Trading Update and Notice of Results

RNS Number : 0687Q

Checkit PLC

16 February 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF UK MARKET ABUSE REGULATION .  UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.

16 February 2023

Checkit plc

("Checkit" or the "Group")

Trading Update and Notice of Results

Checkit plc (AIM: CKT), the intelligent operations platform for the deskless worker, is pleased to report an unaudited trading update for the year ended 31 January 2023 ("FY23").

(£'m) Reported	Twelve months to
	31 January 2023 Actual	31 January 2022 Actual	% Change
ARR1	11.5	9.0	28%
Revenue from continuing operations
Recurring	9.6	6.8	+41%
Non-recurring	0.7	1.6	(58) %
Total Group	10.3	8.4	22%

· ARR increased by 28% to £11.5m, vs. consensus market expectations of £10.8m (+20%)

· Net cash at 31 January 2023 of £15.6m vs. consensus market expectations of £15.2m

ARR growth was better than expected during H2 amidst a challenging economic and political environment, driven by consistent sales momentum, with contracts signed offering further expansion opportunities underpinning the Board's confidence in future growth.

Checkit has continued to expand into the US market, achieving 91% year on year ARR growth to £2.8m as a result of a number of contract wins, including continued growth in its footprint with its biopharma customers and a new contract with a large resort and casino operator. These new contract wins have the potential to grow significantly over time. Our US business is on track to be the largest revenue contributor of the Group.

Checkit has also renewed one of its largest existing enterprise contracts with an integrated energy company to provide real time operations management capability to over 300 sites, which evidences the value and stickiness of the platform and IoT offering.

Recurring revenue growth has exceeded 30% for the third consecutive year and now accounts for 93% of total revenue, demonstrating Checkit's successful transition into a subscription-based model.

Non-recurring revenue declined compared to FY22 as planned, driven by the ongoing conversion of US customers from maintenance contracts to subscription income during the year.

Following the decision to close the BEMS business unit, this is now reported as a discontinued operation. Revenue from discontinued operations in the year amounted to £0.6m (FY22: £4.9m). The Group is now wholly focused on delivering recurring revenue from its technology solutions.  

Cash

Net cash at 31 January 2023 was £15.6m (31 July 2022: £19.5m).

The Group continues to benefit from a strong balance sheet and in light of market conditions, will continue to execute against its growth strategy and develop its technology, whilst also applying increased focus on its plan to drive further operating efficiencies and accelerate its path to profitability.

A further update will be provided as part of the preliminary results announcement to be issued by the end of April 2023.

Kit Kyte, Chief Executive Officer, commented:  "We are pleased to have delivered strong growth in ARR and a robust cash position, both of which are ahead of market expectations. We expect the positive sales momentum to continue and as we enter FY24, we will look to continue to expand our US presence and build on the successes of the past year."

Investor presentation

Kit Kyte (CEO) and Greg Price (CFO) will provide a live presentation via the Investor Meet Company platform at 12pm today. This presentation is open to all existing and potential shareholders.

To register please click on the following link:

https://www.investormeetcompany.com/checkit-plc/register-investor

Investors who already follow Checkit on the Investor Meet Company platform will automatically be invited. Questions can be submitted at any time during the live presentation.

Note:

1.  Annual Recurring Revenue ("ARR") is defined as the annual value of contracted recurring revenue as at the period end date. This has been restated from the prior year (reported ARR of £8.2m), where it related only to contracts that were installed.

Contacts:

Checkit plc  [phone]

www.checkit.net

Kit Kyte (Chief Executive Officer)

Greg Price (Chief Financial Officer)

Singer Capital Markets (Nominated Adviser & Broker)  [phone]

Shaun Dobson / Harry Gooden / George Tzimas

Forward looking statements

This announcement 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 announcement are made as of the date hereof, and Checkit undertakes no obligation to update any of its forward-looking statements.

 

END

 

 

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