REG - Checkit PLC - Trading update notice of results & contract

CheckitAnnouncement

10/08/2023 07:00

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RNS Number : 8559I  Checkit PLC  10 August 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.

 

10 August 2023

 

Checkit plc

("Checkit" or the "Group")

 

Trading update, notice of interim results and contract renewal

 

Checkit plc (AIM: CKT), the intelligent operations platform for the deskless
worker, provides an unaudited trading update for the six months ended 31 July
2023 ("H1 FY24") and announces the renewal of a significant contract. The
Group will publish its interim results on 14 September 2023.

 

 

 (£'m) Reported      Six months to
                     31 July 2023  31 July 2022  % Change

                     Actual        Actual
 ARR                 12.6          10.2          24%

 Revenue
    Recurring        5.4           4.4           +22%
    Non-recurring    0.3           0.4           (21) %
 Total Group         5.7           4.8           19 %

 

 

 

 

 

 

 

 

 

 

 

ARR growth has continued to grow in line with market expectations during H1
FY24, despite the uncertain economic environment, driven by consistent
execution of our "land and expand" strategy, as well as high net retention
rates.

 

Checkit's ability to grow with our customers is seen in a net retention rate
of 113% and a gross retention rate of 98%. Over 50% of H1 FY24 ARR growth
resulted from upsell and cross sell within our current customer base, as they
continue to see the productivity and efficiency benefits which Checkit
platform enables, with the balance coming from new customer wins and pricing.

 

The Group has also continued its strong performance in the US, with 41% growth
in ARR to £3.2m (H1 FY23: £2.3m).

 

Recurring revenue growth reflects bookings achieved in FY23. Recurring revenue
accounted for 95% of total revenue in H1 FY24.

 

Cash

 

Net cash at 31 July 2023 was £12.8m (31 January 2023: £15.6m).

 

In H1 FY24, Checkit has followed a programme of controlled investment, with
the intention of achieving further ARR growth alongside an accelerated path to
profitability.

 

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 driving further operating efficiencies on
its path to profitability.

 

Contract Renewal

 

Checkit announces the renewal of our Framework Agreement with John Lewis plc
to provide connected workflow, automated asset monitoring and digital building
management solutions with improved pricing for a further period of three
years. The Framework Agreement and associated services have a total contract
value across the three year term of c.£6m.

 

The agreement, effective from 1 August 2023, continues to provide Waitrose and
John Lewis shops with the opportunity to benefit from Checkit's Connected
Workflow Management (CWM), Connected Automated Monitoring (CAM) and Connected
Building Management (CBM) services. Checkit will continue to provide services
to over 270 Waitrose core branch stores, 60 Waitrose convenience branches, 30
John Lewis stores as well as offices and distribution centres for both John
Lewis and Waitrose.

 

Separately in April 2023, Checkit signed a master service agreement (MSA) with
Compass Contract Services (U.K) Limited ("Compass") for the provision of CAM
and CWM to their end users, primarily in the food services sector. Since
signing the MSA with Compass, Checkit has entered into 3 new contracts with
Compass.

 

 

Kit Kyte, Chief Executive Officer, commented:

"In H1 FY24, we saw strong upsell and cross sell from existing customers as
they look to streamline their organisations to improve efficiencies and reduce
costs.

 

Underpinned by a robust balance sheet, strong pipeline of new business and
increasing visibility, we look forward with confidence in the Group's
long-term prospects."

 

 

NOTES

 

1.    Annual Recurring Revenue ("ARR") is defined as the annual value of
contracted recurring revenue as at the period end date.

2.    31 July 2023 reflects continuing operations only and is restated to
exclude discontinued operations

3.    Net revenue retention is defined as the amount of recurring revenue
from existing customers retained over the period, excluding new wins in the
last 6 months

 

 

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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