LONDON (ShareCast) - (ShareCast News) - Northern Irish digital services company Kainos Group posted only a slight increase in revenue at the half-year stage despite a large jump in its order backlogs.
Revenue grew just 2% to £41.4m, even as the company's backlog of sales orders shot higher by 94% to £63.4m, finishing out the first half with only a 1% improvement in adjusted pre-tax profit of £7.1m.

Software as a service (SaaS) sales orders were especially strong, up by a whopping 253% to £5.3m but the firm was unable to translate that into increased profits.

Group gross margins for the six months leading to 30 September was 49%, the same as Kainos had returned at the same time a year earlier, with a minor reduction of 0.5% to 47.5% in the gross margin for its digital services, and a more significant reduction to 54% in the gross margin for digital platforms, driven mostly by heightened costs associated with its Evolve IC product.

On the other hand, cash and equivalents rose 31% to £27.3m.

Diluted earnings per share gained 7% to 4.6p.

Brendan Mooney, Kainos' chief executive, said, "It has been another successful period for Kainos and I am particularly pleased with our strong sales execution which provides a solid platform for further growth. To support this growth we have continued to expand nationally and internationally during 2017, opening three new offices in Birmingham, Frankfurt and Copenhagen."

"Within Digital Services, we continue to be a key partner to UK government in their major transformation programmes. We are also driving very strong growth in the commercial sector, which remains our fastest growing segment within the division. The past period has seen us consolidate our position as the leading European boutique partner for Workday and we now have 17 customers in mainland Europe," he added.

As of 1215 GMT, shares had gained 4.19% to 300.08p.

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