Brexit’s Not Bad for Everyone; Just Ask This U.K. IT Firm

LONDON (Capital Markets in Africa) – Brexit’s impending arrival is prompting intensifying warnings from the likes of Airbus SE and Nissan Motor Co. about the potential fallout for U.K. businesses. But Britain’s split from the European Union has been a boon to at least one information-technology provider.

Kainos Group Plc stock surged almost 11 percent Monday after the London-based government contractor said full-year results will probably exceed analysts’ expectations, thanks to “very strong” growth in digital services and ongoing demand from state and commercial clients. The stock has almost tripled since the U.K. referendum to exit the EU 2 1/2 years ago, putting it among the FTSE All-Share Index’s top 10 best-performing equities in the period.

Kainos is working on the U.K.’s so-called transformation strategy, which is aimed at providing citizens and businesses with easier online access to government data and services. Shore Capital Markets analyst Martin O’Sullivan (buy) expects Brexit to be a “net positive” for Kainos, since it has had early projects on the EU pullout, including operations under way at the Home Office and Department for Environment, Food & Rural Affairs.

There’s “much more to do” generally in developing the government’s web links, and Kainos has “strong credentials,” O’Sullivan said.

Source: Bloomberg Business News