REG - Checkit PLC - Strategic update

CheckitAnnouncement

08/04/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250408:nRSH0102Ea&default-theme=true

RNS Number : 0102E  Checkit PLC  08 April 2025

Checkit plc

("Checkit" or the "Company")

 

Strategic Plan to deliver accelerated profitability and sustainable growth

 

Checkit plc (AIM: CKT), the automated monitoring platform for operational
leaders, announces the implementation of a comprehensive strategic plan to
enhance operational efficiency and to accelerate profitability.

Strategic Plan Overview

In response to the evolving economic landscape in the US and UK - particularly
the UK National Insurance increase and the introduction of US trade tariffs -
which are contributing to uncertainty and caution among customers, the Company
has taken steps to strengthen its financial position. A review of Checkit's
operations and cost base, has resulted in the identification and
implementation of measures expected to deliver annualised cash savings of
approximately £3 million. The measures will involve one-off exceptional cash
costs of approximately £0.4 million in the current year.

Key components of the programme include:

·      A Staff Productivity Programme: A carefully managed restructuring
which (subject to a consultation process) will result in a reduced number of
roles across various departments. This decision was made following a thorough
evaluation to ensure that the Company remains agile and focused on its
strategic objectives with an appropriate cost base. We acknowledge the
contributions of all affected employees and are providing support during this
transition.

·      Non-Staff Efficiency Measures: A programme to reduce
non-staff-related expenditures, including reducing discretionary spending,
renegotiating supplier contracts, and streamlining processes.

Cash Generation

The cost reduction programme is expected to yield annualised cash savings of
approximately £3 million from quarter two of the current financial year, with
the full benefit to be realised in the subsequent financial year. The
implementation of these measures is expected to bring forward the point at
which the Company starts to generate net cash inflows.

Growth Strategy

The Checkit management team have undertaken a comprehensive evaluation of the
entire business. This in-depth review generated valuable insights that have
now been embedded into our FY26 strategy and longer-term planning:

·    Our Go-to-Market (GTM) approach is designed to drive strong
commercial performance while maintaining a disciplined investment profile. We
aim to deliver healthy revenue retention and low churn, in line with
top-quartile industry benchmarks as demonstrated by our 3-year average NRR of
111% and GRR of 97%.

·    The US remains the priority region responsible for driving new
customer acquisition, supported by its broad range of target enterprises.  In
FY25 23% of US bookings came from new customers. While recent US trade tariffs
contribute to economic uncertainty, based on our current understanding, they
are not expected to have a material impact on Checkit's revenue or cost base.

·    The successful launch of Asset Intelligence, a new ML / AI data
module, that optimizes asset availability, reduces operating costs and
delivers ROI, differentiates Checkit as a data orchestration platform for
operational leaders.  Future product innovation will focus on further
monetization of data "at ground level" as a source of high margin growth.

 

Outlook

The Board remains confident in Checkit's strategic direction and its
positioning in key growth markets. Strong revenue retention across our almost
entirely recurring revenue base, combined with the cost reduction initiatives,
enhances the Company's financial resilience in a challenging economic
environment. Together, these factors provide a solid foundation for delivering
a profitable and cash-generative business.

 

Kit Kyte, Chief Executive Officer, commented:

"We are refining Checkit's operating model to improve efficiency, to enhance
performance, and to accelerate our transition to profitability. By
streamlining costs and focusing resources on key areas, we are strengthening
the business for long-term success. Our commitment to delivering value to
customers and shareholders remains our priority. I look forward to setting out
our vision in more detail when we announce our preliminary results on 24 April
2025."

Enquiries:

 Checkit plc                                                  +44 (0) 1223 643313
 www.Checkit.net (http://www.checkit.net/)
 Kit Kyte (Chief Executive Officer)
 Kris Shaw (Chief Financial Officer)
 Singer Capital Markets (Nominated Adviser & Broker)          +44 (0) 20 7496 3000
 Shaun Dobson / James Fischer
 Yellowstone Advisory (Investor Relations)                    +44 (0) 203 951 8907
 Alex Schlich                                                 alex@yellowstoneadvisory.com (mailto:alex@yellowstoneadvisory.com)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDEAELXEFFSEAA