 2.24% at 686p.