Kin and Carta ends year with record backlog and pipeline

The London-listed firm said net revenue in the Americas grew 55% year-on-year for the 12 months ended 31 July, or 49% on an organic basis, to £132.2m, representing 69% of total net revenue.

Europe net revenue, meanwhile, grew 33%, or an organic 27%, to £58.1m, representing 31% of total net revenue.

The company reported a “record” year-ending backlog of £96m, up 35% on the year, and a pipeline of £176m, up 74%.

Adjusted profit before tax from continuing operations grew 65% to £17.1m, while the total loss before tax from continuing operations widened to £15.9m from £5.8m, due to acquisition and pension-related charges as well as lease-related impairments and provisions.

Adjusted earnings per share from continuing operations increased 82% to 8.7p.

Kin and Carts said its adjusted operating cash inflow from continuing operations before working capital came in at £25.9m, up from £12.6m in the prior year, driven by its higher EBITDA.

The firm’s balance sheet strengthened through the year, with net debt reduced to £0.5m from £19.2, after the effect of £5.6m of share purchases by the employee benefit trust.

Its legacy pension scheme accounting surplus increased to £38.7m from £19.3m a year earlier, following the April technical valuation.

The board said the pension was in a technical surplus of £5.4m at the latest triennial date on 5 April, with a full hedge in place against interest rate and inflation risk.

Looking ahead, Kin and Carta said that while macroeconomic headwinds were evolving, its focus on the “business-critical digital transformation sector”, underpinned by a record year-end backlog of £96m, record pipeline of demand, and new client wins gave it confidence in its growth ambitions.

It said it expects 2023 organic growth in constant currency of 15% to 20%, with an additional 6% to 7% growth from the annualisation of the prior-year acquisitions.

If rates remained near current levels, it expected further growth in total net revenue and adjusted operating profit.

The board said its medium term guidance remained unchanged.

“Following a strong trading year the foundation of the business is well established and our sights are set on continued client success and profitable global growth,” said chief executive officer Kelly Manthey.

“Kin and Carta's focus on the business-critical digital transformation sector and the scaling of nearshore delivery position the company well to benefit from our client's prioritised investment in transformative technology.”

At 1025 BST, shares in Kin and Carta were up 5.26% at 200p.

Reporting by Josh White at Sharecast.com.