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REG - Checkit PLC - Trading Update

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RNS Number : 1219D  Checkit PLC  15 February 2024

15 February 2024

 

Checkit plc

("Checkit" or the "Group)

 

FY24 Trading Update

 

Checkit (AIM: CKT), the intelligent operations platform for the deskless
worker, announces its unaudited trading update for the year ended 31 January
2024 ("FY24").

 

·    Annual recurring revenue ("ARR"(1)) growth of 16% to £13.3m, in line
with expectations

·    Focus on path to profitability is anticipated to result in better
than expected losses ("LBITDA"(2)) halving year-on-year to £3.4m

·    Recurring revenues provide good visibility for future periods
underpinned by a high net revenue retention(3) of 111%

 

 (£'m) Reported      Twelve months to
                     31 January 2024  31 January 2023  % Change
 ARR                 13.3             11.5             16%

 Revenue
    Recurring        11.2             9.6              +17 %
    Non-recurring    0.8              0.7              +18 %
 Total Group         12.0             10.3             +17 %

 

Kit Kyte, CEO of Checkit, commented: "The second half of the year has seen
further progress on our stated strategy and our drive towards profitability.
Our new AI enhanced products are, we believe, best in class and a step change
ahead of what's currently available in the market. We will continue to focus
on driving top-line growth in the business and look forward to FY25 with
confidence."

 

Results

 

Revenue has grown by 17% to £12.0m, in line with market expectations despite
the challenging global economy. Our 'Land and Expand' strategy of up-selling
and cross-selling has generated growth from our existing customer base, whilst
at the same time we have actively identified areas of expansion and
opportunity both geographically and vertically.  With recurring revenues now
representing 93% of the total and our high net revenue retention of 111%, we
have a sound base to pursue our drive towards profitability.

 

Our focus on gross margin expansion continues to deliver and we expect losses
(adjusted LBITDA) to be better than expected and nearly halve for the year to
£3.4m (2023: LBITDA of £6.4m) as we drive operational efficiencies and
carefully manage costs across the business.

 

Our cash position at the end of year was £9.0m (31 July 2023: £12.8m),
reflecting the 46% reduction in LBITDA and the strategic purchase of inventory
to mitigate supply chain constraints in the market. We expect this position to
unwind over the next 12-18 months, supporting further revenue growth.

 

Product Update

 

During the year, utilising the data we collect and new AI and ML tools, we
have successfully added new functionality to our products that will allow our
customers to deliver sustainability and energy saving initiatives and benefit
from predictive maintenance of their assets. This is being actively trialled
by one of our largest customers and we are confident that these developments
will provide significant value to the Group and our customers.

 

We have continued to invest in our products and our markets and we are gaining
traction geographically, with 26% of ARR now generated in the US, and as we
develop our offerings to address new sectors, such as food manufacturing and
R&D laboratories.

 

We will provide further detail on our product strategy and the path to
profitability at the time of our FY24 Results announcement in April 2024.

 

The Group's management team will host a live webinar which will include an
opportunity for questions at 14:00 (GMT) today. The webinar can be accessed
via the news area of the website at https://www.checkit.net/news/
(https://www.checkit.net/news/)  or by using this 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)

 

NOTES

 

1.    Annual Recurring Revenue ("ARR") is defined as the annualised value
of contracted recurring revenue from subscription services as at the period
end, including committed annual recurring revenue from new wins.

2.    Adjusted LBITDA is the loss on operating activities before
depreciation and amortisation, share based payment charges and non-recurring
or special items. Analysts' Adjusted LBITDA expectations for FY24 were £3.6m.

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 year.

 

 

For further information, please visit www.checkit.net (http://www.checkit.net)
or contact:

 

 Checkit plc                                              +44 (0) 1223 643313

 Kit Kyte (Chief Executive Officer)

 Greg Price (Chief Financial and Operations Officer)

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

 Shaun Dobson / Harry Gooden / James Fischer

 Tavistock (Financial PR)                                 +44 (0) 20 7920 3150

 Lulu Bridges / Katie Hopkins / Simon Hudson

 

 

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