Trading update and notice of interim results

RNS Number : 8435V

Checkit PLC

12 August 2020

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION   596/2014.  UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.

12 August 2020

Checkit plc

("Checkit" or the "Group")

Trading update and notice of interim results

The Group provides a trading update for the six months to 31 July 2020, in light of the COVID-19 situation, the Group has provided an analysis of sales on a quarterly basis for this period. A summary of the Group's unaudited sales is as follows:

	Three months to (Q1)			Three months to (Q2)			Six months to (HY)
	30 April 2020 Actual	30 April 2019 Actual	30 April 2019 Normalised*	31 July 2020 Actual	31 July 2019 Actual	31 July 2019 Normalised*	31 July 2020 Actual	31 July 2019 Actual	31 July 2019 Normalised *		Change Actual	Change Normalised*
Revenues (unaudited)	£m	£m	£m	£m	£m	£m	£m	£m	£m		%	%
Recurring	1.1	0.3	1.0	1.2	0.9	0.9	2.3	1.2	1.9		96.8%	23.4%
Non-recurring	2.4	-	2.1	1.7	2.0	2.2	4.1	2.0	4.3		105.4%	-6.8%
Total	3.5	0.3	3.1	2.9	2.9	3.1	6.4	3.2	6.2		102.2%	2.3%

Recurring revenue change Q1 to Q2	+6.2%
Non-recurring revenue change Q1 to Q2	-29.7%
Total revenue change Q1 to Q2	-18.2%

*Normalised sales illustrate sales that would have been included in the Group's financial results had Checkit UK Limited, which was acquired on 14 May 2019, been owned by the Group throughout both periods.

The impact of COVID-19 continues to evolve and remains highly uncertain but has undoubtedly delayed sales progress in the six months ended 31 July 2020. As indicated within the previous update, which was released on 26 May 2020, the Board is continuing to rely on its recurring revenue as its base case for internal planning purposes. Recurring revenues have been resilient through the first half of the current financial year, whilst the non-recurring installation and project based revenues have seen a significant fall of approximately 30% in the second quarter compared to the first quarter of the current year.

Notwithstanding  COVID-19, overall revenues achieved in the first half were 2.3% up compared to the previous year (on a normalised basis).Recurring revenues improved by 23% resulting from new installations and the conversion of existing annual calibration and maintenance contracts in the healthcare sector, which were acquired with Checkit UK Limited (previously Next Control Systems Limited), into subscription-based income. This has helped to offset the shortfalls in the lower margin installation business (non-recurring revenues).

Recurring revenue for the six months ended 31 July 2020 accounted for approximately 36% of sales compared to 31% for the same period a year ago.

As previously announced the Group had undertaken cash saving initiatives in response to the impact of COVID-19. Cash at 31 July 2020 was £13.4m (31 January 2020: £14.3m; 30 April 2020: £12.8m) benefitting by £0.5m from the repayment of the loan with the Group's Employment Benefit Trust, following the sale of the Trust's remaining shares as announced on 9 July 2020.

Notice of interim results

The Group expects to issue its interim results on Wednesday 16 September 2020.

Forward looking statements

This document contains forward looking statements with respect to the business, strategy and plans of Checkit plc and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about Checkit or management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Checkit's actual future results may differ materially from the results expressed or implied in these forward looking statements as a result of a variety of factors among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. The forward looking statements contained in this document are made as of the date hereof, and Checkit undertakes no obligation to update any of its forward looking statements

 Checkit plc  [phone]

 www.checkit.net

 Keith Daley (Executive Chair)

 Andrew Weatherstone (Chief Financial Officer)

 Yellowstone Advisory (Investor Relations)  [phone]

 Alex Schlich 

 N+1 Singer (Nominated Adviser & Broker)  [phone]

 Shaun Dobson / George Tzimas (Corporate Finance)

 Rachel Hayes (Corporate Broking)

 

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