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REG - Checkit PLC - Trading Update and Notice of Results

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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  31 January 2022  % Change

                                     Actual           Actual
 ARR(1)                              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
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.investormeetcompany.com%2Fcheckit-plc%2Fregister-investor&data=05%7C01%7CHugh.Wooster%40checkit.net%7Cdd2fb3d65ff9412a06c708dae1a815bb%7Cc766b9048fbf43bea8450cab82a691e9%7C1%7C0%7C638070409271004915%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=utsFc9ht3y2TWaqsmaiiF6tmf%2F2JUOBjGHoyFJy0O1A%3D&reserved=0)

 

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
+44 (0) 1223 643313

www.checkit.net

Kit Kyte (Chief Executive Officer)

Greg Price (Chief Financial Officer)

 

 

Singer Capital Markets (Nominated Adviser & Broker)  +44 (0) 20 7496 3000

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.

 

 

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