Kin and Carta Regulatory News (KCT)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

21 September 2020

Kin and Carta

Trading Update

Kin and Carta plc (the "Company" or "Kin and Carta"), the international digital transformation ("DX") company, provides the following update on trading for the financial year ended 31 July 2020.

Further to our Financing and Trading Update provided on 23 July 2020 (the "July Update"), we expect revenue and profits for the financial year to be slightly ahead of the expectations provided in our July Update due to a better end to the financial year.

The pandemic reinforced the imperative for companies to not only address DX in their businesses but also accelerate it. As a result we have seen new business opportunities returning and existing clients reopening larger projects. Our strategic partnerships with Google and Microsoft continue to expand, with Microsoft recently awarding Kin and Carta Gold Competencies in both cloud and application development capabilities. In addition to Kin and Carta's cloud transformation offering, we have won new projects in the areas of data transformation which are progressing well. We recently began working with a leading global food and beverage brand which has engaged Kin and Carta to help lead its central data infrastructure transformation. These early signs of improving market conditions reinforce our optimism about the growth of the DX market and the Company's opportunity within it.

Net debt reduced to £31.7m at 31 July 2020 from £39.5m at 31 January 2020 due to strong cash flow generation and reductions in working capital offsetting acquisition-related cash outflows of £7.1m. Our year end net debt to EBITDA ratio was below 2 times, and we continue to focus on managing costs and cash flow carefully to ensure that our balance sheet remains robust.

Further to our July Update, we have now agreed with the Trustees of the legacy St Ives defined benefit pension scheme (the "Scheme") a new deficit recovery plan that commenced in September 2020 which aligns the cash contributions with the Company's cash generation. FY21 deficit repair contributions to the Scheme will reduce to a fixed amount of £1.0 million plus 15% of free cash flow (adjusted for certain pension-related items) generated in excess of £1.0 million. The Scheme continues to have an accounting surplus, valued at £1.1 million at 31 July 2020.

Our focus on the DX market includes a review of our non-strategic Ventures while building an M&A pipeline for inorganic growth. As a result, on 31 August 2020 the Company disposed of Pragma, a consultancy to operators of airports and retail property. Pragma was not core to the Company's DX focus and its disposal marks progress in the final steps of reshaping the Company.

The Company remains cautious regarding the continuing effects of the pandemic on H1 of the current financial year which commenced 1 August 2020. Nonetheless, early signs of improvement in client activity, pipeline and continued traction with our strategic partners give us confidence in the Company's future prospects.

The Company expects to announce preliminary results for the year ending 31 July 2020 in November.

Enquiries:

Important notices

This announcement contains inside information and is issued on behalf of the Company by Daniel Fattal, Company Secretary.

Cautionary statement regarding forward-looking statements

This Announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they are based on numerous assumptions regarding the Company's present and future business strategies, relate to future events and depend on circumstances which are or may be beyond the control of the Company which could cause actual results or trends to differ materially from those made in or suggested by the forward-looking statements in this Announcement, including, but not limited to, domestic and global economic business conditions; market-related risks such as fluctuations in interest rates; the policies and actions of governmental and regulatory authorities; the effect of competition, inflation and deflation; the effect of legislative, fiscal, tax and regulatory developments in the jurisdictions in which the Company and its respective affiliates operate; the effect of volatility in the equity, capital and credit markets on profitability and ability to access capital and credit; a decline in credit ratings of the Company; the effect of operational and integration risks; an unexpected decline in sales for the Company; inability to realise anticipated synergies; any limitations of internal financial reporting controls; and the loss of key personnel. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Save as required by the Market Abuse Regulation, the Disclosure Guidance and Transparency Rules, the Listing Rules or by law, the Company undertakes no obligation to update these forward-looking statements and will not publicly release any revisions it may make to these forward-looking statements that may occur due to any change in its expectations or to reflect events or circumstances after the date of this Announcement.