Profits fall at IT firm Kainos despite rising revenue and global expansion

Kainos employs more than 3,100 people globally

IT firm Kainos, one of Northern Ireland's largest businesses, has made £32m in pre-tax profit in the first half of the financial year.

Although revenues rose to £196.1m, increased costs from national insurance rises, investments and temporary staffing reduced profits by 16% on the previous year.

The company is set to take four floors of the £40m office building currently under construction at Bankmore Square as its new headquarters, due to open in September 2027.

Kainos employs more than 3,100 people globally, offering digital services to large institutional clients like public bodies and the NHS, as well as finance and HR products in partnership with US firm Workday.

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Kainos CEO Brendan Mooney told BBC News NI that AI was already an important part of the company's own operations.

"That's everything from how we do our software engineering to how we are able to do prototyping for clients in ever quicker timeframes. Some 65% of what we do on the engineering side is now supported by AI tools and we see productivity improvements around that."

While a lot of tools for clients are still at the "experimentation" stage, some narrower AI tools have already been rolled out by the company, including a chat bot for Leeds City Council intended to provide guidance for those in financial distress.

Other clients, dealing with sensitive data or live systems, are more hesitant.

"Some of our clients will be the likes of the Home Office, the Passport Service, the Ministry of Defence. Some clients, I think rightfully, are cautious about - you give the model your data, there's no guarantee you get it back or it doesn't go somewhere else."

Forty-three percent of the company's half year revenue came from its international operations, with 120 new employees in Canada and entry to new markets in Australia and New Zealand.

Brendan Mooney said that trend is likely to continue.

"At our current pace, in two years' time, the majority of our business will be generated elsewhere – even while our UK business grows as well. The opportunities are global for what we do."

Another key growth area for the company is in the health care sector. Revenues from the health sector increased by 33% to £29.6m with the company providing services to research bodies, as well as the NHS.

With the Chancellor announcing action on waiting lists as one of her priorities ahead of the Autumn Statement, there is likely to be an increased focus on boosting productivity and digital accessibility in the health service.