Kooth Shares Rally After Announcing US Contract Win, Share Buyback Programme

Shares in Kooth Plc (LON: KOO) jumped by more than 12% in early Tuesday trading following the announcement of a significant US contract win and a new share buyback programme.

The company revealed it has secured a $1.45 million pilot contract with the State of New Jersey to provide mental health support through its Soluna platform.

The year-long contract, beginning in January 2025, will give 50,000 students aged 13 to 18 access to digital tools, peer support, and confidential counselling.

The contract win marks Kooth's continued expansion in the US, adding to existing partnerships in California and the private sector partnership with Aetna Better Health in Illinois.

CEO Tim Barker said, “We're confident that we will continue to grow our presence across the US, providing support to young people to help combat the growing global youth mental health crisis.”

Meanwhile, in a separate announcement, Kooth revealed plans to launch a share buyback programme of up to £1.5 million.

The buyback aims to reduce dilution from share-based rewards and reflects the board's belief that the current share price undervalues the Group.

“The Board is of the view that the shares significantly undervalue the Group and therefore believe that utilising the company's strong balance sheet to minimise dilution arising from share options is in the best interest of all shareholders,” said Kooth.

The programme will be conducted through Stifel Nicolaus Europe Limited under pre-set parameters.

The twin announcements have bolstered investor confidence, with the stock now trading around the 180p per share mark. However, it is down over 38% so far in 2024.