Kainos Shares Fall 12.20% Despite 37% First-Half Revenue Growth
Key Facts
Kainos shares fell about 12%, with KNOS showing a change of -12.20% in Investing.com coverage published on November 9, 2026, after the company reported first-half results for fiscal 2027. The company posted revenue of £268.8 million for the six months ended September 30, up 37% from £196.1 million in the comparable period. Adjusted pretax profit rose 30% to £41.7 million, while statutory pretax profit increased 26% to £35.8 million. But revenue and profit growth coincided with narrowing profit margins, highlighting the cost of supporting rapid expansion. The company said its second-half outlook was in line with current market expectations.
The group’s gross margin fell to 43.1% in the first half from 48% a year earlier, according to Investing.com, citing Reuters. The pressure was more pronounced in digital services, where gross margin declined to 31.9% from 35.8% in the comparable period. The company attributed the roughly 3.9 percentage-point decline in the segment’s margin largely to continued use of contractors and supply partners to support rapid growth. It attributed 3.4 percentage points of the decline to greater reliance on those parties, according to the coverage. Kainos said it expects margins to return to their usual levels as employees replace external parties and revenue growth slows. The company therefore faced a trade-off between meeting rising demand quickly and preserving its services margins.
On earnings per share and distributions, adjusted diluted earnings per share rose 45% to 27.4 pence, compared with 18.9 pence in the first half of the previous fiscal year. The company increased its interim dividend per share 6% to 10.4 pence, from 9.8 pence in the comparable period. These figures show an improvement in accounting returns per share alongside higher adjusted pretax profit. Meanwhile, cash and treasury deposits stood at £86.5 million at the end of the first half, down 18% from £105.5 million a year earlier. The company said it currently has no plans to launch a new share buyback program. The interim dividend is due to be paid on December 11, 2026.
Bookings rose 27% to £402.3 million in the first half, and contracted work stood at £853 million under a revised calculation methodology. The new methodology counts the full value of digital services contracts, lifting reported figures compared with the previous basis. Under the previous methodology, bookings would have been £304.7 million and contracted work £472.6 million. The adjusted figures give a broader picture of contract value, but comparisons between periods require attention to the difference in calculation methods. Strong bookings and contracts did not prevent margin contraction from becoming a central focus in the reading of the period’s results.
Kainos said it expects further growth in revenue and adjusted pretax profit in the second half of fiscal 2027, in line with current market expectations. It also expects digital services revenue to continue growing, but at a slower pace than in the first half, which the company described as exceptional, due to a strong comparable period in the second half. This guidance differs from the August update, when the company said it expected full-year results to be “significantly ahead of current market expectations.” It now places its second-half outlook in line with those expectations. Upcoming milestones include payment of the interim dividend on December 11, 2026, followed by a fiscal-year trading update on April 19, 2027. The company plans to announce its fiscal 2027 results on May 17, 2027.