What does
it take to
change the
world?
2025 ANNUAL REPORT
TRUE
PARTNERS
CHANGE
THE WORLD
TOGETHER
Kainos Group plc is a UK-headquartered provider of sophisticated IT
services to major public sector, commercial and healthcare customers.
Our shares are listed on the London Stock Exchange (LSE: KNOS).
Our expertise spans three divisions: Digital Services, Workday Services
and Workday Products.
Find out more
You can discover more
about us at
www.kainos.com.
CONTENTS
Strategic report
01 Financial highlights
02 Operational highlights
08 Kainos at a glance
10 Chief Executive Officer’s statement
14 Our markets
18 Our business model
21 Our strategy
24 Operational review
32 Our environmental, social and
governance (ESG) commitments
56 Financial review
59 Key Performance Indicators (KPIs)
60 Risk factors and uncertainties
66 Viability and non-financial
information
Corporate governance
68 Directors’ biographies
70 Corporate Governance Report
75 Nominations Committee Report
78 Audit and Risk Committee Report
83 Directors’ Remuneration Report
92 Annual Report on Remuneration
102 Directors’ Report
Financial statements
106 Independent Auditor’s Report to
the members of Kainos Group plc
113 Consolidated income statement
113 Consolidated statement of
comprehensive income
114 Consolidated statement of
financial position
115 Consolidated statement of
changes in equity
116 Consolidated statement
of cash flows
117 Notes to the consolidated
financial statements
159 Company statement of
financial position
160 Company statement of
changes in equity
161 Notes to the Company
financial statements
164 Definition of terms
165 Company information
1
Kainos Annual report 2025
Strategic Report
Results in line with revised
expectations, with strong
growth in Workday Products
revenue more than offset by
the tough trading environment
in our two services divisions
• Revenue decreased 4%
(-4% organic, -3% ccy) to £367.2 million
(2024: £382.4 million).
• Adjusted pre-tax profit was 15% lower
(-14% ccy) at £65.6 million, including a
£5.2 million investment to support our
extended Workday partnership
(see Operational Highlights).
• Adjusted profit margin decreased
to 18% (2024: 20%).
• Overall bookings fell 10% to £382.4
million (2024: £424.5 million), although
activity accelerated in the second half
of the year (H1: £179.5 million;
H2: £202.9 million).
• Year-end contracted backlog rose 3%
to £368.2 million (2024: £357.1 million).
• Cash conversion of 112%
(3)
(2024: 98%)
contributed to a strong year-end cash
position
(2)
of £133.7 million (2024: £126.0
million), after completing £22.6 million
of our £30.0 million share buyback
programme.
• The share buyback programme
completed on 9 May 2025 with a total
of 3,993,382 shares bought back for
consideration of £30.0 million.
• The Board announces intention to
launch a further share buyback
programme of £30.0 million to be
executed over the next six months.
Restructuring for growth:
global workforce reduced by 7%
• In March, we made the difficult decision
to reduce our workforce, with 190
people leaving Kainos as part of the
organisational changes.
• The restructuring programme was
driven by the need to create capacity
for investment in product development,
AI, data, new partnerships, skills
development, targeted recruitment
and carefully managed international
expansion.
• The workforce reduction resulted in
restructuring costs of £8.4 million in
FY25. Most affected colleagues had
a leaving date of 4 April 2025.
• Approximately two-thirds of the
estimated £19 million cost savings will
be reinvested in the areas outlined
above, with the remainder allocated to
staff-related cost increases, including
pay rises, higher UK National Insurance
contributions, and new hires.
2025 2024 Change
Revenue £367.2m £382.4m -4%
Statutory profit before tax £48.6m £64.8m -25%
Adjusted pre-tax profit
(1)
£65.6m £77.2m -15%
Diluted earnings per share 28.2p 38.6p -27%
Adjusted diluted earnings per share 38.3p 46.5p -18%
Total dividend per share 28.4p 27.3p +4%
Bookings £382.4m £424.5m -10%
Product Annual Recurring Revenue (ARR) £72.6m £60.5m +20%
Contracted backlog £368.2m £357.1m +3%
Cash
(2)
£133.7m £126.0m +6%
(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) Includes £5.4 million (2024: £4.4 million) of treasury
deposits which do not meet the definition of cash and
cash equivalents.
(3) Excluding the impact of restructuring costs, cash
conversion is 103%.
FINANCIAL
HIGHLIGHTS
pages 2 – 7
Kainos Annual report 2025
Strategic Report
2
WORKDAY-RELATED
PRODUCTS CONTINUED TO
STRONGLY
Workday-related products continued
to grow strongly and now account for
19% of Group revenue (2024: 15%). Our
enhanced partnership with Workday
underpins our £100 million 2026 ARR
target and our new 2030 target of
£200 million.
• Workday Products
revenue was up 24%
(26% organic, 26% ccy)
to £71.3 million (2024:
£57.3 million), with ARR
increasing by 20% (23%
ccy) to £72.6 million
(2024: £60.5 million).
• Growth was driven
by strong sales
execution across the
Smart product suite
and the continued
success of our
Employee Document
Management (EDM)
product, launched in
October 2023.
• Our new strategic
partnership with
Workday, announced in
July 2024, incentivises
its global sales teams
to introduce and
co-sell both current
and future Kainos-
developed Workday
products.
• We continued
to invest in our
products and are on
schedule to release
our fifth product in
late 2025, which will
help organisations
understand and
address pay equality
issues, with particular
focus on the EU Pay
Directive that will
be adopted by EU
member states in 2026.
24%
Increase in Workday
Products revenue
3
Kainos Annual report 2025
Strategic Report
OPERATIONAL
HIGHLIGHTS
• During the year, we
increased research
& development
investment by 24%
to £16.8 million (2024:
£13.5 million), all of
which was expensed
in the period. Sales &
marketing spend also
rose by 24% to £15.5
million (2024: £12.5
million), including costs
relating to the Built on
Workday partnership.
The multi-year
agreement represents
an annual investment
of £7.8 million, with
£5.2 million recognised
during FY25 following
its activation in July
2024.
Digital Services had a subdued year
with customers delaying project-related
investment
• Digital Services
revenue decreased
by 7% to £197.2 million
(2024: £213.1 million).
• Public sector revenue
declined by 9% to
£125.5 million (2024:
£138.2 million),
reflecting the hiatus
caused by the UK
General Election and
the delays in the new
government setting
out its longer-term
plans to save money
and increase efficiency
through the continuing
digitisation of
government services.
• Within the healthcare
sector, revenue was
up strongly, with
14% growth to £50.6
million (2024: £44.2
million), driven by
major digital and
data wins with NHS
England and UKHSA,
alongside continued
growth across
other arm’s-length
bodies and devolved
administrations.
• Commercial sector
revenue continued to
be affected by weak
economic conditions
and was 32% lower
at £21.0 million (2024:
£30.8 million).
£50.6 million
Healthcare revenue was up
strongly with 14% growth
Kainos Annual report 2025
Strategic Report
4
Operational Highlights
Continued
WE ARE THE
PAN-EUROPEAN WORKDAY
CONSULTING SPECIALIST
Softer market conditions and increased competition affected
Workday Services revenue, with opportunity for further
international expansion into Asia Pacific
• We are the leading
pan-European
Workday consulting
specialist and the
eighth largest by
certified consultant
numbers globally. We
have extended our
Workday Services
activities to Asia
Pacific, winning our
first contracts in
Australia and
New Zealand in
the second half
of the year.
• Despite continued
strong win rates
and high customer
satisfaction, lower
contract volumes and
values – alongside
aggressive pricing in
some areas due to
increased competition
from new partners
– resulted in a 12%
decline in revenue
(-10% ccy) to
£98.7 million
(2024: £112.0 million),
with bookings of
£84.6 million (2024:
£116.5 million).
• On a like-for-like
basis, revenue was 8%
lower, after adjusting
prior year revenue
for discontinued
procurement
consulting services
associated with
Blackline Group, which
we acquired in 2022.
We ceased providing
these services in FY24.
5
Kainos Annual report 2025
Strategic Report
We continue to benefit from our
geographical breadth, with international
markets generating 41% of Group
revenue (2024: 39%)
• International revenue
was in line with last
year at £149.9 million
(2024: £149.8 million).
• Our Workday Products
and Workday Services
divisions have
particularly strong
international positions,
collectively generating
81% of their revenues
from these customers
(2024: 81%).
Excellent customer service drives
customer satisfaction and retention
• Our customers
continued to rate our
services as ’excellent’,
with a Net Promoter
Score of 70
(4)
(2024: 58).
• Existing customers
generated revenue
of £299.4 million
(2024: £345.8 million).
• Customer numbers
increased to 1,094
(2024: 930)
(5)
.
(4) See the definition of terms for more information on how Net Promoter Score is calculated.
(5) We refined the definition of an active customer during the period (see the definition of terms) and customer
numbers at the period end are therefore not directly comparable to prior periods.
£299.4 million
Existing customer revenue
£149.9 million
International revenue was in line
with last year
OPERATIONAL
HIGHLIGHTS
Kainos Annual report 2025
Strategic Report
6
Kai
nos
Annual r
epo
rt
Strategic Report
The commitment and engagement of
our colleagues underpins our business
performance
• We have more
than 2,800 people
(2024: 2,995) across
20 countries, with our
employee retention
remaining strong at
93% (2024: 93%).
• Engagement
levels remain high,
measuring 75% (2024:
78%) in our internal
surveys, and we
were ranked 14th in
Glassdoor’s ‘50 Best
Places To Work in the
UK’, up from 32nd
in 2024.
• As noted earlier, we
recently completed a
restructuring exercise
that directly affected
190 colleagues. We
are now focused
on internal efforts
to strengthen
engagement across
the organisation.
Continued growth in our AI business,
with revenues growing 61%, as we help
customers harness the potential of AI
• Revenues for AI and
related projects
increased 61% to
£41.1 million (2024:
£25.6 million) and
now represent 21% of
our Digital Services
revenues.
• To date, we have
delivered over 250 AI &
Data projects across
the public, healthcare,
and commercial
sectors, including 88 in
the period.
• Since 2018, Kainos has
been the 5th largest
supplier of AI to the UK
Public Sector, with over
£61 million in awarded
contracts.
• We now have
more than 250 AI
professionals across
the organisation,
accelerating
innovation and delivery
for our customers.
• We launched a
Microsoft AI Centre
of Excellence to
accelerate customer
adoption of AI, building
on our Microsoft AI
Partner of the Year
recognition and deep
sector expertise.
• Kainos has 3 of the 20
AI solutions available
on the Workday
Marketplace, reflecting
our leadership in
delivering trusted,
Workday-approved
innovation.
GROWTH
IN OUR
BUSINESS
61%
Increase in revenues for
AI and related projects
Operational Highlights
Continued
7
Kainos Annual report 2025
Strategic Report
Current trading
and outlook
• Following a challenging
first half of the
financial year, we
are pleased to have
delivered against our
revised expectations,
supported by an
improved final quarter
performance which
recorded low single-
digit percentage
revenue growth.
• Looking ahead, we
remain confident in
the opportunities for
digital transformation,
as public, healthcare,
and commercial
organisations
increasingly seek to
harness technology
– including AI – to
improve services for
users while reducing
the cost of delivery.
• While the long-term
drivers in our market
remain strong,
and our near-term
performance is
supported by a healthy
pipeline, a significant
contracted backlog,
and a strong balance
sheet, we believe it is
prudent to maintain
our cautious stance
given continued
volatility in the global
macroeconomic
environment.
93%
Employee retention
remaining strong in
2025
• In considering FY26,
we expect the
following:
– Continued
momentum in
Workday Products,
driven by our
Built on Workday
partnership, with
significant progress
towards our ARR
milestones of £100
million (2026) and
£200 million (2030).
continued…
– Ongoing recovery in
Digital Services, led
by our public sector
and healthcare
segments, with
the upcoming
UK Government
Comprehensive
Spending Review
announcement
expected to
influence the timing
and pace of future
demand.
– In Workday Services,
market-related
pressures are
easing, and we are
encouraged by
signs of recovery
and stronger
international activity,
including recent wins
in Australia and
New Zealand.
• More generally, we
continue to see
opportunities in
smaller but faster-
growing areas,
including AI, data,
low-code development
and building custom
Workday applications
through our Workday
Extend capabilities.
OPERATIONAL
HIGHLIGHTS
Digital Services
54% of Group total
5-year growth: 5% CAGR
Workday Services
27% of Group total
5-year growth: 19% CAGR
Workday Products
19% of Group total
5-year growth: 31% CAGR
£71.3m
£197.2m
£98.7m
Revenue by operating division FY25
2
0
2
5
Digital Services
Our Digital Services division helps our
customers to solve their business problems
by using technology, enabling them and
their users to work smarter, faster and
better.
Digital Services engagements are
often large, complex and critical for
our customers. We work collaboratively
with them to create innovative and
transformative solutions that are secure,
accessible, cost-effective and take a
user-first approach. We enable customers
to utilise their data to drive better
decision-making, leverage the benefits
of public cloud and, increasingly, of AI.
In the public sector, we have delivered
projects helping more than 60 million
users, while saving our customers hundreds
of millions of pounds. Our projects for
customers such as HM Passport Office are
part of the UK’s national IT infrastructure.
In the commercial sector, customers
trust us to provide digital transformation
programmes that evolve their services,
deliver efficiencies, increase their
capabilities and future-proof their
businesses.
In healthcare, we help providers deliver a
service that is faster, more cost-effective
and patient-centric.
We deliver services to over 120 customers,
including the Open University, the
government of Ontario, Rolls-Royce, the
Crown Prosecution Service, Royal London
Asset Management and Arqiva.
Workday Services
Workday Services helps forward-thinking
organisations to deploy Workday’s software,
to organise their staff efficiently and support
their financial reporting requirements. These
customers are often large and international,
which is why we have teams in 20 countries.
We provide a comprehensive range of
services to support customers in their
adoption and utilisation of Workday’s
software suite. Our expertise spans
consulting, project management, integration
and post-deployment services.
Kainos first engaged with Workday in 2009
and was appointed as a partner in 2011,
making us one of the most experienced
participants in Workday’s partner
ecosystem. From the UK, we have grown to
be the largest Workday partner in Europe
and our reach is now global, with 75% of
our projects being undertaken for clients in
Central Europe and North America.
With over 500 customers worldwide, we are
proud to work with organisations such as
Kion Group (Germany), Triumf (Canada),
Novozymes (Denmark), Kone (Finland),
ASOS plc (UK), Takeaway.com (Netherlands),
CoMade (Australia) and Trintech (USA).
Our operating divisions
Kainos Annual report 2024
8
Strategic Report
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.
KAINOS
AT A GLANCE
Workday Products
Our Workday Products help customers safeguard and
improve their Workday systems, complementing Workday’s
innovative Finance, HR and Planning suite.
We currently have four products, of which three sit within the
Smart Suite:
• Smart Test (launched in 2014) is the leading platform for
Workday customers to automatically test and verify that
their unique Workday configuration is operating effectively.
• Smart Audit (2021) is a compliance-monitoring tool
that allows Workday customers to maintain operational
security controls across their Workday environments.
• Smart Shield (2022) is a data-masking tool that ensures
sensitive data remains controlled when Workday
environments are made available to broader internal or
external teams.
Our most recent product, EDM (2023), improves the
experience of generating and storing documents inside
Workday, while supporting an organisation’s global
compliance requirements.
We are on schedule to release our fifth product in late 2025,
which will help organisations understand and address pay
equality issues, with particular focus on the EU Pay Directive
which will be adopted by EU member states in 2026.
These tools are implemented as cloud-based Software as a
Service (SaaS) solutions and customers access them on a
subscription basis.
Over 550 customers use at least one of our products,
including AT&T (USA), State of Oregon (USA), Booking.com
(Netherlands), Whole Foods (USA) and Netflix (USA).
In July 2024, we announced a unique strategic partnership
with Workday, which incentivises Workday’s sales teams
across North America, Europe and Asia Pacific to introduce
and co-sell our products.
Commercial sector
Public sector
Healthcare
UK & Ireland
North America
Central Europe
Rest of World
14%
(2024: 12%)
52%
(2024: 52%)
34%
(2024: 36%)
9%
(2024: 11%)
59%
(2024: 61%)
31%
(2024: 28%)
2
0
2
5
1%
(2024: <1%)
2
0
2
5
2
0
2
4
2
0
2
5
2
0
2
4
UK & Ireland
Central Europe
Americas
Rest of World
Digital Services
Workday Services
Workday Products
Central Services
14%
68%
15%
2
0
2
5
3%
20%
49%
24%
2
0
2
5
7%
Customers by sector (revenue): Customers by region (revenue): People by region: People by division:
1,094
(2024: 930)
70
(2024: 58)
82%
(2024: 90%)
Our Customers
2,865
(2024: 2,995)
2,796
(2024: 2,953)
93%
(2024: 93%)
Our People
Active customers: Net Promoter
Score:
Revenue from
existing customers:
Number of staff
and contractors:
Number of
employed staff:
Employee
retention:
2
0
2
4
9
Kainos Annual report 2024
Strategic Report
11 OFFICES
Antwerp, Belfast, Birmingham, Buenos Aires,
Derry, Dublin, Gdańsk, Helsinki, Indianapolis,
London and Toronto.
Kainos Annual report 2025
Strategic Report
10
CHIEF EXECUTIVE
OFFICER’S STATEMENT
A challenging year
STRONG
GROWTH
IN SOME
AREAS,
ALONGSIDE
CHALLENGES
IN OTHERS
11
Kainos Annual report 2025
Strategic Report
Our financial results over the past year
reflect a mixed performance for Kainos –
strong growth in some areas, alongside
challenges in others.
As a result, we recorded our first declines in revenue and
adjusted profit since 2009.
Overall, our revenues fell to £367.2 million, a decrease of 4%,
and our adjusted pre-tax profit declined by 15% to £65.6
million.
The most significant reductions were in the public sector
segment of our Digital Services division, reflecting the impact
of the UK General Election in July 2024; in the commercial
sector of Digital Services, where we were affected by weak
economic conditions; and in our Workday Services division,
where a combination of a subdued economic environment
and increased competition led to lower revenues.
At the same time, we recorded strong growth in our software-
focused Workday Products division, which now accounts for
19% of our overall business, alongside continued growth in
the health sector segment of our Digital Services division.
Encouragingly, we ended the year positively, recording low
single-digit sequential revenue growth in the final quarter.
We look forward to sustaining this growth in the year ahead.
Restructuring for growth
In March, we made the difficult decision to reduce our
workforce, which directly affected 190 of our colleagues –
approximately 7% of our global team. The decision was taken
with careful consideration and with a clear focus on the long-
term growth opportunities for our business.
While we recognise the business necessity of this step,
we also acknowledge the significant impact it had on
190 colleagues and their families, and on the friends and
teammates they leave behind at Kainos. In recent weeks, we
have said goodbye to some very talented individuals who
have played important roles in our Company.
As CEO, I deeply regret that this was necessary.
However, I believe it was essential to create the capacity
to invest in the high-growth areas of our business –
including product development, AI, data, automation, new
partnerships, skills development, targeted recruitment and
carefully managed international expansion.
We have a sense of urgency around these activities and
have already mobilised teams, particularly in early-stage
opportunities in Cyber AI and Agentic AI.
Supporting our customers
The combination of our mixed business performance and
a significant restructuring could have diverted focus from
the critical work of supporting our customers. However, our
teams’ continued commitment and professionalism ensured
that they continued to deliver successfully. This is reflected
in our Net Promoter Score increasing from 58 to 70 – a rating
classified as ‘excellent’.
During the year, we continued to support our existing
customers – who account for 82% of our work – while also
acquiring new ones. Total customer numbers increased from
930 to 1,094. We view this as an encouraging indicator of
future opportunity, underpinned by our strong track record
of building long-term, trusted relationships that often span
multiple programmes of work with our customers.
Our customers continue to actively experiment
with AI, and we supported this through 88 separate
engagements over the year – averaging nearly two
per week. Our largest AI projects have been in the UK
public sector, where we are the fifth-largest AI supplier,
and we are focused on replicating that success across
our healthcare and commercial client base.
Many of our customers are global organisations, and they
continue to navigate an economic landscape influenced by
US tariffs and international responses, which contribute to
ongoing uncertainty. We expect this to remain a recurring
theme throughout 2025.
As their partners, our role is to support them as they
respond to these changing circumstances. For many, this
will involve maintaining investment in critical transformation
programmes; for others, it may mean reducing technology
expenditure in response to shifting business priorities.
Changes for our customers will require us to be agile in
how we manage our own business. As a result, we have
strengthened our internal processes to ensure we can act
quickly and effectively when needed.
We are excited about the opportunity
for our Workday Products division.
Brendan Mooney
Chief Executive Officer
“
Kainos Annual report 2025
Strategic Report
12
Workday Products
Our standout performance came from
Workday Products, with revenue increasing
by 24% to £71.3 million, as we made strong
progress towards our initial ARR target of
£100 million by the end of 2026. We reached
£72.6 million in ARR at the end of March 2025.
We continued to invest in our product
portfolio. In addition to advancing our
existing products, we remain on track to
launch our fifth product at the end of 2025,
designed to help organisations understand
and address pay equality issues, with
particular focus on the EU Pay Directive
which will be adopted by EU member states
in 2026. During the year, our research &
development investment increased by 24%
to £16.8 million, all of which was expensed in
the period.
We also deepened our relationship with
Workday through our Built on Workday
agreement – a new strategic partnership
announced in July 2024. This agreement
incentivises Workday’s global sales teams
to introduce and co-sell Kainos-developed
products. The multi-year agreement
represents an annual investment of £7.8
million, with £5.2 million recognised during
FY25 following its activation in July 2024.
We believe this agreement will enhance
our access to Workday’s base of more than
11,000 customers, reduce sales cycle times,
and improve win rates. As we continue to
mobilise the partnership, we are confident it
will be a significant contributor toward our
long-term target of achieving £200 million in
ARR by the end of 2030.
Digital Services
Our Digital Services division recorded a
reduction in revenue of 7% to £197.2 million.
The largest reduction occurred in the public
sector, reflecting the hiatus caused by the
UK General Election. This was accompanied
by reductions in project-related expenditure
among our commercial sector clients. In
contrast, we recorded strong growth among
our healthcare clients, primarily consisting
of departments, agencies and arm’s-length
bodies within the NHS.
Over the last months, the UK Government
has published a series of papers – most
notably the ‘State of Digital Government
Review’ – which highlight the importance
of digital transformation in driving public
sector and public service reform. Against
this positive backdrop, we look forward
to the publication of the Comprehensive
Spending Review, expected in spring 2025,
which will provide clarity on spending
limits across all departments and allow
our customers to plan their digital
transformation projects.
We continue to make excellent progress
in expanding our Digital Services activity
in North America, primarily in Canada.
Revenues from our engagements in the
region have grown to £8.9 million – an
increase of 71%. While still a modest share of
our overall Digital Services revenue, the pace
of progress is highly encouraging.
Workday Services
We also experienced challenges in our
Workday Services division, as softer market
conditions and increased competition
affected our revenues, which declined by 12%
(8% on a like-for-like basis) to £98.7 million.
Most of our Workday Services customers
operate in the commercial sector and
typically have a global footprint. As such,
they are highly responsive to changes in the
economic environment and have actively
managed their technology investments in
response. As a result, both the number and
value of contracts have been lower than in
previous years.
In addition, the number of accredited
Workday partners increased from
approximately 60 to over 100 during the
year. This has led to more aggressive pricing
from some competitors as they seek to
establish a presence in the market.
Chief Executive Officer’s Statement
Continued
£71.3 million
Workday Products revenue increasing
by 24% in 2025
13
Kainos Annual report 2025
Strategic Report
While we expect some easing of these headwinds in the
year ahead, we believe our destiny remains in our own
hands – drawing on our deep Workday experience, strong
delivery reputation, and innovation capability to differentiate
ourselves in this more competitive landscape.
Being a responsible business
We remain a carbon neutral organisation and, while we made
further progress during the year, we have not yet reached
our goal of achieving carbon net zero. Our carbon reduction
programme continues to deliver results, with a further 15%
reduction in Scope 1, 2 and full Scope 3 emissions compared
to last year. Since the start of the programme in 2020, we
have more than halved our carbon intensity – from 7.3 to 3.3
tonnes of CO2e per employee.
The tech industry continues to face a diversity challenge,
with only 29% of UK tech roles held by women. At Kainos,
we are encouraged by our further progress, with women
now representing 36% of our workforce (2024: 35%). But real
change starts earlier, with just 3% of young women who
currently consider tech as their preferred career, which is
why we are proud that 1,462 young women, out of over 3,000
participants, took part in our outreach programmes this year.
Board changes
At our AGM in September 2024, Tom Burnet and Andy
Malpass completed their terms as Non-Executive Directors
on the Kainos Board, having most recently served as Chair
and Senior Independent Director, respectively. We extend
our sincere thanks to Tom and Andy for their significant
contributions during their time on the Board.
At the same meeting, Rosaleen Blair was appointed Chair
of the Board, and James Kidd was appointed Senior
Independent Director.
In December 2024, Russell Sloan stepped down as CEO of
Kainos. I would like to place on record my thanks – and that
of the entire Kainos team – for Russell’s leadership as CEO
and his outstanding contribution over a 25-year career with
the Company.
Following the completion of Russell’s term as CEO, I was
appointed to succeed him in the role.
An improving outlook, but caution remains
The broader economic environment remains uncertain,
with volatility in global trading arrangements providing an
unwelcome backdrop to our plans for the year ahead.
Despite this, we remain positive.
The UK Government continues to prioritise digital
transformation and AI as a way of improving public services
and reducing delivery costs. The election-related hiatus is
now receding, and the upcoming Comprehensive Spending
Review is expected to provide greater clarity for departments
around future spending plans.
We are confident in our ability to improve our performance
in the Workday consulting marketplace, drawing on our
significant product experience, strong delivery reputation
and innovation capability to differentiate ourselves in a
more competitive landscape. With renewed international
expansion – most notably in Australia and New Zealand –
and increasing demand for Workday-adjacent services, we
see growth opportunities ahead in this market.
The established trajectory of our Workday Products division,
underpinned by the strength of our Built on Workday
partnership, means we are on track to achieve £100 million
in ARR by the end of 2026. We look forward to launching our
fifth product later this year, designed to help customers
address their enhanced pay transparency requirements.
The potential for long-term growth across our market
segments is clear, and we are excited by the opportunities
that lie ahead. As we move forward, we must first navigate
the short-term uncertainty created by the global economic
backdrop – but we do so from a position of strength,
supported by a healthy pipeline, a significant contracted
backlog, and a strong balance sheet.
Thank-you
I would like to express my appreciation to our customers and
colleagues for their ongoing support.
We are grateful for the trust and confidence our customers
continue to place in Kainos, and thankful for the engagement
and commitment our colleagues have shown throughout the
year.
Thank-you.
Brendan Mooney
Chief Executive Officer
With renewed international
expansion – most notably in Australia
and New Zealand – and increasing
demand for Workday-adjacent
services, we see growth opportunities
ahead in this market.
Brendan Mooney
Chief Executive Officer
“
Kainos Annual report 2025
Strategic Report
14
Demand for digital
transformation by
building bespoke
systems
The UK Government is
facing immense pressure to
cut costs while improving
public services. In January
2025, the government
published its State of Digital
Government Review, which
shows both the scale of
the opportunity and the
challenges. Among the
review’s key findings were
that:
• Full digitalisation of
public services could save
more than £45 billion a
year through reduced
costs and increased
productivity, making
digitisation the most
powerful lever available
to drive public service
reform.
• The average UK adult
citizen spends a week
and a half every year
dealing with government
bureaucracy. Services
are under-digitised, with
nearly half of central
government and NHS
services lacking a digital
pathway. Even when
services are superficially
digitised, there is often a
very high level of manual
processing. For example,
HMRC still handles
around 100,000 calls per
day, while DVLA processes
45,000 letters daily. Not
surprisingly, satisfaction
with public services is
falling, from 79% to 68%
over the last decade.
• Digital delivery creates
policy success, with a key
recent example being
the digital-first approach
to the Home Office’s EU
Settlement Scheme, which
automated residency
verification for 6 million
people in record time.
• Legacy technology
presents a significant
risk, with critical services
depending on technology
that is decades old,
unreliable and exposes
the public to high cyber
security threats.
The UK Government
is intending to publish
the final part of its 2025
Spending Review in late
spring 2025. This will set
budgets for government
departments, as part of
which they will be expected
to make better use of
technology to reform public
services. While we await
the detail of the Spending
Review, it is clear that the
government is committed
to substantial investment
in technology in the coming
years, underpinning our
confidence in this market.
In the commercial sector,
UK businesses spend more
than three times as much
on technology as the public
sector. We therefore see
a substantial opportunity
for us in the longer-term.
Businesses have similar
pressures to the public
sector, as they look to
reduce costs, improve
productivity and deliver
better outcomes for their
customers and employees.
The NHS is our principal
healthcare client. The
scale and complexity of
its operating environment
has resulted in under-
investment in technology
and digitisation will
be a necessary part of
delivering better outcomes
for patients, which is a
key priority for the new
government. However, in the
short-term we expect some
disruption in this market
following the government’s
announcement in March
2025 that it intended to
abolish NHS England
and bring the English
health service back under
government control over the
next two years.
Powerful long-term trends are driving
demand for our services. We have designed
our strategy to take advantage of these
trends, giving us confidence in our growth
prospects. See Our Strategy section for
more information.
OUR
MARKETS
TREND
1
pages 21-23
15
Kainos Annual report 2025
Strategic Report
How we are responding
We remain focused on supporting
our existing clients as they deliver
their ambitious multi-year digital
transformation programmes, while
securing new business wins across the
public and healthcare sectors.
We will continue to augment our
existing client activity by securing new
customers, who are typically at the
start of their transformation journey.
These engagements are generally
smaller pieces of work, which allow us to
establish strong customer relationships
through successful delivery, secure
further projects with them and grow our
revenues over time.
28
%
IT systems in central government
estimated to be dependent on
decades-old legacy technology
100,000
Calls received by HMRC every day
which could potentially be digitised
Digitisation is the most powerful lever
available to drive public sector and
service reform.
State of Digital Government Review,
published January 2025
“
£26 billion
Annual spend on technology by the
UK public sector
Kainos Annual report 2025
Strategic Report
16
Our Markets
Continued
Demand for digital
transformation
by implementing
Workday
We have an outstanding
relationship with Workday
and its success in attracting
new customers is a key
driver for our Workday
Services division. Workday
continues to grow rapidly,
with its most recent results
to 31 January 2025 showing
revenue rising by 16.4% to
$8.4 billion
(6)
. Workday is
now used by more than
11,000 customers globally.
The rapid uptake of
Workday’s product reflects
its competitive advantages.
Workday’s primary
competition, Oracle and
SAP, have software that has
its heritage firmly rooted
in the 1970s. Workday,
launched in 2005, is built
to operate as a SaaS suite
of applications that are
cloud-based, mobile-first
and reflect the way modern
organisations want to
manage their employees
and finances. In addition,
weekly updates mean
Workday customers are
always using the latest
version of the software,
preventing systems from
becoming outdated.
While SAP and Oracle both
have several thousand
implementation partners,
Workday has appointed
just 114 partners to deploy
its software across its
customer base, to ensure
high-quality project
delivery. However, the
number of global Workday
partners has increased from
around 60 to over 100 in the
last year, which has resulted
in more competition for us
and contributed to lower
revenues in FY25.
Workday is a
comprehensive platform,
but Workday customers
can also require additional
solutions to address
a unique business
requirement, without
having to implement
another platform to operate
alongside Workday. This has
created a growing market
for software products
that enhance Workday’s
platform, which we serve
through our Workday
Products business.
TREND
2
11,000
Workday customers
worldwide
114
Global Workday
partners, with Kainos
ranked 8th by number of
certified consultants
How we are responding
In Workday Products, we are investing to enhance existing
products and develop new ones, while ramping up our unique
partnership with Workday.
In Workday Services, in addition to supporting Workday
implementations for new customers, our strategy includes
geographic expansion to access the large and growing base
of Workday customers across Europe and particularly in the
US. We also aim to take share by winning customers from other
Workday partners, as well as continuing to add non-Workday
services that create value for our Workday customers and
broaden our revenue streams.
(6) Workday Annual Results: 2025 Results.
17
Kainos Annual report 2025
Strategic Report
Emerging
technologies
creating new
opportunities
Technological advances
continue to open new
possibilities in our markets.
For example, artificial
intelligence (including
Generative AI), machine
learning, intelligent
automation and the rapid
growth in data all have the
potential to change the way
that organisations operate
and deliver their products
and services.
TREND
3
Our competitive environment
A strong track record of delivery is important for success in all our divisions, underpinning our relationships with existing
clients and providing credibility with potential customers. While the competitive environment has generally been stable,
with few competitors entering or leaving the market, we have seen an increase in the number of Workday partners, as
noted above. As new partners lack a track record, we have seen an increase in competing on price in Workday Services.
Digital Services
£ 3,263m
Addressable market
(7)
(2024: £3,096 million)
Example competitors:
Deloitte, Capgemini, BJSS,
Atos, Equal Experts, Solirius.
Workday Services
£1,369m
Addressable market
(8)
(2024: £1,100 million)
Example competitors:
Strada (formerly Alight),
Cognizant, TopBloc, Invisors.
Workday Products
£900m
Smart suite addressable
market
(9)
(2024: £650 million)
£700m
EDM addressable market
(10)
(2024: £415 million)
Example competitors:
Worksoft, Turnkey, Opkey.
Our commitment to
innovation
Innovating is a habit practised
throughout the Company
1. Dedicating time and space
for innovation
2. Building a culture of
curiosity across the
business
3. Investing in new ideas and
trying new things
4. Partnering for growth and
giving back to start-ups
5. Joining the dots and
making it all visible
The purpose of innovation
within Kainos is to ensure that
we continue to grow, staying
in existing markets whilst
finding new and emerging
markets.
(7) The size of the digital solutions market in Central (£1,871 million), Health (£374 million), Defence (£828 million), Education (£36 million) and Police (£154 million)
sectors for FY25 according to TechMarketView’s Digital Evolution Model.
(8) Estimate of total addressable market.
(9) Estimated global Workday automated testing market.
(10) Estimated global Workday document management market, April 2025.
How we are responding
We believe new technologies could lead to significant new
revenue streams for our business in the coming years.
We have a structured innovation process for supporting
the development of new business concepts and revenue
streams. We also invest in understanding early-stage
technology developments through our Research team.
Ideas from this research will likely form the next cohort of
candidates for our innovation process.
Further information is provided within the
‘Operational Review, Innovation, research
and development’ section of this report.
page 31
Kainos Annual report 2025
Strategic Report
18
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2
WHO WE ARE
We are a UK-headquartered IT
provider with expertise across
three divisions: Digital
Services, Workday Services
and Workday Products
1
H
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C
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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
What we do
We provide sophisticated IT services to major public
sector, commercial and healthcare customers.
For more information on our operating divisions,
see ‘Kainos at a Glance’ section.
OUR BUSINESS
MODEL
pages 8 – 9
19
Kainos Annual report 2025
Strategic Report
How we operate
Digital Services
In the public and healthcare sectors,
our positions on major frameworks and
our history of delivery help us to win
new projects. These frameworks enable
buyers to procure from a list of pre-
approved suppliers, with agreed terms
and conditions. We are an approved
supplier on 29 frameworks, including
large multi-year frameworks such
as the £1.2 billion Ministry of Defence
Digital and IT Professional Services
framework, and the £4.2 billion HMRC
Digital and Legacy Application
Services framework.
In the commercial sector, we use
practitioner-led sales teams. Our
expertise means we are relied on by
partners such as Amazon Web Services
(AWS) and Microsoft to help solve
complex client challenges.
Having secured a project, we focus
on service design and then build, test
and implement the solution. This is
often done at pace, with timescales
ranging from six to nine months.
Major transformational projects
have multiple stages, with further
functionality or services added over
time. Projects can therefore generate
revenue quickly and over many years.
Once we secure an initial piece of work
for a customer, we tend to generate
high levels of repeat business across
multiple parts of their organisation,
as we earn their trust by showing we
can solve their problems and, typically,
save them money.
Workday Services
Workday contracts directly with its end
customer and typically recommends
a shortlist of implementation partners
such as Kainos, who then undertake
the project directly with the customer.
We are usually recommended because
of our international presence or our
deep knowledge of particular Workday
modules.
Most customers begin with the
Financial, Planning or HCM (HR)
modules, then add further modules
from Workday’s extensive range over
time. This means winning a customer
often generates a multi-year revenue
stream. We also secure work from
existing Workday customers who want
to switch from their current partner
when implementing the next phase of
their system.
Workday Products
Historically we have gained our
product customers through our
direct outbound marketing activities,
in-person events and referrals from
existing customers. Going forward, we
expect our partnership with Workday
to deliver an increasing level of
customer referrals.
Typically, a customer will take multiple
products from us over time and
because our customer satisfaction
remains very high, our Net Revenue
Retention (NRR) is also very high.
Our Workday Products contracts are
always direct with the end customer,
which allows us to control commercial
arrangements and understand the
quality of our customer service.
This also helps shape our product
roadmap, with direct customer
feedback providing valuable insight
and inspiration for new products that
address unmet needs.
Our commercial model
In both Digital Services and Workday
Services, we primarily charge on a time
and materials basis for consultancy
services. Fees are typically invoiced
monthly for work completed.
In Workday Products, all products have
contracts that are typically three years
in duration, with a subscription fee
charged annually in advance.
Our sources of competitive advantage
Our people
Our people are the key to our success.
We hire the very best experienced
talent and bring in young people
with potential. We help them to excel
by investing in their learning and
development and providing interesting
and challenging work, on projects that
are often of national importance. We
have a very low attrition rate, which
means many people choose to stay
and develop their careers at Kainos.
Our reputation
We have a strong reputation, based
on a long track record of successful
delivery for our customers. This
reputation is critical for winning new
work and for attracting the talent we
need. This is demonstrated in Digital
Services by our presence on important
government frameworks. In Workday
Services, we are the leading partner
in Europe by number of certified
consultants.
Our customer relationships
We look for customers who not only
want a partner that adds value, but
who themselves prioritise long-term
cost of ownership over the lowest
possible up-front price.
In the public and healthcare sectors,
we tend to work with customers with
a large portfolio of transformation
projects, supported by significant
budgets. A multi-year transformation
project is typically up to £30 million in
value, while more complex projects can
exceed £100 million.
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.
“
Kainos Annual report 2025
Strategic Report
20
Our Workday customers range from small,
dynamic companies to some of the world’s
largest and most recognisable brands.
Our six-monthly customer surveys tell us
that we achieve best-in-class customer
service, with our Net Promoter Score of 70
being defined as ‘excellent’. This underpins
our repeat revenue, with over 80% of our
revenue each year coming from existing
customers.
Our partner relationships
We have an excellent relationship with
Workday, having been a partner since 2011.
Our expanded strategic partnership for
Workday Products is the first of its kind.
We also have strong partnerships with
Microsoft and AWS, having worked closely
with these market-leading vendors for
several years. In addition to our delivery
excellence, we are positioned as thought
leaders, often serving on their internal
advisory panels. With over 90% of the world’s
IT expenditure still entrenched in on-premise
technology, there is significant work to
transform organisations to being cloud-
enabled.
Our intellectual property
We have a range of proprietary products,
such as our Smart Suite and Employee
Document Management for Workday, and
we continue to invest in extending their
capabilities.
Our innovation and research activities
also focus on the application of new
technology such as AI, machine learning
and automation, and we are delivering
engagements in these areas.
The value we create
We create a broad range of financial and
non-financial value for our stakeholders.
For our people
We provide rewarding, well-paid
employment in a dynamic environment,
where people can work with colleagues who
are often world-class in their fields. As we
grow, we create new opportunities for our
people to grow with us.
For our customers
We help our customers to improve their
services, save money and manage their
organisation more effectively.
For our partners
We support Workday’s business growth by
successfully implementing its system for
its customers. Similarly, we also generate
growing volumes of business for Microsoft
and AWS as we replace ageing on-premise
systems with modern cloud-based services.
For our shareholders
Long-term growth in revenue and profits,
strong cash flow and a capital-light business
model support our ability to generate high
returns, invest for further growth and pay an
attractive dividend to shareholders.
For society
As a creator of skilled, highly paid work, we
are proud to generate tax revenues that
support public services. At the same time,
we help NHS and public sector customers
to make the best use of taxpayers’ money
by helping them replace ageing, inefficient,
manually intensive systems with more
cost-effective modern digital services that
are rapidly becoming the preferred way of
interaction for citizens and patients.
We are also proud of our track record of
being a responsible organisation, including
our carbon net zero commitments, our work
in supporting our communities and our
outreach programmes. More details are
contained within the ‘Environmental, Social
and Governance (ESG) Commitments’
section of this report.
Our Business Model
Continued
Our values: Creative,
Cooperative, Determined,
Honest and Respectful.
“
pages 32 – 55
21
Kainos Annual report 2025
Strategic Report
OUR
STRATEGY
In building for the long-term, we:
• expect our international presence to
continue to grow;
• prefer to grow organically and only acquire
businesses in exceptional circumstances, such as
when we need to obtain unique skills; and
• aim to have a well-balanced business, which is not
overly reliant on any one customer, market, region
or sector.
People Progress in FY25 Priorities for FY26
People are the
fundamental
component of our
strategy. Our long-term
success depends on
their talent, skill and
motivation, and we
aspire to provide them
with rewarding and
fulfilling careers. We
recruit high-calibre
people from school,
college and industry,
invest in developing
their skills and careers,
and strive to be a great
employer.
Employed 2,865 colleagues at
the year-end (2024: 2,995),
including 103 early careers
colleagues.
Invested over 13,000 days (2024:
over 12,000 days) of technical
and skills development in our
people.
As a result of our lower trading
performance, we reduced our
workforce by 190 people across
functions and locations, to
better match our capacity to
current customer demand.
Maintain high standards
when recruiting new
applicants.
Ongoing investment in skills
and career development of
all colleagues in Kainos.
Continued to be ranked in the
’50 Best Places to Work in the
UK’ by Glassdoor, increasing our
ranking from 32nd to 14th.
Continued to achieve high levels
of employee engagement (75%)
(2024: 78%), and high ratings for
diversity and inclusion (D&I)
(82%) (2024: 83%) and wellbeing
(74%) (2024: 77%).
Maintain our high levels of
employee retention (achieve
over 85%).
Maintain or improve
our scores for employee
engagement, D&I and
wellbeing.
Involved over 3,000 young
people and those from under-
represented groups in our
outreach programmes (2024:
over 2,200 young people).
Continue to inspire and
educate young people
and those from under-
represented groups for
potential careers in IT.
Financial KPI
Non financial KPI
Our ambition is to be a global, independent company
operating towards the disruptive end of technology, that will
thrive today and for generations. As part of this ambition,
we believe that we can achieve long-term growth in revenue,
adjusted pre-tax profit and cash flow. We therefore focus on
dynamic, higher-growth markets where the talents of our
people shine brightest.
People
Customers
Markets
The three key pillars
of our strategy
1 2 3
1
Kainos Annual report 2025
Strategic Report
22
Markets Progress in FY25 Priorities for FY26
Digital Services
Our focus is to:
• grow within the public and
healthcare sectors, by engaging in
ambitious transformation projects
across UK Government and the
NHS;
• repeat our digital transformation
success in the UK commercial
sector; and
• expand internationally, focused
initially on Canada where we
already have an established
Delivery team, have built business
development expertise and have an
existing Workday Services and
Products client base.
Public sector revenues decreased by
9% to £125.5 million (2024: £138.2
million).
Healthcare revenues increased by 14%
to £50.6 million (2024: £44.2 million).
Grow our business in both sectors,
supporting existing clients and
projects, and adding new long-term
clients.
Commercial sector revenues reduced
by 32% to £21.0 million (2024: £30.8
million).
Focus on winning smaller
engagements, where we can
demonstrate our capabilities and
start to build a valuable long-term
customer relationship.
Continued to build our team in
Canada to support growth in this
market, contributing to a 71% increase
in revenue to £8.9 million (2024: £5.2
million).
• Continue to build reputation and
references in our target international
markets.
• Continue to build in-region delivery
capability, in line with success.
Workday Services
Our focus is to:
• grow in our established markets, as
Workday continues to expand
within these markets;
• gain market share, by replacing
incumbent providers to existing
Workday customers through a
reputation for higher service levels;
and
• expand internationally, establishing
operations in countries with large
and growing numbers of Workday
customers.
Workday Services revenues decreased
by 12% to £98.7 million (2024: £112.0
million).
Support existing clients and projects,
and add new long-term clients in line
with capacity.
Appointed by approximately 40
customers where earlier phases of the
project were undertaken by a different
partner.
Continue to excel in customer service.
International revenues fell by 13% to
£74.4 million (2024: £85.6 million).
Expanded into Australia and
New Zealand markets, delivering
first projects.
Continue to expand international
revenues.
Increase footprint within Australia and
New Zealand.
Further expansion in APAC and
evaluate expansion into LATAM
market.
Workday Products
Our focus is to:
• increase the number of Workday
customers who use our software;
• ensure high levels of customer
satisfaction driving strong NRR;
• invest in our existing products and
develop additional products within
the Workday ecosystem; and
• continue to work with Workday to
increase the scope and impact of
our Built on Workday partnership.
Revenues increased by 24% to £71.3
million (2024: £57.3 million).
Customer numbers increased to over
550 (2024: 450+) with 198 customers
now using more than one of our
products.
Increase the total number of
customers using our software.
Increase the adoption of multiple
products by each customer.
Maintained a high level of NRR, driven
by segment NPS of 93% (2024: 97%).
Maintain our high levels of customer
satisfaction.
• Overall investment, spanning product
development and sales & marketing,
increased by 24% to £32.3 million (2024:
£26.0 million).
Agreed an enhanced strategic
partnership with Workday, to promote
our products through its sales teams.
• Progressed the development of our fifth
product which will help organisations
understand and address pay equality
issues, which we expect to launch
towards the end of 2025.
• Ensure that customer adoption and
revenues reflect the strong increase in
investment.
Continue to work with Workday to
increase product sales through our
new Built on Workday partnership.
• Develop and launch one new Workday
product.
• Consider the development of products
for other platforms or extend our
existing products to other platforms.
Our Strategy
Continued
2
Financial KPI
Non financial KPI
23
Kainos Annual report 2025
Strategic Report
Customers Progress in FY25 Priorities for FY26
Consistently delivering for our
customers helps us to build long-
lasting, mutually beneficial
relationships that will see us thrive as a
business. We therefore focus on
providing exemplary customer service,
which underpins our repeat revenues.
• Invested in our customer relationship
management system, IT service
management to support service
levels and self-service, and provided
ongoing training.
Maintain high levels of customer
satisfaction, including through
continued investment in training and
developing our people.
Customer satisfaction level as
measured by NPS was 70 (2024: 58),
which is regarded as ‘excellent’.
Actively monitor client satisfaction
through regular surveys and using
NPS as the industry-standard
metric. Ensure that we maintain high
levels of customer satisfaction.
New opportunities Progress in FY25 Priorities for FY26
As noted in the previous section, we
invest strongly in our Workday
Products, both in extending our
existing products and developing new
products. We also look to develop new
opportunities for the other areas of
Kainos and have a structured
innovation process which helps us
identify and promote new ideas that
have the potential to become sizeable
revenue streams in the future.
• In total, 23 ideas were evaluated,
with 13 moving to the next stage of
development (2024: 46 ideas
evaluated and eight moved to next
stage).
• Maintain idea generation and
evaluation activity levels.
• Develop current next-stage ideas,
seeking to create at least one viable
business opportunity.
Financial KPI
Non financial KPI
3
Kainos Annual report 2025
Strategic Report
24
OPERATIONAL
REVIEW
Our overall performance
Revenue declined by 4% to £367.2 million
in FY25 (2024: £382.4 million), with strong
growth in Workday Products and the
Digital Services healthcare sector more
than offset by lower revenues in other
parts of Digital Services and in Workday
Services. This reflects the impact of the UK
General Election in the public sector along
with the subdued economic environment
encouraging customers to defer project-
based expenditure.
Adjusted pre-tax profit was down by 15%
(-14% ccy) to £65.6 million (2024: £77.2 million)
generating an 18% margin (2024: 20%). The
margin reflected our continued disciplined
management of our costs and the growth
in the higher-margin Workday Products
business, offset by lower contributions from
the services businesses and the impact of
the additional investment we announced
in July 2024 to support our enhanced
partnership with Workday (see below).
Bookings in the year were 10% lower at
£382.4 million (2024: £424.5 million). Our
contracted backlog increased by 3% to
£368.2 million (2024: £357.1 million).
As previously guided, we have continued
to invest to support the growth in our
software products. Research & development
investment rose by 24% to £16.8 million
(2024: £13.5 million) and our product-related
sales & marketing investment (including
£5.2 million of Built on Workday partnership
costs) was £15.5 million, up 24% (2024: £12.5
million). The total investment in our software
products was £32.3 million (2024: £26.0
million), an increase of 24%.
We remain highly cash generative and
delivered another robust cash performance,
with cash conversion in the year of 112%
(2024: 98%). At 31 March 2025 we had a
cash balance (including treasury deposits)
of £133.7 million (2024: £126.0 million), after
completing £22.6 million of a £30.0 million
share buyback programme.
Consistently delivering for our customers is
at the heart of our business.
EMPLOYEE
DOCUMENT
MANAGEMENT
IN ACTION
25
Kainos Annual report 2025
Strategic Report
Workday Products performance
Workday Products had another strong year, with growth
across all our products. Revenue increased by 24% (26%
organic, 26% ccy) to £71.3 million (2024: £57.3 million).
In total, more than 550 customers (2024: over 450) now use
our products, with about 200 taking multiple products. We
are continuing to improve our sales execution and refining
our customer value proposition for our Smart Suite products
(Smart Test, Smart Audit and Smart Shield), emphasising
the cost savings they can deliver as well as their control and
compliance benefits. EDM, which we released in October
2023, was our most successful product launch.
Annual recurring revenue at the year-end was £72.6
million (2024: £60.5 million), up 20% (23% ccy). Our strong
momentum and enhanced strategic partnership with
Workday (see below) make us confident of achieving our
ARR target of £100 million by the end of 2026 and our new
target for 2030 of £200 million. Our backlog at the year-end
increased 17% to £148.7 million (2024: £127.5 million).
Accelerating our growth through enhanced
Workday partnership
In July 2024, we announced an enhanced partnership with
Workday, which incentivises Workday’s sales teams across
North America, Europe and Asia Pacific to introduce and
co-sell our products. This unique partnership gives us an
increased profile within Workday and supports its Built
on Workday program. Built on Workday uses the Workday
Extend technology (see Workday Services below) to enable
partners to create apps and distribute them to Workday’s
11,000+ customers via the Workday Marketplace.
The multi-year agreement covers our Smart Audit, Smart
Test and EDM products, as well as future products that
we will develop utilising Built on Workday. To support the
strategic partnership, we will incur the following additional
costs:
• payments to Workday of approximately £7.8 million per
year (£5.2 million incurred in FY25);
• investment to expand our own global sales capability, to
support Workday’s sales organisation; and
• investment to continue to develop Smart Test, Smart Audit
and EDM, to utilise the full power of Built on Workday.
While the mobilisation of the new partnership has taken
slightly longer than we expected, we started to see the first
sales come through towards the end of the financial year.
We continue to expect revenue to build from FY26 and
Workday has shown significant commitment to making the
partnership successful.
The partnership is the first of its kind and we expect that
Workday will sign further agreements with other product
providers. This will help to grow the market as a whole and
further increase the attractions of Workday to customers,
since they will be able to extend its functionality to solve their
specific business issues through third-party products.
Product development
We continue to develop new Workday products and expect
to launch our fifth in late 2025. This product will help
organisations understand and address pay equality issues,
with particular focus on the EU Pay Directive which will be
adopted by EU member states in 2026.
ING Bank is a Dutch multinational banking corporation with
60,000 employees. They wanted to streamline document
management across 40 countries and needed a solution
that offered scalable automation inside Workday.
The bank has completed the first three countries as part of
its wider roll-out and is already achieving:
• 80% of HR documents
fully automated in
Phase 1
• Consolidated systems to
reduce inefficiencies for
centralised team
• Ability to scale
compliance for audits
and data privacy
obligations
• Better experience
for users throughout
employee lifecycle
• Journey to one global
system for 40 countries
by 2026
• 2,000 requests every year
for access to documents
from varied legacy
systems – now available
in EDM for self service
Kainos EDM offers efficiencies
on many levels – in terms of HR
processes, user experience and the
maintainability of the system.
Praba Prabakar,
Workday Lead at ING Bank
“
80% of HR
documents
fully
automated
One global
system for
40 countries
by 2026
2,000
requests
every
year – now
available for
self service
Kainos Annual report 2025
Strategic Report
26
Digital Services performance
Our Digital Services division builds highly
cost-effective solutions that make public-
facing services more accessible and easier
to use for citizens, patients and customers.
Overall, Digital Services’ revenue was 7%
lower at £197.2 million (2024: £213.1 million).
Bookings declined by 11% to £202.0 million
(2024: £228.1 million), while the contracted
backlog rose 2% to £160.1 million (2024:
£156.6 million).
Public sector
Revenue from public sector customers
was 9% lower at £125.5 million (2024: £138.2
million), with the sector accounting for
64% of divisional revenue (2024: 65%).
The first half of the year was affected by
the UK General Election, which caused a
hiatus in contract awards and delays in
mobilising projects. Since the Election,
the new government has spent time
determining its spending priorities and the
role digital transformation will play, and
we expect longer-term investment plans
to be announced as part of the multi-year
spending review in Spring 2025.
Despite the difficult year, prospects in the
public sector remain positive. In January
2025, the government published its ‘State
of Digital Government Review’. This showed
that public services are still significantly
under-digitised and that full digitisation
could realise savings and productivity
benefits of £45 billion a year, for example
through process simplification, using AI to
automate tasks and the adoption of low-cost
digital channels. According to the review,
this makes digitisation the most powerful
lever available to drive public sector and
service reform. While the government needs
to overcome sizeable challenges to deliver
all these benefits, we are encouraged by the
direction of travel.
During the year, we continued to support
our long-standing customers including
the Ministry of Justice, the Department for
Environment, Food & Rural Affairs, the Driver
and Vehicle Standards Agency, HM Passport
Office, the Department for Transport and the
Ministry of Defence. We also began working
with new customers, including Network
Rail, the Crown Prosecution Service, Ofwat
and University of Cambridge, as well as a
new framework win with Queen’s University
Belfast.
Healthcare sector
Our customers in this sector are mainly UK
public health bodies. The business had a
good year, in part because NHS England
began awarding larger programmes of work
to tender, after previous delays caused by its
Operational Review
Continued
HEALTHCARE
IN ACTION
27
Kainos Annual report 2025
Strategic Report
merger with NHS Digital. Revenue from the sector was £50.6
million (2024: £44.2 million), representing growth of 14% and
accounting for 26% of Digital Services’ revenue in the year
(2024: 21%).
During FY25, our customers included NHS England, the
Department for Health and Social Care, the UK Health
Security Agency and the NHS Business Services Authority.
In March 2025, the government announced its intention to
abolish NHS England and take the health service in England
back into direct government control. This is expected to take
place over a two-year period and is likely to result in some
disruption to the market during that time. The State of Digital
Government Review highlighted the significant need for
digitisation in the NHS, with many Trusts having substantial
levels of legacy technology and poor system reliability,
which means digitisation will be a necessity as part of health
service reform.
Commercial sector
There is significant long-term potential for us in the UK
commercial sector, where IT expenditure is more than three
times higher than the public sector. However, demand from
the commercial sector remained low in FY25, reflecting the
uncertain economic environment. Our commercial sector
revenue was therefore 32% lower at £21.0 million (2024: £30.8
million), representing 11% of divisional revenue (2024: 14%).
We continue to deliver digital services for our established
customers, including Irish Life Assurance plc, Bank of Ireland,
EasyJet and WPP, and we are helping new customers
including NFU Mutual, Just Group and Rolls-Royce.
Looking forward, our intention is to be more agile and
focus on securing smaller pieces of work with commercial
customers, so we can demonstrate our credentials
through successful delivery and build valuable long-term
relationships with them. We have had considerable success
with this approach in other sectors and believe it will better
align with the market, with customers looking to implement
projects in phases rather than procuring a major multi-
phase project at the outset.
International
We see good prospects internationally and our strategy is
to target countries where we already have a presence and
customer contacts through our Workday Services division.
We continue to gain momentum in Canada, where the
government is investing to provide better digital services. We
have built a local team to support our growth, reflecting our
strategy to scale our in-region delivery capability in line with
our success. Our customers in North America include the
Province of Nova Scotia and the government of Ontario in
the public sector, and WPP in the commercial sector.
International revenue for the division was £11.7 million (2024:
£12.3 million), representing 6% of total Digital Services
revenue (2024: 6%).
We delivered a secure digital platform for the UK’s largest
health research programme:
– Over 350,000 blood samples collected.
– Less than two years from build to pilot to full
national launch.
– One platform to engage up to 5 million volunteers.
– More than 1 million consented volunteers to date.
• Transforming the
prevention, detection, and
treatment of conditions
such as dementia, cancer,
diabetes, heart disease
and stroke so future
generations can live in
good health for longer.
• Building one of the most
detailed pictures of health
information in the world.
• Supporting clinicians to
collect blood samples and
analyse for early disease
indicators.
• Enabling global research
to identify more effective
ways of tackling diseases,
including early detection,
risk profiling and
prevention interventions,
and more personalised
treatments.
Kainos is a great digital partner for
us. With a successful track record in
secure, datacentric health projects,
including the NHS App in England and
Wales, the team’s digital expertise
has truly been invaluable… we’re
delighted to extend our partnership.
Marko Balabanovic,
Chief Technology Officer, Our Future Health.
“
Over 350,000 blood
samples collected
<2 years from build to
pilot to full national
launch
One platform to
engage up to 5 million
volunteers
More than 1 million
consented volunteers
to date
Kainos Annual report 2025
Strategic Report
28
Workday Services performance
We are Workday’s leading partner in Europe
and a Phase 1 Prime partner in the US, which
is Workday’s biggest market. At the end of
the year, we had 809 accredited Workday
consultants (2024: 798), ranking us eighth
globally.
Workday Services revenue was 12% lower
(-10% ccy) at £98.7 million (2024: £112.0
million). In the prior financial year, we
stopped providing procurement consulting
services previously offered by Blackline
Group, which we acquired in 2022. Adjusting
FY24 revenue to exclude these services,
revenue in FY25 was 8% lower on a like-for-
like basis.
Our performance in the year partly reflects
an increased number of Workday partners,
with Workday adding new partners who
often specialise in particular sectors such
as professional services. We have seen more
aggressive pricing by some competitors,
as they look to establish themselves in the
market. The number and value of contracts
in the market has also been lower than in
previous years, with much of Workday, Inc.’s
growth coming from existing customers, who
are taking additional modules that do not
need the same level of consulting support to
implement.
Sales bookings decreased by 27% to
£84.6 million (2024: £116.5 million) while
our contracted backlog was £59.3 million
(2024: £73.0 million).
Regionally, 51% of divisional revenue came
from North American customers (2024: 49%)
and 49% from European customers (2024:
50%). We are building a team in Australia
to support growth in Asia Pacific and won
our first contracts in Australia and New
Zealand in the second half of the year. We
are also looking at other opportunities for
geographical expansion.
We continue to add non-Workday services
that create value for our Workday customers
and broaden our revenue streams. For
example, the partnership with Pulsora we
announced in FY25 will enable customers
to extract data from their Workday
systems and use it to fulfil ESG reporting
requirements.
Workday Extend
Workday Extend is Workday’s Platform-as-
a-Service offering. It allows organisations
to build specialised functionality on the
Workday platform, to further enhance
customers’ Workday deployment. Engaging
with clients on Workday Extend projects
gives us insight into common challenges
that they experience and creates the
Operational Review
Continued
WORKDAY
SERVICES
IN ACTION
29
Kainos Annual report 2025
Strategic Report
potential to build further products that can be part of the
Built on Workday program. To date, we have helped more
than 80 organisations to build Workday Extend applications.
We also built our own EDM product on Workday Extend.
We believe that we have the largest independent group
of Extend skills globally. We continue to upskill colleagues
through our Extend Academy, enabling them to carry out
consulting projects for customers and to work on product
development for our Workday Products division.
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:
• our NPS of 70 (2024: 58), maintaining our record of
consistently high customer satisfaction, with a score above
50 viewed as ‘excellent’;
• existing customers generating 82% of our revenue (2024:
90%), as they continue to trust us to deliver for them; and
• further new customer wins, giving us 1,094 active
customers at the year-end (2024: 930).
Our business is well diversified across our sectors, with
revenue coming from:
• commercial customers: 52% (2024: 52%);
• public sector customers: 34% (2024: 36%); and
• healthcare customers: 14% (2024: 12%).
Regionally, UK & Ireland accounts for 59% of our business
(2024: 61%), North America for 31% (2024: 28%), Central
Europe for 9% (2024: 11%), and the rest of the world
representing 1% (2024: <1%). Total international revenue was
unchanged at £149.9 million (2024: £149.8 million).
RaceTrac operates gasoline service stations across
the southern United States. It acquired Gulf Oil in 2023,
adding 1,100 branded sites across the US and Puerto
Rico. They needed to quickly convert the Gulf Oil entity
into the RaceTrac Workday Financials environment.
Kainos leveraged the Workday Launch Express
deployment methodology to bring RaceTrac live
in six months.
• Seamless migration of
Gulf Oil into RaceTrac’s
Workday financial
system without
operational downtime.
• 3-year professional
services extension
signed in 2024.
• RaceTrac is now also a
Smart Test customer.
Kainos was an amazing partner.
They were able to provide resources
and expertise quickly to help us
ideate around best practices and
implement a design that aided in our
consolidation of two companies into
one tenant within 8 months.
Megan Wallace,
Director of Financial Systems & Processes,
RaceTrac
“
1,100 branded
sites across
the US and
Puerto Rico
Live in
6 months
Now a
Smart Test
customer
Kainos Annual report 2025
Strategic Report
30
Artificial intelligence
Our vision for AI is to guide and deliver
responsible AI adoption and to solve real-
world problems. To date we have delivered
more than 200 AI & Data projects for
public sector, healthcare and commercial
customers, providing end-to-end services
ranging from strategy development to full-
scale AI deployment and data optimisation.
During the year, we won over 80 AI & Data
contracts across all markets, with clients
including NHS England, the UK Health
Security Agency, Homes England, the
Ministry of Defence, WPP, the National
Highways Agency, Hodge Bank, Mizuho
Bank, Danske Bank, Irish Life and
Control Risks. We also secured a major AI
consultancy engagement with the Crown
Prosecution Service. Example projects
include providing AI solutions for the United
Nations International Organization for
Migration, to support migration as a result
of climate change and to combat fraudulent
passports being used to cross borders.
We now have more than 250 AI professionals
across the organisation, accelerating
innovation and delivery for our customers.
We launched a Microsoft AI Centre of
Excellence to accelerate customer adoption
of AI, building on our Microsoft AI Partner
of the Year recognition and deep sector
expertise. Examples include AI-assisted
document fraud for Government, AI-assisted
Inspections and Compliance for Food Safety
and Public Health agencies and AI-driven
equity research for investment firms.
Our position as an AI leader is demonstrated
through a series of significant initiatives
and achievements. We hosted and curated
AI Con – the leading AI conference – for the
sixth year, welcoming over 400 attendees
and featuring the first live AI-powered
panellist. Our thought leadership on AI
regulation was recognised in the UK
Department for Science, Innovation and
Technology’s Portfolio of AI Assurance
Techniques. We were also awarded the
National AI Award for Government & Public
Sector for our work with HM Land Registry,
where we developed a machine learning
solution that automatically compares
documents in different formats and
identifies discrepancies.
Our alliance strategy continues to
strengthen. As a Microsoft Data & AI
Solution Partner, we have achieved three
AI Advanced Specialisations and are an
established member of the Global Partner
Advisory Council. We are a Premier Tier
AWS Partner (top 1% globally), hold the AWS
Machine Learning specialist competency
and have developed AWS-approved
Generative AI solutions, which are soon
to be available on the AWS Marketplace.
Additionally, we are one of only 15 global
early AI adopters for Workday, with three
products already available on the Workday
AI Marketplace, all of which have attained
the ‘Responsible AI’ designation from
Workday.
Finally, we are driving our own efficiency
through AI. In addition to our internal
Operational Review
Continued
VEHICLE
INSPECTION
AUGMENTED
REALITY
APPLICATION
31
Kainos Annual report 2025
Strategic Report
projects, including a Gen AI employee assistant, a pre-sales
content assistant and ‘Juno’ – our AI workshop facilitator
– over half of our development projects are using AI to
accelerate delivery as we help more customers adopt these
emerging technologies.
Innovation, research and development
Successful businesses continue to challenge themselves.
We are keen to improve our existing offerings, develop new
business ideas and assess business and technology concepts
that are likely to impact us or our clients in the future.
Our research & development expenditure for the year
amounted to £16.8 million (2024: £13.5 million), an increase of
24%, all of which was fully expensed.
Assessing the technologies of the future
Our R&D team’s horizon scanning and strategic foresight
help us to uncover the upcoming trends and technologies
to explore and exploit, both within the business and
with our customers. Examples include next-generation
AI, which explores topics such as Small Language
Models, Agentic AI and Federated Learning; sustainable
computing, which investigates topics such as green software,
responsible computing and sustainable AI; and emerging
technology, which includes research into quantum
computing, distributed trust and spatial computing.
Smart Product Suite
We are making sustained investment in our Smart Suite,
where we are leveraging cutting-edge AI alongside
Workday’s Extend technology to drive operational
efficiencies for our customers. Our Smart Test platform now
incorporates AI to automate test scoping and creation, which
allows for broader, deeper and more efficient test coverage
within Workday environments.
AI is also embedded in Smart Audit, where it increases the
ability to swiftly detect anomalous Workday configurations.
This helps customers identify potential vulnerabilities,
allowing for more thorough and accelerated automation of IT
security and audit controls.
Employee Document Management for Workday
We are continuously enhancing EDM’s capabilities to
increase its value for Workday customers across an
expanding number of specific regional compliance
standards. We are utilising AI across multiple aspects of
document management, including automated document
generation, intelligent document filing and regulatory
compliance tracking.
Launching new products for Workday
Alongside improvements to our current product portfolio,
a key focus of our R&D efforts is to identify and develop
new products that streamline manual processes within HR
and Finance. As part of our Built on Workday partnership,
we are collaborating closely with Workday to align these
developments with its product roadmap. Our target is
to introduce at least one new product every year, each
catering to distinct market needs. As noted above, we
expect to launch a product to support customers with pay
transparency during FY26.
Our Innovation Services Team
Our Innovation Services Team utilises our innovation
framework to support customers and colleagues in the
effective evaluation of solution feasibility, when assessing an
idea that solves an internal or customer-centric idea.
One of the framework’s key elements is Spark & Scale, our
programme to incubate great ideas brought forward by our
people. We are currently investing in 14 ideas, ranging from
using generative AI in the Policing and Justice sector, to Low
Code tools to drive business efficiencies.
Manual inspection of heavy goods vehicles can be prone to
errors and difficult to complete due to the complexity and
variability of components. Drawing on our deep experience
in the vehicle inspection industry, along with our research in
Augmented Reality and AI, we developed a prototype system
to address these challenges.
The prototype uses augmented reality to detect faulty
components during inspections and uses AI to understand
the severity of the defect, which could lead to increasing
testing accuracy in both roadside and site-based settings.
Early trials indicate that the system not only enhances
inspection quality by supporting engineers in real time,
but also improves reporting through AI-enabled inspection
reports. Over time, additional data capture will improve the
quality of the system and build a dataset of common faults
that manufactures could then leverage to improve vehicle
quality. In addition, by allowing inspectors to focus on higher-
value tasks, productivity could be improved over the lifecycle
of the tool and lead to cost savings.
Innovating is a habit practised
throughout the Company.
“
Kainos Annual report 2025
Strategic Report
32
Introduction
This section of the report is our Non-
Financial and Sustainability Information
Statement, as required by Sections 414CA
and 414CB of the Companies Act 2006.
The required disclosures on our business
model, principal risks and non-financial key
performance indicators can be found in the
relevant sections of this Annual Report.
We use the UN Sustainability Development
Goals (SDGs) as a framework for our efforts
as a responsible company. Specifically, we
focus on the following five SDGs:
• Good health and well-being
• Quality education
• Gender equality
• Reduced inequalities
• Climate action
We are proud of our track record of being
a responsible business and we are pleased
to record further progress in this report,
particularly our ongoing status as a carbon
neutral business.
Responsibilities
The Board has nominated the following
Directors to oversee our ESG activities:
• Environment: Chair, Rosaleen Blair,
supported by the CEO, Brendan Mooney.
• Social: CEO, Brendan Mooney.
• Governance: Senior Independent Director,
James Kidd.
Each Director regularly meets with our
internal teams to discuss progress, set
priorities and contribute to our plans.
Board involvement in ESG is important
because it:
• ensures ESG initiatives align with our
business strategy and goals;
• allows the Board to track progress with
our ESG initiatives;
• helps to identify and mitigate ESG-related
risks that could affect our reputation and
performance;
• ensures the Board understands evolving
ESG regulations and standards, ensuring
compliance and avoiding potential legal
or reputational issues; and
• builds trust with investors, customers
and other stakeholders, demonstrating
our commitment to sustainable and
responsible practices.
Our culture
At Kainos, our culture is a powerful force,
shaping how we work, innovate and
support our people, customers, partners
and stakeholders. It drives us to create
meaningful change through technology and
ensures we remain forward-thinking and
impactful in a dynamic, evolving industry.
Our culture pillars set the tone for what we
stand for, providing the foundation for how
we deliver our strategic ambitions. These
are supported by our values, which set the
behavioural standards of every Kainos
employee. These are woven into the DNA of
Kainos, influencing how we interact, lead,
collaborate and learn. This enables us to
nurture a culture where integrity, innovation,
improvement and teamwork flourish.
Our culture is the energy behind our ability
to attract and retain top talent, build
lasting customer and partner relationships,
and positively impact the world around
us. It shapes our approach to our wider
responsibilities. For example, Know your
Impact directly relates to our work to reduce
our environmental footprint, inspire the next
generation to pursue careers in our sector
and support our communities.
Our culture is underpinned by our values.
We are all:
Creative
There is always a better way. And we don’t
stop until we find it. It’s how we transform
innovation into dramatic change.
Cooperative
Here, there is an I in team: I for the
individuals who bring their best selves
to work, liberally sharing knowledge,
information and experience, listening and
keeping an open mind.
Determined
Individually, all together, there is no obstacle
we can’t overcome. It’s how we get the job
done. In fact, we’ve built our reputation on it.
Honest
Keeping it real, being truthful in our words
and actions, and always being constructive
is how we continue to build success. It’s
something our people and our customers
see immediately.
Respectful
Respect does not have to be earned. Here it
is given freely to all. Because we treat others
how we would like to be treated. Everyone,
equally.
OUR ENVIRONMENTAL,
SOCIAL AND GOVERNANCE
(ESG) COMMITMENTS
We are proud of our track record of being a responsible
business and we are pleased to record further progress in
this report, particularly our ongoing status as a carbon
neutral business.
33
Kainos Annual report 2025
Strategic Report
…everyone is so
welcoming and truly
wants everyone else
to succeed, I find
the culture perfectly
matches my ideals.
Anonymous employee
Monthly employee survey
(Peakon)
“
Over the last couple
of years, I’ve been
working on a project
that was part of
a programme to
digitally transform
how health screening
is carried out across
England. We worked
with all kinds of people
in the NHS, building
the relationships
to transform the
screening process
for things like breast
and cervical cancer,
ultimately, of course,
with a view to saving
more lives. I love
working on projects
like these where you
know you’re making a
real difference.
Charlene McDonald,
Head of Product, Belfast
“
Life at Kainos is all
about embracing
the challenges.
Sometimes the
technology is
complicated, other
times we just don’t
know if an idea
will work. We’ll try
something. We’ll
check it. We assess
it. We make sure
it works. If it does,
great. But if it
doesn’t work, it’s
safe to fail and we
can learn from that.
Kamil Pakur,
Solution Architect,
Gdańsk
“
Every day brings
new and exciting
projects and I get
to enjoy having
nerdy conversations
about technology
with like-minded
people. I don’t just
go to work here, I am
challenged, rewarded
and encouraged to
continually grow and
evolve.
Lennox Akoto,
Delivery Manager, London
“
During FY25, the
Group produced the
Kainos Culture Book,
based on around 50
interviews with past
and present colleagues.
It celebrates the unique
culture across Kainos,
captures the history of
the business and sets
out the four cultural
pillars and examples of
what our cultural pillars
mean in practice for
our people.
Put
people
first
What this means for us
• We celebrate diversity
and champion
individuality.
• We focus on people’s
wellbeing and have an
overriding sense of care,
and integrity towards
others.
• We encourage, respect
and support everyone we
work with.
• We promote a culture
of trust and honesty,
reflected in an open,
truly collaborative
and supportive way of
working.
1
Know
your
impact
What this means for us
• We have an inherent,
deep-rooted connection
with the work that we do.
• We make a positive
impact on individuals,
businesses and society.
• We are trusted partners,
delivering transformative
solutions for our
customers and those
around us.
• We are proud to play a
key part in work that is
relevant and important.
2
Be the
benchmark
What this means for us
• We work at pace and at
scale, delivering projects
of the best possible
quality.
• We push boundaries,
think creatively and
set high standards for
ourselves and for our
industry.
• We use our expertise,
curiosity and
determination to solve
complex challenges.
• We are collaborative
and cooperative, sharing
knowledge and ideas that
will enable us to do things
differently and better
than the competition.
• We constantly strive
to add unique value
to our customers,
delivering a distinct and
transformative offer.
3
Embrace
the
future
What this means for us
• We embrace change,
growth, and learning.
• We empower every team
member to contribute
ideas and drive positive
change.
• We seek out opportunities
for personal and
professional development,
knowing this isn’t always
the most comfortable
path.
• We create a safe
space for learning,
experimentation, and
informed risk-taking, as
we collectively shape the
future of Kainos.
4
Kainos Annual report 2025
Strategic Report
34
Environmental: protecting
and restoring our planet
Contributes to: SDG 13 Climate Action
The Board has overall responsibility for our
climate action strategy, carbon reduction
and business opportunities. Our Chair,
Rosaleen Blair, is our climate action sponsor.
Our CEO, Brendan Mooney, is responsible for
setting and delivering our climate strategy,
creating continuity between operational
and Board focus in this area. Operational
activities are led by our Sustainability Group,
comprising senior individuals who are
responsible for day-to-day coordination of
our climate strategy.
The Group is chaired by our Workday EMEA
Business Development Lead, Stephan
Sakowicz, who is a subject matter expert in
climate action and reports directly to our
CEO on these matters. Other members of
this Group include our Environmental Lead,
Head of Engagement and Culture, technical
leads, and leads from across Kainos’
ESG priority areas, including health and
wellbeing, quality education and diversity
and inclusion. The Sustainability Group is
supported by our ‘Green team’, which is a
network of colleagues who drive climate
action initiatives at local levels.
Our focus is to ensure that we understand,
manage and reduce the environmental
impact of our business activities. Our
emission reduction efforts, in conjunction
with purchasing carbon offsets, have
allowed us to be carbon neutral since 2021.
We also aim to make a wider impact by
helping our customers, employees and
suppliers to achieve their own low-carbon
futures. For many customers, our digital
solutions significantly reduce their carbon
impact compared with the ageing, inefficient
and manually intensive systems that we are
replacing.
We report in line with the Streamlined
Energy and Carbon Reporting Regulation
(SECR), the Task Force on Climate-related
Financial Disclosures (TCFD) and the
sustainability accounting standard for the
software & IT services sector, as defined by
the Sustainability Accounting Standards
Board (SASB).
We continue to comply with all our
environmental legal requirements across
all our activities. This year there were zero
breaches of environmental regulations
(2024: zero).
Our net zero targets
In 2020, we set ourselves the ambitious
goal of achieving carbon net zero status
by calendar year 2025, along with clear
milestones to allow us to chart our progress,
including setting near-term targets with
the Science Based Targets initiative (SBTi).
These commit us to reducing our Scope 1
and 2 emissions by 70% on an absolute basis
and Scope 3 emissions by 45% on a per unit
of value added by FY26, using 2020
(11)
as
our base year. Alongside these significant
reductions, continuing to offset our residual
emissions will enable us to move towards our
net zero ambition.
For information on our progress
towards these targets, see the
‘Metrics and Targets’ section.
CDP (previously Carbon Disclosure Project)
During the year we made our fifth
submission to CDP, which runs a global
disclosure system to support organisations
with managing their environmental impacts.
CDP’s score report allows participants to
identify actions to improve their climate
governance. This year we were awarded a
‘B’ rating (2024: ‘C’ rating), reflecting our
continued progress in managing our climate
impact. A ‘B’ rating means CDP recognises
that:
• we are taking proactive steps in
environmental management, moving
beyond basic disclosure to implementing
effective strategies; and
• our collective effort in managing and
reducing our environmental impact shows
a continued commitment to sustainability.
The CDP platform aligns with TCFD and
therefore supports our implementation of
the TCFD framework.
TCFD disclosures
Our TCFD disclosures are set out in the
following tables and are consistent with the
TCFD Recommendations and Recommended
Disclosures. Supporting detail is available in
this year’s CDP submission
(12)
.
Our Environmental, Social and Governance (ESG) Commitments
continued
(11) FY20 Base year emissions data:
Scope 1: 87 tonnes CO2e, Scope
2: 409 tonnes CO2e, Scope 3:
(full) 9,828 tonnes CO2e, (Scope
3 business travel only is 5,028
tonnes CO2e). Total full emissions
for FY20 were 10,324 tonnes
CO2e. FY20 total for Scope 1, 2
and Scope 3 business travel were
5,524 tonnes CO2e.
(12) https://www.kainos.com/about-
us/sustainability/climate-action
page 39
35
Kainos Annual report 2025
Strategic Report
Governance Disclosure
a) Describe the Board’s
oversight of climate-
related risks and
opportunities.
The Board has overall responsibility for our climate action strategy and reducing our carbon
impact, as well as taking the business opportunities presented by climate change. Our Chair,
Rosaleen Blair, is the Non-Executive Director sponsor for climate-related issues.
The Group Risk Register is our principal tool for monitoring and reporting risk, including climate-
related risks. The Audit and Risk Committee reviews our principal risks twice a year or more
regularly if substantial changes occur between scheduled Committee meetings. The Committee
informs the Board of any significant changes to the Register, as well as new or emerging climate
risks, areas of focus or individual risks that require attention.
We have identified long-term climate change and sustainability as one of our principal risks, due
to the potential impact on our reputation if we fail to take sufficient and timely action to reduce
our impact. More information on this risk, our risk management framework and our governance
structure is in the ‘Risks and opportunities’ section of this report.
The Board receives formal updates on climate matters twice a year. The first session is to review
our carbon footprint and highlights from our reduction initiatives, and to verify the annual
climate action plan for the coming year (see below). This is followed by a detailed mid-year
presentation about our H1 footprint, our CDP submission and progress against our SBTi near-
term net zero targets. These updates are jointly delivered by the CEO and representatives
from the Sustainability Group. The timing is typically linked to a notable event such as a CDP
response or SBTi update.
The Board also welcomes quarterly climate related agenda items at its meetings, for example
if there are material changes to the strategy or additional investment requests. The Board may
also receive news about climate action as part of the monthly People or ESG Board papers.
Climate-related costs are factored into the annual budget, which is overseen by the CEO and
approved by the Board (see below). As a provider of software products and services, climate
change is not a material influence on the business strategy approved by the Board, other than
looking to take advantage of the opportunities presented, as described later in this section.
The Board has set climate-related goals for senior management via the Remuneration
Committee. The Kainos Executive Long Term Incentive Share plans include conditions tied
to emission reduction and achieving SBTi Net Zero by FY26. Specifically, 5% of the C-suite’s
performance share plan and 1.2% of their total reward are linked to climate management. These
incentives support our climate action strategy and SBTi targets.
b) Describe
management’s role in
assessing and managing
climate-related risks and
opportunities.
The CEO is the responsible individual for our environmental strategy. This creates continuity
between operational activities and Board focus in this area.
The Sustainability Group leads our operational activities. Our dedicated Environmental
Sustainability Lead is responsible for day-to-day co-ordination with the Sustainability Group.
Our management ensures that we act on climate-related risks and opportunities. Staffing
and climate-related costs are factored into the annual budget cycle, including increased
investment in carbon offsetting and removals, reporting costs and development of new business
opportunities. We use our enterprise climate platform to calculate our carbon footprint and
provide monthly updates to the leadership on our performance.
In addition, we have a wide range of activities to inform colleagues about our climate strategy
and encourage them to participate and reduce their climate impact. These include:
• a climate action plan, which we update annually and use for internal communications;
• quarterly updates on progress towards our SBTI targets;
• an online climate action channel, for sharing sustainability-related content;
• internal publications and CEO-hosted walkthroughs of our annual report and investor
presentation, including climate action progress;
• updates to policy and communications about our green travel principles;
• continuous personal development sessions on climate; and
• promotion of the Green Software Practitioner Certification, with over 250 technologists having
completed this to date.
We measure the impact of these and other initiatives through the Workday Peakon platform,
with over 75% (2024: 76%) of respondents viewing our climate action plan positively and agreeing
that Kainos makes a positive contribution to climate action.
Kainos Annual report 2025
Strategic Report
36
Our Environmental, Social and Governance (ESG) Commitments
continued
Strategy Disclosure
a) Describe the climate-
related risks and
opportunities that
the organisation has
identified over the short,
medium and long-term.
We use the following timeframes when considering climate risk and the impact on our business.
• Short term: to 2026, which is the end of our current strategic plan
• Medium term: to 2030, which will be covered by our next strategic plan
• Long term: to 2040.
Potential areas of risk
Physical. Extreme weather could damage our offices, restrict business travel, disrupt cloud and
internet connectivity, interrupt power supplies or disrupt our supply chains, for instance the
supply of laptops.
Transition. The transition to a low-carbon economy could result in increased regulation, greater
reporting requirements, changes to operational practices and shifts in customer demand.
Reputational. Our reputation could be damaged if we fail to meet our climate targets and
regulatory requirements, or fail to continue our internal education and awareness initiatives.
Liability. We may face liabilities if we receive incorrect advice on our own sustainability-related
areas, or fail to provide our customers with any required emissions data relating to the services
we provide to them.
Potential areas of opportunity
Products and Services. There is the potential to help our customers achieve a lower-carbon
future by moving their services to the cloud or redesigning their services to be more energy-
efficient. We are well-established in this market.
Reputation. Being seen as a sustainability leader in the technology sector can enhance our
reputation and create new business opportunities for us.
This year we were awarded a ‘B’
rating (2024: ‘C’ rating), reflecting our
continued progress in managing our
climate impact.
“
37
Kainos Annual report 2025
Strategic Report
Strategy Disclosure
b) Describe the impact
of climate-related risks
and opportunities on the
organisation’s businesses,
strategy, and financial
planning.
Impact on our businesses
Potential areas of risk
Using our enterprise risk framework, our assessment of the impact of climate-related risk to our
business is moderate likelihood, moderate impact.
Physical. While some disruption could occur, we are a consulting organisation with a distributed
workforce, a cloud infrastructure and limited supply chain and should be able to work remotely
for extended periods of time. This assessment assumes electricity and internet services continue
reliably. (moderate risk, long-term)
Transition. As part of our drive to carbon net zero, we actively monitor and consider the changes
to the legislative and regulatory landscape. (low risk, medium-term)
Reputational. We are proactive on climate topics, which resonates with our colleagues,
customers and other stakeholders. At the same time, we recognise that reputations can be
damaged very quickly. (moderate risk, given the unknown future cost and availability of carbon
removals, medium-term)
Liability. We understand the importance of accurate emissions data and how this could impact
our business and our customers, hence the importance we place on ensuring robust data
management and reporting systems to ensure compliance and mitigation of risk. (low risk,
medium-term)
Potential areas of opportunity
Given that well-designed digital services can reduce the carbon footprint of an organisation’s
technology operations, we expect this to increase demand for our services in the future. To aid
customers in making that assessment, we provide a Carbon Calculator to help calculate the cost
and carbon reduction of moving services or data from on-premise settings to cloud locations.
We anticipate that this opportunity will drive growth in our cloud services revenue over the next
three to five years, enhancing our financial performance and reinforcing our commitment to
environmental sustainability.
Impact on our strategy
Our analysis shows that the primary risk for us in relation to climate change is reputational. Our
reputation as a climate-aware organisation is also a potential source of business opportunity.
Much of our climate-related work therefore focuses on enhancing our reputation in this area,
both through our proactive approach to reducing our emissions and by creating tools to help
our customers understand the carbon impact of running their projects.
Climate-related disruption to our supply chain is not a material risk to our strategy, and we have
not identified any significant adaptation or mitigation activities, investments in R&D or changes
to our operations or locations that are needed due to climate change. We rarely acquire or divest
businesses and climate issues will not therefore have a meaningful impact on these activities.
We do not expect climate issues to have an impact on our access to capital.
Impact on our financial planning
We consider the costs of our climate actions in our annual budget, as noted above. Climate
issues are not likely to materially affect our financial position over any of the timescales we have
considered, either by reducing the value of our assets or increasing our liabilities.
Our climate actions do not require significant capital expenditure. While the construction of our
new Belfast office is not specifically climate-related, it will further improve our environmental
performance due to its highly sustainable design.
Kainos Annual report 2025
Strategic Report
38
Strategy Disclosure
c) Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related
scenarios, including
a 2°C lower scenario.
In FY25, we commissioned scenario analysis in line with the TCFD Guidance on Scenario Analysis
for Non-Financial Companies. The analysis considered the following Shared Socioeconomic
Pathway (SSP) and Representative Concentration Pathway (RCP) scenarios:
SSP RCP
Global
temperature
increase Description
SSP1 RCP 1.9 1.4°C Sustainability (low challenges to mitigation and adaptation)
RCP 2.6 1.8°C A low-carbon transition is successful and timely. Regulation
is stringent, net zero is reached by 2050 (RCP 1.9) or shortly
after (RCP 2.6), resulting in a more sustainable society. Societal
benefits are realised as well.
SSP2 RCP 4.5 2.7°C Middle of the Road (medium challenges to mitigation and
adaptation)
Progress towards sustainability and a fossil-free society
continues but is slow. Socioeconomic statuses stay relatively the
same as the present, with income and development continuing
to be unequal. Environmental systems degrade. However, overall
intensive resources and energy use declines.
SSP3 RCP 7.0 3.6°C Regional Rivalry (high challenges to mitigation and adaptation)
GHG emissions continue to rise, almost doubling by 2100.
National, energy and food security concerns take precedent
over the environment. Environmental protection is a low priority
which leads to strong environmental degradation. Adaptation is
prioritised over mitigation.
SSP5 RCP 8.5 4.4°C Fossil-Fuelled Development (high challenges to mitigation, low
challenges to adaptation)
Market approaches to technological progress are valued more
than government regulation. Globalisation has increased, and
investments in human and social capital are prioritised. However,
fossil fuels remain the primary and preferred energy source and
consumption-based lifestyles are prevalent. The global economy
booms yet the population peaks and then starts to decline.
Our scenario analysis therefore includes the 2°C or lower scenario required by TCFD. The
Climate Action Tracker shows that under existing government policies worldwide, the most-likely
outcome is a 2.7°C increase, which is also included in our scenarios.
The analysis shows that:
• Transition risks are greatest under SSP1 and also prevalent under SSP2. For example, there
is a potential impact on the cost of renewable energy credits and increased costs for IT
equipment due to import carbon pricing. These risks are present across all timeframes
considered. Transition risks under SSP3 and SSP5 are low to negligible.
• Physical risks are greatest under SSP3 and SSP5. The impact increases over time, with both
acute and chronic effects. Under the most significant temperature increases, there is the
potential in the long-term for socioeconomic hardship and disruption to the global economy,
affecting our ability to grow the business. Costs may increase (for example, due to higher
electricity use to cool offices) and the impact of heat on employees may affect productivity.
We are confident that our climate actions make us resilient to the impact of transitional risks
under the SSP1 and SSP2 scenarios. We are not significantly exposed to physical risks (for
example, coastal flooding) under these scenarios. The long-term physical risks presented by
very high temperature increases, such as the impact on the global economy, cannot easily be
mitigated at this stage and we will consider what actions we can take in future to increase our
resilience if necessary.
Our Environmental, Social and Governance (ESG) Commitments
continued
39
Kainos Annual report 2025
Strategic Report
Risk Disclosure
a) Describe the
organisation’s processes
for identifying and
assessing climate-related
risks.
Our approach to assessing risks is described in the ‘Risk factors and uncertainties’ section of
this report.
Climate-related reputational risk has been a principal risk for us since 2021. The Audit and
Risk Committee oversees all principal risks and the plans to mitigate and manage their
potential impact. The heat map in the Risk factors and uncertainties section shows the relative
significance of climate-related risk compared with our other principal risks.
Kainos stays up to date on climate-related regulations through our Audit and Risk Committee,
chaired by a Non-Executive Director, and our wider Sustainability Group. These teams regularly
review regulatory changes and assess their impact on our business and our customers. Key roles
ensure our climate risk assessments are aligned with the latest requirements. This approach
is further supported through CEO and Board oversight, and external reviews of our practices,
including CDP, helping to ensure we proactively manage climate risks and opportunities.
b) Describe the
organisation’s processes
for managing climate-
related risks.
In line with our overall approach, outlined in the ‘Risk factors and uncertainties’ section, we
review our Risk Register twice each year, with further updates, where required, provided to the
Audit and Risk Committee. Climate-related risks are reviewed as part of this process.
We determine the materiality of climate-related risks by integrating climate risks into our
enterprise risk management framework. This process involves evaluating the potential financial,
operational and reputational impacts of identified risks, prioritising these based on their
likelihood and potential severity, and focusing on those that could significantly impact our
operations and strategic objectives. This assessment is based on a combination of internal data,
external regulatory requirements, and climate scenario analysis. In doing so, we address the
most important risks and opportunities, aligning our strategy with our sustainability goals.
c) Describe how
processes for identifying,
assessing, and managing
climate-related risks
are integrated into the
organisation’s overall risk
management.
As discussed in further detail in the ‘Risk factors and uncertainties’ section, the Group Risk
Register is our main tool for monitoring and reporting risk. Senior management co-ordinates the
Register’s preparation, using input from Executive and Leader teams from across Kainos.
The Register is reviewed regularly by members of the Sustainability Group and updated with any
new or emerging climate risks, areas of focus or individual risks that require attention.
Each principal risk is assigned to a senior manager, who is responsible for ensuring that we have
appropriate controls and mitigating actions to reduce the likelihood and potential impact of the
risk being realised.
Climate-related risks are allocated to our CEO, Brendan Mooney.
Metrics and targets
Disclosure
a) Disclose the metrics
used by the organisation
to assess climate-related
risks and opportunities
in line with its strategy
and risk management
process.
As noted above, we believe that our key risk is reputational risk, with our mitigation focused on
achieving carbon neutral and then carbon net zero status. This focus is reflected in our metrics,
which all focus on our emissions.
See the ‘Carbon footprint’ section for more information.
b) Disclose Scope 1, Scope
2, and, if appropriate,
Scope 3 GHG emissions,
and the related risks.
Our emissions are disclosed in the ‘Carbon footprint’ section below. The primary related risk is the
reputational risk discussed earlier in these disclosures.
c) Describe the targets
used by the organisation
to manage climate-
related risks and
opportunities and
performance against
targets.
We achieved carbon neutrality in 2021 and remain on track to achieve our SBTi near-term net zero
targets for Scope 1, 2 and 3 emissions.
From our base year (FY20) we have:
• reduced Scope 1 and 2 emissions by 68%, against our target of 70% by FY26; and
• reduced Scope 3 emissions per unit of value added by 53%, against our target of 45%. This is an
intensity-based target calculated using gross profit.
Information on our base year and current year emissions can be found in the ‘Carbon footprint’
section below.
page 40
Kainos Annual report 2025
Strategic Report
40
Carbon footprint
We use the market-leading platform
Watershed to reliably measure and report
our emissions.
Our carbon impact for the year, detailed
across Scope 1, 2 and 3, was as follows:
• Scope 1 comprises emissions from the
direct burning of fossil fuels. We generated
111 tonnes of carbon dioxide equivalent
(CO2e), relating to oil-based central
heating in our premises (2024: 86 tonnes).
Additional factors contributing to this
increase include the need for increased
heating in some offices due to inclement
weather, and a brief period during which
we operated two offices in Argentina
before consolidating staff into the new
location.
• Scope 2 describes emissions that result
during the generation of purchased
energy. These emissions largely relate
to our offices. We generated 0.3 tonnes
CO2e within the UK and a further 46.7
tonnes worldwide (total: 47 tonnes CO2e;
2024: 62 tonnes CO2e). This reduction
in Scope 2 emissions is attributed to
the energy efficiencies implemented in
our offices and the adoption of green
energy contracts across all our UK-based
locations, ensuring sustainable purchased
energy sources.
• Scope 3 emissions relating to business
travel. In FY25, our emissions in this
category decreased by 12% to 2,252 tonnes
CO2e (2024: 2,570 tonnes CO2e) as a result
of implementing our green travel policy
and a general decrease in business travel
across the Group this year.
• Scope 3 (full) emissions generated
indirectly from business activities. In
FY25, 9,622 tonnes of CO2e were generated
(2024: 11,300 tonnes CO2e), inclusive of
business travel, a decrease of 15%. This is
attributed to a reduction in our number of
leased offices, less capital spend on office
refurbishment (the majority of which was
completed in FY24), and ongoing adoption
of our hybrid working culture.
Compared to 2024, our total emissions
decreased by 15% to 9,780 tonnes CO2e
(2024: 11,448 tonnes CO2e) largely linked
to reduced capital expenditure, reduced
business travel emissions and our ongoing
carbon reduction initiatives.
Our Scope 1, 2 and Scope 3 business travel
emissions in FY20 (base year) were 5,524
tonnes CO2e; the same emissions for FY25
were 2,410 tonnes CO2e, a reduction of 56%.
Our total emissions (inclusive of Scope 1, 2
and full Scope 3) for FY25 represent a 5%
decrease from our base year of 2020, despite
our staff numbers increasing by 107% over
the same period. Our FY20 Scope 1, 2 and full
Scope 3 emissions were 10,324 tonnes CO2e.
Our carbon intensity ratio (tonnes CO2e per
employee) has reduced from 7.3 in FY20 to
3.3 in FY25.
During the year we offset our total emissions
to maintain our carbon neutral status,
at a cost of £63,000 (2024: £52,000). We
will continue to utilise a portfolio of high-
quality, certified offsets that blend local
and international projects as well as carbon
removal projects. We believe this best
reflects our global business and gives us
the opportunity to invest in programmes
that offer positive social and environmental
impacts.
Methodology
We have used the GHG Protocol Corporate
Accounting and Reporting standard (revised
edition) and emission factors from the UK
Government’s GHG Conversion Factors for
Company Reporting 2019 to calculate the
below disclosures. The standard requires
a statement of relevant intensity ratios,
which are an expression of the quantity
of emissions in relation to a quantifiable
factor of the business activity. We have
identified two such intensity ratios, set out
below. These figures were calculated from
data available for our main operations and
extrapolated to take account of our smaller
locations.
Our Environmental, Social and Governance (ESG) Commitments
continued
56%
Decrease in Scope 1, 2 and
Scope 3 business travel
emissions since FY20
41
Kainos Annual report 2025
Strategic Report
Global tonnes of CO
2
e
GHG emissions data for period 1 April 2024 to 31 March 2025
2025 2024
UK Non-UK UK Non-UK
Combustion of fuels and operation of facility (Scope 1) 89 22 67 19
Emissions from purchase of electricity, heat, steam and cooling
purchased for own use (Scope 2)
0.3 46.7 0.3 61.7
Business travel (Scope 3) 1,576 676 1,799 771
Total emissions by location 1,665 745 1,866 852
TOTAL EMISSIONS FOR YEAR 2,410 2,718
Total energy consumption for activities for which the Company is responsible
(Scope 1 and 2) 2025 2024
Global – kWh (thousand) 332 337
UK – kWh (thousand) 659 604
The following table expresses our annual emissions in relation to quantifiable factors associated with our activities:
Intensity ratios
2025 2024
tCO
2
e/£ million revenue 6.56 7.11
tCO
2
e/average number of employees 0.82 0.92
Saving energy
We have an energy savings action plan, which we produced
in line with the requirements of the Energy Savings
Opportunity Scheme. The plan covers the period from
December 2023 to December 2027.
We will shortly start constructing a bespoke office in Belfast.
The project’s targets include achieving a low-energy design,
with a goal of less than 70 kWh/sqm Energy Use Intensity
(EUI). An all-electric approach will ensure the building is
prepared for Net Zero Carbon in operation, aligning with
future sustainability needs. Wider sustainability goals will
be achieved by following the BREEAM methodology and
targeting a BREEAM Outstanding rating. BREEAM promotes
sustainability across various aspects of building design,
construction and operation, to minimise the building’s
environmental impact, enhance occupant well-being and
contribute to a more sustainable development.
Ahead of moving to the new office, our main energy saving
activities focus on behavioural and short-term reduction
strategies. These include running energy awareness
campaigns for our colleagues, ensuring boilers, and Heating,
Ventilation and Air Conditioning (HVAC) systems are serviced
annually and developing tailored shutdown procedures for
buildings at the end of each day, for example ensuring lights
and appliances are turned off.
Carbon reduction plans
All companies bidding for UK Government contracts worth
more than £5.0 million per year must produce a carbon
reduction plan, which includes the company’s emissions,
reduction targets and the actions it is taking. This allows
procurement teams to ensure government suppliers are
aligned to its 2050 net zero target. We update our plan
annually and the latest plan can be downloaded from the
‘Sustainability’ section of our website.
Collaborating with DEFRA Government Digital
Sustainability Alliance (GDSA)
We continue to support the UK Government Digital
Sustainability Alliance (GDSA) as a member, collaborating
with other DEFRA suppliers to fulfil digital sustainability
commitments. Since 2023 this has focused on advancing
the work of the Planetary Impact group to promote wider
sustainability beyond carbon emissions.
Hybrid working
To us, hybrid working is about combining remote and office-
based working, giving our people greater flexibility to work in
the location that best suits them, taking into consideration
the needs of their role, their work, their team members and
the customer.
Hybrid working also provides a unique opportunity to reduce
our environmental impact across Scopes 1, 2 and 3, especially
in the areas of business travel and employee commuting,
which are significant contributors to our environmental
impact.
Secure equipment recycling
As we operate a cloud-based infrastructure, most of our
equipment recycling is focused on our laptops. During the
year we disposed of our Waste Electronic and Electrical
Equipment (WEEE) with two partners who are committed
to 100% reuse and recycle of equipment and a ‘zero landfill
policy’. We continue to generate funds for charitable causes
from disposing of our old equipment.
Kainos Annual report 2025
Strategic Report
42
Social: Our people
Our success depends upon the ability, skills
and motivation of our people. We therefore
focus on engaging with them, providing
development opportunities and making it
easy for them to stay at Kainos to build their
career.
Our Chief People Officer sets the strategy for
all our people-related activity, with everyone
in Kainos sharing responsibility for creating
a great place to work.
Information on our employee numbers,
including the split by region and division,
can be found in the ‘Kainos at a Glance’
section.
Engagement
Colleague feedback is a key part of
achieving our ambition to be a great
employer. We use Workday Peakon, which
is an intelligent listening platform that
provides a holistic view of employee
sentiment and allows comparison against
over 300 global technology employers.
We ask our colleagues for feedback
each month. The results show employee
engagement remains high at 75%, with the
diversity and inclusion rating at 82% and
wellbeing measuring 74%.
We also measure engagement through
Glassdoor, which enables current and
former employees to provide feedback on
companies. In March 2025, Kainos had an
approval rating of 80%, which is well above
the 74% average derived from over 750,000
UK companies on Glassdoor. Similarly, 78%
of respondents would recommend working
at Kainos to a friend. In early 2025, we were
once again ranked in Glassdoor’s ’50 Best
Places to Work in the UK’ annual Employee
Choice awards, coming in at number 14.
We work hard to retain the talented people
already in Kainos. We are also very focused
on attracting, developing and engaging
talented colleagues. We continue to attract
strong interest in key recruitment markets,
with tens of thousands of candidates
applying each year to join Kainos. During the
year our headcount reduced to 2,865 people
(2024: 2,995).
We are focused on creating a workplace that
people want to join and then stay to develop
their careers. With the global shortage in
digital skills, we are pleased that 93% of our
colleagues made the choice to stay and
develop their career at Kainos (2024: 93%).
Our Environmental, Social and Governance (ESG) Commitments
continued
2
0
2
5
Peakon scores:
2024: 78% 2024: 83% 2024: 77%
Staff retention: Headcount:
75
%
82
%
74
%
93
%
2024: 93%
2
0
2
4
2
0
2
5
2
0
2
4
2
0
2
5
2
0
2
4
Glassdoor
approval rating:
80
%
2024: 84%
2
0
2
5
2
0
2
4
2
0
2
5
2
0
2
4
Engagement Diversity & Inclusion Wellbeing
2025 2024
2,865
people
2,995
people
Measures:
page 9
43
Kainos Annual report 2025
Strategic Report
Wellbeing
Contributes to: SDG 3 Good Health and Well-Being
We focus on supporting our people across five key areas of
wellbeing: emotional, physical, career, financial and social.
We regularly update our wellbeing portal with materials
developed with and by our people, to help employees
manage their own and others’ wellbeing. We also have an
app covering physical and emotional wellbeing.
Professional support is available globally through our
employee assistance programmes. These offer 24/7
confidential access to expert advice across a range of areas,
including wellbeing and financial and legal advice.
a) Emotional wellbeing
Our Mindset wellbeing platform empowers our people to
explore their emotional wellbeing through 30 practical
learning modules. Over 1,500 people (2024: over 1,600) are
actively using the platform, expressing high satisfaction
with it, and around 728 people (2024: 696) actively use our
wellbeing app.
In addition, we have trained 50 volunteers from across our
office locations to be ‘wellbeing champions’. This equips them
to have supportive conversations with colleagues and direct
them to further support or professional help if needed.
(1) Claims data for FY25 includes
the UK, US and Canada. Data for
FY24 is for the UK only.
Using the
mindset platform:
1,515
people
2024: 1,651 people
Using the
wellbeing app:
2024: 696 people
Wellbeing
champions:
2024: 50 people
Accessing the employee
assistance programme:
2
0
2
5
2
0
2
4
50
people
728
people
182
people
168
people
2025 2024
Measures:
b) Physical wellbeing
As well as offering the platforms described above, we run
a range of activities focused on preventing health issues.
These include wellbeing webinars, women’s health initiatives,
supported cycling schemes and employee-led sport, fitness
and charity events.
To support colleagues when health-related issues arise,
we offer private medical and permanent health insurance
globally.
During the year, sickness absence decreased to 7 days per
person (2024: 7.9 days), which is similar to the UK average of
7.8 days.
Absence levels:
2024: 7.9 days
Accessing private
medical insurance:
Accessing permanent health
insurance:
2024: 6 people
7days per
person
10
people
2025 2024
2,690
claims
740
(1)
claims
Measures:
c) Career
We have 987 people managers of varying levels of seniority,
who support our people’s career development day-to-day
(2024: 965). Each colleague has an annual performance
appraisal with their people manager, which includes
planning for the year(s) ahead. We complement this with
monthly one-to-ones, to ensure career plans are progressing.
We also support our people with practical tools such as our
online coaching portal.
People managers undertake our Effective Manager
programme, which covers management and personal
leadership skills, everyday coaching, and giving and
receiving feedback. Several hundred people managers have
completed this training, including 128 during the past year
(2024: 176).
We have 14 global capabilities, covering disciplines such as
cyber security, experience design, engineering, and reporting
and analytics. The global capabilities are responsible
for developing our colleagues’ skills, qualifications and
confidence. We have a diverse curriculum of internal courses
and comprehensive self-study materials to support technical
and professional qualifications and certifications. Our heavy
investment in training resulted in over 13,000 trainings days
being completed in the past year (2024: over 12,000 days).
Kainos Annual report 2025
Strategic Report
44
We also have comprehensive talent
development programmes, mapped to key
career stages. These are our:
• Developing Leaders programme: targeting
employees who are early in their career
and already displaying leadership
potential.
• Emerging Leaders programme: aimed
at mid-management employees who are
developing leadership ability.
• Engaging Leaders programme: aimed
at senior managers who are displaying
leadership potential and are not currently
identified on a succession plan.
• Inspiring Leaders programme: for senior
management who are recognised to be
successors for a future executive role
within the business.
• Empowering Leaders programme:
a course specifically designed for
developing future senior women in
leadership.
During FY25, 74 employees attended and
graduated from our talent programmes
(2024: 105).
We have succession plans for
our Executive Team and other
critical roles. See the Nominations
Committee Report for
more information.
Our Environmental, Social and Governance (ESG) Commitments
continued
(13) KNOS closing share price on
31 March 2025: 664 pence.
pages 75-77
Annual appraisals
completed:
99.3
%
2024: 100%
2
0
2
5
2
0
2
4
Number of
promotions:
2024: 421
369
people
Training
expenditure:
2024: £1.0 million
£0.9
million
Measures:
Shares and options
allocated in FY25:
(£9.0 million at 31 March 2025
closing price
(13)
)
1,359,362
Measures:
d) Financial wellbeing
We offer a compelling reward framework, to support our people’s needs through their career.
This encompasses salary, bonus (where applicable), pension and a comprehensive benefits
package, some of which has been detailed above.
To enable colleagues to share in the value they create, we gift shares to employees in the UK,
Ireland, Poland and US, and operate cash-equivalent schemes in our other locations. We also
operate a save-as-you-earn share-based scheme.
In FY25, we granted 1,359,362 shares and options under all our share schemes, bringing the
total allocated to 13,148,245 since we became a public company in 2015. See the Directors’
Remuneration Report for information on how we are refreshing our share schemes.
To support colleagues facing financial pressure, we offer webinars and a financial wellbeing
guide, with practical advice for managing personal finances and links to find out more about
our reward offerings.
e) Social wellbeing
We enjoy being a social company and have a network
of over 18 Location Advocates. They work with local
social committees to organise inclusive social events, to
bring people together to connect and have fun.
We also encourage quarterly social meet-ups at team
level. Kainos pays for all expenses linked to these
events.
Shares and options
allocated since 2015:
(£87.3 million at 31 March 2025
closing price
(13)
)
13,148,245
Staff entertainment
expenditure:
2024: £2.2 million
£2.5
million
Measures:
45
Kainos Annual report 2025
Strategic Report
Diversity and inclusion
Contributes to: SDG 5 Gender Equality and SDG 10 Reduced
Inequalities
We are committed to creating an inclusive culture that
champions diversity of thinking and ensures everyone
has an equal opportunity to develop, be rewarded and be
recognised for their contribution. Our Diversity and Inclusion
(D&I) policy commits to a culture that responds to the needs
of all groups and takes a zero-tolerance attitude to bullying,
harassment, exclusion or victimisation.
D&I is an integral part of our Company strategy because we
know that having culturally diverse leadership and teams is
likely to:
• increase our people’s wellbeing, engagement and
retention;
• help us deliver technology and services that meet the
diverse needs of users and citizens; and
• support innovation and help us quickly bring new ideas to
market.
D&I therefore benefits our people, customers, service users
and shareholders.
We continue to pledge our support to the Office of the United
Nations High Commissioner for Human Rights (OHCHR), UN
Standards of Conduct for Business Tackling Discrimination
against LGBTI People, the Race at Work Charter and the
Armed Forces Covenant. We have retained our membership
of Inclusive Employers and we are a proud Disability
Confident Level 2 employer.
How we are organised
Our Global D&I Council drives delivery of our D&I programme.
It is sponsored by our Chief People Officer and comprises
colleagues from various levels across our business. It is
supported by our five Employee Network Groups, which
provide support, education and voices for their communities.
Each group is sponsored by a member of the Executive
Team, to ensure representation at all senior decision-making
forums.
Our data
We want our D&I activities and network groups to focus on
areas that are important to our people. We therefore use
Workday VIBE Index
TM
to allow colleagues to voluntarily
disclose details about their ethnicity, disability, marital
status, religion, citizenship status, nationality, sexual
orientation, sex at birth and gender identity. Over 84%
of all diversity characteristics for all our colleagues are
confidentially recorded (2024: 82%).
Progress
Our Inclusion, Diversity, Equality and Equity e-learning is an
essential module for all Kainos staff. It introduces concepts
such as microaggressions, stereotyping and prejudice,
as well as how our communication styles and behaviours
impact inclusion. Over 2,800 people have now completed it
(2024: 2,880). People managers take an additional module
to help them understand their role in creating an inclusive
environment.
We have continued delivery of our Inclusive Leadership
Programme, with 60% of Leaders and 89% of Executives
having attended. Post-programme work is continuing
through supplementary learning and reflections, with the
first follow-on session covering how to build psychological
safety in teams.
We have continued to make progress towards becoming a
Disability Confident Level 3 employer. In FY25, we worked with
our internal IT team to embed the Reasonable Adjustments
process through education and consultation with our
Employee Network Groups (ENGs). IT worked with the ENGs
to optimise the Reasonable Adjustments process and to
understand the types of individual needs and requirements
to support disabled people, so that adjustments can be
processed as standard.
Diversity data disclosed
by employees:
84
%
2024: 82%
2
0
2
5
2
0
2
4
Members in Employee Network Groups:
645
2024: 684
Inspire
(women):
374
2024: 412
Xpression
(LGBTQ+):
304
2024: 340
Voice
(ethnic diversity):
256
2024: 263
Neurodiversity:
86
2024: 86
Embrace
(disability):
Measures:
Kainos Annual report 2025
Strategic Report
46
Gender balance
Recent data indicates that despite some
improvement, gender diversity in the
technology industry globally remains a
challenge. Around 25% of roles in technology
are undertaken by women
(14)
, highlighting the
need for continued efforts to improve gender
diversity. In the UK, women make up 29%
(15)
of the technology workforce overall, with
only 5% of leadership positions being held by
women
(16)
.
The table below shows our gender diversity
at the year-end.
There are 219 women at manager level
or above (2024: 229), representing 32%
of manager roles (2024: 32%). All Board
members identify ‘White/European’ as their
ethnic group.
The under-representation of women in
Kainos and the sector means that our
journey towards gender parity is a long-term
endeavour. Our gender parity plan has three
key themes and associated actions plans,
outlined below.
Note: At the time of writing, not all colleagues
who joined Kainos through the RapidIT-
Cloudbera acquisition have been added to
our internal Workday systems, hence there is
a small difference in reported numbers.
a) Develop the talents and careers of women
already in Kainos
We partner with Women in Business to help
women develop networks and connections.
In FY25 this included a virtual event (Turning
your inner critic into your inner mentor),
attended by 64 women. Specialist learning is
also offered to support career advancement
and personal development for women.
One example is our Empowering Leaders
(Women in Leadership) programme, focusing
on colleagues at principal and leader levels.
This learning aims to build a supportive
community among women leaders, fostering
trusting relationships and mutual support
through change. It raised awareness
of systemic challenges and provided
strategies for effective communication,
influencing, and power use. The programme
also encouraged participants to seek and
capitalise on opportunities, leading boldly
to drive systemic change in diversity, equity,
and inclusion. 16 colleagues completed this
learning in FY25.
Our ENGs also support women in Kainos.
In addition to women’s coffee mornings
in our main global offices, our Inspire
Network hosted ‘I Am Remarkable’
workshops. These 90-minute sessions
aimed to empower women at consultant
level and above to confidently discuss their
achievements, reframing self-promotion as
self-empowerment to foster personal and
professional growth. 50 women attended
in FY25.
Kainos and Microsoft hosted the Power
Women in Leadership event in Belfast,
uniting over 50 women leaders to discuss
leadership challenges and successes. The
event featured inspiring talks and aimed
to foster a supportive network for women
leaders.
Informal learning is also prevalent in
Kainos, including mentoring (163 mentors
and 168 mentees) and day-to-day support
through our Inspire Network. Additionally
we have a group of 34 men who are actively
participating in our Male Allies programme
and they are providing support by engaging
in D&I learning, participating in events,
sharing network content, and fostering
inclusivity by amplifying underrepresented
voices, checking in with colleagues, and
challenging microaggressions.
b) Become the destination employer for
talented women
We believe that the most effective way
to encourage people to join Kainos is to
showcase our existing talented women
colleagues. This year we had six finalists
and four winners across several awards
and categories, including Inspirational Role
Model, Digital Transformation Leader of the
Year and the Microsoft Power Women Award.
Our Environmental, Social and Governance (ESG) Commitments
continued
(14) Skillsoft Women in Tech Report (2024).
(15) Tech Talent Charter Diversity in Tech Report (2024).
(16) PwC Women in Tech Report (2023).
2025 2024
Gender diversity Board Executive managers All employees Board Executive managers All employees
Male 3 (60%) 15 (83%) 1,717 (63%) 5 (71%) 15 (88%) 1,842 (64%)
Female 2 (40%) 3 (17%) 974 (36%) 2 (29%) 2 (12%) 1,002 (35%)
Non-binary, transgender
or not disclosed - (0%) - (0%) 20 (1%) - (0%) - (0%) 19 (1%)
47
Kainos Annual report 2025
Strategic Report
c) Encourage more women into digital careers
The ‘Outreach’ section in this report describes our activities,
including gifting digital bursaries to undergraduate women
at university and events for young women considering a
digital career. We were delighted to engage 1,462 young
women in our virtual outreach programmes, where over
3,000 students participated (2024: 715 young women, over
2,200 students).
Social: Communities
Contributes to: SDG 4 Quality Education and SDG 10
Reduced Inequalities
Part of our role as a leading digital company is to use
outreach to promote awareness of digital technologies
among school leavers and young people, and to help them
build the skills to forge a fulfilling career in technology. We
also benefit society by employing young people on our
graduate and apprentice schemes, as well as supporting
charitable causes.
Outreach
In the past year, over 3,000 young people were involved in
one of our programmes (2024: over 2,200). Since 2015, we
have engaged over 12,500 young people in the UK, Ireland,
Poland and the Americas through our outreach activities
(2024: over 9,600).
In addition to our popular work experience programme,
during FY25:
• 25 young people attended our week-long Quantum Camp
in Gdańsk, Poland, with experts from around Europe
inspiring and educating attendees on this emerging
technology;
• 375 students attended our global, one-week CodeCamp
event, which we have now been delivering for a decade;
• 86 young people attended our TechCamp in Toronto,
Indianapolis and Buenos Aires;
• 389 young people participated in our Digital Insights
events in Data Science and Artificial Intelligence; and
• 148 young people aged 9-13 took part in our CodeClub.
We offer learning to support colleagues to become outreach
mentors, which significantly increases participation. In FY25,
159 colleagues recorded over 500 days of mentoring support
for young people (2024: 190 mentors and over 500 days).
Our Digital Bursaries aim to widen the participation of young
people who are traditionally under-represented at university.
Launched in 2021 and partnering with Queen’s University
Belfast and Birmingham City University, we are supporting
95 young people during their courses, including 27 new
bursaries this year (2024: 68 young people).
We have continued our partnership with Now Group, a social
enterprise and autism charity. Through its Digital Skills
Academy, we provide paid work placements for young people
seeking to gain entry-level employment. We also partner
with disability charity Leonard Cheshire through its Change
100 programme, offering paid internships for computing
graduates living with a disability.
Gender identity:
36
%
2024: 35%
2
0
2
5
2
0
2
4
63
%
2024: 64%
2
0
2
5
2
0
2
4
1
%
2024: 1%
2
0
2
5
2
0
2
4
32
%
2024: 32%
2
0
2
5
2
0
2
4
17
%
2024: 12%
2
0
2
5
2
0
2
4
Women:
Men:
Non-binary, transgender
or prefer not to disclose
this information:
Women at manager
level and above:
Women at
executive level:
Measures:
2025 2024
Virtual and in-person
placements:
2025 2024
Digital inclusion
bursaries, young people since
FY22 launch:
616
provided
676
provided
95
people
68
people
Measures:
Kainos Annual report 2025
Strategic Report
48
In recognition that positive outcomes for
young people are most often shaped by
teachers, through the year we engaged
with 121 educators in Northern Ireland
and Poland, helping them acquire skills in
artificial intelligence and to bring the latest
technologies to their classrooms (2024: 230
educators).
Graduate employment and our Earn as You
Learn® apprentice scheme
Since Kainos was founded in 1986, we have
recognised our responsibility to provide roles
for people starting their career.
In the year, we recruited 66 graduates (2024:
114) and 29 placement students (2024: 29).
These roles were based across our Belfast,
Birmingham, Derry, Gdańsk, Indianapolis
and Toronto locations.
We continue to operate our popular Earn
as You Learn® apprenticeship scheme,
which allows us to identify talented young
people outside our traditional graduate
recruitment activity. Since its launch in 2013,
107 young people have joined us through this
programme (2024: 102).
Charities
Our people select a global charity, which
we support for a minimum of two years. We
allocate 50% of our funds to it, with the other
50% supporting local charities. Our current
global charity is Cancer Research.
We have volunteer-led charity committees
at all our locations, who organise fundraising
and decide which local charities receive
support. We provide financial support for
all these activities. During the year, our
charitable donations were £49,000
(2024: £50,000).
In addition to making donations, we enable
our people to support good causes in a
practical way, with everyone in Kainos able
to take two paid days each year to get
involved in social and charitable activities.
Governance: our stakeholders
Our key stakeholder groups are our
workforce, customers, shareholders and
communities. We recognise that the
importance of a topic may vary between
stakeholder groups and that the interests
of different groups may occasionally
conflict. The Board is therefore committed
to effective engagement, to understand
stakeholders’ interests and priorities.
Each month, the Board receives detailed
reports from management, which include
the outputs from stakeholder engagement.
The Directors also engage directly with
stakeholder groups as appropriate. The
table below summarises our engagement
with each stakeholder group and the
outcomes.
Our Environmental, Social and Governance (ESG) Commitments
continued
2025 2024
EAYL apprenticeship places
since programme launch in
2013:
2025 2024
Charity donations:
2025 2024
Graduates and students
employed:
121
people
194
people
107
places
102
places
£49,000
£50,000
Measures:
49
Kainos Annual report 2025
Strategic Report
a) Our employees
We engage with our people to understand how they view Kainos as an employer and where we can improve. This helps us to
attract and retain the talent we need to fulfil our strategy.
Further information on our workforce engagement is set out in the
Corporate Governance Report and in the ‘Social: Our people’ section of this report.
Employees
Their interests • Reward and benefits.
• Career progression.
• Training and development.
• Our culture and strategy.
• Teamwork and peer and manager support.
• Health and wellbeing.
• Diversity and inclusion.
• Our ethical stance.
How we engage • Each month, we use Workday Peakon to measure sentiment and capture confidential feedback
about our strengths and areas for improvement. The outputs are shared with the Board and
made available to all staff through online dashboards. Progress with our plans to address
feedback is reported monthly to the Executive Team, quarterly to the workforce and twice yearly
to the Board.
• The Culture and Development Group (chaired by the Chief People Officer) is our formal workforce
advisory panel. It meets periodically and reports to the Board on people-related matters.
• The Directors engage with employees through office visits, presentations from staff as part of our
monthly Board meetings, organised events which they attend, and regularly at Board dinners.
• Our CEO holds monthly ‘Kainos in Brief’ sessions with staff groups, to share news and receive
direct input from staff.
• Our Executive Team hosts twice-yearly strategy review sessions with staff groups, to discuss
culture, engagement and performance.
• Our internal social network platform (Microsoft Viva Engage) allows every person to publish,
share and comment on all aspects of working in Kainos.
Outcomes • We continue to achieve a high employee engagement score, currently 75% (2024: 78%).
• In FY25, colleagues contributed 9,472 posts to Microsoft Viva Engage, indicating a highly engaged
workforce (2024: 10,642).
We have volunteer-led charity
committees at all our locations, who
organise fundraising and decide
which local charities receive support.
“
pages 72, 75 and 42-47
Kainos Annual report 2025
Strategic Report
50
Our Environmental, Social and Governance (ESG) Commitments
continued
b) Our customers
We engage with our customers so we can understand their evolving needs and their attitudes towards our service, so we can
continue to deliver high levels of customer satisfaction. This enables us to generate repeat business and to win work with new
customers.
Customers
Their interests • Quality and cost of service.
• Our ability to meet agreed deadlines.
• Our ability to innovate.
• Our ethical stance.
How we engage • Our project teams typically interact with customers daily. Feedback or escalations are shared
within the project team and, where appropriate, with the Executive Team and the Board.
• We use an online customer survey to capture a NPS. Surveys happen on a rolling basis, with
customers asked for feedback twice a year. The result is shared monthly with the Board and is
reported in our investor presentations every six months. The responses inform our continuous
improvement programme, which aims to meet or exceed customer expectations on every project.
• The Executive Directors, primarily the CEO, meet with customers during the year. These meetings
are typically with our largest customers.
• Project success stories and retrospectives are included as part of the regular Board agenda,
with the teams involved in the project presenting to the Board and receiving Board input and
feedback.
Outcomes • We received 347 completed NPS surveys (2024: 678), with an overall NPS score of 70 (above 50
is rated as ‘excellent’) (2024: 58). During the year, we experienced an issue that is now resolved,
where our survey invitations were being classified as spam by many customers’ email systems.
• During the year, the Board received seven presentations on our customers (2024: seven).
c) Our shareholders
We value the support of our shareholders and recognise the importance of keeping them informed about our strategy,
performance and progress with key strategic programmes.
Shareholders
Their interests • Strategy and its implementation.
• Operational and financial performance.
• Dividends and total shareholder return.
• Our ethical stance, including our approach to ESG matters.
• Our remuneration practices.
• Developments in our markets.
How we engage • Our CEO and CFO meet analysts and institutional shareholders throughout the year, with detailed
updates following our interim and full year results. They provide regular feedback from these
meetings to the Board. The Chair proactively leads engagement with major shareholders on
material matters. Our PR and financial advisors also obtain formal feedback from shareholders,
which is reported to the Board.
• Our Chair engages with shareholders on topics they raise.
• We communicate with private investors through the RNS service, the Annual Report and the AGM.
• We make financial and other information available on our website.
Outcomes • We increased our understanding of shareholder views. During the year our conversations focused
on the downward revision of our trading expectations (October and November 2024) and in the
change in CEO (December 2024).
51
Kainos Annual report 2025
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d) Our communities
As a responsible business, we need to contribute to the communities we operate in. Further information is set out in the
Corporate Governance Report and the ‘Social: Communities’ section of this report.
Communities
Their interests • Our engagement with community-based programmes.
• Our carbon footprint and commitment to reducing our environmental impact.
• Employment options for their communities.
• Our tax strategy and tax transparency.
• Our ethical stance.
How we engage • Our outreach programmes engage with our local communities to ensure that our programmes
support the needs of our stakeholders.
• Our volunteer-led charity committees support and amplify the fundraising efforts of our
colleagues and oversee the selection of our global and local charities.
• Relevant community initiatives are managed within the relevant Board committees and discussed
with the full Board.
Outcomes • We recruited 103 graduates, placement students and school leavers in FY25.
• We maintained charitable donations at £49,000 (2024: £50,000).
• We have maintained our carbon neutral status and remain on schedule to achieve net zero
in 2025.
Our outreach programmes engage
with our local communities to ensure
that our programmes support the
needs of our stakeholders.
“
Kainos Annual report 2025
Strategic Report
52
Governance: business conduct
We are committed to maintaining high
standards of business conduct. This
encompasses our ethical principles, our
approach to protecting human rights and
preventing bribery and corruption, and our
quality, data privacy and security standards.
Our culture is one of openness and
accountability, which we believe is essential
for reducing the possibility of legal or ethical
violations and for swiftly addressing them if
they occur. However, all businesses face the
risk of things going wrong or of unknowingly
harbouring illegal or unethical conduct.
To enable our people to speak up about
any actual or suspected issues, we have a
whistleblowing policy and an independently
run whistleblowing hotline. This allows our
people to make confidential reports, which
can be anonymous if they prefer.
We proactively communicate our
whistleblowing policy and provide
mandatory training on it. We review the
policy every five years, with the current
version dated May 2025.
There were zero incidents referred through
our whistleblowing process in FY25 (2024:
zero).
Code of ethics: our ethical principles and
commitments
The number of lives we touch is vast. Each
year, 60 million users interact with the
systems or services we have delivered.
To create the best outcomes for these
users and for our people, customers and
communities, it is vital that we have clear
ethical principles and that everything we do
is aligned to them.
Our code of ethics sets out our principles
in six areas: wellbeing, equality, the
environment, transparency, integrity, and
taking the initiative to make a positive
difference. These principles are then
divided into 36 ethical commitments. The
code of ethics deliberately uses clear and
active terms to describe how to apply our
commitments in our everyday business
dealings, to help everyone in Kainos meet
our commitments wherever they are
relevant.
Our code of ethics was created following
wide-ranging discussions with colleagues
across Kainos and has been published via
our internal employee communication and
conversation platform, Viva Engage.
Our Viva Engage has a dedicated Ethics
channel, however ethical conversations
occur across the entire platform, for
instance; they feature in discussions in
channels including:
• #Innovation (facial recognition,
responsible innovation, streetlamp
cameras)
• #Data&AI (AI, ethics and medical research,
data ethics, ethical principles in defence)
• #AllCompany (assessing our customers
ethical approach)
• #TechOutreach (ethics and the future of
employment)
• #Ethics (cashless society, big tech and
ethics, animal welfare, smart cities)
• #Diversity&Inclusion (anti-racism,
#23andMe)
• #ClimateAction (our customers’ climate
stance)
Business ethics: human rights
The software sector is not at high risk of
issues such as modern slavery or human
trafficking and none of our subsidiaries has
an intricate supply chain or partnerships
with businesses in countries where labour
laws are unenforced or non-existent.
Even so, we are clear that we do not tolerate
slavery or human trafficking in our supply
chains. We conduct supplier due diligence
audits to ensure they have robust modern
slavery policies and have mandatory
training for our employees, which covers
awareness of the various forms of modern
slavery, how to identify the signs of slavery
and how to respond. Employees must also
formally attest that they will abide by our
modern slavery prevention policies. We
publish a modern slavery statement every
year, with the most recent version released
in October 2024.
Our whistleblowing policy encourages
staff to report any human rights violations,
including modern slavery. No violations were
reported during the year (2024: zero).
Our Environmental, Social and Governance (ESG) Commitments
continued
zero
Incidents referred through
our whistleblowing process
53
Kainos Annual report 2025
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Many of our employees’ human rights are protected by
the policies and commitments set out in the ‘Diversity and
Inclusion’ section in this report. We also carry out checks to
ensure employees have the necessary documentation to
legally work in the country where we are employing them
and that we do not employ anyone under the legal minimum
working age.
Business ethics: anti-bribery, anti-corruption
We operate a zero-tolerance approach to corruption and
bribery in all our business dealings and encourage staff to
report suspected wrongdoing as soon as possible. We have
a global anti-corruption and anti-bribery policy, which we
review every two years and was most recently updated in
2024. We provide mandatory training on anti-bribery and
corruption, which includes training on the whistleblowing
policy.
In FY25, there were no reported breaches of our anti-bribery
and corruption policy (2024: zero).
Quality standards, data privacy and security
Consistently delivering a high-quality service to our
customers requires us to have a robust quality management
system and to safeguard the sensitive information we
process every day.
Our quality management system is based on the following
certifications:
• ISO9001 Quality Management System, held since 1993.
• ISO20000 Information Technology Service Management
System, held since 2009.
• ISO27001 Information Security Management System, held
since 2011.
• Cyber Essentials Plus, held since 2022.
We ensure adherence to these standards through our
internal training programme, supplemented by our internal
audit reviews.
As part of the certification process, we are subject to an
annual external assessment to ensure that our controls are
robust, that we are applying them consistently and that we
are updating them regularly to reflect best practice.
To ensure data privacy and security, we have prioritised
secure data handling processes, product design, hosting
and operational management. Our people complete security
awareness and data handling training annually.
We regularly assess and review our information security risks
in IT steering meetings with our senior management team.
We also participate in third-party assessments for public
and private sector customers, to evidence that our security
controls are effective and address any risks.
We have selected SOC2 Certification for our Smart products.
This covers security, availability, processing integrity,
confidentiality and privacy. These practices are subject to
external assessment annually, by global consulting firm EY.
During the year there were no data security or privacy
breaches that required reporting to the Information
Commissioner (2024: zero).
The number of lives we touch is vast.
Each year, 60 million users interact
with the systems or services we have
delivered.
“
Kainos Annual report 2025
Strategic Report
54
Section 172 matter How the Board considered this matter in FY25
The long-term impact of
decisions.
The Board remains committed to sustainable growth and long-term value creation. The
Directors recognise that the decisions they make today will affect the Group’s long-term
success. Key strategic decisions during the year, taken with a view to ensuring the long-
term success of the Company include the Built on Workday investment to expand the
Company’s strategic partnership with Workday, Inc. to jointly develop and distribute ‘Built
on Workday’ applications, including Kainos’ existing products such as Smart Test, Smart
Audit, Smart Shield and EDM. More information on our strategy can be found in the
Our Strategy section of this report.
The interests of our
employees.
Our employees are fundamental to our success and to the delivery of our strategic
ambitions. This is reflected in the use of our employee listening platform, Peakon, to
identify the engagement priorities that form part of our people strategy (‘People Promise’),
the progress against which is discussed at Board level. Peakon also provides external
benchmarks, allowing the Board to compare Kainos against 300+ tech companies across
key measures of engagement, wellbeing and diversity and inclusion. The importance of the
measure is reflected in the fact that it is one of a package of performance measures used
to determine the value of the LTIP awards.
In addition, the Board receives Peakon survey and Glassdoor data in each monthly Board
pack, together with progress updates on our ‘People Promise’ improvement projects.
This data is used as part of the periodic Board presentations by our Chief People Officer,
Colette Kidd, and was used to frame discussions at the Board workshop about our Group
strategy.
The Board engages with employees informally through invites to Board dinners, and more
formally by inviting workforce representatives to various Board and Committee meetings
throughout the year. For example the Remuneration Committee invited Jakub Stempnik,
our Poland Country Lead, to its August 2024 meeting to discuss the value that employees
in the region perceive the employee share schemes to deliver, in advance of the 2025 share
scheme refresh exercise.
Other examples include: presentations by Matt Scourfield, Learning & Development
Manager, on the development of online learning pathways; by Lee Collins, Global Head
of Engagement, Culture and Development on our talent development approach; and by
Kim Freestone, Head of Product, on lessons learned from her attendance at our Engaging
Leaders talent programme.
The Board regularly receives updates regarding our health and wellbeing initiatives
through board papers and in presentations from our Chief People Officer, Colette Kidd. Key
initiatives discussed this year included our Global Parkrun challenge (to support physical
wellbeing), our wellbeing webinar series (focusing on physical, mental and financial
wellbeing), the establishment of a new Employee Relations centre of excellence and
the formation of a new disability employee network group. Key initiatives include Board
approval to move to a flexible benefits scheme, which will allow employees to choose those
elements that are right for them. This is scheduled for implementation in FY26.
Our Environmental, Social and Governance (ESG) Commitments
continued
Governance: Section 172 statement
The Directors have an obligation to act in accordance with a general set of duties, which are set out in Section 172 of the
Companies Act 2006.
Section 172 requires a director of a company to act in the way he or she considers, in good faith, would support the long-term
success of the company and its various stakeholders. In doing this, directors need to consider a variety of matters, which are
set out in the table below.
The Directors are briefed on these duties as part of their induction and through regular training. They also have access to
professional advice from the Company Secretary or, if necessary, from an external advisor.
The Directors consider, both individually and together, that they have exercised care in their decision-making, are cognisant of
their Section 172 obligations, and take into consideration the needs and interests of the various stakeholder groups as part of
all Board decision-making.
pages 21 – 23
55
Kainos Annual report 2025
Strategic Report
Section 172 matter How the Board considered this matter in FY25
Our relationships with our
suppliers and customers.
Delighting our customers is a key tenet of our strategy. The Board receives and reviews
NPS data as part of each monthly Board pack. The Board elected to include NPS as one
of a package of performance measures used to determine the value of the Company’s
LTIP awards. Doing a good job for our customers is so important that it directly impacts
remuneration outcomes.
Our impact in our
communities and on the
environment.
During the year, the Board received two updates on our progress with our climate-related
initiatives and SBTi-approved net zero target and verified the annual climate action plan
for the year ahead. Further information is located within the ‘TCFD’ disclosures section of
this report.
The importance of
maintaining our reputation
for high standards of business
conduct.
Ethical governance and compliance with regulatory standards underpin our operations.
The Board ensures that our corporate governance framework aligns with best practices
and evolving regulations. Key policies and initiatives approved by the Board during the
period include (i) the roll-out of global anti-corruption training, (ii) a refresh of our Anti-
bribery and Anti-corruption Policy to reinforce our commitment to ethical business
practices, and (iii) the roll out of a new Code of Ethics and Standards Policy, which sets
out clear expectations for ethical and compliant business conduct, to ensure that the
Company adheres to the highest standards of integrity, transparency, and accountability.
The need to act fairly between
our shareholders.
The Board remains committed to treating all shareholders fairly and ensuring transparent
communication. We engaged with shareholders through AGMs, investor roadshows, regular
market updates and through one-to-one meetings, always maintaining an open dialogue.
Feedback from investors has been considered in shaping our corporate strategy and
capital allocation decisions. Given the Company’s strong balance sheet position, and
the generation of significant operating cash flow, in November 2024 the Board reviewed
options to return value to shareholders. The Board elected to deliver shareholder return
through the launch of a £30 million share buyback scheme. Purchased shares are
cancelled, rewarding shareholders through growth in earnings while retaining a robust
capital base. Shareholder return is also delivered through our progressive dividend policy.
The Board ensures that our corporate
governance framework aligns
with best practices and evolving
regulations.
“
Kainos Annual report 2025
Strategic Report
56
In aggregate, revenue for the period
decreased by 4% (-3% ccy) to £367.2
million (2024: £382.4 million). Within this,
we recorded continued strong growth in
Workday Products, with revenue in the
period increased to £71.3 million (2024: £57.3
million), representing growth of 24% (26%
ccy) (2024: 28%). This growth was more than
offset by the tough trading environment for
our two services divisions. Digital Services
revenue reduced by 7% to £197.2 million
(2024: £213.1 million), due to lower demand
across the public and commercial sectors.
Workday Services revenue reduced by
12% (-10% ccy) to £98.7 million (2024: £112.0
million), in part due to a more competitive
market. In the prior financial year, we
stopped providing procurement consulting
services previously offered by Blackline
Group, which we acquired in 2022. Adjusting
FY24 revenue to exclude these services,
Workday Services revenue in the current
period was 8% lower on a like-for-like
basis. The Group ‘Operational Review’
provides more information on our revenue
performance.
Our overall gross margin decreased to
47.9% (2024: 49.0%). Digital Services’
gross margin decreased to 36.4% (2024:
38.4%) driven by lower utilisation. Workday
Services’ gross margin decreased by 3%
to 51.7% (2024: 54.7%) mainly driven by rate
pressure. Workday Products’ gross margin
decreased to 74.4% (2024: 77.1%) impacted by
lower margins in our Employee Document
Management product, launched in FY24.
Operating expenses
Operating expenses (excluding restructuring
costs) decreased by 2% to £125.6 million
(2024: £128.4 million) reflecting disciplined
cost management.
Restructuring costs of £8.4 million (2024:
£Nil) were incurred during the period.
These costs relate to redundancy and
severance costs incurred in the delivery of
cost reduction measures in the period.
£3.0 million of the £8.4 million restructuring
costs have been paid in FY25 and the
remainder recorded as a liability in the
statement of financial position. £19.0 million
of cost savings are estimated to arise from
the cost reduction measures which are
expected to be reinvested or offset in the
areas outlined in the ‘Financial highlights’
section.
As noted in our Workday Products review,
we entered into an enhanced strategic
partnership agreement with Workday,
Inc. in July 2024. Under the terms of this
agreement, annual fees of approximately
£7.8 million are payable. A total charge of
£5.2 million (2024: £Nil) was recognised in the
period since July 2024.
We continue to invest in product
development, with expenditure increasing
to £16.8 million (2024: £13.5 million), all of
which was expensed during the period.
We recognised £5.1 million of Research &
Development Expenditure Credit (RDEC)
income during the period (2024: £5.2 million).
Alternative performance measures
We use several alternative performance
measures to understand and monitor
day-to-day performance and to assist
management’s financial, strategic and
operating decisions.
We believe our adjusted measures are better
indicators of trading performance, assist
comparison between periods and provide
useful information for users of the financial
statements. The nature and type of items
adjusted are also similar to comparable
companies.
Specifically we exclude the following items:
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 do not
therefore consider these costs are reflective
of underlying operations.
Share-based payment costs.
Although share-based payment
compensation is an important aspect of the
compensation of our employees, we believe
it is useful to exclude the share-based
payments expense to better understand
FY25 was a period of challenging trading
environments for our services businesses – Digital
Services and Workday Services – but also continued
strong growth in our Workday Products division.
FINANCIAL
REVIEW
57
Kainos Annual report 2025
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Adjusted profit measures
2025
(£000s)
2024
(£000s)
PROFIT BEFORE TAX 48,640 64,772
Share-based payment expense and related costs 5,930 5,952
Amortisation of acquired intangible assets 836 4,190
Increase in fair value of investment property and gain on sale of property – (2,154)
Restructuring costs 8,411 –
Compensation for post-combination services 877 3,800
Acquisition-related expenses 948 626
ADJUSTED PROFIT BEFORE TAX 65,642 77,186
PROFIT AFTER TAX 35,560 48,715
After tax impact of:
Share-based payment expense and related costs 4,335 4,464
Amortisation of acquired intangible assets 645 3,147
Increase in fair value of investment property and gain on sale of property – (1,894)
Restructuring costs 6,194 –
Compensation for post-combination services 877 3,746
Acquisition-related expenses 693 582
ADJUSTED PROFIT AFTER TAX 48,304 58,760
Adjusted EBITDA
2025
(£000s)
2024
(£000s)
ADJUSTED PROFIT BEFORE TAX 65,642 77,186
Depreciation of property, plant and equipment 3,381 2,886
Depreciation of right-of-use assets 1,277 1,152
Finance expense 333 334
Finance income (6,440) (4,336)
ADJUSTED EBITDA 64,193 77,222
the performance of our core business and to 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.
In the prior period we excluded gains relating to the sale of
property, plant and equipment and fair value movements
in investment property. In the current period we have
excluded restructuring costs incurred. 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 pre-tax profit decreased by 15% to £65.6 million (2024: £77.2 million). Profit before tax decreased by 25% to
£48.6 million (2024: £64.8 million).
Kainos Annual report 2025
Strategic Report
58
Corporation tax charge
The effective tax rate for the year was 27% (2024: 25%), which
is higher than the UK corporation tax rate, primarily due to
the impact of higher tax rates in the United States.
We envisage our future effective tax rates to be broadly in
line with this rate.
The year-end tax liability has reduced to £2.5 million (2024:
£7.1 million) due to an increase in advance payments made
during the year.
Financial position
We continue to have a strong financial position with £133.7
million of cash and treasury deposits (2024: £126.0 million), no
debt and net assets of £138.0 million (2024: £156.8 million).
The combined underlying net trade receivables and accrued
income balance decreased by 21% to £54.2 million (2024:
£68.6 million), reflecting the decrease in revenue in Digital
Services and Workday Services and strong cash collection.
Trade payables and accruals have increased to £54.3 million
(2024: £50.1 million) due mainly to timing of receipt of some
larger supplier invoices at year-end.
As previously disclosed, we agreed to sell part of the site
which was purchased in FY20 for the development of the
Group’s future headquarters in Belfast. We concluded the
sale during the year, receiving proceeds of £6.2 million. The
fair value of this investment property prior to disposal was
£6.2 million. As a result, no gain or loss relating to the disposal
of this property has been recognised in the period.
Cash flow and cash conversion
Cash conversion, which is cash generated by operating
activities as a percentage of adjusted EBITDA, was very
strong at 112% (2024: 98%). Adjusting for the impact
of restructuring costs not paid at 31 March 2025, cash
conversion would be 103% .
Dividend
Our progressive dividend policy provides shareholder returns,
while ensuring we have sufficient funds to invest in long-
term growth. The proposed final dividend recommended by
Directors is 19.1p and, if approved by shareholders, will be
paid on 24 October 2025 to shareholders on the register on
3 October 2025, with an ex-dividend date of 2 October 2025.
This will make the total dividend for the year 28.4p (2024:
27.3p) which will represent a distribution of 73% of adjusted
profit after taxation (2024: 58%).
Capital allocation policy
Kainos has a strong unlevered balance sheet and continues
to generate significant operating cash flow. The Board’s
main priorities when it comes to our cash are to enhance
the growth of the business, both organically and through
acquisition, and to reward shareholders through growth in
earnings alongside our progressive dividend policy, while
retaining a robust capital base.
Where there is surplus cash over and above that needed to
fund organic and inorganic growth, the Board will consider
additional one-off returns of capital to shareholders. We
launched a £30.0 million share buyback programme on
8 November 2025, to be executed over a period of six months.
The programme completed on 9 May 2025 with a total of
3,993,382 shares having been bought back for consideration
of £30.0 million. Any shares purchased as part of this
programme are subsequently cancelled. After applying the
Board’s capital allocation framework, as announced on
19 May, we launched a further share buyback programme of
£30 million to be executed over six months.
The Board will continue to keep its capital allocation policy
and further distributions to shareholders under review, with
consideration of other potential uses of capital that may
drive value for shareholders over the medium-term.
Richard McCann
Chief Financial Officer
16 May 2025
Financial Review
continued
£133.7 million
of cash and treasury deposits
(2024: £126.0 million)
59
Kainos Annual report 2025
Strategic Report
We aim to increase profitability while maintaining a
healthy financial position and investing in the people
and opportunities which underpin our growth.
We track several KPIs to identify trends in our operating
performance and to assess progress of our key
objectives, such as staff wellbeing and engagement.
Financial KPI targets are used as a basis for remuneration
awards and are identified in the Directors’ Remuneration Report.
KEY PERFORMANCE
INDICATORS (KPIS)
93
%
2
0
2
5
2
0
2
4
2
0
2
5
2
0
2
4
Financial KPIs:
Non Financial KPIs:
2025 2024
£382.4
million
£424.5
million
2025 2024
£367.2
million
£382.4
million
2025 2024
£65.6
million
£77.2
million
2025 2024
70
58
2025 2024
1,094
930
2025 2024
2,865
2,995
Bookings: Revenue: Adjusted pre-tax profit:
Customer Net Promoter Score: Staff retention:
Numer of customers: Number of staff:
2024: 93%
Kainos Annual report 2025
Strategic Report
60
We recognise the importance of effective risk management
and the need to mitigate potential threats which could
adversely impact our operations, reputation and financial
results. We have therefore developed our risk management
framework and associated governance structures to help us
safeguard our people, our customers and our business.
While Kainos has a higher risk tolerance when exploring new
technologies, opportunities, and partnerships, we have a
low appetite for risks associated with information security
breaches and any form of regulatory non-compliance.
Our risk governance and risk management
process
The Board is responsible for ensuring
that risk is managed across the business.
While we can never eliminate all risk, the
Board considers that our risk assessment
framework and governance structures
are robust and provide assurance that we
are effectively identifying, monitoring and
managing risk.
The Group Risk Register is our principal
tool for monitoring and reporting risk. It
describes each principal risk, its potential
impact, the likelihood of it materialising
and any appropriate mitigating controls to
reduce the risk to an accepted level. Senior
management co-ordinates the Register’s
preparation, using input from all areas of the
business. Each risk is assigned to a senior
manager, who is responsible for ensuring
that we develop controls and mitigating
actions to reduce the risk’s likelihood and
potential impact.
The Audit and Risk Committee formally
reviews the Risk Register twice each year
and may meet at other times if there is an
emerging risk or substantial changes to
principal risks which require attention. The
Committee updates the Board after each
formal review of the Risk Register and when
risks change significantly.
Our risk profile
While Kainos has faced challenging trading
conditions throughout FY25, we continue
to actively manage macroeconomic risks
through individual sector and business
unit mitigation plans, in addition to steps
taken to diversify our customer portfolio
and geographic footprint, and develop key
relationships with our business partners.
These activities are documented throughout
other sections of this report.
Throughout this year, notable improvements
have been made to mitigate and manage
risks associated with cyber and information
security, sustainability, developing Kainos’
partner relationships and managing risks
related to the use and development of AI
solutions.
Although the risks posed by a cyber-
attack continue to be a threat to Kainos’
operations, improvements have been made
across the identification and management
of cyber risk in customer projects, continued
investment in cyber defence tooling and
capabilities, and strengthened controls to
secure email communications.
The risks posed by climate change to our
operations have been reduced, due to
continued improvement in governance,
management and reporting, as evidenced by
our increased CDP rating (moving from a C
rating to B rating in FY25). In addition, Kainos
commissioned an independent external
risk scenario study, which concluded that
climate change does not pose an increased
risk to Kainos, or its operations. Kainos
understands the importance and relevance
of our key partners to our business, and
continue to prioritise and develop those
relationships. In FY25 Kainos has developed
a BizApps practice and Microsoft AI
Centre of Excellence, to ensure relevance
to Microsoft seller priorities. In addition,
the partnership with Workday has been
strengthened through the Built on Workday
partnership, which means Workday is
enabled to co-sell Kainos products, allowing
Kainos to get closer to Workday’s product
teams and align our roadmap for existing
and new product development.
Kainos continues to invest in developing
AI at all levels of our business. We have been
actively engaged in developing global and
UK specific standards in relation to AI Safety
and Security, and have worked closely with
key stakeholders to create the UK code of
practice for DSIT, all underpinned by
an AI Governance forum led by our
Chief AI Officer.
RISK FACTORS
AND UNCERTAINTIES
61
Kainos Annual report 2025
Strategic Report
1. Cyber and information security
2. Global macroeconomic events
3. Exchange rate fluctuations
4. Partner relationships
5. Increasing complexity of global data
protection laws
6. Long-term climate change and
sustainability
7. Non-compliance with laws and
regulations
8. Unsafe use of AI
9. Increasing customer demands in a
competitive skills market
Risk Description Potential impact and mitigation
1. Cyber and
information security
Risk to:
Change:
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.
Potential impact
By failing to protect sensitive data and information systems from cyber-
attacks, we face legal, financial and reputational risk, which could reduce
short-term profits, expose us to regulatory fines (for example under GDPR),
lead to significant remediation costs and contractual liability, and damage
our customer relationships and market credibility.
Mitigation
We continue to monitor the cyber-threat landscape and invest in developing
and strengthening our defences against cyber-attack. We review and test
the effectiveness of our Information Security Programme controls against
industry best practice, assisted by independent external certification
(ISO27001) as well as Cyber Essentials and Cyber Essentials Plus. A
comprehensive internal and independent external cyber assessments and
audits ensures continued focus on emerging threats and to support the
ongoing maturity of our security capabilities. Our senior management team
receives regular updates on our security programme through the Cyber
Steering and Audit and Risk Committees, with representation from our Chief
Information Security Officer, Chief Information Officer, cyber security and
information security teams, and our legal and business management. We
run regular mandatory training for all staff on information security and data
privacy.
Key improvements in FY25 include implementation of enhanced controls
to protect email communications, provision of secure remote access to
company systems and the introduction of advanced network activity
monitoring.
In parallel, we have further embedded cyber risk management into our
business operations. This includes working closely with business units to
identify, assess and mitigate cyber risks in customer-facing projects.
Increased risk No change of risk Decreased riskPeople Customers Markets
Key
1
2
3
4
5
6 7
8
IMPACT
LIKELIHOOD
9
Detailed risk assessment
The following tables summarise our principal and emerging risks, informed by our Group Risk Register, with their current
likelihood and potential impact shown in the heatmap after risk mitigations have been applied. The table is not intended to be
exhaustive and there may be risks that we do not currently consider to be serious or which we are willing to accept to support
strategic objectives.
Where possible, we have taken steps to manage or mitigate risk using a combination of technical, operational and legal
controls, but we cannot entirely safeguard against all of them.
Kainos Annual report 2025
Strategic Report
62
Risk Description Potential impact and mitigation
2. Global
macroeconomic
events
Risk to:
Change:
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 disbanding
or reorganisation
of key public
sector bodies
(e.g. NHS England
disbanding).
Potential impact
If these events occur, they could harm our revenue, profit, growth and cash
flow over a sustained period, result in higher costs and disruption to our
business, damage our reputation or cause financial loss if customers do not
renew their contracts.
Mitigation
We strive to build a balanced business, where our revenues are generated
from many different sources, they are:
• from different service lines: Digital Services (54%), Workday Services (27%)
and Workday Products (19%);
• derived from separate sectors: commercial (52%), public sector (34%) and
healthcare (14%);
• spread over different regions: UK & Ireland (59%), Americas (31%), Central
Europe (9%) and the rest of the world (1%); and
• from different business models: services (79%), subscriptions (18%), third
party and other (3%).
In addition to this resilience in our revenue streams, we have a considerable
contracted backlog (typically over 85% of prior year revenues) that provides
short-term protection.
We also undertake regular reviews of risk mitigation activities across each
business unit and sector. These include targeted efforts to strengthen
customer relationships, diversify our client base and identify and pursue
opportunities in new geographic markets.
3. Exchange rate
fluctuations
Risk to:
Change:
There is a risk of
material detrimental
movement in foreign
exchange rates.
Potential impact
This could harm our revenue, profit, growth and cash flow over a sustained
period.
Mitigation
We have a treasury policy to mitigate currency risk, which we review
and approve annually. Further information on our foreign currency risk
management can be found in note 26 to the financial statements.
4. Partner
relationships
Risk to:
Change:
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.
Potential impact
Failure of partner relationships could reduce revenue, profit and cash flow
in the short-term and damage our reputation, customer relationships and
market confidence in us.
Mitigation
We have contracts with our main partners, including Workday, Microsoft and
AWS, and Strategic Alliances team to establish and manage relationships
with all key partners.
Our partner managers have regular contact with key partners and in
FY25 the partnerships with Workday and Microsoft have been developed
through the establishment of the BizApps practice and Microsoft AI Centre
of Excellence, as well as the Built on Workday partnership, which allows
Workday to co-sell our products and grants Kainos access to Workday
product teams for alignment on existing and new product development.
Kainos is also now part of the AWS Managed Service Provider program,
ensuring that delivery of projects built on AWS meets Amazon’s own high
standards for security and quality delivery.
Risk Factors and Uncertainties
continued
63
Kainos Annual report 2025
Strategic Report
Increased risk No change of risk Decreased riskPeople Customers Markets
Key
Risk Description Potential impact and mitigation
5. Increasing
complexity of global
data protection laws
Risk to:
Change:
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.
Potential impact
Non-compliance could expose us to liability and financial penalties,
reduce profit and cash flow in the short-term, and damage our customer
relationships and credibility in the market.
Mitigation
We review the impact of information security and data privacy regulations
and legislation on us and our customers. These reviews influence our
internal controls and processes and the design of products, solutions and
working practices. Specific data privacy controls or conditions are included,
where relevant, in our customer or supplier contracts.
We make staff aware of the potential impact of changing regulations and
provide company-wide mandatory annual training. Our activities to ensure
the provision of GDPR controls includes, but is not limited to:
• staff education on data privacy;
• Data Privacy Impact Assessments (qualification screening at a minimum)
and data mapping (Record of Processing) for all areas where Kainos acts
as data controller;
• customer consent through legitimate interest terms and conditions;
• retention controls; and
• ensuring personal rights are respected, such as the right to be forgotten,
right to amend, right to view/disclosure.
As we enter new regions, we ensure that:
We review the relevant privacy laws. An example would be subscription to
the revised US Data Privacy Framework and Transfer Risk Assessments for
relevant countries.
We put in place effective initial controls at the project level. We have a Data
Protection Steering body, which meets monthly to ensure that the data
privacy mandate is prioritised, planned and governed accordingly.
6. Long-term
climate change and
sustainability
Risk to:
Change:
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.
Potential impact
A slow response to our climate responsibilities could lead to fines for
non-compliance, increasing costs for carbon offsetting and potential
reputational damage. Reputational damage may encourage colleagues to
leave Kainos or deter applicants from joining us. It may also deter customers
from appointing us to projects and investors owning our shares.
Mitigation
We achieved carbon neutrality in 2021 and remain on track to achieve our
SBTi near-term net zero targets in FY26. We believe that achieving these
ambitious targets mitigates this risk.
Further details can be found in the ‘Our Environmental, Social and
Governance (ESG) Commitments’ section.
page 34
Kainos Annual report 2025
Strategic Report
64
Risk
Description Potential impact and mitigation
7. Non-compliance
with laws and
regulations
Risk to:
Change:
We must comply with
laws and regulations
applicable to us and
design our products
and services to meet
laws and regulations
applicable to our
customers.
FY25 has seen a
substantial increase
in the number of
regulations applicable
to Kainos and/or its
customers, including
the EU Network and
Information Systems
2, EU AI Act and DORA
(Digital Operational
Resiliency Act).
Potential impact
Non-compliance could expose us to liability and/or fines, negatively impact
profit and cash flow in the short-term and cause reputational damage.
Customers are also facing increasing regulatory requirements across areas
such as artificial intelligence, cybersecurity, data protection and operational
resilience. While Kainos may not always be directly within scope of these
regulations, we recognise the importance of aligning with these evolving
standards to ensure we can continue to support and deliver services to our
customers.
Mitigation
While we recognise the increasing burdens of compliance for Kainos and
its customers, we have robust controls in place. The increasing number and
complexity of regulations means we must continue to monitor and closely
manage this area.
Our Finance and Legal teams review draft and current regulatory
and legislative requirements, including, for example, the Network and
Information Systems Regulations, GDPR and emerging AI legislation and
provide an impact assessment for the products and services that we deliver
to customers.
We monitor our internal processes and systems to ensure compliance with
applicable laws and regulations.
We have processes designed to ensure awareness of regulatory
requirements and that the relevant information is appropriately
disseminated. There are well-established training and awareness activities.
We have policies and mandatory training in place in relation to bribery
and corruption. More details can be found in the ‘Business Ethics’ section
of this report.
8. Unsafe use of AI
Risk to:
Change:
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.
Potential impact
Unsafe use of AI could lead to financial penalties, for example due to
non-adherence to data privacy regulations such as GDPR, or instances
of copyright infringement. Publishing unverified and/or biased content
generated by AI models or failing to deliver AI projects with established
governance standards could damage our reputation.
Conversely, reluctance to embrace AI technology may adversely affect our
competitive position, due to missed opportunities and an inability to benefit
from the efficiencies that AI technology can offer.
Mitigation
Building on the progress made in FY24, most notably the appointment of our
Chief AI Officer to lead the strategy and execution of safe AI practices and
establishment of AI Governance structures, Kainos has further strengthened
its commitment to responsible AI development and use throughout FY25.
Our initiatives in FY25 include strategic hires in AI Ethics and Safety, as
well as the appointment of a dedicated Head of AI Security and Head of AI
Ethics and Governance. In addition, we have rolled out AI safety and security
mandatory training for all employees, with completion metrics actively
monitored by the senior management team.
Kainos’ vision for the safe and responsible adoption of AI is being driven by
the Senior Leadership team, and Kainos continues to champion the use of
Safe AI in customer project delivery.
The AI Governance Committee continues to monitor the evolving regulatory
landscape and is responsible for designing and implementing appropriate
controls to ensure ongoing compliance with all relevant legislation and
regulatory frameworks.
Risk Factors and Uncertainties
continued
page 53
65
Kainos Annual report 2025
Strategic Report
Increased risk No change of risk Decreased riskPeople Customers Markets
Key
Risk
Description Potential impact and mitigation
9. Increasing
customer demands
in a competitive
skills market
Risk to:
Change:
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.
Potential impact
This could impact our ability to provide solutions and services to our
customers, exposing us to liability, reducing profit and cash flow in the
short-term and causing damage to our reputation, customer relationships
and staff morale. Through hiring experienced, specialist skills and investing
in the development of these skills, the impact of this risk has decreased from
the previous year.
Mitigation
We have established ourselves as an employer of choice in our key locations
by strengthening our Recruitment team, streamlining hiring processes, and
promoting our employer brand. We have reviewed our reward structures and
continue to focus on employee engagement through competitive benefits,
career development, and regular feedback, contributing to high retention.
Looking ahead, we are prioritising strategic workforce planning to build
critical skills in growth areas. This includes proactively moving talent across
the organisation to fill gaps and support development.
With increasing competition for top talent, we are investing in internal
mobility, succession planning, and capability building to future-proof our
workforce. Leveraging data and insights, we aim to stay agile and ensure we
have the right people in place to support our long-term growth.
Kainos Annual report 2025
Strategic Report
66
In accordance with Provision 31 of the UK
Corporate Governance Code, the Directors
have assessed our viability over a three-
year period, ending 31 March 2028. In
making this assessment, the Directors have
assessed the prospects of the Group by
considering the Group’s current financial
position, its recent and historic financial
performance and forecasts, its business
model and strategy and the principal risks
and uncertainties.
The assessment period
The Directors have reviewed the period
used for the assessment and consider
that three years remains appropriate.
Three years is considered sufficient to
assess the rate of change in each of our
three divisions and is appropriate given
the nature and investment cycle of a
technology business. It also aligns with our
strategic planning timeline.
Assessment of viability
In performing the assessment, the
Directors considered our long-term
strategy and focus, the demand for our
products and services, the increasing level
of recurring revenue and low customer
attrition, the track record of strong cash
generation and the healthy cash balance,
with no debt from financial institutions.
The Directors also considered the risks of
regional and political changes in our main
markets on each of our business areas.
Additionally, the Directors’ review included
sensitivity analysis modelling the impact of
severe, yet plausible scenarios associated
with the Group’s principal and emerging
risks, which could have the most significant
potential impact on viability over the three-
year period, as outlined in the table below.
In all scenarios modelled, the Group
remains profitable with a positive cash
balance. The applied sensitivities do not
include any mitigating actions; however, we
have a proportionally low fixed cost base,
which enables swift responses to adverse
economic conditions when required,
further supported by our strong cash
position, low capital commitments and no
borrowings.
Conclusions
Based on this assessment, the Directors
have a reasonable expectation that should
these risks manifest themselves, either
all or in part, the Group can manage
and mitigate the adverse outcomes,
such that we will be able to continue in
operation and meet our liabilities as they
fall due over the three-year period of their
assessment. In doing so, we recognise that
such assessments are subject to a level
of uncertainty that increases with time
and, therefore, future outcomes cannot be
guaranteed or predicted with certainty.
The Strategic Report was approved by the
Board and signed on its behalf by:
Brendan Mooney
Chief Executive Officer
16 May 2025
VIABILITY
STATEMENT
Risk No. Principal or Emerging Risk Scenario Assumptions Applied
1
Cyber and information
security
A cyber-attack is suffered resulting in signif-
icant remediation costs, regulatory fines and
lower revenue due to reputational damage.
4
Partner relationships Revenue is reduced due to a deterioration in
a strategic partner relationship.
2
Global macroeconomic
events
Current geopolitical events lead to an eco-
nomic recession and decreased demand
from our customers.
67
Kainos Annual report 2025
Corporate Governance
CORPORATE GOVERNANCE
AND FINANCIAL STATEMENT
CONTENTS
Corporate governance
68 Directors’ biographies
70 Corporate Governance Report
75 Nominations Committee Report
78 Audit and Risk Committee Report
83 Directors’ Remuneration Report
92 Annual Report on Remuneration
102 Directors’ Report
Financial statements
106 Independent Auditor’s Report
to the members of Kainos Group plc
113 Consolidated income statement
113 Consolidated statement
of comprehensive income
114 Consolidated statement
of financial position
115 Consolidated statement
of changes in equity
116 Consolidated statement
of cash flows
117 Notes to the consolidated
financial statements
159 Company statement
of financial position
160 Company statement
of changes in equity
161 Notes to the Company
financial statements
164 Definition of terms
165 Company information
Kainos Annual report 2024
Corporate Governance
68
DIRECTORS’
BIOGRAPHIES
Brendan Mooney
(aged 58), Chief Executive
Officer (CEO)
Brendan joined Kainos in
1989 as a trainee software
engineer before moving
into several technical and
commercial roles in Dublin,
London and the US.
He was first appointed CEO
of Kainos in 2001 and led
Kainos through a successful
IPO in 2015 and helped turn
Kainos into an international
business and one of the
UK’s leading IT providers.
Brendan stepped down as
CEO in September 2023,
having served as CEO for
22 years, and was
reappointed to the Board,
as CEO, in December 2024.
In addition to his role
at Kainos, Brendan has
previously served as a
Non-Executive Director
on several private
technology companies, at
the Probation Service for
Northern Ireland and as a
Lay Magistrate. Brendan
has received both an
Honorary Doctor of Science
(DSc) and an Honorary
Doctor of Economics (DSc
Econ) in recognition of
Kainos’ contribution to the
economy.
Rosaleen Blair
(aged 59), Chair
Rosaleen is the founder
and Chair of AMS, a leading
global provider of talent
outsourcing and consulting
services.
She created the company
in 1996 with the ambition of
transforming the way blue-
chip multinationals attract,
engage, and retain top
talent. Rosaleen was CEO
of AMS for 23 years, leading
the business from a start-up
to a global business working
in partnership with clients
such as Deloitte, HSBC, Novo
Nordisk, Rolls-Royce, and
Santander. AMS has 11,000
employees and operates in
100 countries.
Outside of AMS, Rosaleen is
an investor and mentor to
several entrepreneurs and
growth businesses with a
focus on the advancement
of women in business. She
is Non-Executive Director of
BGF and Board member of
Endeavor Ireland. Rosaleen
is involved in several not-
for-profit initiatives, notably
serving as Chair of the
London Irish Centre and
as an Enterprise Fellow of
The King’s Trust. She was
the returning Chair of EY’s
World Entrepreneur of the
Year Awards in 2022.
Rosaleen is recognised
as an industry leader and
entrepreneur, winning
numerous awards
including Veuve Clicquot
Businesswoman of the
Year (2007) and EY London
Entrepreneur of the Year
(2006). She was awarded a
CBE in the 2017 New Year’s
Honours list for services to
business and recruitment.
Rosaleen was appointed
Company Chair on
24 September 2024, having
joined the Board on
1 January 2021. She is
Chair of the Nominations
Committee and a member
of the Remuneration
Committee.
Nominations Committee
Audit and Risk Committee
Remuneration Committee
Chair of the Committee
Key
Rosaleen Blair Brendan Mooney
Richard McCann
(aged 60), Chief Financial
Officer (CFO)
Richard is a Fellow of the
Institute of Chartered
Accountants in Ireland
and trained with Coopers
& Lybrand, before moving
into industry with Galen
Holdings plc. He joined
Galen as financial controller
of a start-up subsidiary in
the US and subsequently
became Senior Vice
President in charge
of Corporate Finance,
with responsibility for
acquisitions and investor
relations. He was Managing
Director of two subsidiaries
in the Almac Group,
including a US subsidiary
that provides software
development services for
pharmaceutical companies.
Richard joined Kainos in 2011
and was appointed to the
Board on the Company’s
admission to the market on
10 July 2015.
69
Kainos Annual report 2024
Corporate Governance
Katie Davis
(aged 60), Independent
Non-Executive Director
Katie holds a BS in Electrical
Engineering from the
University of Illinois at
Champaign/Urbana. She
is an experienced leader,
with a strong track record
of delivery in both the
public and private sectors.
She joined Accenture’s
Chicago office in 1987,
moving to London in 1988
and becoming a partner
in Accenture’s Customer
Relationship Management
practice in 2000.
In 2005, Katie joined
the Cabinet Office, with
responsibility for increasing
the capacity and capability
of UK central government
and the wider public sector
to deliver large-scale IT-
enabled business change.
She subsequently held
several senior positions
in the Cabinet Office,
Home Office, Department
of Health and NHS and
currently is an Independent
Non-Executive Director at
leading pensions software
specialist Heywood Pension
Technologies. In 2012, Katie
was named as one of the
25 most influential women in
IT by Computer Weekly.
Katie was appointed to
the Board on 28 November
2019. She is Chair of the
Remuneration Committee
and a member of the Audit
and Risk Committee, and
Nominations Committee.
James Kidd
(aged 54), Independent
Non-Executive Director
James is a Chartered
Accountant and joined
AVEVA in 2004. Prior to
his appointment to the
Board, James held several
senior finance roles within
the AVEVA Group and was
appointed CFO in 2011.
James was Chief Executive
Officer from January 2017 to
February 2018, leading the
merger with the Schneider
Electric industrial software
business before being
appointed Deputy CEO and
Chief Financial Officer of
the enlarged AVEVA Group.
During his time on the
board, AVEVA grew to over
6,500 people globally, with
revenues of £1.2 billion.
James stepped down
from AVEVA in March 2023
following the acquisition of
the company by Schneider
Electric at an enterprise
valuation of £10.6 billion.
Prior to joining AVEVA,
James worked for Arthur
Andersen and Deloitte,
serving technology clients
in both transactional and
audit engagements.
James was appointed to the
Board on 1 October 2023.
He is Chair of the Audit and
Risk Committee, acts as
Senior Independent Director
(SID) and is a member of the
Nominations Committee
and the Remuneration
Committee.
Richard McCann Katie Davis James Kidd
Kainos Annual report 2025
Corporate Governance
70
The Board believes in strong governance
and recognises the importance of complying
with the various aspects of the UK governance
framework. This section of the Annual Report
outlines how we maintain high standards of
corporate governance, as well as summarising
how each Board Committee functions and
their work during the year.
Statement of application of and
compliance with the UK Corporate
Governance Code 2018
This section explains how we have applied
the principles of the 2018 UK Corporate
Governance Code (‘the Code’), which is
available at www.frc.org.uk.
Throughout FY25, the Company fully
complied with all of the Code’s provisions
with the exception of Provision 24, which
requires a company’s audit committee to
comprise at least three independent
Non-Executive Directors. Andy Malpass, who
chaired the Audit and Risk Committee,
retired from the Board on 24 September
2024, having completed his nine-year term
on the Board. On the same date, Rosaleen
Blair stepped down from the Audit and Risk
Committee on her appointment as Chair of
the Board, as required by Provision 24.
As a result, from 24 September 2024 the Audit
and Risk Committee has comprised two
independent Non-Executive Directors, James
Kidd (Chair) and Katie Davis. As described in
the Nominations Committee Report, we have
been working to recruit a further independent
Non-Executive Director, which we expect to
complete during FY26, which will enable us to
increase the Committee’s membership and
return to compliance with Provision 24.
Board leadership and
Company purpose
The Board’s role is to deliver long-term
success for Kainos and create value for its
stakeholders. It is responsible for our
corporate governance and delegates
operational control to the Executive
Directors.
There is a written Schedule of Matters
Reserved for the Board, which covers key
areas of the Group’s affairs. These include:
• approving the Group’s strategic aims and
objectives;
• setting the Group’s values and standards;
• adopting budgets or business plans;
• decisions on acquisitions, disposals and
material financial commitments;
• setting the dividend policy and declaring
dividend payments;
• approving changes to the capital structure,
including shares issues and buybacks;
• approving the Annual Report and full year
and interim results announcements;
• approving circulars, listing particulars and
resolutions; and
• releasing inside information.
The Directors have access to the Company
Secretary’s advice and services. They can
also obtain independent legal advice at the
Company’s expense, if needed to carry out
their duties.
Division of responsibilities
We have a formal written policy, available on
the ‘Investor Relations’ section of our website,
setting out the division of responsibilities
between the Chair, CEO and Senior
Independent Director (SID), so their roles
complement each other. In summary:
• As Chair, Rosaleen Blair is principally
responsible for leading the Board,
promoting constructive debate among the
Directors, facilitating communication with
shareholders and overseeing strategy.
• As CEO, Brendan Mooney is responsible for
all aspects of our operations. He leads and
develops our strategic plans and identifies
risk factors.
• As SID, James Kidd provides a sounding
board for the Chair and acts as an
intermediary for the other Directors and
shareholders.
Board Committees
The Board’s principal committees are the
Audit and Risk, Nominations and
Remuneration Committees. Their terms of
reference can be found in the Investor
Relations section of our website.
In addition to the Board Committees, the
Disclosure Committee supports the Group
and the Board in identifying, assessing, and
controlling potentially sensitive information,
ensuring compliance with market reporting
obligations. The Disclosure Committee
members include the Chair, CEO, CFO, SID
and the Chief Legal Officer (CLO).
CORPORATE
GOVERNANCE
REPORT
71
Kainos Annual report 2025
Corporate Governance
Changes to Board membership and roles in FY25
There were several changes to Board membership and the Directors’ roles during the year:
• On 24 September 2024, Tom Burnet and Andy Malpass retired from the Board, after completing nine-year terms.
• On the same date, Rosaleen Blair succeeded Tom as Chair of the Board and Chair of the Nominations Committee, and
stepped down from the Audit and Risk Committee, and James Kidd succeeded Andy as SID and Chair of the Audit and
Risk Committee.
• On 11 December 2024, the Company announced that Russell Sloan was stepping down as CEO with immediate effect, with
Brendan Mooney reappointed to the Board as CEO from that date.
Board and Committee meeting attendance
The Board meets formally on a regular basis and schedules additional meetings if needed, to consider specific issues. During
the year, the Board held 13 scheduled meetings. The Directors’ attendance at Board and Committee meetings is shown below.
Where a Director stepped down from or joined the Board or a Committee during the year, the table shows the number of
meetings they were eligible to attend.
Board
Audit and
Risk Committee
Remuneration
Committee
Nominations
Committee
Rosaleen Blair 13/13 1/1 5/5 3/3
Brendan Mooney 4/4–––
Richard McCann 13/13–––
Katie Davis 13/13 3/3 5/5 3/3
James Kidd 13/13 3/3 5/5 3/3
Former Directors
Tom Burnet 5/5 – 2/2 1/1
Andy Malpass 5/5 1/1 – –
Russell Sloan 8/8–––
In addition to meetings of the full Board, the Chair holds two scheduled meetings with the Non-Executive Directors each year,
without the Executive Directors present. These meetings provide space for confidential discussions, independent oversight and
strategic reflection.
The Board acknowledges Provision 12 of the UK Corporate Governance Code, which recommends that Non-Executive Directors
meet without the Chair at least annually to appraise the Chair’s performance. The meeting in November 2024 did not occur as
the incumbent Chair (Tom Burnet) exited and the incoming Chair (Rosaleen Blair) was appointed on 24 September 2024, so it
was too early to evaluate the incoming Chair’s performance. A Non-Executive Directors’ meeting, without the Chair present
is scheduled to take place in November 2025, prior to the annual board evaluation exercise being carried out. The Chair
regularly receives informal feedback from Non-Executive Directors (NEDs), and her performance was formally reviewed as
part of the annual board evaluation, which took place in January 2025. Further information on the board evaluation process
is included within the Nominations Committee Report. To ensure that Directors are fully briefed, a Board pack containing
comprehensive Board and Committee papers is uploaded to a secure Board intranet site, approximately one week prior
to scheduled meetings.
Board independence
The Board meets the Code requirement that at least half the Board, excluding the Chair, should be NEDs whom the Board
considers to be independent.
We carry out due diligence on each NED’s independence before they join the Board and when we invite incumbent NEDs
to serve for another term. The Board confirms that Katie Davis and James Kidd are independent in character and judgement
and that Rosaleen Blair was independent on her appointment as Chair.
Kainos Annual report 2025
Corporate Governance
72
Corporate Governance Report
continued
Purpose, values and strategy
Our Board-approved purpose, values and strategy are set
out in full in the Strategic Report.
Board governance contributes to the delivery of the strategy
in several ways:
• by actively participating in the development, review
and approval of the Company’s strategy and ensuring
alignment with long-term value creation;
• by challenging the strategy and probing key assumptions;
• by ensuring that execution of the strategy aligns with the
Company’s values; and
• by leveraging its experience and knowledge to provide
expertise and insights into the proposed strategy, its
delivery and its iteration.
In FY25, the Board’s oversight of strategy included a
dedicated strategy workshop in August 2024, capturing
Board insights about our vision and progress against our
strategic priorities, as well as discussing opportunities, risks,
enablers and future priorities. The Board also received:
• progress updates on our people strategy, through which we
identify and implement projects to improve our employee
experience, based on monthly Peakon feedback;
• updates on our global talent development roadmap,
including our talent programmes, learning pathway
development and outreach initiatives; and
• updates on the Group’s carbon footprint and progress
against our Science Based Targets initiative (SBTi) near-
term net zero targets.
The Risks and uncertainties section of the Strategic Report,
describe how risks to the future success of the business have
been considered. The Board considers that our risk
assessment framework and governance structures are
robust and provide assurance that we are effectively
identifying, monitoring and managing risk.
Stakeholder engagement
The Group’s long-term success depends on how it interacts
with its stakeholders. The Board welcomes interaction with all
stakeholders and directly engage with shareholders and
employees each year. The Board is also always available to
other stakeholders, including customers and communities, as
an alternative to meetings with the Executive Directors.
Full details of our stakeholder engagement, including
how the Board is kept informed of stakeholder views where
the Directors have not directly engaged with them, are set
out in the ‘Governance: Our stakeholders’ section in the
Strategic Report.
Shareholder engagement
The Executive Directors are primarily responsible for
shareholder engagement, supported by the Investor
Relations team. Our CEO and CFO meet analysts and
institutional shareholders throughout the year, with detailed
updates following our interim and full year results. Regular
feedback from these meetings is provided to the Board.
Formal feedback is also obtained by our PR and financial
advisors and reported to the Board.
In accordance with Code Provision 3, the Chair engages with
shareholders on topics raised, addressing enquiries, setting
out our position and offering to discuss further where
required. During the year, Rosaleen Blair held conversations
with a number of shareholders on the change in CEO. In
addition, the Chair and all of the Board are available to meet
with shareholders at the Group’s AGM.
Workforce engagement
Continued dialogue between the Board and our workforce is
an important part of our people approach. The Nominations
Committee reviews our workforce engagement mechanisms
annually, to ensure they remain effective.
Culture and Development Group (CDG)
The CDG is our formal workforce advisory panel, in
accordance with Provision 5 of the Code. The CEO and Chief
People Officer jointly chair the CDG, which also includes
senior representatives from our different business areas,
offering perspectives from a sector, practice, region and
technologist point of view.
The CDG oversees our people and continuous improvement
agenda, which is aligned to our corporate strategy. The CDG
meets periodically and during FY25 its focus areas included:
• Employee engagement, including the results of the
monthly engagement surveys via Peakon and developing
and implementing action plans. One example of how we
addressed colleague feedback in FY25 is the proposed
introduction of a flexible benefits platform (see below).
• The Group’s remuneration strategy, with the support of
the Remuneration Steering Committee we established in
FY24, to help us take a strategic approach to workforce
remuneration. The focus in FY25 included reviewing our
share plans, long-term incentives and benefits, to ensure
they remain fit for purpose, as well as our approach
to rewarding and incentivising our future leaders and
colleagues who go above and beyond. As part of this work,
we will be introducing a more flexible benefits package for
colleagues during FY26, which will give them greater choice
over the benefits they receive. Information on the share
plans we will operate going forward can be found in the
Remuneration Report.
A CDG member regularly presents to the Nominations
Committee and is invited periodically to attend Remuneration
Committee meetings. This process is positively received by all
involved. The Nominations and Remuneration Committees
report the findings of their meetings to the full Board.
Direct workforce engagement
The Board’s schedule includes regular presentations from
colleagues who have been leading key or innovative projects,
involved in winning a significant contract or responsible for
an important area of our business. There were 11 such
presentations to the Board during the year.
Board meetings are also rotated around the Group’s offices,
allowing the Directors to meet local leaders, typically in a
social setting, as well as other colleagues below senior
management level. In FY25, these visits included our
locations in Gdańsk, Belfast and London.
73
Kainos Annual report 2025
Corporate Governance
Board oversight of culture
Our culture and values are described within the Strategic Report, ‘Our Environmental, Social and Governance (ESG)
Commitments’ section.
The Board plays a pivotal role in shaping and overseeing our culture, ensuring it remains strong and adaptive. By setting the
tone from the top, the Board reinforces our commitment to a culture that empowers our people, prioritises customer success
and upholds the highest ethical standards. Through its decisions, leadership and ongoing engagement, the Board maintains
a culture that not only reflects our heritage but propels us toward future growth and sustainability.
In addition to its interactions with the Executive Team, senior leaders and colleagues, the Board has several other mechanisms
to help nurture Kainos’ unique culture. Here are some examples, written against each of our cultural pillars:
Cultural pillar Board oversight of our culture
Put people first
Meaning our culture
celebrates diversity, care for
wellbeing, and working with
integrity and honesty.
Each month, the Board reviews a broad range of people and culture metrics, including:
• Peakon (employee voice) results for engagement, wellbeing and D&I
• Glassdoor results
• retention rates
• total headcount, the number of job applications received and hires made at both junior and
senior levels
• training days and investment in training
• the number of promotions; and
• gender parity.
Timely access to these metrics enables the Board to monitor and assess our Kainos culture.
Know your impact
Meaning we deeply connect
with our work, taking pride in
delivering transformative
solutions that positively
impact people, customers
and society.
The Nominations Committee directly engages with colleagues and provides feedback to the
Board. Our global Diversity and Inclusion Group reports quarterly to our leadership teams and
every six months to the Nominations Committee. It helps to create a workplace that reflects
and contributes to the diverse global communities in which Kainos operates, informing our
D&I plan and gender pay gap approach, ensuring our policies, processes and behaviours are
inclusive and that our people are educated. See the ‘Social: Our people’ section of the
Strategic Report for more information.
The Committee also holds ‘Spotlight’ sessions, during which it receives direct feedback from
colleagues who have attended a development programme. More detail is provided in the
Nominations Committee Report.
Be the benchmark
Meaning that with creativity,
collaboration and high
standards, we solve
challenges at scale, setting
the benchmark for quality
and innovation.
Reward and remuneration play a crucial role in shaping culture, as they influence employee
engagement and retention. We seek to ensure that the financial and non-financial rewards for
our employees are competitive, and support the talent attraction, engagement and retention
that enables us to ‘be the benchmark’.
Our remuneration strategy is supported by the Remuneration Steering Committee, which
reports the findings of its meetings to the full Board and helps us take a strategic approach to
workforce remuneration. Building on Peakon feedback from our staff, we will be introducing a
more flexible benefits package for colleagues during FY26, which will give them greater
choice over the benefits they receive. This was approved by the Board.
Embrace the future
Meaning that we foster growth
and learning, creating a safe
space for innovation and
shaping a forward-looking
future together.
We use the Peakon survey and Glassdoor data to identify our ‘People Promise’ projects, which
are designed to imbue a culture of continuous learning and improvement of our people
experience. This data is used as part of the periodic Board presentations by our Chief People
Officer and was used to frame discussions at the Board workshop about our Group strategy in
August 2024.
The Board also engages with employees informally through invites to Board dinners, as well as
more formally. For example, the Board received presentations by the Engagement, Culture
and Development team on the development of online learning pathways; on progress with our
climate action strategy; and on our approach to inspiring the next generation of technology
leaders through our tech outreach/CSR initiatives.
This work has enabled the Board to conclude that the Group’s policies, practices and behaviours remain aligned to its purpose,
values and strategy.
Kainos Annual report 2025
Corporate Governance
74
Corporate Governance Report
continued
Director election and re-election
At the 2025 AGM, all Directors will retire, in line with Provision
18 of the Code. Rosaleen Blair, Richard McCann, Katie Davis
and James Kidd are standing for re-election, and Brendan
Mooney is standing for election to the Board. The Board
confirms that each of the Directors continues to be effective
in their role.
Conflicts of interest
At the beginning of each Board meeting, the Directors are
reminded of their obligations to identify, declare and manage
actual or potential conflicts of interest. The Articles of
Association set out the process for the Directors to consider
and, if they deem fit, authorise such conflicts. Any conflict
would be recorded in the Board minutes and on a register
maintained for annual review by the Nominations Committee
and the Board.
No conflicts arose in the year ended 31 March 2025.
Whistleblowing
Provision 6 of the Code requires the Group to have a channel
for the workforce to raise concerns in confidence, including
anonymously. See the ‘Governance: Business conduct’
section of the Strategic Report for more information.
75
Kainos Annual report 2025
Corporate Governance
Attendance
Rosaleen Blair (Chair)
(1)
3/3
Katie Davis 3/3
James Kidd 3/3
Tom Burnet (former Chair)
(1)
1/1
(1) On 24 September 2024 Tom Burnet stepped down from
the Committee and Rosaleen Blair took over as Chair.
Dear fellow shareholders,
As Chair of the Nominations Committee,
I am pleased to present the Committee’s
Report for the year ended 31 March 2025.
The Nominations Committee plays a vital
role in ensuring that the Board has the
correct balance of skills and experience to
support the Company’s long-term success.
FY25 saw the Board continue to evolve, with
Tom Burnet and Andy Malpass retiring as
Directors after completing nine-year terms,
and Brendan Mooney rejoining the Board as
CEO, following Russell Sloan stepping down.
I also became Chair of the Board and of this
Committee during the year. In addition, we
have continued the search for a further NED,
who will add to the Board’s diversity and
bring a fresh perspective to our discussions
and decisions.
This report outlines how the Committee
discharged its responsibilities over the
course of the year and the key issues it has
considered. I will be happy to answer any
questions about our work at the AGM on
23 September 2025.
Committee membership and meetings
Katie Davis and I were Committee members
throughout the year. On 24 September 2024
James Kidd joined the Committee and
I succeeded Tom Burnet as Committee
Chair. The Committee’s membership
therefore complies with Provision 17 of
the Code, which requires the majority of
members to be independent NEDs.
The Committee held three scheduled
meetings during the year.
Responsibilities
The Committee’s main responsibilities
are to advise the Board and make
recommendations on:
• the Board’s size, structure and
composition;
• succession planning for Board members
and the Executive Management Team;
and
• the appointment of new Directors and
reappointment of existing Directors.
The Committee regularly reviews and
updates its terms of reference, which are
available on the Company’s website.
Matters considered during the year
During the year, our main areas of focus
were as follows:
CEO appointment
On 11 December 2024, the Company
announced that Russell Sloan was stepping
down as CEO with immediate effect and that
Brendan Mooney was returning as CEO.
Brendan was the outstanding candidate for
the role, having been CEO for 22 years up to
September 2023. During this time, he
oversaw a hugely successful period of
growth for Kainos, turning the Group into an
international business and one of the UK’s
leading IT providers. He also led Kainos
through its IPO and has an unsurpassed
knowledge of the Group, its challenges and
opportunities. The Board was therefore
pleased to approve his reappointment
as CEO.
Board and Executive composition,
balance and diversity
A stable Board that contains the right
balance of skills and experience is crucial to
strong governance. Our Board comprises the
independent Non-Executive Chair, a position
I hold, two further independent NEDs and
two Executive Directors. More information on
the Directors can be found in the ‘Directors’
biographies’ section.
COMPOSITION, SUCCESSION
AND EVALUATION NOMINATIONS
COMMITTEE REPORT
Kainos Annual report 2025
Corporate Governance
76
Nominations Committee Report
continued
Achieving diversity in the technology sector presents challenges, due to the profile of the available talent pool. However, we
strongly believe that diversity creates a more inclusive corporate culture, better equips companies to navigate challenges and
supports long-term strategic needs. We view diversity through a broad lens, to include gender, ethnicity, nationality, skills,
social mobility and experience. Further information on our D&I strategy and progress can be found in the ‘Environmental,
Social and Governance (ESG) Commitments’ section of the Strategic Report.
The tables below set out disclosures required by the Listing Rules for gender and ethnic diversity. Data is self-reported by the
Board and collected through VIBE for all other employees. Further information on VIBE can be found in the Environmental,
Social and Governance section of the Strategic Report.
Gender diversity
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID, Chair)
Number in
executive
management
Percentage
of executive
management
Men 3 60% 3 15 83%
Women 2 40% 1 3 17%
Other –––––
Not specified –––––
Ethnic diversity
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID, Chair)
Number in
executive
management
Percentage
of executive
management
White British or other White
(including minority-white groups) 5 100% 4 17 94%
Mixed Multiple Ethnic Groups –––––
Asian/Asian British –––––
Black/African/Caribbean/ Black British –––––
Other ethnic group including Arab –––––
Not specified/prefer not to say – – – 1 6%
At 31 March 2025, two (40%) of our five Directors were women (2024: 29%) and we have one woman in a senior Board position,
with me as Chair. We therefore comply with the Listing Rule requirements on gender diversity.
However, the Board does not currently meet the Listing Rule requirement on ethnic diversity, with all Board members identifying
as ‘White/European’. We are actively working to recruit an additional NED and aim to bring our Board composition into line with
this requirement through this appointment.
Given the continued globalisation and evolving skill sets required for our business we have undergone a further review of our
NED talent matrix. This has informed our future hiring approach.
Succession planning and talent
The Nominations Committee leads succession planning for the Board and Executive levels, considering the evolving skills and
experience we need and our focus on diversity and good practice, talent retention, talent pipeline, training and development.
All Executive Team roles and other roles deemed critical have a formal succession plan. These plans contain longer-term
succession options, as well as an emergency successor to ensure business continuity. We put development plans into place for
potential successors, to ensure they are ready for the role.
During FY25, we particularly focused on succession planning for the Executive Team, recognising the risk that some of our
most senior leaders could reach retirement age around the same time. We considered potential timelines for the current
executives to step down from their roles and the succession plans for each of them. The Committee discussed the importance
of introducing talent from outside Kainos, to bring fresh perspectives and challenge, and the need to set successors up for
success by investing time in them and providing support and mentorship. As part of this work, the Group established a Senior
Talent Forum during the year, which meets quarterly to provide operational management of our talent.
77
Kainos Annual report 2025
Corporate Governance
We have a range of leadership programmes to help us build
a robust talent pipeline. We receive regular updates on all
these programmes and conduct more detailed reviews at our
meetings. In FY25, we received two presentations from the
Chief People Officer and met recent development
programme attendees:
• At our May 2024 meeting, we received an update on the
new Engaging Leaders programme, aimed at senior
managers with leadership potential who are not currently
identified on succession plan.
• In September 2024, we reviewed the Empowering Leaders
programme, which is designed for developing women with
leadership roles.
In both cases, the attendees reported positive experiences,
including what they found valuable about the programmes,
as well as identifying opportunities for improvement. More
information on our leadership programmes can be found in
the ‘Social: Our people’ section of the Strategic Report.
The Nominations Committee also plans for rotation of NEDs,
to ensure the Board retains a balance of NEDs with
knowledge of Kainos, while adding new skills and experience
and maintaining independence. Following the retirements of
Tom Burnet and Andy Malpass, Katie Davis is our longest-
serving NED, having joined the Board in November 2019.
Katie could therefore serve for more than three years before
reaching the nine-year recommended limit.
Board evaluation
Having conducted an externally facilitated evaluation of the
Board’s performance in FY24, we held an internal evaluation
this year. This took place in January 2025, after the transition
to Brendan Mooney as CEO. Given he had only just rejoined
the Board, Brendan did not take part in the process.
Our Company Secretary led the evaluation, using
a comprehensive questionnaire developed from the
questions asked in FY24. Topics covered included:
• Board composition
• Board dynamics
• Board support
• Board Committees
• Focus of meetings
• Strategic oversight
• Risk management and internal control
• People oversight
• Stakeholder oversight
• Priorities for change
The Directors completed the questionnaire online, after
which the Company Secretary compiled the results and
presented them to the Board at its February 2025 meeting.
The scores were predominantly ‘excellent’ or ‘good’. Areas of
strength included the quality of relationships between
Non-Executives and senior management, support from the
Company Secretary, and the management of Board
meetings. Areas to focus on included recruiting additional
NEDs, progressing talent and succession planning, and
enabling the Board to spend more time on key topics,
including strategic priorities.
Overall, the survey concluded that the Board is operating
effectively, and that each Director continues to perform
effectively and demonstrates commitment to their roles.
The NEDs also evaluated the Chair’s performance.
The Senior Independent Director (SID), James Kidd,
confirmed that the Chair continues to perform effectively,
as supported by the evaluation results.
Board appointment process
The Nominations Committee oversees Board appointments.
Before a new NED is appointed, they must confirm that they
can allocate sufficient time to carry out their duties and
responsibilities effectively. There is a minimum 20-day
commitment each year, which is set out in the letter of
appointment.
Each Non-Executive Director is appointed for an initial
three-year term, subject to a three-month notice period and
annual re-election by shareholders at the AGM. At the end of
the three years, the Board may invite an NED to continue for
a further period, if the Board is satisfied with their
performance, independence and time commitment.
Directors’ training
When joining the Board, NEDs receive a thorough, formal and
tailored induction process. The SID and Chair regularly
review the Directors’ training and development requirements.
Directors receive ongoing updates to improve their skills and
knowledge, when needed.
Service agreements and letters of appointment
All Directors’ service agreements and letters of appointment
can be requested from the Company Secretary and will be
available to shareholders to view at the 2025 AGM. Summary
details of the Executive Directors’ service agreements are
also contained in the Directors’ Remuneration Report.
Rosaleen Blair
Nominations Committee Chair
16 May 2025
Kainos Annual report 2025
Corporate Governance
78
AUDIT, RISK AND
INTERNAL CONTROL
AUDIT COMMITTEE REPORT
Attendance
James Kidd (Chair)
(1)
3/3
Katie Davis 3/3
Rosaleen Blair (retiring member)
(2)
1/1
Andy Malpass (retiring Chair)
(1)
1/1
(1) On 24 September 2024 Andy Malpass stepped down
from the Committee and was replaced by James Kidd
as Committee Chair.
(2) On 24 September 2024 Rosaleen Blair stepped
down from the Committee on her appointment as
Board Chair.
I am pleased to present my first report
to you as Chair of the Audit and Risk
Committee. This report outlines how we
discharged our responsibilities in FY25
and the key issues we considered.
The Committee fulfils a vital role in the
Company’s governance framework,
providing valuable independent challenge
and oversight of the Group’s accounting,
financial reporting, internal controls and risk
management, as well as overseeing the
relationship with the external auditor.
Andy Malpass was my predecessor
as Committee Chair. As discussed within
the Corporate Governance Report, on
24 September 2024 he retired from the
Board and Rosaleen Blair also stepped down
from the Committee on her appointment as
Board Chair, as required by Provision 24 of
the Code. This meant that from that date,
the Committee comprised only two
independent Non-Executive Directors,
below the minimum of three specified
by Provision 24. The Board is working to
recruit an additional NED, which will bring
the Committee’s composition back into line
with the Code. In the meantime, the
Committee has continued to function
effectively, as reflected in the positive results
in the recent Board and Committee
evaluation process as described in the
Nominations Committee Report.
I look forward to attending the AGM on
23 September 2025 and will be happy to
answer any questions regarding the
Committee’s work.
Composition
At the year-end, the Committee comprised
me as Chair and Katie Davis, who has been
a Committee member since November 2019.
We are both independent Non-Executive
Directors. Our financial and commercial
experience enables us to deal effectively
with the matters we are required to address
and to challenge management when
necessary. The Board is therefore satisfied
that the Committee has the necessary
competence and experience relevant
to the sector in which Kainos operates.
I am a chartered accountant, with relevant
financial experience, having served as CFO,
Deputy CEO and CEO of AVEVA Group plc.
I have also maintained an up-to-date
understanding of financial and corporate
governance best practice by attending
training sessions and updates. I therefore
meet the Code requirement that at least
one member of the Committee has recent
and relevant financial experience, and the
Disclosure Guidance and Transparency
Rules requirement for at least one member
to have competence in accounting and/or
auditing.
The Company Secretary is secretary to the
Audit Committee.
Responsibilities
Our main responsibilities are reflected in the
key activities described in the following
sections. More detail can be found in the
Committee’s terms of reference, which are
available at www.kainos.com/investor-
relations.
Audit Committee meetings and
key activities during FY25
The Committee held three meetings during
the year. Only Committee members have the
right to attend meetings but we also invite
Executive Directors, members of the Finance
team and other senior management,
including those presenting to us on risk-
related matters, to attend as required.
Representatives of the external auditor also
routinely attend our meetings.
79
Kainos Annual report 2025
Corporate Governance
We have a broad agenda and our principal activities during
the financial year were as follows:
May 2024
• Review of the external auditor’s report to the Audit and
Risk Committee for the year ended 31 March 2024.
• Presentation by the Finance team on the significant
judgements and areas for consideration in relation to
the financial statements, including customer project
provisions, R&D tax credits, bad debts and other provisions.
• Review and approval of the Group’s going concern and
viability statements. In assessing viability, the Committee
considered the Group’s position as presented over a
three-year period, as well as a number of scenarios
modelled by management.
• Review and recommendation to the Board to approve the
Final Results Announcement and the 2024 Annual Report,
concluding it was fair, balanced and understandable.
• Review and conclusion on KPMG’s effectiveness as our
external auditor.
• Update on information security.
• Review of the Group’s Enterprise Risk Register, with the
use of generative AI added to the risk register and noted
as a new material risk.
• Annual review of insurance coverage.
• Review of the internal audit report prepared by
Grant Thornton on payroll and procure to pay, with no
material issues raised but with small improvements in
controls noted.
November 2024
• Review of the Interim Report, including the going concern
statement and key disclosures, and recommendation of its
approval to the Board.
• Plan for KPMG key audit partner transition from John
Poole to Niall Savage.
• Presentation from the Finance team on the key accounting
judgements and other areas for consideration in the
Interim Report, including accounting for the Built on
Workday contract, customer provisions, bad debt provision
and R&D tax credits.
• Review of the Group’s Enterprise Risk Register, with no new
material risks noted.
• Update on information security from the Group’s Chief
Information Security Officer.
February 2025
• Review of the external auditor’s audit plan and strategy
for the year ended 31 March 2025.
• Annual review of Group treasury function including
changes to counterparty limits and cap on money
market funds.
• Annual update on tax risks, status of tax filings, tax
enquiries and transfer pricing policy.
• Review of financial accounting policies.
• Review of Group legal and compliance matters, including
AI regulation, update on insurance and corporate
governance.
• Approval of scope of internal audit projects to be
conducted by Grant Thornton in FY26, on cyber security
and order to cash.
• Review of internal audit work on Workday Services, Digital
Services and Central Services, covering commercial
reviews, information security and delivery.
• Update on preparedness for the introduction of the new
Internal Controls Reform.
The Committee completed its work on the financial reporting
cycle for FY25 at its meeting in May 2025. The matters
considered at that meeting were as follows:
May 2025
• Review of the external auditor’s report to the Audit and
Risk Committee for the year ended 31 March 2025.
• Assessment of the integrity, completeness and consistency
of financial reporting, including the adequacy, clarity
and appropriateness of disclosures and compliance with
financial reporting requirements.
• Presentation by the Finance team on the significant
judgements and other areas for consideration in relation
to the financial statements, including customer project
provisions, R&D tax credits, bad debts and other provisions.
• Consideration of whether the going concern basis of
accounting should continue to apply in preparing the
financial statements and whether the period covered by
the viability statement was appropriate.
• Review and approval of the Group’s going concern
and viability statements. In assessing viability, the
Committee considered the Group’s position as presented
over a three-year period, as well as a number of scenarios
modelled by management.
• Review and recommendation to the Board to approve
the Final Results Announcement and the 2025 Annual
Report, concluding that the Annual Report, taken as a
whole, is fair, balanced and understandable, and provides
the information necessary for shareholders to assess
the Company’s position, performance, business model
and strategy.
• Review and conclusion on the effectiveness of the
external auditor.
• Update on information security.
• Review of the Group’s Enterprise Risk Register.
• Update on internal audit.
Kainos Annual report 2025
Corporate Governance
80
Key assumptions, judgements and estimates
We identified the matters below as being significant to the FY25 financial statements, considering their materiality and the
degree of management judgement required. We discussed the issues in detail, to ensure that the approaches taken were
appropriate. This included reviewing presentations and reports from management and the external auditor.
Revenue recognition The Group has a clear revenue recognition policy, as described in note 3 of the consolidated financial
statements. The policy is reviewed at least annually and there were no changes during the year.
We reviewed and challenged management’s judgements, assumptions and estimates relating to the
level of contract or fixed-price provisioning for rectification and irrecoverable accrued income.
We also received and considered updates from KPMG on the findings of its procedures over revenue
recognition during the year.
Following these reviews, we are satisfied that the Group’s processes and internal controls are
appropriate and revenue recognition is in line with IFRS15 ‘Revenue from contracts with customers’.
Development costs We received updates from management on accounting for development costs.
During each period, management works with product leaders in the business to update a document
which details development expenditure incurred by product or module. Management then assesses
this expenditure against the capitalisation criteria in IAS38 ‘Intangible Assets’.
Having discussed and reviewed this approach, we are satisfied that the accounting for development
costs is in line with IAS38.
Tax strategy We recognise the tax complexity and risk related to the Group’s multinational operations and the
areas of uncertainty that arise.
We considered:
• the appropriateness of deferred tax assets and tax provisions;
• an update from management on accounting for R&D expenditure credit, and its impact on the
reported results; and
• the application of the Group’s transfer pricing policy and its impact on the reported results.
We are satisfied the treatment adopted is fair and reasonable in all circumstances.
The Group’s UK tax strategy is available online at www.kainos.com/information/uk-tax-strategy.
Going concern
and viability
We reviewed management’s process for assessing the Group’s going concern and longer-term
viability, including:
• the period over which viability should be assessed;
• whether the scenarios identified were appropriate, in light of the Group’s principal risks and
uncertainties; and
• whether management made reasonable assumptions in calculating the financial impact of
a viability scenario.
We were satisfied with management’s work and supported its conclusions in respect of the Company’s
going concern and longer-term viability.
There were no material changes to significant accounting policies during FY25.
Audit and Risk Committee Report
continued
81
Kainos Annual report 2025
Corporate Governance
External audit
The Committee has primary responsibility for overseeing the
relationship with the external auditor and its performance.
This includes making recommendations on appointing,
reappointing or removing the auditor.
We appointed KPMG as external auditor following
shareholder approval at the AGM in September 2021.
We confirm that Kainos complied with the provisions of
The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014 during the financial year ended 31 March 2025.
Auditor independence and objectivity
We carefully review the auditor’s independence and
objectivity and have not identified any issues that could
compromise it. As part of our review, we received written
confirmation from KPMG that it considered itself to be
independent. The current audit partner is Niall Savage,
replacing John Poole who retired during the year and had
been in the role since September 2021. Audit partners for
listed companies are ordinarily rotated every five years.
We have a non-audit services policy to ensure that the
auditor’s independence and objectivity is not impaired by
providing non-audit services to the Group. We review the
policy annually, with the most recent review in February 2025.
The policy classifies non-audit work into assignments
for which:
• management can engage the external auditor without
referral to the Audit and Risk Committee;
• approval to engage the auditor must be provided
on a case-by-case basis; and
• the auditor is excluded.
The policy aims to ensure that in providing non-audit
services, the external auditor is not in a position whereby it is:
• auditing its own work;
• making management decisions for the Group;
• creating a mutuality of interest; or
• required to advocate for the Group.
The table below shows the approval levels specified in
the policy:
Description Approval required
Hiring staff from the
external auditor
Audit and Risk Committee
External audit fee Audit and Risk Committee
Any engagement > £20,000 Audit and Risk Committee
Chair
Services between £5,000 and
£20,000 in aggregate for each
financial year
Chief Financial Officer
Permitted services up to an
aggregate of £5,000 in any
financial year
Group Head of Finance
Other than reviewing the interim financial statements for the
period ended 30 September 2024, KPMG did not provide any
non-audit services during the year.
Fees paid to KPMG for auditing the consolidated financial
statements are set out in note 6 to the consolidated financial
statements.
Effectiveness of the external auditor
We review the auditor’s effectiveness and quality on an
ongoing basis, to ensure a high-quality external audit
process. During the year, we specifically considered:
• the audit plan, including identified significant risks,
presented at the February 2025 meeting;
• KPMG’s robustness and perceptiveness in its handling
of key accounting and audit judgements;
• the audit team’s experience and expertise, demonstrated
by its direct communication with, and support to, the
Committee;
• engagement with our Finance team in planning the audit
and its execution; and
• the content, insights and added value of KPMG’s
formal reports.
Based on our review, we consider the external auditor
to be effective.
Kainos Annual report 2025
Corporate Governance
82
Risk management and internal control
The Board is ultimately responsible for the Group’s systems
of internal controls and risk management and for reviewing
their effectiveness. These systems are designed to manage
risk, rather than eliminate it, and can provide only
reasonable and not absolute assurance against material
misstatement or loss. This includes the risk of failure to
achieve business objectives. The concept of reasonable
assurance recognises that the cost of control procedures
should not exceed their expected benefits.
Information on the Group’s principal and emerging risks is
set out in the Strategic Report.
The Board confirms that Kainos has established systems,
procedures and controls for identifying, evaluating and
managing the principal and emerging risks it faces, and that
they have been in place for the period under review and up to
the date of approval of the Annual Report. The Board
regularly reviews the effectiveness of those systems,
procedures and controls.
As required by the Code, the Audit and Risk Committee
has reviewed the internal controls and risk management
systems, including those relating to financial reporting,
information security, business continuity, management
of employees, and operational and compliance matters.
We have confirmed to the Board that we are satisfied
that Kainos has established internal controls and risk
management systems that are effective and compliant
with the current governance provisions.
The key elements of the Group’s processes for providing
effective internal control and risk management systems
include:
• regular Board meetings to consider matters reserved
for the Directors’ attention;
• regular management meetings to monitor divisional
performance. Management is responsible for identifying
and evaluating significant risks in its area of business, and
for designing and operating suitable internal controls;
• maintenance of a Group Risk Register, to identify and
track the risks facing the business. The key risks are
summarised for the Audit & Risk Committee’s review and
are operationally owned and managed by management;
• a comprehensive annual budget process, for review
and approval by the Board, with updated forecasts
regularly prepared throughout the year. Operating results
are reported monthly to the Board and compared to
the latest forecast, with explanations for all significant
variances; and
• documentation of key policies and procedures.
Internal audit
In the past, the Group has not had a separate internal audit
function. Instead, we have used our subject specialists across
the business and our central services teams to assess our
controls in specific areas, and engaged external specialists
when needed. These activities have focused on areas of risk
and covered:
• information security;
• data privacy and governance;
• corporate governance and legal compliance;
• financial compliance;
• commercial reviews;
• project delivery assurance;
• financial planning and analysis; and
• risk reporting.
The reviews provide useful insight and we will continue
to undertake them.
However, we also recognise the benefit of an external
perspective and independent review. In FY25, we engaged
Grant Thornton on a project basis to review our controls in
two areas, payroll and procure to pay. No material control
weaknesses were identified in those reviews.
Currently the external auditor does not place reliance on the
work of the internal audit reviews to date, but this is expected
to change as the internal audit function develops.
FY26 internal audit plan
Following the successful completion of these reviews, we
have appointed Grant Thornton to provide internal audit
services to the Group, by conducting ‘deep dive’ reviews on
areas of greater risk. This will begin in FY26 with reviews
of our order-to-cash processes, and cyber security
programme assurance.
Preparing for compliance with the 2024 UK
Corporate Governance Code
The 2024 edition of the UK Corporate Governance Code
introduced new requirements relating to audit, risk and
internal control. Most significantly, Provision 29 introduces
new Board responsibilities for monitoring, reviewing and
ensuring the effectiveness of the risk management and
internal control framework, including a statement on the
effectiveness of all material controls at the balance sheet
date. This provision comes into force for reporting periods
beginning on or after 1 January 2026, which means it will
first apply to Kainos in FY27.
The Committee has discussed the new requirements and
developed a high-level plan to ensure timely compliance.
Our newly formalised approach to internal audit will
support us in gaining comfort about the operation and
documentation of key controls.
James Kidd
Chair of the Audit and Risk Committee
16 May 2025
Audit and Risk Committee Report
continued
83
Kainos Annual report 2025
Corporate Governance
DIRECTORS’
REMUNERATION
REPORT
Attendance
Katie Davis (Chair) 5/5
Rosaleen Blair 5/5
James Kidd 5/5
Tom Burnet (former member)
(1)
2/2
(1) On 24 September 2024 Tom Burnet stepped down from
the Committee.
Statement from the Chair of the
Remuneration Committee
As Chair of the Remuneration Committee,
I am pleased to introduce our Directors’
Remuneration Report for the year ended
31 March 2025.
Composition
The Remuneration Committee members are
Rosaleen Blair, James Kidd and me, as the
Committee Chair. Tom Burnet stepped down
from the Committee when he retired from
the Board in September 2024.
While only Committee members are
entitled to attend meetings, we also
invite the Executive Directors to attend
meetings as necessary, as well as employee
representatives from across the business
to participate in strategic remuneration
discussions.
The Company Secretary is secretary to
the Committee.
Responsibilities
The Committee manages all aspects of the
Executive Directors’ remuneration, gives
guidance on the remuneration of other
members of the senior management team
and supervises the workings of all our share
incentive plans.
The Committee operates within its terms of
reference, which are reviewed and updated
annually and are available from the
Company’s website.
Key activities
There were five meetings during the year,
with the members’ attendance set out above.
During the year we:
• continued to oversee the operation of the
Directors’ Remuneration Policy approved
by shareholders at the 2022 AGM;
• reviewed and updated the Directors’
Remuneration Policy, ahead of putting
it to shareholders for approval at the
2025 AGM;
• reviewed the Group’s share schemes, as
we approach the 10-year anniversary of
the Group’s IPO, with a view to simplifying
the offering and ensuring they continue to
meet our strategic objectives;
• approved an updated and strengthened
malus and clawback policy, which forms
part of our bonus and share scheme rules
and applies to all employees who take part
in these schemes, including the Executive
Directors;
• approved Russell Sloan’s remuneration
payments and payments for loss of office,
when he stepped down as CEO, and
Brendan Mooney’s remuneration package
on his appointment as CEO;
• reviewed the Non-Executive Directors’ fees
and recommended changes to the Board
for approval, to apply from 1 June 2024; and
• continued to oversee remuneration
practice across Kainos, to ensure
alignment with our reward philosophy.
The proposed Remuneration Policy to apply
from FY26 is set out in the ‘Proposed
Remuneration Policy’ section of this report
and includes information on our updated
share schemes. The malus and clawback
policy, which sits alongside the
Remuneration Policy, is available from our
website at: https://www.kainos.com/investor-
relations/people-and-policies.
Business context
Our financial results reflected a more
challenging year for Kainos, with strong
growth in some areas balanced by
challenges in others. We delivered very
strong growth in our Workday Products
division, though this was more than offset by
declines in our two services divisions. As a
result, we reported our first declines in
revenue and adjusted profit since 2009.
In March, we made the difficult decision to
reduce our workforce, directly affecting 190
colleagues — approximately 7% of our
global team. This decision was made with
careful consideration and with a clear focus
on the long-term growth opportunities for
our business.
Kainos Annual report 2025
Corporate Governance
Strategic context
Overseeing reward for the wider workforce is an important
part of our remit. The Remuneration Committee considers
wider company pay policies at various meetings throughout
the year and considers these and broader pay trends when
making executive Directors’ compensation decisions.
A significant area of focus this year has been our three-year
review of our Directors’ Remuneration Policy, which coincided
with the 10-year anniversary of our IPO and the renewals of
our existing share plans. We took the opportunity to consider
our share plans in the context of our overall business and
remuneration strategy, to ensure that our share schemes
continue to be relevant, simple to understand and value for
money for our people. The Group’s Remuneration Steering
Committee (made up of senior leaders) takes the lead on
remuneration strategy for the wider workforce and therefore
led the shares review, with Deloitte providing expertise and
knowledge of the market and external context.
In advance of the changes to the malus and clawback
provisions introduced in the 2024 UK Corporate Governance
Code taking effect, we strengthened our malus and clawback
provisions through a new policy to promote accountability,
integrity and responsible conduct among employees. Subject
to approval at the AGM, the proposed Directors’
Remuneration Policy will be effective for three years from
September 2025.
When times are difficult, it is more important than ever that
we look after our people and understand how the rewards we
offer can attract, retain and motivate them. The Group’s
geographic expansion has also made our workforce
remuneration more complex than a few years ago. We
therefore continue to listen to our people’s feedback and
support the work of the Remuneration Steering Committee.
This has resulted in good progress with developing a more
flexible benefits package. Other key remuneration initiatives
included creating a UK Pensions Committee, reviewing
pension provision across our global locations and initiating
a review of sales roles and their compensation structures,
to determine the appropriate compensation mix and create
consistency across the organisation. A job-sizing exercise
for Executive roles was undertaken, which considered factors
such as the role’s geographical scope and contribution to the
business, to determine the right compensation packages.
The Group has also taken further steps to close identified
gender or ethnicity pay gaps, with people receiving a positive
adjustment to their remuneration.
Workforce engagement and education remain a priority,
to help our employees understand our reward strategy.
Our Directors’ Remuneration Policy, which is available to all
employees sets out the relationship between Executive
Directors’ pay and employees’ remuneration and how
annual salary increases and pension contributions align
with the broader workforce. We have an ongoing campaign
to educate our employees and during FY25, the Group ran
a range of webinars and other communications to inform
our people about the rewards and benefits to which they
are entitled. We also educated our people managers on our
reward philosophy and salary ranges, to enable them
to understand salary positioning and communicate
effectively within their teams, and run drop-in sessions for
senior leaders covering topics such as the Performance
Share Plan. The Group will continue to run educational
programmes in FY26, including detailed communications
and engagement around the planned roll-out of the new
flexible benefits offering.
Executive outcomes and reward
The Group’s financial KPIs of revenue, adjusted pre-tax profit
and bookings are used in establishing the Executive
Directors’ annual bonus targets. Given the weightings in our
scheme, the Group’s performance for the year translates to a
30% pay-out against these targets, with the key measures
outlined below.
2025
£
2024
£
Revenue £367.2m £382.4m
Adjusted pre-tax profit £65.6m £77.2m
Bookings £382.4m £424.5m
Total dividend per share 28.4p 27.3p
In June 2024, the Group made performance share awards to
Russell Sloan and Richard McCann of 34,602 and 25,951
share options, respectively.
On 29 June 2021, we granted long-term incentive awards to
Brendan Mooney and Richard McCann. These awards vested
at 37.3% during the year, and the Executive Directors
received 2,231 and 2,476 share options respectively.
Further detail of these awards is provided in the Annual
Report on Remuneration.
As discussed earlier in the Annual Report, Russell Sloan
stepped down as CEO in December 2024, with Brendan
Mooney rejoining the Board in that role.
Our policy is to pay Executive Directors at a level comparable
to the Group’s peers. However, Brendan has requested to
take a lower base salary than provided for in our policy,
which also reduces the potential value of his incentive
awards and pension contributions, which are calculated as a
multiple of base salary. If the Company is required to appoint
a new CEO in future to succeed Brendan, we would expect
the remuneration package on recruitment to be in line with
our policy.
Information on Russell Sloan’s remuneration payments and
payments for loss of office can be found in the Annual Report
on Remuneration.
Alignment with UK Corporate Governance Code
The Remuneration Policy approved in September 2022
is aligned with the UK Corporate Governance Code 2018,
as outlined below.
Directors’ Remuneration Report
continued
84
85
Kainos Annual report 2025
Corporate Governance
Clarity
• This report sets out the arrangements for Executive
Directors in a clear and transparent way.
• Performance requirements are clearly disclosed and
transparent for all stakeholders and we provide detailed
disclosures on the relevant performance outcomes for all
stakeholders to consider.
• A formal Reward Philosophy and Strategy has been agreed
and continues to be communicated and embedded in the
organisation to ensure greater transparency.
• Colleagues from across the organisation are periodically
invited to Remuneration Committee meetings to engage
on various remuneration topics to ensure internal clarity.
• The Committee’s workings and the Remuneration Policy
are discussed regularly with the Remuneration Steering
Committee, which leads the remuneration strategy
for Kainos.
• Shareholders can ask questions and comment on
remuneration at our AGM. The current Remuneration
Policy has not attracted any significant level of
shareholder challenge and minimal changes have been
made to the new Remuneration Policy. Changes that have
been made reflect feedback received from shareholders
on the ‘Directors’ Remuneration Report’. For example,
as a result of shareholder feedback on certain cliff edge
vesting, the Company is reviewing the long-term incentive
plan (LTIP) performance measures to consider linear
conditions with quantifiable targets.
Simplicity
• The remuneration framework is made up of three key
elements: fixed pay (including base salary, pension and
benefits), annual bonus scheme and LTIP.
• The framework is simple to understand for participants,
shareholders and the wider workforce. Incentive elements
are aligned to our strategic priorities.
Risk
• We have set variable remuneration targets at levels
which reward high performance, but do not encourage
inappropriate business risk.
• Part of any bonus earned is deferred and a holding
period applies to any long-term award, to ensure variable
remuneration is linked to sustainable performance.
• Our malus and clawback policy applies to variable
incentives.
Predictability
• Our policy sets out the maximum payments available for
the annual bonus and LTIP.
• We have set target and threshold performance levels
for the annual bonus, and minimum, mid and maximum
performance levels for LTIP financial performance
conditions.
Proportionality
• A significant proportion of Executive Director reward is
linked to performance through the incentive framework,
and there is a clear line of sight between performance and
the delivery of long-term shareholder value.
• The Committee regularly reviews performance measures
and the underlying targets to ensure they are directly
aligned to our strategic priorities.
Alignment to culture
• The ‘Responsible Company’ LTIP performance condition
reflects areas that are important to the business.
• The Committee regularly reviews Executive Director
reward to ensure alignment with shareholder and
workforce experience.
• Share incentives are used extensively throughout Kainos
to align the employee experience with shareholders. All
employees are given the opportunity to benefit through the
Save as You Earn (SAYE) and Share Incentive Plan (SIP), or
the equivalent in locations where these share schemes are
not available.
We are satisfied that the policy operated as intended during
the reporting period, however we have revised the policy in
2025 to strengthen our malus and clawback policy and
reflect proposed changes to our share schemes as previously
outlined in this report.
Advisors to the Committee
The Committee does not have retained remuneration
advisors. However, the Group and the Committee did receive
advice from Deloitte as part of the review of the share
schemes in FY25.
AGM
At the 2025 AGM:
• the Directors’ Annual Report on Remuneration will be put
to an advisory shareholder vote; and
• the proposed Directors’ Remuneration Policy will be put to
a binding shareholder vote.
Looking forward
We will continue to ensure that our reward practices help us
to retain our talented employees and support our strategic
goals, while balancing this with the need for fiscal prudence.
The Committee’s priorities over the next year include:
• implementing the new Directors’ Remuneration Policy and
the changes to our share schemes for Executive Directors
and the wider workforce;
• continuing to educate and embed our reward philosophy,
strategy and Remuneration Policy; and
• continuing to oversee remuneration arrangements for the
wider workforce, to ensure we continue to attract, retain
and motivate the talented people we need to deliver our
strategy.
Katie Davis
Chair
16 May 2025
Kainos Annual report 2025
Corporate Governance
86
Directors’ Remuneration Report
continued
Directors’ Remuneration Policy for FY25
The Directors’ Remuneration Policy which applied during FY25 was approved at the 2022 AGM held on 28 September 2022 and
is effective for three years from that date. The full Policy can be accessed on the Company website at www.kainos.pub/
rempolicy. No changes have been made to the policy since it was approved.
Shareholders and statement of voting at AGM
Shareholders approved the Annual Report on Remuneration for FY24 at the 2024 AGM and the Directors’ Remuneration Policy
at the 2022 AGM, with the votes cast set out below:
Resolution Votes cast for
% of votes
cast for
Votes
against
% of votes
against
Tot al
votes cast
Votes
withheld
Approval of Annual Report on
Remuneration for the year ended
31 March 2024 96,115,928 95.19% 4,857,275 4.81% 100,973,203 1,581
Approval of the Directors’
Remuneration Policy at the 2022 AGM 101,532,521 97.64% 2,454,090 2.36% 103,986,611 80,214
We are keen to ensure that shareholders support the Group’s remuneration philosophy and policy. As Chair, I welcome
shareholder feedback at any time of year, including as part of the AGM process. To date, we have not received any significant
dissenting shareholder votes on our Remuneration Policy or the outcomes.
Proposed Remuneration Policy 2025
Our proposed Directors’ Remuneration Policy is set out below. It will be put to shareholders for approval at the AGM on
23 September 2025 and, subject to that approval, will be effective for three years from that date. The policy is similar to
previous years, but has been updated to reflect the following:
• A strengthened malus and clawback policy, which is referenced within the Executive Directors’ Bonus and LTIP reward
components.
• Revised fees for the Chair and Non-Executive Directors.
• Changes to our share schemes from FY26, to better align them to the Group’s strategy and market trends. The changes
include:
– greater focus on the Long-Term Incentive component of Total Target Compensation, calculating future awards as a
percentage of base salary;
– a review of performance measures, weightings and targets, to ensure continued alignment to business strategy and
industry trends;
– a transition to performance shares aligned to business goals for senior leadership, replacing share option awards; and
– an adjustment to the frequency, timing and quantum of SAYE and SIP awards.
87
Kainos Annual report 2025
Corporate Governance
Executive Director reward components
Base Salary
Purpose To attract and retain Executive Directors.
Operation Reviewed annually and fixed for 12 months, commencing 1 June each year. The Remuneration
Committee considers:
• an individual’s experience and knowledge;
• business and individual performance;
• achievement of objectives;
• comparative salaries and periodic reviews;
• the Company’s financial position; and
• salary increases for Kainos’ employees.
Potential remuneration Percentage increases will normally be in line with other employees in the same location.
Higher increases may be awarded if there are commercial reasons for doing so, such as to reflect
market movements, changes in job responsibilities and to address retention issues.
Performance metrics None.
Benefits
Purpose To attract and retain Executive Directors.
Operation The Executive Directors are entitled to private medical insurance, life insurance and permanent
health insurance.
Potential remuneration No maximum is set but the Remuneration Committee will monitor the overall cost of the benefits
package. Any changes will normally be in line with other employees in the same location.
Performance metrics None.
Pension
Purpose To attract and retain Executive Directors.
Operation The Executive Directors are entitled to participate in the Kainos pension scheme or receive a
payment in lieu of pension.
Potential remuneration The maximum Company contribution for Executive Directors is 5% of base salary, in line with other
employees in the same location. Any changes will normally be in line with other employees in the
same location.
Performance metrics None.
Kainos Annual report 2025
Corporate Governance
88
Directors’ Remuneration Report
continued
Annual Bonus
Purpose To reward and incentivise performance within a financial year, focus Executive Directors on key
objectives and support positive team behaviour, with adequate reward for good performance and
excellent reward for exceptional performance.
Operation Performance is measured on an annual basis for each financial year. The Committee establishes
and weights the criteria at the beginning of each year, based on Company financial targets, and
determines threshold and target levels of performance for each measure. At the end of the year, the
Committee determines the extent to which targets were achieved. On-target levels of payment are
set for each Executive Director at the start of each year. Up to 150% of these levels may be paid,
based on the extent to which the target is exceeded.
Annual bonus is normally paid in cash following the completion of the audit of that year’s
financial statements. One third of payments will be deferred for three years and then paid in cash
or in shares.
Clawback in line with the Company’s malus and clawback policy may be applied at the
Remuneration Committee’s discretion, in the event of material misstatement of the financial results
or other exceptional circumstances, such as gross misconduct.
The Remuneration Committee has discretion to apply ‘corporate override’ if core targets are not
achieved or a material negative event occurs.
Potential remuneration The maximum annual bonus opportunity under the policy is 150% of the Executive’s salary.
Performance metrics Annual bonus is discretionary. The Committee chooses and weights the criteria and sets targets
each year, in line with business priorities.
An element of the bonus may also be based on personal performance.
Long-Term Incentive Plan (LTIP)
Purpose To motivate Executive Directors, incentivise long-term performance and facilitate share ownership.
Operation Performance share awards are made under the Group’s 2025 Performance Share Plan (PSP)
(to be approved).
Awards, made in the form of nil or nominal cost options, will normally have a three-year vesting
period following the date of award. For Executive Directors, there is an additional two-year holding
period prior to exercise. Awards will vest and be exercisable subject to continued employment and
meeting appropriately challenging performance conditions specified at the outset. The
Remuneration Committee determines the extent to which performance conditions have been met.
Awards may be increased for dividends paid during the vesting period.
The Remuneration Committee determines the performance conditions, weighting and target
performance levels at the point of award. Clawback may be applied in line with the Company malus
and clawback policy, at the Committee’s discretion, in the event of material misstatement of the
financial results or other exceptional circumstances, such as gross misconduct.
Potential remuneration The normal maximum level of annual award is 200% of salary. In exceptional circumstances, awards
may be made up to a maximum of 300% of salary.
In the event of a new appointment the Remuneration Committee would expect to make a higher
award, closer to the normal maximum.
Performance metrics The Remuneration Committee will assess what measures and targets best support the Group’s
long-term focus, so measures and targets may be different from year to year.
89
Kainos Annual report 2025
Corporate Governance
Non-Executive Director payments
Fees
Purpose To attract and retain Non-Executive Directors with appropriate experience and skills.
Operation The Chair and Non-Executive Directors are paid fees, as detailed in this table. The fees reflect their
time commitment and responsibilities, and the fees paid in other companies of comparable size
and complexity.
The Chair’s fee is approved by the Board, on the Remuneration Committee’s recommendation.
Fees for the Non-Executive Directors are approved by the Board, on the recommendation of the
Chair and Executive Directors.
Additional fees are payable for additional responsibilities.
Potential remuneration The Chair’s fee is currently £140,000 per annum. The base fee for Non-Executive Directors is
currently £60,000 per annum.
Additional fees per annum are awarded:
• Senior Independent Director – £12,000
• Chair of Audit and Risk Committee – £10,000
• Chair of Remuneration Committee – £10,000
Performance metrics None.
Company-wide share plans
The following share schemes are offered to eligible employees. Executive Directors are eligible to participate as shown.
Share Incentive Plan (SIP) UK
Purpose To motivate, facilitate share ownership and align employees with shareholders.
Operation The Share Incentive Plan (SIP) is a tax-advantaged all-employee plan, supervised by the
Remuneration Committee. Significant tax advantages apply if shares acquired under the plan are
held for five years.
UK employees, including Executive Directors, may be awarded free shares up to a maximum value
of £3,600 each year.
They may purchase partnership shares out of pre-tax salary up to £1,800 per tax year and may be
awarded up to two free matching shares for each partnership share acquired (although no
partnership purchase or matching has been implemented to date).
The Board shall determine if and when further SIP awards will be made and the terms of those
awards.
Potential remuneration Up to £3,600 of free or matching shares per annum.
Performance metrics None.
Kainos Annual report 2025
Corporate Governance
90
Directors’ Remuneration Report
continued
Save As You Earn Option Plan (SAYE)
Purpose To motivate, facilitate share ownership and align employees with shareholders.
Operation An ‘all-employee’ share option plan approved by HMRC and supervised by the Remuneration
Committee.
UK employees, including Executive Directors, may enter into a savings contract under which they
agree to save a specified monthly amount for three or five years. At the end of the contract,
participating employees may use the amount saved to exercise options with an exercise price of up
to a 20% discount to the market share price at the outset.
The Board shall determine if and when further SAYE awards will be made and the terms of SAYE
participation.
Potential remuneration Under the plan, the maximum monthly savings amount is £500. Executive Directors are eligible to
participate in these schemes.
Performance metrics None.
Poland, Ireland & US Share Schemes
Purpose To motivate, facilitate share ownership and align employees with shareholders.
Operation The Group has implemented share schemes for employees in Poland and the Republic of Ireland to
make share awards to these employees on similar terms and of a similar value to those made under
the UK SAYE and SIP schemes. It has also implemented a share scheme for employees in the US on
similar terms and of a similar value to that made under the UK SIP scheme.
The Board shall determine if and when further awards will be made and the terms of those awards.
Potential remuneration Employees based in these countries may be eligible to participate in these plans, at similar levels to
those offered to UK employees under the SAYE and SIP schemes. If Executive Directors were based
in these countries, they would be able to participate in these schemes.
Performance metrics None.
Service contracts – Executive Directors
The key terms of the Executive Directors’ contracts are summarised in the table below:
Provisions
Term and notice Indefinite with 12 months’ notice from either party.
Payment Salary and discretionary annual bonus.
Benefits and other
entitlements
Company pension contribution or payment in lieu of pension, private medical insurance and
permanent health insurance.
Termination May be terminated on 12 months’ written notice served by either party. Kainos has a contractual
right to pay the Executive Directors in lieu of all their notice and to place them on garden leave
during all or part of their notice period. In the event of gross misconduct, their employment will be
terminated with immediate effect without the requirement for notice or associated payment in lieu.
Letters of appointment – Non-Executive Directors
The Non-Executive Directors have letters of appointment which may be terminated in certain circumstances, including the
giving of three months’ written notice by either party or failure to be re-elected by shareholders.
Payments for loss of office
In the event of termination, all Directors will receive payments for loss of office in accordance with the termination provisions of
their service contract or letter of appointment.
The default position is that on loss of office, an Executive Director forfeits any right to any bonus payment which would
otherwise have accrued in respect of that year. If an Executive Director is deemed a ‘good leaver’, they will be entitled to receive
a pro-rated bonus for the proportion of the year that they worked.
91
Kainos Annual report 2025
Corporate Governance
The treatment of an Executive Director’s share-based
incentives will be determined based on the plan rules. The
default treatment will be for outstanding unvested awards to
lapse on leaving. For awards granted under the PSP, SIP or
SAYE plans, ‘good leaver’ status may be applied in certain
circumstances, and the awards may vest in full.
In respect of performance shares, awards of ‘good leavers’
will normally vest on the original vesting date, subject to
achieving any performance conditions, with the award being
pro-rated to reflect the portion of the vesting period elapsed
when they leave. Under the plan rules, the Remuneration
Committee may determine that awards vest at the point of
departure, to the extent that performance conditions have
been met at that point (as determined by the Committee
acting reasonably) and pro-rated for time, unless the
Remuneration Committee allows vesting to a greater extent.
Remuneration Policy for new Directors
Non-Executive Directors will be appointed on terms
substantially similar to the existing Non-Executive Directors
and in accordance with the Remuneration Policy at the time.
If a new Executive Director is appointed, or an existing
Executive Director agrees a new service contract, the
contract would be subject to a notice period of no more than
12 months, with the Director entitled to receive salary, bonus
and benefits and take part in the current share plans. The
remuneration package for the new Director would be set in
accordance with the Remuneration Policy at the time, while
reflecting the individual’s experience and skill.
The new Director’s total remuneration would be consistent
with comparable packages, and the Remuneration
Committee will seek external advice to validate this. In the
year of joining, the annual bonus and associated
performance measures will be pro-rated.
When recruiting Executive Directors externally, the
Remuneration Committee may need to offer additional
one-off cash and/or share-based elements, when in the best
interests of Kainos and its shareholders. Such payments
would be limited to the remuneration the individual lost when
leaving their former employer to join Kainos and would
broadly reflect the delivery mechanism for the lost
remuneration (for example, cash, shares or options), as well
as the time horizons and whether performance requirements
are attached to that remuneration. Shareholders will be
informed of such payments at the time of appointment.
For an internal appointment, any variable pay element
awarded in respect of the prior role would be allowed to pay
out according to its terms, adjusted as relevant to take into
account the appointment. Other ongoing remuneration
obligations existing prior to appointment would continue as
appropriate, provided they are put to shareholders for
approval at the earliest opportunity.
For both external and internal appointments, the
Remuneration Committee may agree that Kainos will meet
reasonable relocation expenses, in line with market practice.
Employees
Kainos offers total remuneration for employees that attracts,
motivates and retains talented individuals.
Some employees may receive a bonus, which in many cases
will be a percentage of salary, with elements determined by
personal performance and the Group’s financial performance.
For more senior employees, a higher proportion of
remuneration is payable as a bonus.
The benefits available depend on market practice in each
country. The pension scheme available to an employee varies
according to location, with contributions at a competitive
level for each country.
The Group’s policy is to offer all employees the chance to
take part in SIP or SAYE. More senior employees may receive
discretionary share option awards.
When reviewing the Executive Directors’ remuneration, the
Remuneration Committee considers the pay and benefits of
employees. In addition, the Committee consults with
employee representatives who attend Remuneration
Committee meetings periodically, to ensure that the
Remuneration Policy aligns with our culture and employee
experience.
Flexibility, discretion and judgement
The Remuneration Committee developed this policy to
ensure that it has sufficient flexibility to deal with unusual
situations. As outlined in the policy tables, the Remuneration
Committee retains flexibility to determine the objectives,
weightings and target performance for the annual bonus at
the start of each year. The Committee may also alter the
performance criteria during the year, reflecting
circumstances and the Group’s performance, to ensure
targets remain both challenging and appropriate.
Similarly, the Committee has flexibility to determine the
conditions, weightings and target performance for share
awards at the point awards are made. The Committee can
also subsequently amend performance conditions, if events
mean that the conditions are no longer a fair measure of
performance. The alternative performance condition will be
equally challenging.
External appointments
Executive Directors may accept appointments as Non-
Executive Directors of other companies, provided that the
appointments do not conflict with their duties or time
commitments to Kainos. Any external appointment is subject
to written approval from the Board. The Executive Director is
entitled to retain the fees from such appointments.
Kainos Annual report 2025
Corporate Governance
92
Information on the Committee’s responsibilities, membership and activities in the year can be
found in the Statement from the Chair of the Remuneration Committee.
Remuneration details
The following tables set out the remuneration for each Director for the years ended
31 March 2025 and 31 March 2024.
Single total figure of remuneration for Executive Directors (audited)
Name Year Salary Benefits
(1)
Bonus Pension
(2)
Other
(3)
Incentive
vested
(6)
Tot al
Tot al
fixed
Tot al
variable
All amounts in (£000s)
Brendan
Mooney
(4)
2025 69 – 16 3 2 10 100 72 28
2024 113 – 66 6 – 90 275 119 156
Richard
McCann
2025 275 1 56 14 2 18 366 290 76
2024 271 1 145 14 2 122 555 286 269
Russell
Sloan
(5)
2025 264 1 47 13 2 28 355 278 77
2024 190 – 93 9 2 3 297 199 98
(1) Benefits is the taxable value of private health insurance received by Executive Directors.
(2) Pension amounts for Brendan Mooney and Richard McCann are payments in lieu of pension.
(3) Other relates to the award of SIP shares. The SIP award to Brendan Mooney was prior to his reappointment as CEO.
(4) Brendan Mooney stepped down from the role of CEO, effective 21 September 2023 and was reappointed as CEO
effective 11 December 2024. The table above includes:
• for FY25, base salary payments from 11 December to 31 March 2025 (annual base salary £226,600); and
• for FY24, base salary payments from 1 April 2023 to 30 September 2023 (annual base salary £226,600).
(5) Russell Sloan was appointed CEO effective 21 September 2023 and stepped down as CEO effective 11 December 2024.
The table above includes:
• for FY25, base salary payments from 1 April 2024 to 11 December 2024 (annual base salary £380,000); and
• for FY24, base salary payments from 1 October 2023 to 31 March 2024 (annual base salary £380,000).
(6) The 2021 PSPs vested during the year. The award to Russell Sloan although granted prior to his appointment as CEO,
vested during his tenure as CEO, and its value at vesting date has been included in the table above.
Single total figure of remuneration for Non-Executive Directors (audited)
Name Year Fees
All amounts in (£000s)
Rosaleen Blair
(1)
2025 100
2024 50
James Kidd
(2)
2025 73
2024 25
Katie Davis 2025 68
2024 58
Tom Burnet
(3)
2025 61
2024 100
Andy Malpass
(3)
2025 34
2024 68
(1) Rosaleen Blair’s remuneration for FY25 reflects her appointment as Chair of the Board from 24 September 2024.
(2) James Kidd’s remuneration for FY24 is from the date of his appointment on 1 October 2023. His remuneration for FY25
includes the additional payments as Chair of the Audit and Risk Committee and SID from 24 September 2024.
(3) Tom Burnet and Andy Malpass’s remuneration for FY25 is for the period from 1 April to 24 September 2024, when they
retired from the Board.
ANNUAL REPORT
ON REMUNERATION
93
Kainos Annual report 2025
Corporate Governance
Annual bonus (audited)
Eligible bonus pay-out
Objective Weighting
Target
performance
(£ million)
Threshold
performance
(£ million)
Outcome
(£ million)
Brendan
Mooney
(£000s)
Richard
McCann
(£000s)
Russell
Sloan
(£000s)
Revenue 30% 411.6 349.9 367.2 4 14 12
Adjusted pre-tax profit 40% 88.2 70.6 65.6–––
Bookings 30% 475.7 285.4 382.4 12 42 35
Totals 100% 16 56 47
Under the Remuneration Policy, the maximum annual bonus opportunity is 150% of salary for the CEO and CFO. The bonuses
payable to Brendan Mooney, Richard McCann and Russell Sloan are 23%, 20% and 18% of salary respectively.
The bonus amounts for Brendan Mooney and Russell Sloan have been calculated on a pro-rata basis, reflecting the time each
of them was in the role of CEO in FY25.
As per the Remuneration Policy (approved September 2022), one-third of the annual bonus amount will be deferred for a
period of three years and then paid in cash or shares.
2025 Performance Share Plan (PSP) granted (audited)
The following table summarises the PSP awards made to Executive Directors on 3 June 2024. The awards are share options
with a nominal exercise price of £0.005 per option and do not have the right to dividend payments or equivalent until the
options have been exercised.
Executive Director Date of grant
No. of ordinary
shares under option
Face value
(1)
(£000s)
Exercise price per
ordinary share First exercise date Lapsing date
Richard McCann June 2024 25,951 305 £0.005 June 2029 June 2034
Russell Sloan June 2024 34,602 407 £0.005 June 2029 June 2034
(1) Calculated using the grant price of £11.76.
(2) No options were granted to Brendan Mooney during the period.
The awards are subject to the following performance conditions. The EPS and TSR conditions are measured over the three
financial years commencing 1 April 2024. The Responsible Company criteria must be achieved by 31 March 2027:
Performance condition Weighting Minimum performance Mid performance Maximum performance
Earnings per share
(EPS) growth
40% 30% vesting for growth of 5% Linear vesting between
minimum and maximum
performance
100% vesting if growth
is 13% or higher
Total shareholder return
(TSR) performance versus
FTSE techMARK index
30% 30% vesting if Company
performance is at mean
average index price growth
Linear vesting between
minimum and maximum
performance
100% vesting if Company
performance is at or above
mean average index price
growth plus 4% points
Responsible Company
(1)
30% N/A N/A N/A
(1) Responsible Company reflects strategic priorities in the areas of diversity, workforce engagement, climate action and customer satisfaction. Includes: 37% of senior
management roles held by women (10% vesting), latest available staff engagement score of 7 or above (10% vesting), reduction in the intensity of Scope 3 carbon
emissions of 45% (5% vesting) and latest available customer Net Promoter Score of more than 30 (5% vesting).
Kainos Annual report 2025
Corporate Governance
94
Annual Report on Remuneration
continued
2025 SIP and SAYE schemes granted (audited)
The Executive Directors are entitled to participate in the SIP and SAYE schemes, on the same terms as all other employees with
the same length of service.
The SIP shares awarded on 12 November 2024 to Executive Directors are shown below:
Executive Director 2024 SIP shares
Face value
(1)
(£000s) Vesting period
Brendan Mooney
(2)
200 2 Three years from the date of grant
Richard McCann 200 2 Three years from the date of grant
Russell Sloan 200 2 Three years from the date of grant
(1) Calculated using the grant price of £8.77.
(2) Brendan Mooney was not an Executive Director at the date of award.
The SAYE shares awarded on 1 July 2024 to Executive Directors are shown below:
Executive Director 2024 SAYE shares
Face value
(1)
(£0.00s) Vesting period
Richard McCann 575 6 Three years from the date of grant
Russell Sloan 575 6 Three years from the date of grant
Brendan Mooney
(2)
575 6 Three years from the date of grant
(1) Calculated using the grant price of £10.40.
(2) Brendan Mooney was not an Executive Director at the date of the award.
2021 PSP vested in 2025 (audited)
The outcomes of the 2021 PSP awards are shown below. The performance measurement period for the EPS performance
condition ended on 31 March 2024 and the measurement period for the Company TSR and Employee Engagement conditions
ended on 28 June 2024, with the following outcome.
Award Measure Weighting Vesting scale
Performance
achieved
% of award
vesting
2021 EPS 30% No vesting if EPS growth below 5% p.a., 30% of awards
vest if EPS growth equals 5% p.a. and 100% vests if EPS
growth exceeds 13% p.a. Straight-line pro-rata basis
from 30% to 100% if EPS growth exceeds 5% but is less
than 13% p.a.
8.2% 57.85%
2021 TSR
(FTSE techMARK
Index)
50% Minimum performance: 30% vesting at median
performance.
Maximum performance: 100% vesting if in upper
quartile.
Mid performance: Linear vesting between minimum
and maximum performance.
–0%
2021 Best Companies 20% 100% vesting if score at end of the three-year period is
at least equal to the score at the start of the period.*
– 100%
* In 2023 the Company determined that the all-company staff survey, Peakon, provided a more relevant measure of employee engagement. The score at the end of
the three-year period was at least equal to scores at the start.
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Kainos Annual report 2025
Corporate Governance
EPS
Executive Director No. of shares % vested
Number of
shares vested
Number of
shares lapsed
Share price
at end of
performance
period
Value at
end of
performance
period
(£000s)
Brendan Mooney
(2)
1,792 57.85% 1,036 756 £9.66 10
Russell
Sloan
(1)
2,148 57.85% 1,243 905 £9.66 12
Richard McCann 1,988 57.85% 1,150 838 £9.66 11
(1) The award was granted prior to Russell Sloan being appointed as CEO but vested during his tenure as CEO.
(2) The award was granted during Brendan Mooney’s first term as CEO but vested prior to his reappointment on 11 December 2025.
Company TSR and Employee Engagement
Executive Director No. of shares % vested
Number of
shares vested
Number of
shares lapsed
Share price
at end of
performance
period
Value at
end of
performance
period
(£000s)
Brendan Mooney 4,182 28.6% 1,195 2,987 £10.58 13
Russell Sloan 5,012 28.6% 1,432 3,580 £10.58 15
Richard McCann 4,640 28.6% 1,326 3,314 £10.58 14
(1) The award was granted prior to Russell Sloan being appointed as CEO but vested during his tenure as CEO.
(2) The award was granted during Brendan Mooney’s first term as CEO but vested prior to his reappointment on 11 December 2024.
2022 PSP vested in 2025 (audited)
The outcomes of the 2022 PSP awards are shown below. The performance measurement period for the performance conditions
ended on 31 March 2025.
Award Measure Weighting Vesting scale
Performance
achieved
% of award
vesting
2022 EPS 25% No vesting if EPS growth below 5% p.a., 30% of
awards vest if EPS growth equals 5% p.a. and 100%
vests if EPS growth exceeds 13% p.a. Straight-line
pro-rata basis from 30% to 100% if EPS growth
exceeds 5% but is less than 13% p.a.
(0.23)% 0%
2022 TSR
performance
versus FTSE
techMARK
index
45% 30% vesting if Company performance is at mean
average index price growth. Linear vesting between
minimum and maximum performance. 100% vesting
if Company performance is at or above mean
average index price growth plus 4% points
–0%
2022 Responsible
Company
30% Responsible Company reflects strategic priorities in
the areas of diversity, workforce engagement,
climate action and customer satisfaction
66.67% 20%
Executive Director No. of shares % vested
Number of
shares vested
Number of
shares lapsed
Share price
at end of
performance
period
Value at
end of
performance
period
(£000s)
Brendan Mooney 6,753 20% 1,350 5,403 £6.64 9
Richard McCann 7,493 20% 1,498 5,995 £6.64 10
Kainos Annual report 2025
Corporate Governance
96
Annual Report on Remuneration
continued
Payments to past Directors (audited)
Brendan Mooney
Brendan stepped down as CEO and Director on 21 September 2023 and remained an employee until his reappointment as
CEO on 11 December 2024.
As set out in the 2024 Annual Report on Remuneration, while he remained an employee Brendan was entitled to receive salary,
benefits and a pro-rated bonus. His remuneration from 1 April 2024 to 10 December 2024 was:
• base salary of £157 thousand;
• benefits totalling £1 thousand; and
• a bonus of £37 thousand, which was calculated as pro-rated portion of his total bonus.
He did not receive an LTIP grant in respect of FY25.
His existing share awards continued to vest in line with their original terms, subject to applicable performance conditions,
post-vesting holding periods and malus and clawback. During the year, the 2021 PSP award vested at 37.3%, as a result of
which he received 2,231 share options, with a value at the end of the performance period of £23 thousand.
Russell Sloan
On 11 December 2024, the Company announced that Russell Sloan had stepped down as CEO and that his employment with
Kainos would end on 10 December 2025, or such earlier date as he and the Company may agree (the Termination Date).
The remuneration payments and payments for loss of office are in accordance with the Directors’ Remuneration Policy
approved by shareholders at the AGM on 28 September 2022 and as set out in the Company’s Annual Report and Accounts
for the year ending 31 March 2022. Specifically:
1. Russell will receive salary and contractual benefits up to the Termination Date.
2. He will be eligible to receive a bonus for FY25 pro-rated to the portion of the financial year worked. One-third of the bonus
will be deferred in cash or shares for three years. The upfront element of the bonus will be paid on the normal payment date,
which will be no later than 30 June 2025.
3. The deferred element of the bonus payment for FY24 will be paid on the normal payment date, which will be no later than
30 June 2027.
4. Any bonus payments will be subject to the bonus scheme rules, including malus and clawback.
5. Russell is treated as a good leaver for the purposes of the PSP. As such, he:
• will be required to exercise any vested awards within six months of the Termination Date; and
• will retain any outstanding unvested awards under the PSP and they will remain capable of vesting on the normal vesting
dates, subject to satisfaction of the relevant performance conditions at the normal vesting dates and a pro rata reduction
to reflect the proportion of the vesting period elapsed on the Termination Date. The unvested awards granted while Russell
was a Director of the Company (in November 2023 and June 2024) will vest on the third anniversary of their grant date, but
may only be exercised at the end of an additional two-year period commencing on the relevant vesting date.
6. Russell remains subject to the Executive Director Shareholding Policy, which requires him to retain all of the shares in the
Company he is treated as holding at the Termination Date for an additional two-year period from the Termination Date.
7. The Company will pay up to £10,000 plus VAT in respect of legal services provided to Russell in connection with his
stepping down.
97
Kainos Annual report 2025
Corporate Governance
Directors’ shareholdings (audited)
The interests in the Company’s ordinary shares of the Directors in office at 31 March 2025, including their connected
persons, were:
Shares Options
Name
Current
shareholding
SIP shares
(available to
withdraw)
SIP shares
(not available
to withdraw)
With
performance
measures
Without
performance
measures
Vested but
not exercised
Exercised
during the year
Brendan Mooney 10,619,062 4,959 640 12,309 575 117,496 N/A
Richard McCann 4,630,932 3,808 640 50,463 1,119 130,321 N/A
Rosaleen Blair N/A N/A N/A N/A N/A N/A N/A
James Kidd N/A N/A N/A N/A N/A N/A N/A
Katie Davis 6,400 N/A N/A N/A N/A N/A N/A
Dividend equivalent payments are not made in respect of options held.
No other changes in the Directors’ interests took place between 31 March 2025 and 30 April 2025.
Share ownership guideline for Executive Directors
The Remuneration Committee has guidelines for the value of the Executive Directors’ shareholdings in Kainos. A minimum
shareholding requirement of 200% of annual salary, over a four-year period, applies. In addition, Executive Directors are
required to retain shares post-employment equal to 200% of annual salary (or their actual shareholding on departure if that is
lower) for a minimum of two years post-employment.
Shareholding
requirement
(% of salary)
Shareholding
requirement met
Brendan Mooney 200% Yes
Richard McCann 200% Yes
Russell Sloan 200% Note (1)
(1) Russell Sloan is required to retain shares held on stepping down as CEO for a two-year period from his termination date.
There is no shareholding guideline for the Non-Executive Directors.
The shareholding requirement has been assessed in relation to the annual base salaries of Executive Directors as at
31 March 2025 and a closing share price of £6.64 on 31 March 2025.
The following shares count towards the required holding amount:
• shares owned by the Executive Directors in their own name; and
• SIP shares which are available to withdraw.
Unvested or unexercised awards under our share plans do not count towards the ownership target.
Kainos Annual report 2025
Corporate Governance
98
Annual Report on Remuneration
continued
Performance graphs and comparator tables
The Board believes that the FTSE techMARK All-Share Index provides the best benchmark for comparing the Company’s
performance. It is also the index we use as a performance criterion for PSPs.
Our TSR performance against the FTSE techMARK All-Share Index TSR, from the date of IPO in July 2015 to the end of
31 March 2025, is shown below. The Kainos share price and the FTSE techMARK All-Share Index are both rebased to 100
at the start of the period.
Kainos TSR performance against FTSE techMARK All-Share Index
Total shareholder return (rebased to 100)
Jul 15
Oct 15
Jan 16
Apr 16
Jul 16
Oct 16
Jan 17
Apr 17
Jul 17
Oct 17
Jan 18
Apr 18
Jul 18
Oct 18
Jan 19
Apr 19
Jul 19
Oct 19
Jan 20
Apr 20
Jul 20
Apr 21
Jul 21
Oct 20
Jan 21
Jan 22
Apr 23
Jan 23
Oct 21
Apr 22
Jul 22
Oct 22
Apr 24
Mar 25
Jan 24
Jul 23
Oct 23
Jan 25
Jul 24
Oct 24
Kainos Group plc TSR FTSE techMARK All-Share TSR
Rebased share price performance since IPO
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
CEO remuneration (10-year analysis)
The table below sets out the CEO’s total remuneration over the last 10 years, valued using the methodology applied to the
single total figure of remuneration.
CEO single figure of
total remuneration
(£000s)
Annual bonus
pay-out against
maximum (%)
Long-term incentive
vesting rates
against maximum
opportunity (%)
2025
(1)
455 20 37
2024
(1)
572 35 100
2023 580 54 100
2022 645 59 100
2021 591 65 100
2020 683 51 100
2019 1,036 65 96
2018 423 53 N/A
2017 399 46 N/A
2016 428 57 100
(1) CEO remuneration is the total remuneration for the role of CEO. For FY24 and FY25 it includes remuneration for Brendan Mooney and Russell Sloan as per the single
table of remuneration.
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Kainos Annual report 2025
Corporate Governance
CEO to employee pay ratio
The following table sets out the ratio of the CEO’s latest single total figure of remuneration versus UK full-time equivalent (FTE)
employees’ remuneration.
Year Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2025 A 11.4:1 7.0:1 4.9:1
2024 A 14.7:1 8.9:1 6.2:1
• The Committee has adopted option A as its preferred method for calculating the pay ratio for the year ended 31 March 2025.
The Committee considered this is the most efficient and robust approach to gathering data for the year.
• The salaries and wages of UK staff were used to calculate an equivalent single figure remuneration.
• For 2024 and 2025, the total single figure used to derive the CEO pay ratio is a combination of the two individuals in position
of CEO during the year.
• The wages and salaries figures for the median, 25th and 75th percentile employees used in the pay ratio calculation are
as follows:
Y25 Y50 Y75
Wages and salaries £40k £66k £94k
Percentage change in remuneration
The tables below show the percentage change in remuneration for each Director and all UK employees, for both the current
and prior periods. The Committee considers the comparator group of all UK employees to be representative of Kainos as a
whole and a global comparator group would not result in a material variance.
Executive Directors
Percentage increase in remuneration in 2025 compared with remuneration in 2024:
Brendan Mooney
(2)
Richard McCann Russell Sloan
(3)
Employees
Salary and fees
(1)
(38.9%) 1.5% 39.5% 11.3%
All taxable benefits 0.0% 0.0% N/A 9.7%
Annual bonuses (75.8%) (61.4%) (49.5%) (45.3%)
(1) Executive Directors’ salary movements calculated using the single total figure of remuneration.
(2) Remuneration included for Brendan Mooney from his reappointment as CEO on 11 December 2024.
(3) Remuneration included for Russell Sloan up to 11 December 2024, when he stepped down as CEO.
Percentage increase in remuneration in 2024 compared with remuneration in 2023:
Brendan Mooney
(2)
Richard McCann Russell Sloan
(3)
Employees
Salary and fees
(1)
(50.2%) 4.2% N/A 12.1%
All taxable benefits (54.0%) 0.0% N/A 0.0%
Annual bonuses (64.1%) (21.2%) N/A (23.5%)
(1) Executive Directors’ salary movements calculated using the single total figure of remuneration.
(2) Remuneration included for Brendan Mooney up to the date of his resignation as CEO on 21 September 2023.
(3) Russell Sloan was appointed to the Board on 21 September 2023 and has no comparative remuneration information as an Executive Director.
Kainos Annual report 2025
Corporate Governance
100
Annual Report on Remuneration
continued
Non-Executive Directors
Percentage increase in remuneration in 2025 compared with remuneration in 2024
(1)
Rosaleen Blair
(2)
Katie Davis James Kidd
(3)
Andy Malpass
(4)
Tom Burnet
(4)
Employees
Salary and fees 100.0% 17.2% 192.0% (50.0%) (39.0%) 11.3%
All taxable benefits – – – – – 9.7%
Annual bonuses – – – – – (45.3%)
(1) Calculated using the single total figure of remuneration table.
(2) Rosaleen Blair was appointed Chair of the Board on 24 September 2024 and received the Chair’s fee from that date.
(3) James Kidd was appointed Senior Independent Director and Chair of the Audit and Risk Committee on 24 September 2024 and received additional fees for those
roles from that date.
(4) Tom Burnet and Andy Malpass retired from the Board on 24 September 2024.
Percentage increase in remuneration in 2024 compared with remuneration in 2023
(1)
Rosaleen Blair Katie Davis James Kidd
(2)
Andy Malpass Tom Burnet Employees
Salary and fees 0.0% 0.0% N/A 0.0% 0.0% 12.1%
All taxable benefits – – – – – 0.0%
Annual bonuses – – – – – (23.5%)
(1) Calculated using the single total figure of remuneration table.
(2) James Kidd was appointed on 1 October and has no comparative remuneration in FY23.
Relative importance of spend on pay
As a digital technology business with a growth strategy focused on organic development, our primary costs are related to our
employees. The profit, corporation tax and dividend figures have been included to provide greater context to staff remuneration.
2025
(£000s)
2024
(£000s)
Change
(£000s)
Change
%
Staff remuneration 259,119 261,430 (2,311) (1%)
Profit before tax 48,640 64,772 (16,132) (25%)
Corporation tax 13,080 16,057 (2,977) (19%)
Effective tax rate 27% 25% N/A N/A
Dividends paid 35,748 30,422 5,326 18%
Share buyback programme 22,785 – 22,785 100%
101
Kainos Annual report 2025
Corporate Governance
Directors’ remuneration for the year commencing 1 April 2025
If shareholders approve the proposed Directors’ Remuneration Policy at the AGM, then the following will apply for the year
commencing 1 April 2025:
Salary The Remuneration Committee will continue to monitor the remuneration of Executive Directors
against other companies in the IT sector and other listed companies with similar market
capitalisation, to ensure that the Executive Directors remain sufficiently rewarded to promote
long-term success. The Remuneration Committee will also consider salary increases across the
wider workforce.
Benefits There is no expected change to the value of Executive Directors’ benefits in the year
commencing 1 April 2025. However, they will align to any broader workforce changes offered to
all employees as part of the Group’s flexible benefits implementation.
Pension There is no expected change to the value of Executive Directors’ pension contributions in the
year commencing 1 April 2025. However they will align to any broader workforce changes
offered to all employees as part of the Group’s flexible benefits implementation.
Annual bonus Annual bonus for the year commencing 1 April 2025 will be determined by the policy disclosed
in this report. Executive Directors will defer one-third of the annual bonus payable in June 2026
for three years.
The targets for the annual bonus for FY26 are not disclosed in this report, as that information is
deemed commercially sensitive and may be interpreted to be a forecast. The targets will be
disclosed in the 2026 Annual Report.
Long-term incentives The Remuneration Committee intends to make further performance share awards in mid-2025.
These will be made in line with the Remuneration Policy. The Committee will determine the
levels, performance conditions, weighting and growth targets to be applied at the time of
award and disclose them in the 2026 Annual Report.
Non-Executive Director
remuneration
The Non-Executive Directors’ annual fees are set out in the ‘Proposed Remuneration Policy’
section of this report.
On behalf of the Board
Katie Davis
Chair of the Remuneration Committee
16 May 2025
Kainos Annual report 2025
Corporate Governance
102
DIRECTORS’
REPORT
The Directors present their report and the
audited financial statements for Kainos
Group plc (company number 09579188) for
the year ended 31 March 2025. These will be
laid before the shareholders at the AGM to
be held on 23 September 2025. The Strategic
Report and the Corporate Governance
Report are incorporated by reference into
this Directors’ Report.
Forward looking statements
All sections of the Annual Report contain
certain forward-looking statements which,
by their nature, involve risk and uncertainty.
The forward-looking statements are based
on the knowledge and information available
at the date of preparation and on what are
believed to be reasonable judgements.
A wide range of factors may cause the
actual results to differ materially from
those contained within, or implied by, these
forward-looking statements.
The forward-looking statements should not
be construed as a profit forecast.
Other statutory disclosures
In accordance with Section 414C (11) of the
Companies Act 2006, to the extent they are
not addressed in the Directors’ Report, the
disclosures relating to the following matters
are included in the Strategic Report:
• environmental matters (including
greenhouse gas emissions and the
impact of the Group’s business on the
environment);
• the Group’s employees (including equal
opportunities, gender diversity and
employee engagement);
• details of research & development
activities; and
• social, community and human rights
issues (including corporate social
responsibility).
Directors
The Directors who held office during the
year are detailed within Corporate
Governance Report.
Financial performance and position
The financial results and position are
shown in the consolidated financial
statements. A fuller explanation of the
results and financial position, including the
dividend recommended by the Directors, is
provided in the ‘Operational Review’ and
‘Financial Review’ sections of the Strategic
Report and the notes to the financial
statements.
Information on the Group’s financial
instruments and risk management
objectives and policies, including our policy
for hedging is provided in note 26 of the
financial statements.
Political donations
No political donations were made during the
year ended 31 March 2025 (2024: £Nil).
Off-balance sheet arrangements
There are no off-balance sheet
arrangements. Details of the trusts relating
to Kainos’ share incentive plans are set out
in note 24 to the consolidated financial
statements. The shares held by the trust
rank pari passu with all the other shares
in issue and have no special rights.
103
Kainos Annual report 2025
Corporate Governance
Information required by the Listing Rules
For the purposes of LR9.8.4C R, the information required to
be disclosed by LR9.8.4 R can be found in the following
locations:
Section topic Location
1 Interest capitalised Not applicable
2 Publication of unaudited
financial information
Not applicable
4 Details of long-term
incentive schemes
Directors’
Remuneration Report
5 Waiver of emoluments
by a Director
Not applicable
6 Waiver of future emoluments
by a Director
Not applicable
7 Non pre-emptive issues of
equity for cash
Not applicable
8 Section (7) in relation to major
subsidiary undertakings
Not applicable
9 Parent participation in a
placing by a listed subsidiary
Not applicable
10 Contracts of significance Directors’ Report
11 Provision of services by a
controlling shareholder
Not applicable
12 Shareholder waivers
of dividends
Not applicable
13 Shareholder waivers of
future dividends
Not applicable
14 Agreements with controlling
shareholders
Not applicable
Share capital and Articles of Association
Details of the called-up and fully paid share capital are set
out in note 23 to the consolidated financial statements.
The rights and obligations attaching to the shares and
the powers of the Directors are set out in the Articles of
Association, copies of which can be obtained from
Companies House. There are no restrictions on the voting
rights attached to the shares and no person holds securities
carrying special rights regarding control.
Authority to purchase own shares
Kainos holds a general authority to purchase up to
12,584,171 ordinary shares in the market. This represented
approximately 10% of Kainos’ issued share capital as at
1 August 2024, as approved by shareholders at the 2024
AGM. On 11 November 2024, the Company announced a
programme to buy back and cancel up to £30.0 million of
ordinary shares (excluding expenses). The programme
completed on 9 May 2025 with the Company having
purchased 3,993,382 shares, equivalent to 3.2% of the
issued share capital as at 31 March 2025, at an aggregate
cost of £30.0 million.
A similar authority will be requested at the forthcoming AGM,
again limited to a maximum of 10% of the issued share
capital. The Board intends to exercise this authority only if it
believes it will lead to an increase in earnings per share for
the remaining shareholders.
Appointment and replacement of Directors
The appointment and replacement of Directors is governed
by the Articles of Association and the Nominations
Committee’s terms of reference. The Articles of Association
may be amended by a special resolution.
Directors’ indemnities
At the date of this Directors’ Report, indemnities are in force
under which Kainos has agreed to indemnify the Directors
and the Company Secretary to the extent permitted by law,
and by Kainos Group plc’s Articles of Association in respect
of losses arising in their capacity as Director or officer of any
member of the Kainos Group.
Directors’ and officers’ liability insurance
Kainos has purchased and maintained throughout the year
Directors’ and officers’ liability insurance in respect of itself
and its Directors and officers.
Disclosure of information to auditor
The Directors who held office at the date of approval of the
Directors’ Report confirm that, so far as they are each aware,
there is no relevant audit information of which the auditor is
unaware, and each Director has taken the steps that he or
she ought to have taken as a Director to ascertain any
relevant audit information and to establish that the auditor is
aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006.
Auditor
In accordance with Section 489 of the Companies Act 2006,
a resolution for the reappointment of KPMG as auditor of the
Company is to be proposed at the forthcoming AGM.
Significant agreements – change of control
Group companies are subject to certain customer contracts,
which require them to notify the customer of a change of
control of the Group. In some instances, this may allow the
customer to terminate its contracts with the Group. The
Directors are not aware of, and do not anticipate, any
circumstances where, any customer would wish to trigger its
termination rights under such change of control provisions.
The only significant agreements with change of control
provisions are the share incentive plans. Under the CSOP,
SAYE and Polish share plans, on a change of control, options
and awards that have not lapsed would generally vest in full.
Awards under the PSP rules would also vest, subject to the
satisfaction of any performance conditions at the time, but
these would be time pro-rated.
Kainos Annual report 2025
Corporate Governance
104
Directors’ Report
continued
Kainos is not party to any other significant agreements that
take effect, alter or terminate upon a change of control
following a takeover or upon a takeover bid.
Principal shareholders
Information provided to the Company pursuant to the
Financial Conduct Authority’s (‘FCA’) Disclosure Guidance
and Transparency Rules (‘DTRs’) is published on a Regulatory
Information Service and on the Company’s website. As at
31 March 2025, the following information had been received,
in accordance with DTR5, from holders of notifiable interests
in the Company’s issued share capital. It should be noted
that these holdings may have changed since notified to the
Company. The following have disclosed that they (including
persons closely connected, where appropriate) have an
interest in 3% or more of the issued ordinary share capital.
Investor
Ordinary
0.5p shares
% of issued
share capital
Qubis Limited 12,221,217 9.89
Brendan and Eileen Mooney 10,619,062 8.59
Baillie Gifford & Co 7,485,280 6.06
Liontrust Asset Management plc 7,489,033 6.06
Paul Gannon 6,125,533 4.96
Richard McCann 4,630,932 3.75
Dr Brian Gannon 4,285,675 3.47
Going concern
Our business activities and position in our markets are
described in the ‘Operational Review’, ‘Our Markets’ and ‘Risk
factors and uncertainties’ sections of the Strategic Report.
The financial position, cash flows and liquidity position are
described in the ‘Financial Review’ and the notes to the
consolidated financial statements. In addition, the notes to
the consolidated financial statements include our objectives,
policies and processes for managing our capital, our
financial risk management objectives and our exposures to
credit and liquidity risk. Having reviewed the plans and
projections for our business and our current financial
position, the Board believes 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. As a consequence
of these factors, and having reviewed the forecasts for the
coming year, the Board has 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 report. For this reason, we
continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
Long-term viability
The full Viability Statement and the associated explanations
made in accordance with Provision 31 of the Code can be
found in the Strategic Report.
Directors’ responsibilities statement in respect of the
Annual Report and the financial statements
The Directors are responsible for preparing the Annual
Report and the Group and Company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
Company financial statements for each financial year. Under
that law they are required to prepare the Group financial
statements in accordance with UK-adopted international
accounting standards and applicable law and have elected
to prepare the Company financial statements in accordance
with UK accounting standards and applicable law, including
FRS101 Reduced Disclosure Framework.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
Company and of the Group’s profit or loss for that period.
In preparing the Group and Company financial statements,
the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant, reliable and prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• assess the Group and Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to
going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the Company
or to cease operations or have no realistic alternative
but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that its financial statements
comply with the Companies Act 2006. They are responsible
for such internal controls as they determine are necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other
irregularities. Under applicable law and regulations, the
Directors are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration Report
and Corporate Governance Statement that comply with that
law and those regulations. The Directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation
in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
105
Kainos Annual report 2025
Corporate Governance
In accordance with Disclosure Guidance and Transparency
Rule 4.1.14R, the financial statements will form part of the
annual financial report prepared using the single electronic
reporting format under the ESEF Regulation. The auditor’s
report on these financial statements provides no assurance
over the ESEF format.
Responsibility statement of the Directors in respect
of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the issuer, and the undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face.
We consider the Annual Report and Financial Statements,
taken as a whole, is fair, balanced, and understandable and
provides the information necessary for shareholders to
assess the Group’s position and performance, business
model and strategy.
This Directors’ Report was approved by the Board of
Directors on 16 May 2025 and is signed on its behalf by:
Rosaleen Blair
Chair
16 May 2025
Kainos Annual report 2025
Financial Statements
106
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF KAINOS GROUP PLC
1. Opinion
We have audited the financial statements of Kainos
Group plc (“the Company”) and its consolidated
undertakings (“the Group”) for the year ended 31 March
2025 set out in pages ϭϭϯ to ϭϲϯ,which comprise the
consolidated income statement, consolidated statement
of comprehensive income, consolidated statement of
financial position, consolidated statement of changes in
equity, consolidated statement of cash flows, Company
statement of financial position, Company statement of
changes in equity, and the related notes, including the
accounting policies in note 3 to the Group financial
statements and note 2 to the Company financial
statements. The financial reporting framework that has
been applied in their preparation is UK Law, UK adopted
international accounting standards and,as regards the
Company financial statements, UK Law and andUK
accounting standards including FRS 101 Reduced
Disclosure Framework.
In our opinion:
— the financial statements give a true and fair view of
the state of the Group’s and of the Company’s
affairs as at 31 March 2025 and of the Group’s
profit for the year then ended;
— the Group financial statements have been properly
prepared in accordance with UK adopted
international accounting standards;
— the Company financial statements have been
properly prepared in accordance with FRS 101
Reduced Disclosure Framework issued by the UK’s
Financial Reporting Council; and
— the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006.
Independent auditor’s
report
to the members of Kainos Group plc
Report on the audit of the financial statements
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on
23 September 2021. The period of total uninterrupted
engagement is for four financial years ended 31 March
2025. We have fulfilled our ethical responsibilities under,
and we remain independent of the Group in accordance
with, UK ethical requirements including the Financial
Reporting Council (FRC)'s Ethical Standard as applied to
listed public interest entities. No non-audit services
prohibited by that standard were provided.
107
Kainos Annual report 2025
Financial Statements
2. Conclusions relating to going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Group
or the Company or to cease their operations, and as they have
concluded that the Group and the Company’s financial position
means that this is realistic. They have also concluded that there
are no material uncertainties that could have cast significant
doubt over their ability to continue as a going concern for at least
a year from the date of approval of the financial statements (“the
going concern period”).
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the Group and
Company’s ability to continue to adopt the going concern basis
of accounting included:
— Obtaining an understanding of the inherent risks to the Group
and Company's business model and analysed how those risks
might affect the Group and Company's financial resources or
ability to continue operations over the going concern period.
— Obtaining an understanding of the directors’ use of the going
concern basis of preparation. This included inspecting their
going concern assessment and associated underlying
forecasts and assumptions, and performing inquiries of
management and those charged with governance.
— Assessing the appropriateness of key assumptions made in
the Group’s business plan, by comparing them to historical
performance and challenging the achievability of budgeted
growth.
— Testing the clerical accuracy of the going concern model
including the data used in stress testing.
— We also compared past budgets to actual results to assess the
directors' track record of budgeting accurately.
— We considered whether the going concern disclosure in note
3 to the Group financial statements gives an appropriate and
sufficient description of the directors' assessment of going
concern.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group or the Company’s ability to continue as a going concern
for a period of at least twelve months from the date when the
financial statements are authorised for issue.
In relation to the Group and the Company’s reporting on how
they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time
they were made, the absence of reference to a material
uncertainty in this auditor's report is not a guarantee that the
Group or the Company will continue in operation.
3. Detecting irregularities including fraud
We identified the areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements and risks of material misstatement due to fraud,
using our understanding of the entity's industry, regulatory
environment and other external factors and inquiry with the
directors. In addition, our risk assessment procedures included:
— Inquiring with the directors and other management as to the
Group’s policies and procedures regarding compliance with
laws and regulations, identifying, evaluating and accounting
for litigation and claims, as well as whether they have
knowledge of non-compliance or instances of litigation or
claims.
— Inquiring of directors and the audit committee as to the
Group’s high-level policies and procedures to prevent and
detect fraud, as well as whether they have knowledge of any
actual, suspected or alleged fraud.
— Inquiring of directors regarding their assessment of the risk
that the financial statements may be materially misstated due
to irregularities, including fraud.
— Inspecting the Group’s regulatory and legal correspondence.
— Reading Board, audit committee, remuneration committee
and nomination committee meeting minutes.
— Performing planning analytical procedures to identify any
usual or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors
and the need to remain alert among the audit team.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including companies and financial
reporting legislation, taxation legislation and distributable profits
legislation. We assessed the extent of compliance with these laws
and regulations as part of our procedures on the related financial
statement items, including assessing the financial statement
disclosures and agreeing them to supporting documentation
when necessary.
Secondly, the Group is subject to many other laws and
regulations where the consequences of non-compliance could
have a material effect on amounts or disclosures in the financial
statements, for instance through the imposition of fines or
litigation. We identified the following areas as those most likely
to have such an effect: health and safety, anti-bribery,
employment law, environmental law and certain aspects of
company legislation recognising the nature of the Group’s
activities.
Auditing standards limit the required audit procedures to identify
non-compliance with these non-direct laws and regulations to
inquiry of the directors and other management and inspection of
regulatory and legal correspondence, if any. These limited
procedures did not identify actual or suspected non-compliance.
We assessed events or conditions that could indicate an incentive
or pressure to commit fraud or provide an opportunity to commit
fraud. As required by auditing standards, we performed
procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition. We
identified a fraud risk in relation to the Group revenue
recognition relating to misstatement of fixed price revenue
contracts. Further detail in respect of fraud risk in relation to the
Group revenue recognition is set out in the key audit matter
disclosures in this report.
Kainos Annual report 2025
Financial Statements
108
Independent auditor’s report continued
To the members of Kainos Group plc
3. Detecting irregularities including fraud (continued)
In response to the fraud risks, we also performed procedures including:
— Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting
documentation.
— Assessing significant accounting estimates for bias.
— Assessing the disclosures in the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in
the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For
example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the
financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and
cannot be expected to detect non-compliance with all laws and regulations.
4. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in formingour
opinion thereon, and we do not provide a separate opinion on these matters (unchanged from 2024).
In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows:
How the matter was addressed in our auditThe key audit matter
Our procedures included, amongst others:
— Control operation: We obtained and documented our understanding
of the process for recording the recognition of revenue and tested the
design and implementation of the relevant control.
— Tests of detail: For fixed price contracts, we selected a sample of
contracts and assessed the level of completion. Supporting evidence
included the signed contract, approved time records confirmed by the
appropriate person, invoices, evidence of customer payment and
discussions with project managers on percentage completion as at 31
March 2025.
— For SaaS revenue we selected a sample of revenue transactions to
ensure these have been recognised in line with the terms of the
contract and spread accordingly over the service period, including
whether revenue has been recognised within the correct accounting
period.
— For T&M revenue we utilised IT specialists to test the underlying
timesheet data alongside sampling employee charge out rates and
agreeing these back to signed contracts. We also tested a sample of
revenue transactions to invoice and customer payment together with
discussions with project managers in relation to specific large
projects.
— Tested a sample of deferred revenue and accrued revenue balances
to ensure they are in accordance with the Group’s revenue
recognition accounting policies.
— We considered the Group’s revenue accounting policies in accordance
with the requirements of IFRS 15.
— We made enquiries of the directors’ and other management and
remained alert to the indicators of fraud during the course of the
audit.
— Disclosures: We assessed the disclosures presented in the financial
statements to explain revenue recognition, including key sources of
estimation uncertainty and judgments being applied.
Our results
— The results of our testing were satisfactory, and we found the amount
of revenue recognised to be appropriate.
Professional standards require us to make a
rebuttable presumption that the fraud risk
from revenue recognition is a significant risk.
An overstatement of revenue could occur
through premature revenue recognition or
recording fictitious revenues, due to an
incentive to achieve revenue forecasts to
meet investor expectations and in order to
achieve targets as part of performance-based
compensation arrangements.
There is a potential opportunity for fraud in
relation to fixed price contracts where an
inappropriate amount is estimated for inputs
used to measure progress.
No fraud risk has been assessed over time and
material (‘T&M’) or Software as a Service
(‘SaaS’) contracts due to there being no
significant judgement or estimation involved,
with the revenue recognised based on
approved time charged and contractual rates
for T&M and recognised evenly over the
contracted term of the SaaS contract.
Whilst we do not deem there to be a fraud
risk over T&M or SaaS revenue, all three
steams of revenue are key audit matters due
to the size and volume of transactions
recorded and the related audit effort.
For the reasons outlined above the
engagement team determine this matter to
be a key audit matter.
Revenue recognition
Revenue:
£367.2 million
(2024: £382.4 million)
Refer to note 3
Significant Accounting
Policies (revenue
section), note 4 Material
accounting judgements
and key sources of
estimation uncertainty
(Critical judgements in
applying the Group’s
accounting policies) and
note 5 Segment
reporting.
109
Kainos Annual report 2025
Financial Statements
4. Key audit matters: our assessment of risks of material misstatement (continued)
How the matter was addressed in our auditThe key audit matter
Our procedures included, amongst others:
— Tests of detail: We considered management’s assessment of
impairment indicators over the investment in subsidiaries.
— We compared the carrying amount of 100% of the amounts included in
investments in subsidiaries with the respective subsidiaries’ net assets
values to identify whether the net assets values, being an
approximation of their minimum recoverable amount, were in excess of
the carrying amount.
— We consider the Group’s market capitalisation to the book value of the
investments in subsidiaries which indicated that the market
capitalisation exceeded the book value by £0.7 billion as at 31 March
2025.
Our results
— The results of our testing were satisfactory, and we found the carrying
amount of the investments in subsidiaries to be acceptable.
Recoverability of investments in
subsidiary
The Company holds an investment
of £9.0m in subsidiary undertakings
and is accounted for at cost less any
provision made for impairment.
The recoverability of the
investments in subsidiaries is not at
high risk of significant misstatement
or subject to significant judgement.
However, due to their materiality in
the context of the Company
financial statements this is
considered to be the area that had
the greatest effect on our overall
audit of the Company.
For the reason outlined above the
engagement team determine this
matter to be a key audit matter.
Investments in
subsidiaries
£9.0 million
(2024: £9.0 million)
Refer to Company note
2 Significant
Accounting Policies
(investment in
financial assets
section) and Company
note 4 Investments in
subsidiaries.
Kainos Annual report 2025
Financial Statements
110
Independent auditor’s report continued
To the members of Kainos Group plc
Group total assets
Key:
Full scope for group audit
purposes 2025
Residual components
Group revenue
5. Our application of materiality and an overview of the scope of
our audit
Materiality for the Group financial statements as a whole was set at
£2.9m (2024: £3.4m), determined with reference to a benchmark of
Group profit before tax, normalised to exclude acquisition related costs
and one-off restructuring costs of £10.2m (2024: £4.4m), of which it
represents 5% (2024: 5%). We consider the basis of our materiality to
be one of the important considerations for shareholders of the
Company in assessing the financial performance of the Group. It is
linked to the key earnings measures discussed when the Group
presents the financial results. The Group’s reported adjusted profit
before tax is detailed in note 5. In addition to acquisition related costs
and post-combination remuneration expenses, the Group also adjusts
for amortisation of purchased intangibles and share based payments
expense and related costs to present adjusted profit before tax; these
amounts are not excluded from our materiality calculation.
Materiality for the Company financial statements as a whole was set at
£1.1m (2024: £0.9m), determined with reference to a benchmark of
Company total assets (2024: total assets), of which it represents 1%
(2024: 1%). In line with our audit methodology, our procedures on
individual account balances and disclosures were performed to a
lower threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the
financial statements as a whole.
In applying our judgement in determining the percentage to be applied
to the benchmark for Group and Company, the following qualitative
factors, had the most significant impact, increasing our assessment of
materiality and included:
the Group has no external debt; and
the stability of the business environment in which it operates.
We applied Group materiality to assist us determine the overall audit
strategy.
Performance materiality was set at 75% (2024: 75%) of materiality for
the financial statements as a whole, which equates to £2.2m (2024:
£2.5m) for the Group and £0.8m (2024: £0.7m) for the Company. In
applying our judgement in determining performance materiality for
the Group and Company, the following factors were considered to
have the most significant impact, increasing our assessment of
performance materiality:
the low number and value of misstatements detected in the prior
year financial statement audit;
the low number and severity of deficiencies in control activities
identified in the prior year financial statement audit; and
the stability in the senior management and key financial reporting
personnel over the last three years.
We applied performance materiality to assist us determine what risks
were significant risks and the procedures to be performed.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £147k (2024: £172k),
in addition to other identified misstatements that warranted
reporting on qualitative grounds.
This year, we applied the revised group auditing standard in our audit
of the consolidated financial statements. The revised standard
changes how an auditor approaches the identification of components,
and how the audit procedures are planned and executed across
components.
In particular, the definition of a component has changed, shifting the
focus from how the entity prepares financial information to how we,
as the group auditor, plan to perform audit procedures to address
group risks of material misstatement ("RMMs"). Similarly, the group
auditor has an increased role in designing the audit procedures as
well as making decisions on where these procedures are performed
(centrally and/or at component level) and how these procedures are
executed and supervised.
Adjusted group profit
before tax
£58.9m (2024: £69.2m)
Group materiality
£2.9m (2024: £3.4m)
58.9
Adjusted Group PBT
Group materiality
£2.2m (2024: £2.5m)
Whole financial
statements
performance
materiality
£0.1m to £2.2m
Range of materiality at
9 components (2024:
£0.1m to £2.1m at 9
components)
£147k (2024: £172k)
Misstatements reported
to the audit committee
As a result, we assess scoping and coverage in a different way
and comparisons to prior period coverage figures are not
meaningful. In this report we provide an indication of scope
coverage on the new basis
Of the Group’s 31 reporting components, we subjected 9 to full
scope audits for group purposes. The latter were not individually
financially significant enough to require a full scope audit for
group purposes.
The work on these components, including the audit of the
Company, was performed by the Group team. The audit was
performed using the materiality levels set out above.
The components within the scope of our work accounted for the
percentages illustrated below.
The remaining 15% of total Group revenue and 7% of total Group
assets is represented by 21 reporting components, none of which
individually represented more than 4% of any of total Group
revenue, Group profit before tax or total Group assets. For the
residual components, we performed analysis at an aggregated
group level to re-examine our assessment that there were no
risk of material misstatement within these.
111
Kainos Annual report 2025
Financial Statements
6. We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. The other information comprises the information
included in the Directors’ report and the Strategic report and
Corporate governance sections of the Annual Report. Our
opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion
or, except as explicitly stated below, any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified
material misstatements in the other information.
7. Opinions on other matters prescribed by the Companies Act
2006
Strategic report and directors’ report
Based solely on our work on the other information undertaken
during the course of the audit:
— we have not identified material misstatements in the
strategic report or the directors’ report;
— in our opinion the information given in the strategic report
and the directors’ report for the financial year is consistent
with the financial statements; and
— in our opinion, the strategic report and the directors’ report
have been prepared in accordance with the Companies Act
2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance
with the provisions of the UK Corporate Governance Code four
our review specified by the Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
— Directors’ statement with regards the appropriateness of
adopting the going concern basis of accounting and
any material uncertainties identified on page ϭϬϰ;
— Directors’ explanation as to their assessment of the Group's
prospects, the period this assessment covers and why the
period is appropriate set out in the Directors’ report and
Strategic Report on page ϲϲ;
— Directors’ statement on whether it has a reasonable
expectation that the Group will be able to continue in
operation and meets its liabilities set out in the Directors’
report and Strategic Report on pages ϲϲĂŶĚϭϬϰ.
7. Opinions on other matters prescribed by the Companies Act
2006 (continued)
— Directors' statement on fair, balanced and understandable
and the information necessary for shareholders to assess the
Group's position and performance, business model and
strategy set out on pages ϭϬϰ to ϭϬϱ;
— Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks and the
disclosures in the annual report that describe the principal
risks and the procedures in place to identify emerging risks
and explain how they are being managed or mitigated set
out on pageƐϲϬƚŽϲϱ;
— Section of the annual report that describes the review of
effectiveness of risk management and internal control
systems set out on pageϴϮ; and
— Section describing the work of the audit committee set out on
pages ϳϴ to ϴϮ.
8. We have nothing to report on the other matters on which
we are required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
— adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
— the Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
— certain disclosures of directors’ remuneration specified by
law are not made; or
— we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities and restrictions on use
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities
statement set out on pages ϭϬϰ to ϭϬϱ, the directors are
responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such
internal control as they determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the
Group and Company’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 they either
intend to liquidate the Group and Company or to cease
operations, or have no realistic alternative but to do so.
Kainos Annual report 2025
Financial Statements
112
Independent auditor’s report continued
To the members of Kainos Group plc
9. Respective responsibilities and restrictions on use
(continued)
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud, other irregularities or error,
and to issue an opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud, other irregularities or error and are considered
material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in
an annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report
provides no assurance over whether the annual financial report
has been prepared in accordance with that format.
The purpose of our audit work and to whom we owe our
responsibilities
Our report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an auditor’s 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 Company and the
Company’s members, as a body, for our audit work, for this
report, or for the opinions we have formed.
for and on behalf of KPMG , Statutory Auditor
Chartered Accountants
The Soloist Building
1 Lanyon Place
Belfast
BT1 3LP
16 May 2025
113
Kainos Annual report 2025
Financial Statements
CONTINUING OPERATIONS Note
| 2025 | 2024 | ||
| (£000s) | (£000s) | ||
REVENUE | 5 | ||
Cost of sales | 5 | ( | ( |
GROSS PROFIT | 5 | ||
| OPERATING EXPENSES | |||
Restructuring costs | 22 | ( | |
Other operating expenses | ( | ( | |
TOTAL OPERATING EXPENSES | ( | ( | |
| Impairment gain/(loss) (including amounts recovered) on trade receivables | |||
and accrued income | 26 | ( | |
Gain on disposal of property, plant and equipment | |||
Increase in fair value of investment property | 14 | ||
OPERATING PROFIT | 6 | ||
Finance income | 7 | ||
Finance expense | 7 | ( | ( |
PROFIT BEFORE TAX | |||
Income tax expense | 9 | ( | ( |
PROFIT FOR THE YEAR | |||
| EARNINGS PER SHARE | |||
Basic | 11 | ||
Diluted | 11 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
| 2025 | 2024 | |
| (£000s) | (£000s) | |
PROFIT FOR THE YEAR | ||
| ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS: | ||
Foreign operations – foreign currency translation differences | ( | ( |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2025
Kainos Annual report 2025
Financial Statements
114
Note
| 2025 | 2024 | ||
| (£000s) | (£000s) | ||
| NON-CURRENT ASSETS | |||
Goodwill | 12 | ||
Other intangible assets | 12 | ||
Investment property | 14 | ||
Property, plant and equipment | 13 | ||
Right-of-use assets | 16 | ||
Investments in equity instruments | |||
Deferred tax asset | 18 | ||
| CURRENT ASSETS | |||
Trade and other receivables | 17 | ||
Prepayments | 17 | ||
Accrued income | 17 | ||
Cash and cash equivalents | 19 | ||
Treasury deposits | 19 | ||
TOTAL ASSETS | |||
| CURRENT LIABILITIES | |||
Trade payables and accruals | 21 | ( | ( |
Deferred income | 21 | ( | ( |
Current tax liabilities | 21 | ( | ( |
Other tax and social security | 21 | ( | ( |
Lease liabilities | 20 | ( | ( |
Provisions | 22 | ( | |
( | ( | ||
| NON-CURRENT LIABILITIES | |||
Provisions | 22 | ( | ( |
Deferred tax liability | 18 | ( | ( |
Lease liabilities | 20 | ( | ( |
( | ( | ||
TOTAL LIABILITIES | ( | ( | |
NET ASSETS | |||
| EQUITY | |||
| Share capital | 23 | ||
Share premium account | |||
Other reserves | 23 | ||
Share-based payment reserve | |||
Shares held to be cancelled | 23 | ( | |
Translation reserve | ( | ( | |
Retained earnings | |||
TOTAL EQUITY |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2025
115
Kainos Annual report 2025
Financial Statements
| Shares | Other | Share-based | ||||||
| Share | held to be | Share | Reserves | payment | Translation | Retained | Tot al | |
| capital | cancelled (17) | premium | (note 23) | reserve | reserve | earnings | equity | |
| (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | |
BALANCE AT 31 MARCH 2023 | ||||||||
Profit for the year | ||||||||
Other comprehensive income | ( | ( | ||||||
Total comprehensive income for the year | ( | |||||||
Equity-settled share-based payment | ||||||||
Current tax for equity-settled share- based payments | ||||||||
| Deferred tax for equity-settled | ||||||||
share-based payments | ( | ( | ||||||
| Issue of share capital – | ||||||||
share options exercised | ||||||||
Dividends | ( | ( | ||||||
BALANCE AT 31 MARCH 2024 | ( | |||||||
Profit for the year | ||||||||
Other comprehensive income | ( | ( | ||||||
Total comprehensive income for the year | ( | |||||||
Equity-settled share-based payment | ||||||||
Current tax for equity-settled share- based payments | ||||||||
| Deferred tax for equity-settled | ||||||||
share-based payments | ( | ( | ||||||
| Issue of share capital – | ||||||||
share options exercised | ||||||||
Share buyback programme | ( | ( | ||||||
Shares cancelled | ( | ( | ||||||
Dividends | ( | ( | ||||||
BALANCE AT | ( | (18) | ( |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
(17) Shares purchased as part of the share buyback programme due to be cancelled.
(18) £25.4 million relates to exercised or lapsed options or fully vested free share awards and is considered distributable.
Kainos Annual report 2025
Financial Statements
116
Note
| 2025 | 2024 | ||
| (£000s) | (£000s) | ||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
PROFIT FOR THE YEAR | |||
| Adjustments for: | |||
Finance income | 7 | ( | ( |
Finance expense | 7 | ||
Tax expense | 9 | ||
Share-based payment expense | 24 | ||
Depreciation of property, plant and equipment | 13 | ||
Depreciation of right-of-use assets | 16 | ||
Amortisation of intangible assets | 12 | ||
Gain on disposal of property, plant and equipment | ( | ||
Increase in fair value of investment property | 14 | ( | |
Post-acquisition remuneration settled by shares | |||
Increase in provisions | 22 | ||
OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL | |||
Decrease in trade and other receivables | |||
Increase/(decrease) in trade and other payables | ( | ||
CASH GENERATED FROM OPERATING ACTIVITIES | |||
Income taxes paid | ( | ( | |
NET CASH FROM OPERATING ACTIVITIES | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
Interest received | |||
Purchases of property, plant and equipment | 13 | ( | ( |
Proceeds from sale of property, plant and equipment | |||
Proceeds from sale of investment property | 14 | ||
Amounts placed on treasury deposit | 19 | ( | ( |
Acquisition of subsidiaries net of cash acquired | 28 | ( | |
NET CASH FROM/(USED) IN INVESTING ACTIVITIES | ( | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
Dividends paid | 10 | ( | ( |
Share buyback programme | 23 | ( | |
Interest paid | ( | ( | |
Repayment of lease liabilities | 20 | ( | ( |
Proceeds on issue of shares | |||
NET CASH USED IN FINANCING ACTIVITIES | ( | ( | |
NET INCREASE IN CASH AND CASH EQUIVALENTS | |||
Cash and cash equivalents at beginning of year | |||
Effect of exchange rate fluctuations on cash held | ( | ( | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 19 |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
117
Kainos Annual report 2025
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. Adoption of new and revised standards
Kainos Annual report 2025
Financial Statements
118
2. Adoption of new and revised standards continued
Notes to the consolidated financial statements
continued
119
Kainos Annual report 2025
Financial Statements
3. Material accounting policies continued
Kainos Annual report 2025
Financial Statements
120
3. Material accounting policies continued
Notes to the consolidated financial statements
continued
121
Kainos Annual report 2025
Financial Statements
3. Material accounting policies continued
Leases continued
Kainos Annual report 2025
Financial Statements
122
3. Material accounting policies continued
Notes to the consolidated financial statements
continued
123
Kainos Annual report 2025
Financial Statements
3. Material accounting policies continued
Long-term leasehold property | 2.5% |
Leasehold improvements | Over the term of the lease up to five years |
Fixtures and fittings | 20% |
Office equipment | 25%-33% |
Kainos Annual report 2025
Financial Statements
124
3. Material accounting policies continued
Notes to the consolidated financial statements
continued
125
Kainos Annual report 2025
Financial Statements
3. Material accounting policies continued
Impairment of financial assets continued
Kainos Annual report 2025
Financial Statements
126
4. Material accounting judgements and key sources of estimation uncertainty
In applying the Group’s accounting policies, which are described in note 3, the Directors are required to make judgements
(other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates
and assumptions about the carrying amounts of the assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations (which are presented separately below), that
the Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect
on the amounts recognised in financial statements.
Product development expenditure
The Group invests on a continual basis in the development of new and enhanced features in the product suite. There is a
continual process of enhancements to and expansion of the overall product suite. Judgement is required in assessing whether
the development costs meet the criteria for capitalisation. These judgements have been applied consistently year to year. In
making this judgement, the Group evaluates, amongst other factors, whether there are future economic benefits beyond the
current period, the stage at which technical feasibility has been achieved, management’s intention to complete and use or sell
the product, the likelihood of success, availability of technical and financial resources to complete the development phase and
management’s ability to measure reliably the expenditure attributable to the project. Research and product development
expenditure incurred on minor or major upgrades, or other changes in software functionality, does not satisfy the criteria in
order to capitalise. Such expenditure is therefore recognised as an expense.
Therefore, judgement is required in assessing whether eligible costs meet the relevant capitalisation criteria under IAS38
Intangible Assets. The accounting policy for research and product development is in note 3 and in the current year there are no
development expenses that have been capitalised (2024: £Nil). The total product development expenditure in the period is
£16.8 million (2024: £13.5 million). R&D expenditure credit (RDEC) grants received from HMRC and product development
expenditure incurred are presented gross in note 6.
Generally, commercial viability of new products is not proven until all high-risk development issues have been resolved through
testing pre-launch versions of the product. As a result, technical feasibility is proven only after completion of the detailed
design phase and formal approval, which occurs just before the products are ready to go to market. Certain development costs
are incurred for specific projects and there is a lack of certainty that the work may have future economic benefit on future
projects. Accordingly, development costs have not been capitalised.
Costs which are incurred after the general release of internally generated software, or costs which are incurred in order to
enhance existing products are expensed in the period in which they are incurred and included within the research &
development expense in the financial statements.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below.
Revenue recognition
Service revenue
Kainos charges for its digital services on a time and materials or fixed price basis. Where there are fixed price contracts,
revenue is recognised based on the stage of completion. Stage of completion is measured by reference to costs incurred to
date as a percentage of total estimated costs. The Group estimates costs to complete its contractual obligations by reference
to the current run rate of these costs until contractual completion. The estimation of stage of completion is sensitive to future
uncertainties such as technical challenges, timescale changes and commercial issues. During the year revenue relating to
fixed price project income was £57.3 million (2024: £35.1 million). The associated carrying values of accrued and deferred
income at 31 March 2025 were £10.0 million (2024: £11.5 million) and £2.3 million (2024: £2.0 million) respectively.
Notes to the consolidated financial statements
continued
127
Kainos Annual report 2025
Financial Statements
| Digital | Workday | Workday | ||
| Services | Services | Products | Consolidated | |
| 12 MONTHS TO 31 MARCH | (£000s) | (£000s) | (£000s) | (£000s) |
REVENUE | 197,173 | 98,725 | 71,348 | 367,246 |
Cost of sales | (125,438) | (47,647) | (18,252) | (191,337) |
GROSS PROFIT | 71,735 | 51,078 | 53,096 | 175,909 |
Direct expenses (19) | (21,546) | (33,491) | (33,615) | (88,652) |
CONTRIBUTION | 50,189 | 17,587 | 19,481 | 87,257 |
Depreciation of property, plant and equipment | (3,381) | |||
Central overheads (19) | (24,341) | |||
Net finance income (note 7) | 6,107 | |||
ADJUSTED PRE-TAX PROFIT | 65,642 | |||
Share-based payments expense and related costs | (5,930) | |||
Amortisation of acquired intangible assets | (836) | |||
Compensation for post-combination remuneration | (877) | |||
Acquisition-related expenses | (948) | |||
Restructuring costs | (8,411) | |||
PROFIT BEFORE TAX | 48,640 |
| Digital | Workday | Workday | ||
| Services | Services | Products | Consolidated | |
| 12 MONTHS TO 31 MARCH | (£000s) | (£000s) | (£000s) | (£000s) |
REVENUE | 213,097 | 112,044 | 57,252 | 382,393 |
Cost of sales | (131,280) | (50,717) | (13,082) | (195,079) |
GROSS PROFIT | 81,817 | 61,327 | 44,170 | 187,314 |
Direct expenses (19) | (20,778) | (35,889) | (28,280) | (84,947) |
CONTRIBUTION | 61,039 | 25,438 | 15,890 | 102,367 |
Central overheads (19) | (29,183) | |||
Net finance income | 4,002 | |||
ADJUSTED PRE-TAX PROFIT | 77,186 | |||
Share-based payments expense and related costs | (5,952) | |||
Amortisation of acquired intangible assets | (4,190) | |||
Compensation for post-combination remuneration | (3,800) | |||
Acquisition-related expenses | (626) | |||
| Increase in fair value of investment property and gain | ||||
on sale of property | 2,154 | |||
PROFIT BEFORE TAX | 64,772 |
Kainos Annual report 2025
Financial Statements
128
5. Segment reporting continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
United Kingdom & Ireland | 217,374 | 232,557 |
Americas | 114,392 | 106,990 |
Central Europe | 33,710 | 41,433 |
Rest of world | 1,770 | 1,413 |
367,246 | 382,393 |
| Digital | Workday | Workday | ||
| Services | Services | Products | Tot al | |
| 2025 | 2025 | 2025 | 2025 | |
| (£000s) | (£000s) | (£000s) | (£000s) | |
| TYPE OF REVENUE | ||||
Services | 188,451 | 95,047 | 4,061 | 287,559 |
Subscriptions | – | – | 67,287 | 67,287 |
Third party and other | 8,722 | 3,678 | – | 12,400 |
197,173 | 98,725 | 71,348 | 367,246 |
| Digital | Workday | Workday | ||
| Services | Services | Products | Tot al | |
| 2024 | 2024 | 2024 | 2024 | |
| (£000s) | (£000s) | (£000s) | (£000s) | |
| TYPE OF REVENUE | ||||
Services | 204,950 | 105,428 | 2,430 | 312,808 |
Subscriptions | – | – | 54,822 | 54,822 |
Third party and other | 8,147 | 6,616 | – | 14,763 |
213,097 | 112,044 | 57,252 | 382,393 |
Notes to the consolidated financial statements
continued
129
Kainos Annual report 2025
Financial Statements
5. Segment reporting continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
| DIGITAL SERVICES | ||
Public | 125,502 | 138,168 |
Commercial | 21,030 | 30,749 |
Healthcare | 50,641 | 44,180 |
197,173 | 213,097 | |
| WORKDAY SERVICES | ||
Public | 35 | 89 |
Commercial | 98,575 | 111,949 |
Healthcare | 115 | 6 |
98,725 | 112,044 | |
| WORKDAY PRODUCTS | ||
Public | – | – |
Commercial | 71,267 | 57,170 |
Healthcare | 81 | 82 |
71,348 | 57,252 | |
| GROUP | ||
Public | 125,537 | 138,257 |
Commercial | 190,872 | 199,868 |
Healthcare | 50,837 | 44,268 |
TOTAL | 367,246 | 382,393 |
| 2025 | 2024 | ||
| (£000s) | (£000s) | ||
Trade receivables | 17 | 31,481 | 35,368 |
Accrued income | 17 | 22,673 | 33,225 |
Deferred income | 21 | (46,358) | (44,954) |
Kainos Annual report 2025
Financial Statements
130
5. Segment reporting continued
Disaggregation of revenue by sector continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Northern Ireland | 10,754 | 18,177 |
Rest of UK | 2,745 | 2,231 |
United States of America | 33,131 | 34,954 |
Finland | 8,145 | 8,454 |
Canada | 1,729 | 2,208 |
Poland | 1,769 | 2,112 |
Other | 1,441 | 275 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Total staff costs (note 8) | 259,119 | 261,430 |
Government grants (20) | (793) | (2,070) |
Research & development expensed as incurred | 16,818 | 13,493 |
Research & Development Expenditure Credit | (5,073) | (5,161) |
Depreciation of property, plant and equipment (note 13) | 3,381 | 2,886 |
Depreciation of right-of-use assets (note 16) | 1,277 | 1,152 |
Gain on disposal of property, plant and equipment | – | (1,173) |
Net foreign exchange loss | 461 | 553 |
Amortisation of acquired intangibles (note 12) | 836 | 4,190 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts | 214 | 160 |
Fees payable to the Group’s auditor for the audit of subsidiaries | 118 | 88 |
TOTAL AUDIT FEES | 332 | 248 |
Fees payable to the Group’s auditor for other services to the Group: | – | – |
Review of interim report | 28 | 27 |
TOTAL AUDIT-RELATED FEES | 360 | 275 |
Non-audit fees | – | – |
Total audit and non-audit fees | 360 | 275 |
Total % of non-audit fees | 0% | 0% |
Notes to the consolidated financial statements
continued
131
Kainos Annual report 2025
Financial Statements
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Bank interest | 6,440 | 4,336 |
FINANCE INCOME | 6,440 | 4,336 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Interest expense on lease liabilities | 328 | 320 |
Other finance expense | 5 | 14 |
FINANCE EXPENSE | 333 | 334 |
8. Staff numbers and costs
The average number of employees during the year was:
| 2025 | 2024 | |
| Number | Number | |
Technical | 2,410 | 2,354 |
Administration | 310 | 331 |
Sales | 233 | 258 |
2,943 |
The aggregate payroll costs of these persons were as follows:
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Wages and salaries | 222,692 | 222,916 |
Social security costs | 21,105 | 21,821 |
Contributions to defined contribution plans (note 25) | 9,392 | 9,270 |
Share-based payments (note 24) | 5,930 | 7,423 |
259,119 | 261,430 |
The split of remuneration between cost of sales and operating expenses is as follows:
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Cost of sales | 164,429 | 164,101 |
Operating expenses | 94,690 | 97,329 |
259,119 | 261,430 |
Kainos Annual report 2025
Financial Statements
132
| 2025 | 2024 | |
| (£000s) | (£000s) | |
| CURRENT TAX EXPENSE: | ||
Current year (UK) | 9,909 | 12,201 |
Current year (overseas) | 4,070 | 6,456 |
Adjustments in respect of prior years | (635) | (444) |
13,344 | 18,213 | |
| DEFERRED TAX (NOTE 18) | ||
Origination and reversal of temporary differences | (1,277) | (1,439) |
Adjustments in respect of prior years | 1,013 | (717) |
(264) | (2,156) | |
TOTAL TAX EXPENSE | 13,080 | 16,057 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
| CURRENT TAX | ||
Permanent element of share-based payments deduction | 21 | 514 |
| DEFERRED TAX | ||
Deferred tax on share-based payments | (25) | (968) |
TOTAL TAX RECOGNISED DIRECTLY IN EQUITY | (4) | (454) |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
PROFIT BEFORE TAX ON CONTINUING OPERATIONS | 48,640 | 64,772 |
Tax at the UK corporation tax rate of 25% (2024: 25%) | 12,160 | 16,193 |
Expenses not deductible for tax purposes | 662 | 1,333 |
Tax exempt income | (357) | (428) |
Effect of tax rates in foreign jurisdictions | 237 | 120 |
Adjustments to tax charge in respect of prior years | 378 | (1,161) |
TAX EXPENSE FOR THE YEAR | 13,080 | 16,057 |
EFFECTIVE TAX RATE | 27% | 25% |
Notes to the consolidated financial statements
continued
133
Kainos Annual report 2025
Financial Statements
10. Dividends
| 2025 | 2024 | |
| (£000s) | (£000s) | |
| AMOUNTS RECOGNISED AS DISTRIBUTIONS TO EQUITY HOLDERS IN THE PERIOD: | ||
Interim dividend for 2025 of 9.3p per share | 11,721 | – |
Final dividend for 2024 of 19.1p per share | 24,027 | – |
Interim dividend for 2024 of 8.2p per share | – | 10,287 |
Final dividend for 2023 of 16.1p per share | – | 20,135 |
35,748 | 30,422 |
The Board has proposed a final dividend in respect of the year ended 31 March 2025 subject to approval by shareholders
at the AGM. This dividend has not been recognised as a liability in these financial statements and there are no tax
consequences. The proposed final dividend, if approved by shareholders, will be 19.1 p per share (£23.6 million in total) and
payable on 24 October 2025 to all shareholders on the Register of Members on 3 October 2025, and with an ex-dividend
date of 2 October 2025.
11. 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.
| 2025 | 2024 | |
| (£000s) | (£000s) | |
PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | 35,560 | 48,715 |
Thousands | Thousands | |
Issued ordinary shares at 1 April | 125,788 | 124,628 |
Effect of shares held in trust | (882) | (790) |
Effect of share options vested and exercised | 418 | 711 |
Effect of shares issued related to a business combination | 58 | 113 |
Effect of shares issued related to free share awards | 122 | 109 |
Effect of share buyback programme | (468) | – |
Weighted average number of ordinary shares at 31 March | 125,036 | 124,771 |
BASIC EARNINGS PER SHARE | 28.4p | 39.0p |
Kainos Annual report 2025
Financial Statements
134
11. Earnings per share continued
Diluted
The calculation of diluted EPS has been based on the following profit attributable to ordinary shareholders and weighted-
average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.
| 2025 | 2024 | |
| (£000s) | (£000s) | |
PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | 35,560 | 48,715 |
Thousands | Thousands | |
Weighted average number of ordinary shares (basic) | 125,036 | 124,771 |
Effect of share options in issue | 228 | 626 |
Effect of shares held in trust | 882 | 790 |
Effect of potential shares to be issued related to a business combination | – | 138 |
Weighted average number of ordinary shares (diluted) at 31 March | 126,146 | 126,325 |
DILUTED EARNINGS PER SHARE | 28.2p | 38.6p |
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 year during which the options were outstanding.
At 31 March 2025, 1,344,201 options (2024: 181,451) were excluded from the diluted weighted average number of ordinary
shares calculation because their effect would have been anti-dilutive.
Adjusted (unaudited)
Adjusted basic and adjusted diluted earnings per share is calculated using the adjusted profit for the year measure. The
calculation of adjusted profit for the year is detailed in the ‘Financial Review’ section of the Strategic Report.
| 2025 | 2024 | |
| (£000s) | (£000s) | |
ADJUSTED PROFIT FOR THE YEAR | 48,304 | 58,760 |
Thousands | Thousands | |
Weighted average number of ordinary shares for the purposes of basic earnings per share | 125,036 | 124,771 |
Weighted average number of ordinary shares for the purposes of diluted earnings per share | 126,146 | 126,325 |
ADJUSTED BASIC EARNINGS PER SHARE | 38.6p | 47.1p |
ADJUSTED DILUTED EARNINGS PER SHARE | 38.3p | 46.5p |
Notes to the consolidated financial statements
continued
135
Kainos Annual report 2025
Financial Statements
| Customer | ||||
| Goodwill | Order backlog | relationships | Tot al | |
| (£000s) | (£000s) | (£000s) | (£000s) | |
| COST | ||||
At 1 April 2023 | 19,007 | 1,098 | 7,686 | 27,791 |
Exchange adjustments | (720) | (43) | (79) | (842) |
Acquisitions through business combinations (note 28) | 19,916 | 677 | 4,892 | 25,485 |
At 31 March 2024 | 38,203 | 1,732 | 12,499 | 52,434 |
Exchange adjustments | (890) | (42) | (287) | (1,219) |
AT 31 MARCH 2025 | 37,313 | 1,690 | 12,212 | 51,215 |
| AMORTISATION AND IMPAIRMENT | ||||
At 1 April 2023 | – | 1,098 | 3,870 | 4,968 |
Charge for the year | – | 179 | 4,011 | 4,190 |
Exchange adjustments | – | (23) | (112) | (135) |
At 31 March 2024 | – | 1,254 | 7,769 | 9,023 |
Charge for the year | – | 231 | 605 | 836 |
Exchange adjustments | – | (28) | (168) | (196) |
AT 31 MARCH 2025 | – | 1,457 | 8,206 | 9,663 |
| CARRYING AMOUNT | ||||
AT 31 MARCH 2025 | 37,313 | 233 | 4,006 | 41,552 |
At 31 March 2024 | 38,203 | 478 | 4,730 | 43,411 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Kainos Workday Adaptive Practice | 3,176 | 3,199 |
Workday Services Americas | 6,457 | 6,649 |
Workday Services Europe | 8,111 | 8,290 |
Workday Products | 19,569 | 20,065 |
TOTAL | 37,313 | 38,203 |
Kainos Annual report 2025
Financial Statements
136
12. Intangible assets and goodwill continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Workday Adaptive Practice | 11-12% | 12-13% |
Workday Services Americas | 11-12% | 12-13% |
Workday Services Europe | 12-13% | 13-14% |
Workday Products | 10-11% | 11-12% |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Workday Adaptive Practice | 2% | 2% |
Workday Services Americas | 2% | 2% |
Workday Services Europe | 2% | 2% |
Workday Products | 2% | 2% |
Notes to the consolidated financial statements
continued
137
Kainos Annual report 2025
Financial Statements
13. Property, plant and equipment
| Property | Property and | ||||
| under | leasehold | Office | Fixtures | ||
| construction | improvements | equipment | and fittings | Tot al | |
| (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | |
| COST | |||||
At 1 April 2023 | 3,858 | 1,053 | 8,606 | 1,479 | 14,996 |
Impact of foreign exchange | – | (89) | 543 | 3 | 457 |
Additions | 355 | 4,237 | 1,045 | 25 | 5,662 |
Disposals | – | – | (28) | – | (28) |
At 31 March 2024 | 4,213 | 5,201 | 10,166 | 1,507 | 21,087 |
Impact of foreign exchange | – | (134) | (31) | (2) | (167) |
Additions | 878 | 52 | 883 | 1,556 | 3,369 |
Disposals | – | – | (2,905) | (35) | (2,940) |
AT 31 MARCH 2025 | 5,091 | 5,119 | 8,113 | 3,026 | 21,349 |
| ACCUMULATED DEPRECIATION | |||||
At 1 April 2023 | – | 449 | 4,427 | 611 | 5,487 |
Impact of foreign exchange | – | (27) | 479 | 5 | 457 |
Charge for the year | – | 826 | 1,818 | 242 | 2,886 |
Eliminated on disposals | – | – | (28) | – | (28) |
At 31 March 2024 | – | 1,248 | 6,696 | 858 | 8,802 |
Impact of foreign exchange | – | (30) | (8) | (1) | (39) |
Charge for the year | – | 1,145 | 1,874 | 362 | 3,381 |
Eliminated on disposals | – | – | (2,905) | (35) | (2,940) |
AT 31 MARCH 2025 | – | 2,363 | 5,657 | 1,184 | 9,204 |
| CARRYING AMOUNT | |||||
AT 31 MARCH 2025 | 5,091 | 2,756 | 2,456 | 1,842 | 12,145 |
At 31 March 2024 | 4,213 | 3,953 | 3,470 | 649 | 12,285 |
Property under construction
During the year ended 31 March 2020, the Group acquired a site for development of Kainos’ future Belfast headquarters at
a purchase price of £7.4 million. Costs incurred since purchase relate to legal and professional fees and demolition works.
During the year ended 31 March 2023, £5.2 million was transferred to investment property, reflecting the Group’s agreement
to sell part of this site (note 14). Immediately before the transfer, the Group internally remeasured the relevant portion of the
site to fair value with no gain or loss arising. The sale was completed during the year.
Kainos Annual report 2025
Financial Statements
138
14. Investment property
| (£000s) | |
At 1 April 2023 | 5,160 |
Increase in fair value | 1,040 |
At 31 March 2024 | 6,200 |
Disposal | (6,200) |
AT 31 MARCH 2025 | – |
As described in note 13, during the year ended 31 March 2023, £5.2 million was transferred to investment property, reflecting
the Group’s agreement to sell part of the site purchased in FY20 for the development of the Group’s future headquarters.
The fair value of the property as at 31 March 2024 was based on an agreed contract for sale, discounted at the market rate of
interest. The sale was subject to planning permission which was obtained during the year ended 31 March 2025 and the
transaction completed.
The fair value measurement of the investment property as at 31 March 2024 was categorised as level 3 fair value based on the
input for the risk-adjusted discount rate applied, which is considered to be an unobservable input. The agreed sales price was
also not market observable. The estimated fair value would increase (decrease) if the risk-adjusted discount was lower (higher).
| Proportion of | ||||||
| ordinary share | ||||||
Subsidiary undertakings | Incorporated | Registered office | Principal activity | capital held | ||
Kainos Software Limited | Northern Ireland | Kainos House, 4-6 Upper Crescent, | Software | 100% | ||
| Belfast, BT7 1NT, Northern Ireland | development | |||||
Kainos Software Ireland Limited | Republic of Ireland | Glandore, Fitzwilliam Court, Suite 103, | Software | 100% | ||
| Leeson Close, Dublin 2, D02 YW24, | development | |||||
| Ireland | ||||||
| Kainos Software Poland | Poland | 8th Floor, Tryton Business House, | Software | 100% | ||
| Spólka z.o.o | ul. Jana z Kolna 11, 80-864 Gdańsk, | development | ||||
| Poland | ||||||
| Kainos Poland Services | Poland | 8th Floor, Tryton Business House, | Software | 100% | ||
| Spólka z.o.o | ul. Jana z Kolna 11, 80-864 Gdańsk, | services | ||||
| Poland | ||||||
Kainos Trustees Limited | Northern Ireland | Kainos House, 4-6 Upper Crescent, | Share Scheme | 100% | ||
| Belfast, BT7 1NT, Northern Ireland | Trustee | |||||
Kainos Managers Limited | Northern Ireland | Kainos House, 4-6 Upper Crescent, | Property | 100% | ||
| Belfast, BT7 1NT, Northern Ireland | company | |||||
Kainos Evolve Limited | Northern Ireland | Kainos House, 4-6 Upper Crescent, | Software | 100% | ||
| Belfast, BT7 1NT, Northern Ireland | development | |||||
Kainos WorkSmart Limited | Northern Ireland | Kainos House, 4-6 Upper Crescent, | Software | 100% | ||
| Belfast, BT7 1NT, Northern Ireland | development | |||||
Kainos WorkSmart Inc. | US | Suite 4300, | 111 | Monument Circle | Software | 100% |
| Indianapolis Indiana 46204, USA | development | |||||
Kainos WorkSmart GmbH | Germany | 5th Floor, Hahnstraße 70 60528 | Software | 100% | ||
| Frankfurt am Main Germany | development | |||||
Kainos WorkSmart ApS | Denmark | Office no. 280110080 | Software | 100% | ||
| Harsdorffs Hus Office Club | development | |||||
| Kongens Nytorv 5 | ||||||
1050 | Copenhagen, Denmark | |||||
Kainos Canada Inc. | Canada | 25 King Street West | Software | 100% | ||
Suite 2200, | Commerce Court | development | ||||
| North Toronto, Ontario M5L 2A1 | ||||||
Kainos WorkSmart SAS | France | 3-5 Rue Saint Georges TMF | Software | 100% | ||
Pole 75009, | Paris, France | development | ||||
Notes to the consolidated financial statements
continued
139
Kainos Annual report 2025
Financial Statements
| Proportion of | |||||||
| ordinary share | |||||||
Subsidiary undertakings | Incorporated | Registered office | Principal activity | capital held | |||
Kainos WorkSmart Oy | Finland | c/o TMF Finland Oy, | Software | 100% | |||
| Erottajankatu 15-17, | development | ||||||
00130 | Helsinki, Finland | ||||||
Formulate Kainos Limited | England | 2nd Floor, 21 Farringdon Road, | Software | 100% | |||
| London, EC1M 3HA, England | services | ||||||
Kainos Planning, LLC | US | Suite 4300, | 111 | Monument Circle | Software | 100% | |
| Indianapolis | Indiana 46204 | services | |||||
| USA | |||||||
KW Software Oy | Finland | c/o TMF Finland Oy, | Software | 100% | |||
| Erottajankatu 15-17 | services | ||||||
00130, | Helsinki, Finland | ||||||
Kainos AB | Sweden | c/o Baker & McKenzie | Software | 100% | |||
| Advokatbyrå KB, Box 180, | services | ||||||
| 101 23 Stockholm, Sweden | |||||||
Kainos the Netherlands B.V. | Netherlands | Hogebrinkerweg 15 b, | Software | 100% | |||
3871KM, | Hoevelaken, Netherlands | services | |||||
Kainos Belgium BV | Belgium | 2160 | Wommelgem | Software | 100% | ||
| Nijverheidsstraat 70, Belgium | services | ||||||
Kainos WorkSmart S.R.L. | Romania | Bucureşti Sectorul 4, | Software | 100% | |||
| Calea Văcăreşti, | services | ||||||
| Nr. 391, Intrarea A, Etaj 3, | |||||||
| Sector 4, Bucuresti, Romania | |||||||
Kainos AS | Norway | c/o Azets Insigt AS, | Software | 100% | |||
| Drammensveien, 151, 0277 | services | ||||||
| Oslo, Norway | |||||||
Kainos OÜ | Estonia | Harju maakond, Tallinn, | Software | 100% | |||
| Lasnamäe linnaosa, | services | ||||||
| Valukoja tn 8/1, 11415 | |||||||
| Estonia | |||||||
Blackline Group, Inc. | US | 522 | W Riverside Avenue, | Software | 100% | ||
Suite 4197, | Spokane, | services | |||||
WA 99201, | USA | ||||||
Kainos Argentina S.A.U. | Argentina | Av. del Libertador 498, 13th floor, | Software | 100% | |||
| ‘South’, Buenos Aires, Argentina | services | ||||||
Kainos (Philippines) Inc. | Philippines | 24/F AIA Tower, 8767 Paseo de Roxas | Software | 100% | |||
| Avenue, Brgy. Bel-Air, Makati City, | services | ||||||
| NCR, Philippines 1226 | |||||||
RapidIT – Cloudbera, Inc. | US | Suite 4300, | 111 | Monument Circle | Software | 100% | |
| Indianapolis | Indiana 46204 | development | |||||
| USA | |||||||
| Kainos cell, Mangrove Insurance | Guernsey | PO BOX 155, Mill Court, | Insurance cell | 100% | |||
| Guernsey PCC Limited | La Charroterie, St Peter Port, | (redeemable | |||||
| GY1 4ET, Guernsey | preference | ||||||
| shares) | |||||||
| Kainos Software Technologies | India | Plot No.1202 & 1215A, 3rd Floor, SL | Software | 100% | |||
| Private Limited | Jubilee, Rd Number 36, Jubilee Hills, | development | |||||
| Hyderabad, Telangana 500033, India | |||||||
Kainos Australia Pty Limited | Australia | c/o Baker McKenzie, | Software | 100% | |||
181 | William Street, | services | |||||
| Melbourne, Victoria 3000, | |||||||
| Australia | |||||||
15. Subsidiaries continued
Kainos Annual report 2025
Financial Statements
140
| Property | Other | Tot al | |
| (£000s) | (£000s) | (£000s) | |
| COST | |||
At 1 April 2023 | 2,837 | 87 | 2,924 |
Additions | 5,124 | – | 5,124 |
Disposals | (1,349) | (87) | (1,436) |
Exchange adjustments | 1 | – | 1 |
At 31 March 2024 | 6,613 | – | 6,613 |
Additions | 802 | – | 802 |
Exchange adjustments | (59) | – | (59) |
AT 31 MARCH 2025 | 7,356 | – | 7,356 |
| ACCUMULATED DEPRECIATION | |||
At 1 April 2023 | 1,596 | 67 | 1,663 |
Charge for the year | 1,132 | 20 | 1,152 |
Elimination on disposal | (1,349) | (87) | (1,436) |
Exchange adjustments | 18 | – | 18 |
At 31 March 2024 | 1,397 | – | 1,397 |
Charge for the year | 1,277 | – | 1,277 |
Exchange adjustments | (36) | – | (36) |
AT 31 MARCH 2025 | 2,638 | – | 2,638 |
| CARRYING AMOUNT | |||
AT 31 MARCH 2025 | 4,718 | – | 4,718 |
At 31 March 2024 | 5,216 | – | 5,216 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Depreciation expense on right-of-use assets | 1,277 | 1,152 |
Interest expense on lease liabilities (note 7) | 328 | 320 |
Expense relating to short-term and low value leases | 374 | 726 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
TOTAL CASH OUTFLOW FOR LEASES | 1,823 | 1,512 |
Notes to the consolidated financial statements
continued
141
Kainos Annual report 2025
Financial Statements
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Trade receivables | 31,481 | 35,368 |
Other receivables | 7,039 | 6,464 |
38,520 | 41,832 | |
Prepayments | 7,553 | 4,268 |
Accrued income | 22,673 | 33,225 |
68,746 | 79,325 |
Assets | Liabilities | Net | ||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
| (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | |
Accelerated capital allowances | – | – | (715) | (1,176) | (715) | (1,176) |
Share-based payments | – | – | (647) | (530) | (647) | (530) |
Right-of-use assets | 296 | 319 | – | – | 296 | 319 |
Lease liability | – | – | (228) | (277) | (228) | (277) |
Short-term temporary differences | 5,515 | 5,901 | – | – | 5,515 | 5,901 |
Deferred tax on acquisitions | – | – | (1,286) | (1,461) | (1,286) | (1,461) |
| TAX ASSETS/(LIABILITIES) | ||||||
BEFORE SET-OFF | 5,811 | 6,220 | (2,876) | (3,444) | 2,935 | 2,776 |
Set-off of tax | (900) | (1,073) | 900 | 1,073 | – | – |
NET TAX ASSETS/(LIABILITIES) | 4,911 | 5,147 | (1,976) | (2,371) | 2,935 | 2,776 |
Kainos Annual report 2025
Financial Statements
142
18. Deferred tax continued
| Accelerated | Short-term | Deferred | |||||
| capital | Share-based | Right-of-use | Lease | temporary | tax on | ||
| allowances | payment | assets | liability | differences | acquisitions | Tot al | |
| (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | |
At 1 April 2023 | (1,007) | 479 | – | – | 3,834 | (203) | 3,103 |
Foreign exchange differences | – | – | – | – | ( 6 ) | – | ( 6 ) |
Adjustment for prior years | (150) | – | – | – | 850 | 17 | 717 |
On recognition of lease | – | – | 362 | (362) | – | – | – |
Acquired in business combination | – | – | – | – | – | (1,509) | (1,509) |
Debit to retained earnings | – | (968) | – | – | – | – | (968) |
(Debit)/credit to profit | (19) | (41) | (43) | 85 | 1,223 | 234 | 1,439 |
At 31 March 2024 | (1,176) | (530) | 319 | (277) | 5,901 | (1,461) | 2,776 |
Foreign exchange differences | – | – | – | – | (80) | – | (80) |
Adjustment for prior years | (172) | – | – | – | (822) | (19) | (1,013) |
Debit to retained earnings | – | (25) | – | – | – | – | (25) |
Credit/(debit) to profit | 633 | (92) | (23) | 49 | 515 | 195 | 1,277 |
AT 31 MARCH 2025 | (715) | (647) | 296 | (228) | 5,514 | (1,285) | 2,935 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Cash at bank and in hand | 29,288 | 38,593 |
Short-term deposits | 99,000 | 82,965 |
CASH AND CASH EQUIVALENTS | 128,288 | 121,558 |
TREASURY DEPOSITS | 5,399 | 4,403 |
TOTAL CASH AND CASH EQUIVALENTS AND TREASURY DEPOSITS | 133,687 | 125,961 |
Notes to the consolidated financial statements
continued
143
Kainos Annual report 2025
Financial Statements
20. Lease liabilities
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Less than one year | 1,529 | 1,317 |
One to five years | 3,690 | 3,925 |
More than five years | 1,314 | 1,837 |
6,533 | 7,079 | |
Less: unearned interest | (975) | (1,181) |
5,558 | 5,898 | |
| ANALYSED AS: | ||
Non-current | 4,312 | 4,883 |
Current | 1,246 | 1,015 |
The Group does not have a significant liquidity risk with regard to its lease liabilities.
Reconciliation of movement of liabilities to cash flows arising from financing activities
| 2025 | 2024 | |
| (£000s) | (£000s) | |
At 1 April | 5,898 | 1,379 |
New leases | 802 | 5,124 |
Cash flow on principal | (1,121) | (466) |
Cash flow on interest | (328) | (320) |
Interest expense | 328 | 320 |
Non-cash movement | (21) | (139) |
AT 31 MARCH | 5,558 | 5,898 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Trade payables and accruals | 54,269 | 50,062 |
Deferred income | 46,358 | 44,954 |
Current tax liabilities | 2,526 | 7,069 |
Other tax and social security | 11,452 | 10,135 |
114,605 | 112,220 |
Kainos Annual report 2025
Financial Statements
144
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Restructuring provision | 5,388 | – |
Property-related provision | 1,546 | 1,542 |
6,934 | 1,542 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Current | 5,388 | – |
Non-current | 1,546 | 1,542 |
6,934 | 1,542 |
| Restructuring | |||
| related | Property related | Tot al | |
| (£000s) | (£000s) | (£000s) | |
At 1 April 2024 | – | 1,542 | 1,542 |
Additional provision in the year | 8,411 | 4 | 8,415 |
Utilisation of provision | (3,023) | – | (3,023) |
AT 31 MARCH 2025 | 5,388 | 1,546 | 6,934 |
Notes to the consolidated financial statements
continued
145
Kainos Annual report 2025
Financial Statements
| 2025 | 2024 | |
| (£000s) | (£000s) | |
| ISSUED AND FULLY PAID: | ||
| ORDINARY SHARES | ||
Opening balance | 629 | 623 |
Issued during the year | 3 | 6 |
Shares cancelled | (14) | – |
TOTAL SHARE CAPITAL | 618 | 629 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
| Own shares purchased for cancellation | ||
INCLUDED IN THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ab | (22,785) | – |
Outstanding amount recognised as financial liabilities c | 233 | – |
INCLUDED IN THE CONSOLIDATED STATEMENT OF CASH FLOWS d | (22,552) | – |
| Capital redemption | |||
| reserve | Merger reserve | Total other | |
| (£000s) | (£000s) | (£000s) | |
At 31 March 2023 and 31 March 2024 | – | 3,548 | 3,548 |
Shares cancelled | 14 | – | 14 |
BALANCE AT 31 MARCH 2025 | 14 | 3,548 | 3,562 |
Kainos Annual report 2025
Financial Statements
146
23. Share capital and reserves continued
24. Share-based payments
Share-based payments
The Group has the following equity-settled share-based payment arrangements:
Kainos Group Performance Share Plan (PSP)
Share options are granted to employees as determined by the Remuneration Committee and will only vest in accordance with
the performance conditions established by the Committee. The options cannot generally be exercised within three years and
have a maximum life of 10 years. The options will be settled by the issue of new shares and there are no cash settlement
alternatives. Options ordinarily are forfeited if the employee leaves the Group before the options vest.
The specific performance conditions relating to the Group PSP are described in further detail as part of the Directors’
Remuneration Report.
Company Share Option Plan (CSOP)
Share options are granted to employees as determined by the Remuneration Committee. The CSOP is a sub-plan of the PSP
and permits the Company to grant CSOP options which have tax advantages pursuant to the provisions of Schedule 4 to the
Income Tax (Earnings & Pensions) Act 2003 (‘Schedule 4’). The options cannot be ordinarily exercised within three years and
have a maximum life of 10 years. Exercise of the options will be settled by the issue of shares and there are no cash
alternatives. Options ordinarily are forfeited if the employee leaves the Group before the options vest.
Save as you Earn (SAYE) Scheme
The Group has an all-employee share plan open to UK employees. Employees who participate enter into a savings contract
under which they agree to save between £5 and £150 per month (or such limit as may be permitted by the tax legislation
governing SAYE schemes from time to time) for three years. Options cannot be ordinarily exercised within three years and must
be exercised within six months of the end of the three-year period. Options ordinarily are forfeited if the employee leaves the
Group before the options vest. There are no cash settlement alternatives.
Republic of Ireland Share Option Scheme
The Group has a share option scheme for employees of Kainos Software Ireland Limited. This scheme utilised the PSP Scheme
to grant options to all eligible employees. Options cannot be ordinarily exercised within three years and must be exercised
within six months of the end of the three-year period. The options will be settled by shares and there are no cash alternatives.
Options ordinarily are forfeited if the employee leaves the Group before the options vest.
Notes to the consolidated financial statements
continued
147
Kainos Annual report 2025
Financial Statements
24. Share-based payments continued
Share-based payments continued
UK Share Incentive Plan (SIP)
The Group has established a SIP for UK employees. Under this scheme all eligible employees are awarded a number of shares
determined by length of service of each employee at a specified date for each respective grant. The shares are held in trust for
each employee by Equiniti Share Plan Trustees Limited, which also administers the scheme. A minimum period of three years is
ordinarily imposed before the employee can withdraw. There are no cash settlement alternatives.
Republic of Ireland Restricted Share Scheme
The Group introduced a Restricted Share Scheme for all eligible employees of Kainos Software Ireland Limited. Under this
scheme all eligible employees were awarded a number of shares determined by length of service of each employee. A minimum
period of five years and one week is ordinarily imposed before the employee can withdraw any free shares. The shares are held
in trust for the employees until they vest. There are no cash settlement alternatives.
Kainos Group plc Poland Share Plans
In order to replicate the share-based awards available to staff in the UK and Ireland, the Group implemented the Kainos Group
plc Poland Share Plan. The Remuneration Committee may grant Share Options or Conditional Share Awards (CSAs) to
employees of the Group’s Polish subsidiary. Share options will not generally be exercisable within three years and have a
maximum life of 3.5 years. CSAs may be granted for free or at a purchase price determined by the Remuneration Committee.
CSAs will generally be subject to a minimum three-year vesting period. All options and awards will be satisfied out of newly
issued shares and there are no cash settlement alternatives. Options and awards ordinarily are forfeited if the employee leaves
the Group before vesting occurs.
Kainos Group plc US Share Plans
In order to replicate the share-based awards available to staff in the UK and Ireland, the Group implemented the US CSA which
applies to US employees only. The Remuneration Committee may grant Share Options or CSAs to employees of the Group’s US
subsidiaries. Share options will not generally be exercisable within three years and have a maximum life of 3.5 years. CSAs may
be granted for free or at a purchase price determined by the Remuneration Committee. CSAs will generally be subject to a
minimum three-year vesting period. All options and awards will be satisfied out of newly issued shares and there are no cash
settlement alternatives. Options and awards ordinarily are forfeited if the employee leaves the Group before vesting occurs.
Fair values and awards outstanding
The fair value of shares awarded under the UK SIP scheme and the Republic of Ireland Restricted Share scheme is calculated
using the closing share price on the award date. The total charge is adjusted for attrition and recognised on a straight-line
basis over the three-year vesting period.
For share awards under the PSP, SAYE, CSOP, Republic of Ireland (ROI), US and Poland share option schemes, the fair value
has been measured using the Black-Scholes model. During the year, options were granted on 3 June 2024, 10 June 2024 and
12 November 2024 (2024: 23 June 2023, 17 November 2023 and 20 December 2023) under the PSP, SAYE, CSOP, ROI, US and
Poland option schemes, and under the US and Poland CSA schemes. The aggregate of the estimated fair values of the options
granted on those dates is £3.4 million (2024: £2.2 million). The following table lists the key inputs to the model used in the year
of grant. In calculating the fair value, the expected life of the options is based on historical data. Similarly, expected volatility
was determined by calculating the historical volatility of the Group’s share price over a period commensurate with the
expected life of the option.
| Granted | Granted | |
| during year | during year | |
| to 31 March | to 31 March | |
| PSP | 2025 | 2024 |
Weighted average exercise price | £0.01 | £0.01 |
Fair value at grant date | £8.79-£10.34 | £7.64-£11.62 |
Share price at grant | £11.76 | £10.93-£12.73 |
Expected volatility | 43% | 47%-48% |
Expected life (years) | 4.0 | 4.0-5.0 |
Risk-free interest rate | 4.3% | 3.5%-4.6% |
Expected dividends per annum | 3.2% | 2.2% |
Kainos Annual report 2025
Financial Statements
148
24. Share-based payments continued
Fair values and awards outstanding continued
| Granted | Granted | |
| during year | during year | |
| to 31 March | to 31 March | |
| CSOP | 2025 | 2024 |
Weighted average exercise price | £11.56 | £13.14 |
Fair value | £3.82 | £4.43 |
Share price at grant | £11.76 | £12.73 |
Expected volatility | 43% | 47% |
Expected life (years) | 4.6 | 4.0 |
Risk-free interest rate | 4.3% | 4.6% |
Expected dividends per annum | 3.2% | 2.2% |
| Granted | Granted | |
| during year | during year | |
| to 31 March | to 31 March | |
| Poland CSA and US CSA | 2025 | 2024 |
Weighted average exercise price | £0.01 | £0.01 |
Fair value | £7.90 | £9.34 |
Share price at grant | £8.77 | £10.07 |
Expected volatility | 43% | 48% |
Expected life (years) | 3.25 | 3.25 |
Risk-free interest rate | 4.3% | 4.1% |
Expected dividends per annum | 3.2% | 2.2% |
| Granted | Granted | |
| during year | during year | |
| to 31 March | to 31 March | |
| UK SAYE, ROI and Poland share options | 2025 | 2024 |
Weighted average exercise price | £9.39 | – |
Fair value | £4.21 | – |
Share price at grant | £11.78 | – |
Expected volatility | 43% | – |
Expected life (years) | 3.25 | – |
Risk-free interest rate | 4.3% | – |
Expected dividends per annum | 3.2% | – |
Reconciliation of outstanding share options and share awards
Number of share options 2024/2025
| PSP | UK SAYE | CSOP | US | ROI | Poland | Tot al | |
| (000s) | (000s) | (000s) | (000s) | (000s) | (000s) | (000s) | |
Outstanding at 31 March 2024 | 686 | 407 | 266 | 63 | 11 | 229 | 1,662 |
Granted during period | 180 | 491 | 48 | 39 | 19 | 213 | 990 |
Exercised during the period | (29) | (2) | (8) | – | – | (24) | (63) |
Forfeited during the period | (73) | (147) | (22) | (20) | (4) | (80) | (346) |
OUTSTANDING AT 31 MARCH 2025 | 764 | 749 | 284 | 82 | 26 | 338 | 2,243 |
EXERCISABLE AT THE END OF THE YEAR | 3 6 3 | – | 1 7 2 | – | – | – | 5 3 5 |
Notes to the consolidated financial statements
continued
149
Kainos Annual report 2025
Financial Statements
24. Share-based payments continued
Reconciliation of outstanding share options and share awards continued
Weighted average exercise price 2024/2025
| PSP | UK SAYE | CSOP | US | ROI | Poland | |
| £ | £ | £ | £ | £ | £ | |
Outstanding at 31 March 2024 | 0.005 | 9.91 | 7.41 | 0.005 | 9.92 | 4.68 |
Granted during period | 0.005 | 9.39 | 11.56 | 0.005 | 9.39 | 7.13 |
Exercised during the period | 0.005 | 8.54 | 6.04 | – | – | 0.005 |
Forfeited during the period | 0.005 | 9.70 | 12.04 | – | 9.49 | 6.07 |
OUTSTANDING AT 31 MARCH 2025 | 0.005 | 9.61 | 7.82 | 0.005 | 9.59 | 6.22 |
EXERCISABLE AT THE END OF THE YEAR | 0.005 | – | 5.22 | – | – | – |
Number of share options 2023/2024
| PSP | UK SAYE | CSOP | US | ROI | Poland | Tot al | |
| (000s) | (000s) | (000s) | (000s) | (000s) | (000s) | (000s) | |
Outstanding at 31 March 2023 | 645 | 779 | 291 | 42 | 22 | 379 | 2,158 |
Granted during period | 142 | – | 44 | 42 | – | 54 | 282 |
Exercised during the period | (98) | (319) | (68) | – | (7) | (147) | (639) |
Forfeited during the period | (3) | (53) | (1) | (21) | (4) | (57) | (139) |
OUTSTANDING AT 31 MARCH 2024 | 686 | 407 | 266 | 63 | 11 | 229 | 1,662 |
EXERCISABLE AT THE END OF THE YEAR | 3 6 0 | 1 | 1 5 7 | – | – | – | 5 1 8 |
Weighted average exercise price 2023/2024
| PSP | UK SAYE | CSOP | US | ROI | Poland | |
| £ | £ | £ | £ | £ | £ | |
Outstanding at 31 March 2023 | 0.005 | 8.36 | 5.43 | 0.005 | 8.36 | 5.17 |
Granted during period | 0.005 | – | 13.14 | 0.005 | – | 0.005 |
Exercised during the period | 0.005 | 6.20 | 2.97 | – | 6.20 | 4.27 |
Forfeited during the period | 0.005 | 9.50 | 12.85 | 0.005 | 7.39 | 4.36 |
OUTSTANDING AT 31 MARCH 2024 | 0.005 | 9.91 | 7.41 | 0.005 | 9.92 | 4.68 |
EXERCISABLE AT THE END OF THE YEAR | 0.005 | – | 3.87 | – | – | – |
The weighted average share price at the date of exercise of share options exercised during the year was £9.59 (2024: £11.78).
The options outstanding at 31 March 2025 had an exercise price in the range of £0.005 to £14.66 (2024: £0.005 to £14.66) and
a weighted average contractual life of 6.54 years (2024: 4.67 years).
Restricted shares 2024/2025
| UK SIP | ROI | Tot al | |
| (000s) | (000s) | (000s) | |
Outstanding at 31 March 2024 | 1,716 | 23 | 1,739 |
Granted during period | 373 | 7 | 380 |
Released during the period | (55) | (6) | (61) |
Forfeited during the period | (168) | (3) | (171) |
OUTSTANDING AT 31 MARCH 2025 | 1,866 | 21 | 1,887 |
Kainos Annual report 2025
Financial Statements
150
24. Share-based payments continued
Reconciliation of outstanding share options and share awards continued
Restricted shares 2023/2024
| UK SIP | ROI | Tot al | |
| (000s) | (000s) | (000s) | |
Outstanding at 31 March 2023 | 1,535 | 24 | 1,559 |
Granted during period | 357 | 6 | 363 |
Released during the period | (133) | (6) | (139) |
Forfeited during the period | (43) | (1) | (44) |
OUTSTANDING AT 31 MARCH 2024 | 1,716 | 23 | 1,739 |
Cash-settled share-based payment arrangements
The fair value of the amount payable to employees in respect of share options, which are settled in cash, is recognised
as an expense with a corresponding increase in liabilities, over the period during which the employees become
unconditionally entitled to payment. Based on share price information, the liability is remeasured at each reporting date
and at the settlement date.
| 2025 | 2024 | |
| (£000s) | (£000s) | |
At 1 April | 296 | 296 |
Granted during period | 312 | 53 |
Released during the period | (31) | (26) |
Forfeited during the period | (85) | (27) |
AT 31 MARCH 2025 | 492 | 296 |
During FY25, the fair value of awards on the award date was £3.2 million (2024: £0.5 million). At 31 March 2025, the total liability
(inclusive of social security costs) recognised for all cash-settled awards outstanding was £0.4 million (2024: £0.6 million).
A further accrual of £0.6 million (2024: £0.8 million) has been recognised for social security costs in respect of PSP and
unapproved share-option schemes.
Expense recognised in the profit or loss
The Group recognised a total expense of £5.9 million related to share-based payment transactions during the year (2024:
£7.4 million). £5.7 million (2024: £7.8 million) has been recognised as an employee benefit expense in the share-based payment
reserve. Overall a charge of £0.2 million (2024: credit of £0.4 million) has been recognised relating to cash-settled share-based
payment arrangements and social security contributions associated with equity-settled share-based payment arrangements.
Compensation for post-combination services
The prior year charge of £7.4 million included £1.5 million related to compensation for post-combination remuneration.
In connection with the Group’s acquisitions there were contingent consideration arrangements in place, which were subject
to future service conditions being met and were settled through the allotment of shares. This equity-settled share-based
payment expense was recognised over the service periods based on the grant date fair value. There is no equivalent charge
for FY25.
Notes to the consolidated financial statements
continued
151
Kainos Annual report 2025
Financial Statements
26. Financial instruments
| Financial | ||||||
| assets at | Other | |||||
| amortised | financial | |||||
| FVPL | cost | liabilities | Tot al | Fair value | ||
| 31 MARCH 2025 | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | Level |
| FINANCIAL ASSETS MEASURED AT FAIR VALUE: | ||||||
Investments in equity instruments | 1,299 | – | – | 1,299 | 1,299 | 3 |
| FINANCIAL ASSETS NOT MEASURED AT FAIR VALUE: | ||||||
Trade and other receivables | – | 38,520 | – | 38,520 | – | – |
Cash and cash equivalents | – | 128,288 | – | 128,288 | – | – |
Treasury deposits | – | 5,399 | – | 5,399 | – | – |
| FINANCIAL LIABILITIES MEASURED AT FAIR VALUE: | ||||||
Cash settled share-based payments and share-based social security costs | 1,014 | – | – | 1,014 | 1,014 | 1 |
| FINANCIAL LIABILITIES NOT MEASURED AT FAIR VALUE: | ||||||
Trade payables | – | – | 4,843 | 4,843 | – | – |
Other tax and social security | – | – | 11,452 | 11,452 | – | – |
| Financial | ||||||
| assets at | Other | |||||
| amortised | financial | |||||
| FVPL | cost | liabilities | Tot al | Fair value | ||
| 31 MARCH 2024 | (£000s) | (£000s) | (£000s) | (£000s) | (£000s) | Level |
| FINANCIAL ASSETS MEASURED AT FAIR VALUE: | ||||||
Investments in equity instruments | 1,299 | – | – | 1,299 | 1,299 | 3 |
| FINANCIAL ASSETS NOT MEASURED AT FAIR VALUE: | ||||||
Trade and other receivables | – | 41,832 | – | 41,832 | – | – |
Cash and cash equivalents | – | 121,558 | – | 121,558 | – | – |
Treasury deposits | – | 4,403 | – | 4,403 | – | – |
| FINANCIAL LIABILITIES MEASURED AT FAIR VALUE: | ||||||
Cash settled share-based payments and share-based social security costs | 1,421 | – | – | 1,421 | 1,421 | 1 |
| FINANCIAL LIABILITIES NOT MEASURED AT FAIR VALUE: | ||||||
Trade payables | – | – | 1,565 | 1,565 | – | – |
Other tax and social security | – | – | 10,135 | 10,135 | – | – |
Kainos Annual report 2025
Financial Statements
152
26. Financial instruments continued
Liabilities | Assets | |||
| 2025 | 2024 | 2025 | 2024 | |
| (£000s) | (£000s) | (£000s) | (£000s) | |
Polish Złoty | – | 85 | 728 | 209 |
Euro | 326 | 5,463 | 1,109 | 7,947 |
US Dollar | 1,945 | 4,553 | 2,879 | 2,936 |
Canadian Dollar | – | 4 | 23 | 3,791 |
Sterling | 4,179 | – | 4,261 | 438 |
2025 | 2024 | |
Polish Złoty | 5.000 | 5.038 |
Euro | 1.196 | 1.170 |
US Dollar | 1.295 | 1.263 |
Canadian Dollar | 1.856 | 1.710 |
Notes to the consolidated financial statements
continued
153
Kainos Annual report 2025
Financial Statements
26. Financial instruments continued
Market risk continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Polish Złoty | (7) | (1) |
Euro | (8) | (25) |
US Dollar | (9) | 16 |
Canadian Dollar | – | (37) |
| Interest rate impact | ||
| 2025 | 2024 | |
| (£000s) | (£000s) | |
1% increase in interest rates | 1,337 | 874 |
Kainos Annual report 2025
Financial Statements
154
26. Financial instruments continued
Credit risk management continued
Trade receivables and accrued income continued
| Expected | Gross carrying | Loss | |
| loss rate | amount | allowance | |
| 31 MARCH 2025 | % | (£000s) | (£000s) |
Not past due | 2 | 48,495 | 776 |
Past due 1-90 days | 2 | 6,423 | 142 |
Past due 91 + days | 62 | 405 | 251 |
BALANCE AT 31 MARCH 2025 | 55,323 | 1,169 |
| Expected | Gross carrying | Loss | |
| loss rate | amount | allowance | |
| 31 MARCH 2024 | % | (£000s) | (£000s) |
Accrued income | <1 | 33,962 | 137 |
Not past due | 3 | 26,391 | 890 |
Past due 1-90 days | 2 | 8,796 | 176 |
Past due 91 + days | 52 | 1,352 | 705 |
BALANCE AT 31 MARCH 2024 | 70,501 | 1,908 |
| 2025 | 2024 | |
| (£000s) | (£000s) | |
BALANCE AT THE BEGINNING OF THE PERIOD | 1,908 | 1,621 |
Remeasurement of loss allowance | (500) | 499 |
Amounts recovered during the year | (178) | (212) |
Amounts written off | (61) | – |
BALANCE AT THE END OF THE PERIOD | 1,169 | 1,908 |
Notes to the consolidated financial statements
continued
155
Kainos Annual report 2025
Financial Statements
26. Financial instruments continued
Credit risk management continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
United Kingdom & Ireland | 31,925 | 32,612 |
Americas | 17,385 | 25,034 |
Central Europe | 4,418 | 10,483 |
Rest of world | 426 | 464 |
54,154 | 68,593 |
Kainos Annual report 2025
Financial Statements
156
26. Financial instruments continued
Liquidity risk management continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Short-term employee benefits (emoluments) | 1,080 | 1,204 |
Post-employment benefits (pension contributions) | 6 | 9 |
Gains on exercise of share options | – | 9 |
Share-based payments charge | 149 | 163 |
1,235 | 1,385 |
Notes to the consolidated financial statements
continued
157
Kainos Annual report 2025
Financial Statements
27. Related party transactions continued
| 2025 | 2024 | |
| (£000s) | (£000s) | |
Short-term employee benefits (emoluments) | 766 | 912 |
Gains on exercise of share options | – | 9 |
Share-based payments charge | 149 | 163 |
915 | 1,084 |
28. Acquisitions
Year ended 31 March 2025
The Group did not make any acquisitions during the year ended 31 March 2025.
Year ended 31 March 2024
On 30 June 2023, the Group acquired 100% of the share capital of US-based RapidIT-Cloudbera, Inc. (‘RapidIT-Cloudbera’).
Established in 2017, RapidIT-Cloudbera is the creator of Genie, a Workday-focused automated testing product which has the
ability to rapidly auto-generate test cases, allowing customers to quickly launch their automated testing efforts. Genie is used
by over 100 organisations to streamline their testing activity.
The skills and knowledge of the RapidIT-Cloudbera team will allow us to accelerate our product development, increasing
the functionality of our market-leading automated testing product, Smart Test, and enable us to quickly bring new products
to the market.
From 30 June 2023 to 31 March 2024, RapidIT-Cloudbera contributed revenue of £2.2 million and no profit or loss for the
period. If the acquisition had occurred on 1 April 2023, management estimates that consolidated revenue for the year ended
31 March 2024 would have been £383.1 million and consolidated profit for the period would have been £48.6 million.
The following table summarises the recognised amounts of assets and liabilities assumed at the acquisition date.
| Fair value | |
| (£000s) | |
Cash and cash equivalents | 340 |
Trade and other receivables | 281 |
Intangible assets | 5,569 |
Deferred tax liability | (1,509) |
Trade and other payables | (1,349) |
FAIR VALUE OF NET IDENTIFIABLE ASSETS | 3,332 |
Goodwill | 19,916 |
TOTAL CONSIDERATION | 23,248 |
SATISFIED BY: | (£000s) |
Cash | 23,248 |
TOTAL CONSIDERATION | 23,248 |
| (£000s) | |
Cash consideration | 23,248 |
Less cash and equivalents acquired | (340) |
NET CASH OUTFLOW | 22,908 |
Kainos Annual report 2025
Financial Statements
158
Notes to the consolidated financial statements
continued
28. Acquisitions continued
Year ended 31 March 2024 continued
Goodwill
Goodwill has arisen on the acquisition and reflects the future economic benefits arising from assets that are not capable
of being identified individually and recognised as separate assets. The goodwill reflects the skilled and assembled workforce
of the acquired entity and the anticipated profitability and synergistic benefits arising from the combination for the Workday
Products division. None of the goodwill recognised is expected to be deductible for tax purposes.
Acquisition-related costs
During the year ended 31 March 2024, the Group incurred acquisition-related costs of £0.4 million on legal and due diligence
costs. These costs have been included in operating expenses.
Deferred consideration
Compensation for post-combination remuneration
In respect of all acquisitions of the Group, additional compensation for post-combination services of up to £1.9 million
(2024: £3.3 million) will be payable in future periods to March 2026, subject to future service conditions being met. Amounts
relating to compensation for post-combination services are recognised as an expense over the service period. During the year,
a charge of £0.9 million (2024: £3.8 million) has been recognised for compensation for post-combination services in operating
expenses. The prior year charge included £1.5 million related to share-based payment arrangements and was credited
to equity.
Deferred consideration
In connection with a previous acquisition, a final settlement payment of £0.9 million was incurred during the year. This amount
has been recognised in operating expenses.
30. Subsequent events
The Company bought back, for cancellation, 1,054,544 ordinary shares at a cost of £7.4 million between 1 April 2025 and
9 May 2025.
Furthermore, on 19 May 2025, the Board of Directors approved the commencement of a £30 million share buyback programme
to be executed over a period of six months. The sole purpose of the programme is to reduce the Company’s share capital, and
any shares purchased for this purpose will be cancelled.
There have been no other material events subsequent to year end that would require adjustment or disclosure in these
consolidated financial statements.
159
Kainos Annual report 2025
Financial Statements
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2025
Note
2025
(£000s)
2024
(£000s)
NON-CURRENT ASSETS
Investments in subsidiaries 4 9,025 9,025
Receivables 5 11,043 11,216
20,068 20,241
CURRENT ASSETS
Receivables 5 5,136 2,849
Prepayments 967 842
Cash at bank and in hand 99,246 83,239
105,349 86,930
Payables: Amounts falling due within one year 6 (16,159) (14,987)
NET CURRENT ASSETS 89,190 71,943
TOTAL ASSETS LESS CURRENT LIABILITIES 109,258 92,184
NET ASSETS 109,258 92,184
CAPITAL AND RESERVES
Share capital 7 618 629
Share premium account 9,481 9,419
Share-based payments reserve 36,907 31,228
Other reserves 8,834 8,820
Shares held to be cancelled (1,431) –
Retained earnings 54,849 42,088
SHAREHOLDERS’ FUNDS 109,258 92,184
As permitted by Section 408 of the Companies Act 2006, the parent Company has elected not to present its own profit and loss
account for the year. The parent Company reported a profit for the year of £69.9 million (2024: £39.1 million).
The financial statements of Kainos Group plc (registered number 09579188) were approved by the Board of Directors and
authorised for issue on 16 May 2025.
They were signed on its behalf by:
Richard McCann
Director
16 May 2025
Kainos Annual report 2025
Financial Statements
160
Share
capital
(£000s)
Shares
held to be
cancelled
(21)
(£000s)
Share
premium
account
(£000s)
Share-based
payments
(£000s)
Other
reserves
(£000s)
Retained
earnings
(£000s)
Tot al
equity
(£000s)
BALANCE AT 31 MARCH 2023 623 – 6,567 23,394 8,820 33,547 72,951
Profit and total comprehensive income – – – – – 39,057 39,057
Issue of share capital – share options exercised 6 – 2,852 – – – 2,858
Equity-settled share-based payments – – – 7,834 – – 7,834
Deferred tax for equity-settled
share-based payments – – – – – (94) (94)
Dividends – – – – – (30,422) (30,422)
BALANCE AT 31 MARCH 2024 629 – 9,419 31,228 8,820 42,088 92,184
Profit and total comprehensive income – – – – – 69,888 69,888
Issue of share capital – share options exercised 3 – 62 – – – 65
Equity-settled share-based payments – – – 5,679 – – 5,679
Deferred tax for equity-settled
share-based payments – – – – – (25) (25)
Share buyback programme – (22,785) – – – – (22,785)
Shares cancelled (14) 21,354 – – 14 (21,354) –
Dividends – – – – – (35,748) (35,748)
BALANCE AT 31 MARCH 2025 618 (1,431) 9,481 36,907
(22)
8,834 54,849 109,258
COMPANY STATEMENT OF CHANGES IN EQUITY
(21) Shares purchased as part of the share buyback programme due to be cancelled.
(22) £25.4 million relates to exercised or lapsed options or fully vested free shares and is considered distributable.
161
Kainos Annual report 2025
Financial Statements
1. General information
Kainos Group plc (‘the 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.
2. Significant accounting policies
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (‘FRS101’). In preparing these financial statements, the Company applies the recognition, measurement and
disclosure requirements of UK-adopted international accounting standards (‘Adopted IFRSs’) but makes amendments where
necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS101 disclosure
exemptions has been taken.
In these financial statements, the Company has applied the exemptions available under FRS101 in respect of the following
disclosures:
• cash flow statement and certain related disclosures;
• certain disclosures regarding revenue;
• certain disclosures regarding leases;
• comparative period reconciliations for number of shares outstanding;
• disclosures in respect of transactions with wholly owned subsidiaries;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRSs; and
• disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions
under FRS101 available in respect of the following disclosures:
• IFRS2 Share-based payments in respect of Group settled share-based payments
• Certain disclosures required by IFRS13 Fair Value Measurement, and the disclosures required by IFRS7 Financial Instrument
Disclosures.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are
the same as those set out in note 3 to the consolidated financial statements, including the following policies applicable
to the Company.
Investments in subsidiaries
Investments in subsidiaries are stated at cost and, where appropriate, less allowances for impairment.
Share-based payments
Where the Company has granted rights to its equity instruments to employees of other Group companies, such arrangements
are accounted for as equity-settled share-based payment arrangements. The share-based payment expense relating to
employees of other Group companies is recharged to these companies.
Accounting judgements and key sources of estimation uncertainty
The Directors have identified no key sources of estimation uncertainty that may have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year. Furthermore, no individual
judgements have been made that have a significant impact on the Company financial statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
Kainos Annual report 2025
Financial Statements
162
Notes to the Company financial statements
continued
3. Profit for the year
Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit and loss
account. The parent Company reported a profit for the year of £69.9 million (2024: £39.1 million).
The auditor’s remuneration for audit and other services is disclosed in note 6 to the consolidated financial statements.
The average number of employees (including Executive Directors) was two (2024: two).
2025
(£000s)
2024
(£000s)
Wages and salaries 611 778
Social security costs 87 108
Other pension costs 25 26
Share-based payments 149 125
872 1,037
Pension amounts for employees are payments in lieu of pension.
Further information about share-based payments is provided in note 24 to the consolidated financial statements.
4. Investments in subsidiaries
COST AND CARRYING AMOUNT (£000s)
ON 1 APRIL 2024 AND 31 MARCH 2025 9,025
Details of the Group’s subsidiaries at 31 March 2025 are included in note 15 of the consolidated financial statements.
5. Receivables
2025
(£000s)
2024
(£000s)
AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR:
Amounts owed from Group undertakings 10,981 11,099
Deferred tax asset 62 117
11,043 11,216
AMOUNTS FALLING DUE WITHIN ONE YEAR:
Amounts owed from Group undertakings 5,022 2,817
Tax receivable – 32
Other receivables 114 –
5,136 2,849
The deferred tax asset relates to share-based payments.
Amounts owed from other Group companies are unsecured and carry interest of between 3%-5% per annum charged on the
average outstanding loan balances. Management has assessed that the ECL on such balances is insignificant and, on this
basis, have not provided for an ECL on this balance.
163
Kainos Annual report 2025
Financial Statements
6. Payables: Amounts falling due within one year
2025
(£000s)
2024
(£000s)
Trade creditors and accruals 1,184 1,178
Amounts owed to Group undertakings 14,824 13,770
Tax payable 115 –
Other tax and social security 36 39
16,159 14,987
Amounts owed to other Group companies are repayable on demand, unsecured and carry interest of between 3%-5% per
annum charged on the average outstanding loan balances.
7. Share capital and reserves
Information on share capital and reserves and movements during the year is included in note 23 of the consolidated financial
statements.
8. Distributable reserves
The Company’s distributable reserves as at 31 March 2025 total £80.2 million (2024: £63.8 million).
9. Commitments
As at 31 March 2025 the Company has no commitments (2024: none).
Kainos Annual report 2025
Financial Statements
164
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 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 earnings per share (basis 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 pre-tax profit: profit before tax excluding the effect
of share-based payments expense, acquisition-related
expenses including amortisation of acquired intangible
assets, deferred consideration (including post combination
remuneration expense) and restructuring costs incurred.
Our adjusted results in the prior period also exclude one-off
gains recognised on sale of property, plant and equipment,
and changes in fair value of our investment property.
Adjusted profit margin: adjusted profit as a percentage
of revenue for the period.
Annual recurring revenue (ARR): the total of the annualised
committed subscription value contracted at the end of the
reporting period.
Bookings: the total value of sales contracted during
the period.
Carbon net zero: any CO2 released into the atmosphere from
a company’s entire value chain is reduced as much as
possible and the rest is removed.
Carbon neutral: any CO2 released into the atmosphere from
a company’s entire value chain activities is balanced by an
equivalent amount being removed.
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 contracted revenue that has
yet to be recognised.
Compound annual growth rate (CAGR): annual growth rate
over a specified period of time.
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.
Net revenue retention (NRR): a metric that measures the
percentage of revenue retained from existing customers
over a period of 12 months, including upsells, downgrades,
and churn.
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.
Science Based Targets initiative (SBTi): a target for reducing
greenhouse gases and CO2 emissions which is aligned with
the global effort to limit global warming to 1.5°C.
DEFINITION OF TERMS
165
Kainos Annual report 2025
Financial Statements
Kainos Group plc
Registered Office
2nd Floor
21 Farringdon Road
London
EC1M 3HA
Business Address
Kainos House
4-6 Upper Crescent
Belfast
BT7 1NT
Northern Ireland
Email:
investorrelations@kainos.com
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
Email:
shareholderenquiries@cm.mpms.mufg.com
COMPANY INFORMATION
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KAINOS 2025 ANNUAL REPORT