Kin and Carta updates expectations, announces new CEO

Cloud and digital services provider Kin and Carta said in an update on Wednesday that it now expects net revenue of £191m for the financial year about to end, up from £128.9m year-on-year.

The London-listed firm said that would make for total growth of 48%, and total constant currency growth of 45%.

On a like-for-like basis, it said it expected organic net revenue growth at constant currency of 38%, in line with market expectations and its recently-raised guidance given in February.

Adjusted operating profit was expected to grow by 50% at constant exchange rates for the 12 months ending 31 July, from £12.2m in the 2021 financial year, with margins in line with market expectations.

Kin and Carta said its current trading performance, coupled with a “strong” backlog of orders - a record high of £104m for the end of June - plus the largest digital transformation contract it had signed to date, worth up to $90m over two years, demonstrated its continued momentum and underpinned its medium-term growth expectations.

The board said the existing-client expansion showed the company’s continued trend towards longer-term and larger contracts.

It added that the triennial value of the legacy St Ives defined-benefit pension scheme was “nearly complete” and, subject to audit, was in a “modest technical surplus” at the April valuation date compared to a £28.4m deficit at the previous technical valuation in April 2019.

As a result, the firm said it expected that no further statutory deficit repair contributions would be required once the valuation was finalised.

The balance sheet was described as “strong”, with net debt expected to be in the single-digit millions of pounds sterling at year-end on 31 July.

Kin and Carta said it was continuing to pursue accretive acquisitions and organic growth opportunities, while investing in operations to “profitably scale” the business over the next several years.

At the same time, Kin and Carta said J Schwan had informed the board of his intention to retire as chief executive officer and member of the board at the end of the current financial year.

He would be succeeded by Kelly Manthey, currently group chief executive of the Americas, which is Kin and Carta's largest trading region representing about 70% of its net revenue.

Manthey had been with the company for 16 years, serving previously as the CEO of Solstice - the Americas anchor business and headquarters - since 2018, when she succeeded Schwan in that position.

The directors said they were proposing to appoint Manthey as CEO, and to the board, effective from 1 August.

Schwan would continue as a special adviser for six months to assist with the transition.

The board added that it had appointed chief financial officer Chris Kutsor to the additional role of chief operating officer, to oversee the scaling of operations in pursuit of further financial and operational effectiveness.

Group chief executive of Europe David Tuck and chief strategy officer Richard Neish completed the unchanged leadership team.

“Kin and Carta is unrecognisable from 2018 when J took over as CEO, a period that delivered a total shareholder return of 115%,” said chairman John Kerr.

“With sterling support from Kelly and Chris among others, J has been the architect of this transformation, and on behalf of the board, I would like to thank him for his dedication and contribution.

“J has successfully steered the business through this period of unparalleled change as he shaped a growing pure-play digital transformation consultancy with purpose at the heart of the business.”

Kerr said the board was “delighted” to appoint Manthey as Schwan’s successor.

“Kelly has been alongside J since 2006, including the evolution of Kin and Carta as group chief executive for the Americas since August 2018.

“During that time, Kelly has been instrumental in profitably scaling the Americas business, including organic revenue growth of over 110% in addition to four acquisitions in the world's largest and fastest paced digital transformation market.

“This next phase of Kin and Carta will be defined by continued growth, and we are confident and excited that the profitable growth that Kelly has successfully executed in the Americas, evident in the strength of this trading update, will be replicated at a global scale.”

Kin and Carta said it would report its audited preliminary results for the year ended 31 July in October.

At 1231 BST, shares in Kin and Carta were up 3.49% at 178p.

Reporting by Josh White at Sharecast.com.