Kainos scraps dividend, cuts exec pay in response to Covid-19

Kainos said it was scrapping a final dividend and waiving executive director salaries for six months to cut costs as it dealt with the coronavirus pandemic impact.

The IT company said it had started to see the impact of Covid-19 on on the global economy, but added it was too early to predict the duration or the severity of the economic disruption on its customers as full year profits rose 10% to £23.2m.

Kainos on Tuesday said its customers in the public sector and in healthcare “will likely be more robust than those in other sectors during this crisis”.

“The group's digital services division continues to benefit from the UK government's digitisation programmes and we anticipate a greater adoption of digital services by government, healthcare and commercial organisations once the immediate health crisis has been brought under control.”

Pay increases were deferred until 2021 and bonus schemes have curtailed and chief executive, chief financial officer and senior vice-president of business development had elected to take no salary or bonus.

The rest of the executive team had cut pay by 50% and the non-executive board members reduced their fees by 20%.

“Notwithstanding our strong cash balance (of £40.8m) and the cost reduction measures already implemented, in order to preserve the Group's liquidity during this period, the board considers it prudent to maintain flexibility on dividends at this stage,” Kainos said.