REG - Checkit PLC - Final Results
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RNS Number : 2075B Checkit PLC 21 April 2026
Checkit plc
("Checkit", the "Company" or the "Group")
Final results for the Year Ended 31 January 2026
Checkit plc (AIM: CKT), the automated monitoring and operational intelligence
platform for frontline-led organisations, is pleased to report its audited
results for the year ended 31 January 2026 ("FY26"). The annual report for
FY26 will be published ahead of the Company's Annual General Meeting, which
shall take place on 22 May 2026.
FY26 HIGHLIGHTS
· Adjusted EBITDA* profitability achieved, improving by 113% to a
profit of £0.3m, ahead of the break-even result indicated in the pre-close
trading update (FY25: loss of £2.3m)
· Annual Recurring Revenue ("ARR")** of £14.3m, a reduction of 1%,
but up 2% at constant currency, and underlying ARR growth of 5% excluding a
single large US customer reduction relating to unused services
· Structural reduction in cost base delivered through completion of
a £4m cost saving programme
· Net cash of £3.0m at year end (£2.7m at 31 July 2025),
reflecting a cash-generative H2
· High-quality revenue base maintained, with recurring revenue of
£13.2m representing 96% of total revenue (FY25: £13.1m)
· Launch of a redesigned user interface and improved user
experience, leveraging AI in the development process to accelerate delivery,
improve operational efficiency, and enhance customer engagement.
Strategic Outlook
· On 26 March 2026, the Board announced its decision to commence a
Formal Sale Process by seeking offers for the Group. The Board is of the view
that, under private ownership, a combination of cost normalisation (including
removal of public company costs), operational leverage from platform scaling,
and strategic and revenue synergies could support substantial profitable
growth in the near to medium term. The Board believes this creates a
compelling opportunity for acquirers which is not currently reflected in the
Company's valuation.
· During FY27, the Board will prioritise long-term scalability by
executing the strategic retirement of a legacy product which to date has
diverted resources from Checkit's core product suite. This is a critical
enabler for total platform unification and the launch of our next-generation
solution in FY27. As a result, workflow management capabilities will be
available to 100% of our customer base, with medical customers, representing
around 60% of the total, gaining access for the first time. This move more
than doubles our penetration potential and clears the path for aggressive
customer expansion. The associated reduction in legacy costs, combined with
improved operational efficiencies, secures our trajectory of further
profitable growth.
Kit Kyte, CEO of Checkit, commented:
"FY26 was a pivotal year for Checkit. We completed a structural reset of the
business, delivered Adjusted EBITDA profitability ahead of our plan and
generated cash in the second half. Importantly, we have strengthened the
quality, visibility and durability of our recurring revenue base through
long-term renewals and disciplined commercial execution, while continuing to
build a scalable, hardware-enabled software platform."
NOTES
* Adjusted EBITDA is the earnings on operating activities before depreciation
and amortisation, share based payment charges and non-recurring or special
items.
** 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. Constant currency
comparatives are calculated using exchange rates prevailing at 31 January
2026.
Checkit plc +44 (0) 1223 643 313
www.checkit.net
Kit Kyte (Chief Executive Officer)
Kris Shaw (Chief Financial Officer)
Singer Capital Markets (Nominated Adviser and Broker) +44 (0) 207 496 3000
Shaun Dobson / Peter Steel / James Fischer
CHAIRMAN'S STATEMENT
FY26 represented a significant milestone for Checkit, with the Group achieving
second half EBITDA profitability and positive cash flow. This outcome reflects
the focus, discipline and sustained effort of the executive team and
colleagues across the business.
The Board continues to be acutely aware of shareholder concerns regarding the
Company's valuation.
During the year we received six unsolicited expressions of interest from
potential acquirers of the business and assets of Checkit plc. This led to the
Board's decision to commence a Formal Sale Process under the Takeover Code
announced on 26 March 2026. At the time of writing, that process is still
ongoing and further announcements will be made as appropriate.
The announcement of a Formal Sale Process does not represent a firm intention
by any person to make an offer and there can be no certainty that any offers
will be made as a result of the Formal Sale Process, that any sale will be
concluded, nor as to the terms on which any offer may be made.
Whilst the share price has recovered strongly in percentage terms from the
2025 low, particularly following the announcement of the Formal Sale Process,
it remains well below levels we believe reflect the Group's potential.
It remains for me to thank Chief Executive Officer Kit Kyte, Chief Financial
Officer Kris Shaw, the senior leadership team and all staff in the UK and US
for their contributions. Delivering a substantial improvement in EBITDA
profitability and cash flow in a challenging operating environment is a
notable achievement and provides a strong platform on which to build.
Keith Daley
Chair
CEO'S STATEMENT
FY26 was a pivotal year for Checkit. We reinforced financial discipline,
strengthened its operational foundations and positioned it for the next phase
of development.
Formal Sale Process - Unlocking Strategic Value
The Formal Sale Process reflects our view that Checkit has reached a clear
strategic inflexion point and that the current public market valuation does
not fully reflect its quality, scalability and long-term potential. The
combination of hardware-enabled software, deeply embedded customer workflows
and a growing data and AI capability represents a differentiated and
relatively scarce asset within the operational intelligence market.
We believe that a structured process provides the best opportunity to
crystallise value for shareholders and to accelerate the next phase of the
Company's development, potentially under an ownership structure with greater
strategic flexibility and access to appropriately valued capital.
Importantly, the commencement of the Formal Sale Process does not alter our
strategy or operating priorities. Our focus remains on execution, delivering
for customers and continuing to strengthen the platform, all with a view of
capitalising on the long-term growth opportunities in our markets.
Financial Performance
Our primary objective during FY26 was clear: to establish a sustainable
financial model while continuing to invest in the long-term value of the
platform. This was delivered.
Adjusted EBITDA for the year was profitable at £0.3 million, ahead of
previous board expectations, compared with a loss of £2.3 million in FY25.
The second half of the year generated positive Adjusted EBITDA and positive
operating cash flow. The Group delivered £4.0 million of annualised cost
savings and was cash flow breakeven for ten consecutive months, finishing the
year with net cash of £3.0 million.
Recurring revenue increased to 96% of total revenue and Annual Recurring
Revenue reached £14.3 million, up 2% at constant currency and 5% on an
underlying basis excluding a single large US customer contraction. Revenue of
£13.7 million reflected a continued shift away from lower-quality
non-recurring activity and towards contracted recurring revenue.
These results represent a structural improvement in the business. Checkit now
operates from a materially lower breakeven EBITDA profitability point with
improved operating leverage and greater financial resilience.
Executing the reset
During the year we simplified the cost structure, streamlined internal
processes and focused investment on areas of highest strategic return.
Annualised operating costs were reduced materially while preserving our
go-to-market capability and core product investment.
We strengthened commercial execution by sharpening our vertical focus and
concentrating resources on enterprise customers where our operational
intelligence platform delivers the strongest return on investment (ROI). This
'inch wide, mile deep' approach continues to drive strong renewal rates and
deeper customer relationships.
Customer expansion remained an important source of growth. Many customers
expanded their deployments across additional locations and use cases,
demonstrating the scalability of the platform and the strength of our
land-and-expand model.
We also made significant progress in product development. Continued
investments in Asset Intelligence and connected device capabilities have
strengthened the platform's ability to capture and analyse operational data in
real time. These capabilities are central to the value delivered to customers
and form the foundation for future AI-enabled services.
Taken together, the actions have transformed Checkit into a simpler, more
focused and more scalable business.
A changing technology landscape
The broader technology environment is undergoing profound change.
AI is accelerating a structural repricing of traditional pure-play software
businesses. Application-layer SaaS models without embedded physical
integration are increasingly exposed to commoditisation risk. High gross
margin alone is no longer a guarantee of defensibility and, in some cases, may
indicate vulnerability to AI-enabled disruption.
Checkit does not share this vulnerability. We operate at the intersection of
connected devices, embedded sensors, workflow digitisation and advanced
analytics. Our platform captures operational data at the frontline of physical
processes in environments where AI enhances the system's value rather than
replacing it. This integration of hardware and software creates a defensible
moat rooted in operational embedment.
The data generated by connected devices and digital workflows becomes
increasingly valuable as analytics and AI capabilities develop. Our Asset
Intelligence capability is an early example of this shift, enabling customers
to move from reactive processes toward predictive and outcome-based
operations. This evolution positions Checkit as an operational intelligence
platform embedded within customer workflows rather than a standalone software
application.
Hybrid platforms combining devices, connectivity and software analytics have
demonstrated strong economic characteristics at scale, including durable
customer relationships, high renewal rates and attractive operating leverage.
Our strategy is aligned with this proven operating model.
Across the broader IoT and operational intelligence sector, scaled operators
have demonstrated that disciplined capital allocation and selective bolt-on
acquisitions can strengthen recurring revenue density and accelerate operating
leverage. The combination of organic land-and-expand growth with carefully
targeted inorganic additions has proven effective in deepening vertical
capability, increasing ARR per customer and improving the overall quality and
predictability of revenue. As Checkit continues to strengthen its financial
position, we see selective inorganic opportunities as a natural extension of
our strategy where they enhance our operational intelligence platform and
support long-term value creation.
Asset Intelligence is central to this evolution. It integrates connected
sensors, real-time condition monitoring, workflow automation and advanced
analytics to provide customers with predictive insight into asset performance.
By capturing continuous operational data at the edge, the platform enables
early fault detection, reduced downtime, improved compliance and measurable
cost savings. As structured operational data accumulates, predictive accuracy
improves, increasing customer value and deepening platform embedment across
sites and use cases.
From financial discipline to strategic repositioning
The improvements achieved in FY26 allow the Company to move into its next
phase from a position of strength.
As we enter FY27, management remains focused on improving profitability and
maintaining financial discipline. At the same time, we are sharpening
strategic focus and continuing the transition toward a more concentrated
operational intelligence platform. This includes continued discipline in
customer selection, prioritisation of enterprise deployments where the
platform delivers the greatest value, and ongoing simplification of the
business where activities do not align with long-term strategic objectives.
This disciplined approach allows us to strengthen the platform while
preserving strategic flexibility in a market that is undergoing rapid
structural change.
Strategy in execution
We aim to enhance profitability and cashflow by:
· Expanding within the installed base through additional sites and
use cases
· Increasing ARR density through larger enterprise deployments
· Continuing development of AI-enabled operational intelligence
capabilities
· Improving productivity in new product development by using
increasingly sophisticated AI tools
· Concentrating resources on the core platform
· Pursuing selective inorganic opportunities in a consolidating
market
Growth will be delivered through three clear mechanisms. First, expansion
within the installed base, as customers deploy the platform across additional
sites, regions and operational workflows. Second, deeper monetisation of data
through Asset Intelligence and analytics-led modules that increase average
revenue per customer and strengthen recurring revenue density. Third,
disciplined acquisition of new enterprise customers within focused verticals
where the ROI opportunity is clear and deployment scalability is proven.
An area of focus in FY27 is the United States, which represents our largest
and most scalable addressable market. We are increasing executive attention
and commercial discipline in this region to ensure stronger enterprise
engagement, improved conversion rates and deeper account expansion. The US
market combines operational complexity, multi-site scale and ROI-driven
procurement dynamics that align well with Checkit's operational intelligence
proposition.
While we remain disciplined in capital allocation, we believe that
prioritising markets where organic growth is structurally strongest enhances
both standalone performance and long-term strategic value. As deployments
scale across sites and use cases, customers generate increasing volumes of
operational data. This data underpins additional analytics capability and
creates opportunities for further platform adoption over time. The combination
of land-and-expand economics, recurring revenue visibility and expanding data
value provides a strong foundation for long-term growth.
Outlook
Looking ahead, the Board and management remain focused on disciplined growth,
sustained profitability and strategic clarity.
Our priority for FY27 is to build on the progress achieved in FY26 while
accelerating high-quality ARR growth of the core platform. This will be
achieved through deeper enterprise penetration in focused vertical markets,
continued expansion of Asset Intelligence capabilities, and selective
inorganic opportunities that enhance revenue density and platform strength.
I believe that Checkit is positioned to deliver durable growth in an evolving
technology landscape and to create short, medium and long-term shareholder
value.
Kit Kyte
Chief Executive Officer
FINANCIAL REVIEW
EBITDA profitability achieved
FY26 was a year of significant financial and operational progress for Checkit,
marked by decisive actions to improve profitability, strengthen cash
generation, and position the Group for sustainable long-term growth.
During the year, we executed a substantial operational restructuring
programme, which materially reduced our cost base and accelerated our path to
profitability. These actions delivered annualised cost savings of
approximately £4.0 million, fundamentally reshaping the Group's operating
model and creating a more scalable platform from which future incremental
revenue can drive meaningful profitable growth.
As a result of these actions, the Group achieved an important financial
milestone, delivering full-year positive Adjusted EBITDA of £0.3 million.
This was driven by a significant improvement in performance across the year,
with Adjusted EBITDA improving from a loss of £0.5 million in H1 to a
positive £0.8 million in H2, demonstrating the effectiveness of the
restructuring programme and the inherent operating leverage within the
business. The second half was also cash generative, reflecting both improved
profitability and disciplined working capital management.
With a materially lower cost base now established, the business is well
positioned for profitable future growth and cash generation.
Revenue
Total revenue for FY26 was £13.7 million (FY25: £14.1 million), a reduction
of 2% year-on-year. This primarily reflects a reduction in non-recurring
revenue from £1.0 million to £0.5 million, consistent with our strategic
focus on subscription-based recurring revenue. Recurring revenues represented
96% of total revenue (FY25: 94%).
Recurring revenue increased to £13.2 million (FY25: £13.1 million or £13.0
million at constant currency), representing 2% growth on a constant currency
basis. Performance was impacted by the reduction in ARR from a large US
customer, following the removal of unutilised services as part of a new three
year contract. Excluding the impact of this customer contraction, underlying
ARR growth was 5%, net revenue retention(1) was 104%, and gross revenue
retention was 95%.
Operating Costs and Adjusted EBITDA
The cost reduction programme implemented from May 2025 impacted all areas of
the business and has materially reshaped the Group's cost base. Headcount was
reduced from 165 to 117 employees, with changes weighted towards the product
function, aligning resources more closely with current strategic priorities.
Total annualised cost savings of £4.0 million, comprise £3.2 million of
staff cost reductions and £0.8 million of savings across other operating
expenses. As a result, the Group's EBITDA breakeven ARR threshold has reduced
materially, improving financial resilience and increasing operating leverage
as revenue scales.
Operating expenses charged to the income statement reduced by 18%
year-on-year. The full annualised benefit of the restructuring programme will
be reflected in FY27. The Group's operating costs for the year are set out
below:
FY26 £m FY25 £m
Product management and development 3.3 4.4
Sales and marketing 2.2 3.0
Operations 2.4 2.5
Central costs 3.7 4.6
Total operating costs 11.6 14.5
Less: capitalised development (1.8) (2.4)
Total charged in income statement 9.8 12.1
Non-recurring or special items
Non-recurring and special items in the year totalled £1.1 million (FY25:
£0.5 million). These costs primarily relate to the operational restructuring
undertaken during the year, transaction-related costs and other one-off items
that are not considered part of the Group's underlying performance.
FY26 £m
Restructuring costs 0.8
Transaction costs 0.2
Intangible asset impairment 0.1
Total non-recurring or special items 1.1
Restructuring costs of £0.8 million principally comprise redundancy and
notice pay arising from the headcount reduction implemented from May 2025.
Transaction costs of £0.2 million relate to professional fees incurred in
connection with the proposed acquisition of Crimson Tide, which did not
complete.
The £0.1 million intangible impairment reflects a prudent reassessment of
certain legacy capitalised development assets following the reprioritisation
of the product roadmap.
Taxation
The Group remains loss making at a consolidated level and therefore no UK
corporation tax charge has arisen for the year.
Notwithstanding this, a current tax charge of less than £0.1 million has been
recognised in respect of profits generated by certain overseas subsidiary
companies, which are subject to local corporation tax regimes. In addition
£0.1m of overseas tax expense has been recognised in relation to prior
periods.
At 31 January 2026, the Group had approximately £32 million of carried
forward taxable losses. No deferred tax asset has been recognised in respect
of these losses due to the uncertainty regarding the timing of future taxable
profits.
Claims in relation to R&D tax for the year amounted to £0.2 million,
arising under the UK Research and Development Expenditure Credit ("RDEC")
regime. The credit is treated as taxable income and is therefore subject to UK
corporation tax.
Following changes to the UK R&D tax credit regime the presentation of the
credit has been amended. The RDEC income has been recognised above the line
within other operating income and therefore contributes to operating profit
and EBITDA. In the prior year, the equivalent R&D credit was recognised
within the tax line. This change in presentation reflects the updated
accounting treatment under the revised scheme and does not alter the
underlying economic benefit to the Group.
EPS - continuing operations
The weighted average number of shares in issue in FY26 was 108.0 million
(FY25: 108 million). Loss per share (basic and diluted) was 2.6 pence (FY25:
3.3 pence).
As the Group reported a loss for the year, potentially dilutive share options
have not been included in the calculation of diluted loss per share, as their
inclusion would be anti-dilutive. Accordingly, basic and diluted loss per
share are the same for FY26.
Cash
As at 31 January 2026, the Group's cash balance was £3.0 million (FY25: £5.1
million).
Net cash outflow for the year was materially reduced, with annual cash
consumption decreasing by 46% year-on-year. Cash outflow was weighted towards
the second quarter of the year, reflecting restructuring costs and the
pre-restructuring cost base. Following the implementation of the cost
reduction actions, the Group delivered cashflow breakeven in the second half
of FY26.
The improvement in cash performance reflects the combination of Adjusted
EBITDA profit, improved gross margins and disciplined working capital
management. This is reflected in the improvement in net cash outflow from
operating activities, which reduced from £1.2 million in FY25, to £0.1
million in FY26.
The Group remains debt free and did not undertake any refinancing or equity
fundraising activity during the year.
Kris Shaw
Chief Financial Officer
(1) Net revenue retention ("NRR") is defined as the amount of recurring
revenue from existing customers retained over the year, excluding new wins in
the last 12 months. Gross revenue retention ("GRR") is defined as the amount
of recurring revenue from existing customers retained over the period,
excluding new wins or upsell/expansion in the period.
Consolidated statement of comprehensive income
year ended 31 January 2026
Notes 2026 2025
£m £m
Revenue 2 13.7 14.1
Cost of sales (3.8) (4.3)
Gross profit 9.9 9.8
Other operating income 0.2 -
Operating expenses 3 (9.8) (12.1)
Adjusted EBITDA* 0.3 (2.3)
Depreciation and amortisation (1.6) (1.5)
Share-based payment charge (0.2) (0.1)
Non-recurring or special items (1.1) (0.5)
Operating loss (2.6) (4.4)
Finance income - -
Loss before taxation (2.6) (4.4)
Taxation 5 (0.2) 0.8
Loss for the year attributable to equity shareholders (2.8) (3.6)
Other comprehensive income/(expense)
Exchange differences on translation of foreign operations (0.1) -
Total comprehensive loss for the year attributable to equity shareholders (2.9) (3.6)
Loss per share
Basic EPS 6 (2.6)p (3.3)p
Diluted EPS 6 (2.6)p (3.3)p
*Adjusted earnings before interest, tax, depreciation and amortisation
"EBITDA" is calculated by taking operating profit and adding back depreciation
& amortisation, share-based payment charge and non-recurring or special
items (note 8)
Consolidated balance sheet
as at 31 January 2026
Notes 2026 2025
£m £m
Assets
Non-current assets
Goodwill arising on acquisition 7 0.2 0.2
Other intangible assets 7 6.6 6.1
Property, plant and equipment 0.5 0.9
Total non-current assets 7.3 7.2
Current assets
Inventories 3.4 3.9
Trade and other receivables 2.7 3.7
Cash and cash equivalents 3.0 5.1
Total current assets 9.1 12.7
Total assets 16.4 19.9
Current liabilities
Trade and other payables 7.4 7.9
Lease liabilities 0.2 0.2
Total current liabilities 7.6 8.1
Non-current liabilities
Long-term lease liabilities 0.1 0.4
Long-term provisions 0.3 0.3
Total non-current liabilities 0.4 0.7
Total liabilities 8.0 8.8
Net assets 8.4 11.1
Equity attributable to the owners of the Company
Called up share capital 5.4 5.4
Share premium 23.3 23.3
Capital redemption reserve 6.4 6.4
Other reserves 0.8 0.6
Translation reserve (0.1) -
Retained earnings (27.4) (24.6)
Total equity 8.4 11.1
Consolidated statement of changes in equity
year ended 31 January 2026
Share Share Capital Other Translation Retained Total
capital premium redemption reserves reserve earnings £m
£m £m reserve £m £m £m
£m
At 31 January 2024 5.4 23.3 6.4 0.5 - (21.0) 14.6
Loss for the year - - - - - (3.6) (3.6)
Total comprehensive income for the year - - - - - (3.6) (3.6)
Share-based payments - - - 0.1 - - 0.1
At 31 January 2025 5.4 23.3 6.4 0.6 - (24.6) 11.1
Loss for the year - - - - - (2.8) (2.8)
Other comprehensive income - - - - (0.1) - (0.1)
Total comprehensive income for the year - - - - (0.1) (2.8) (2.9)
Share-based payments - - - 0.2 - - 0.2
At 31 January 2026 5.4 23.3 6.4 0.8 (0.1) (27.4) 8.4
Consolidated statement of cash flows
year ended 31 January 2026
Notes 2026 2025
£m £m
Net cash outflow from operating activities 6 (0.1) (1.2)
Investing activities
Interest received on bank deposits - 0.1
Purchase of property, plant and equipment - (0.2)
Investment in product development projects (1.8) (2.4)
Net cash used in investing activities (1.8) (2.5)
Financing activities
Repayment of lease liabilities (0.2) (0.2)
Net cash utilised by financing activities (0.2) (0.2)
Net decrease in cash and cash equivalents (2.1) (3.9)
Cash and cash equivalents at the beginning of the year 5.1 9.0
Cash and cash equivalents at the end of the year 3.0 5.1
1. Basis of Preparation
The financial information set out in this announcement does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
financial information for the Year ended 31 January 2026 has been extracted
from the Group's audited financial statements which were approved by the Board
of Directors on 20 April 2026 and which, if adopted by the members at the
Annual General Meeting, will be delivered to the Registrar of Companies for
England and Wales.
The financial information for the Year ended 31 January 2025 has been
extracted from the Group's audited financial statements which were approved by
the Board of Directors on 23 April 2025 and which have been delivered to the
Registrar of Companies for England and Wales.
The reports of the auditor on both these financial statements were
unqualified, did not include any references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
did not contain a statement under Section 498(2) or Section 498(3) of the
Companies Act 2006.
The information included in this announcement has been prepared on a going
concern basis under the historical cost convention, and in accordance with
UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and the International Financial
Reporting Interpretations Committee (IFRIC) interpretations issued by the
International Accounting Standards Board ("IASB") that are effective as at the
date of these financial statements.
The Company is a public limited Company incorporated and domiciled in England
& Wales and whose shares are quoted on AIM, a market operated by The
London Stock Exchange.
2. Segmental reporting
Management provides information reported to the Chief Operating Decision Maker
("CODM") as a single operating segment for the purpose of assessing
performance and allocating resources. The CODM is the Chief Executive Officer.
The Group's main activities are the supply of Connected Workflow Management,
automated monitoring, Internet of Things ("IoT"), and operational
insight-based products and services.
Revenue by type
The following table presents the different revenue streams of Checkit:
2026 2025
£m £m
Recurring revenues from subscription services 13.2 13.1
Consultancy and other services 0.5 1.0
Total 13.7 14.1
Geographical information
The Group considers its operations to be in the following geographical
regions:
Revenue from external customers
2026 2025
£m £m
United Kingdom 9.6 9.5
The Americas 3.5 3.8
Rest of World 0.6 0.8
Total 13.7 14.1
Information about major customers
During FY26, the Group had one customer who generated revenues of 13% of total
revenue (FY25: 13%).
Revenue expected to be recognised
The Group expects to recognise revenue amounting to £5.3m (2025: £4.7m) in
FY26 relating to performance obligations from existing contracts that are
unsatisfied or partially satisfied as at 31 January 2026.
3. Operating loss
2026 2025
£m £m
Operating loss is stated after charging:
Product development costs expensed 2.0 2.0
Depreciation on owned property, plant and equipment 0.1 0.2
Depreciation on right-of-use assets 0.2 0.2
Amortisation on development costs 1.0 0.9
Amortisation on computer software 0.3 0.2
Auditor's remuneration:
- fees payable to the Company's auditor for the audit of the Company's annual 0.1 0.1
accounts
- fees payable to the Company's auditor for the audit of the Company's 0.0 0.0
subsidiaries pursuant to legislation
Total audit fees for audit services 0.1 0.1
Tax services - -
Total auditor's remuneration 0.1 0.1
Non-recurring or special items:
- restructuring and integration costs 0.8 0.2
- HMRC investigation - 0.2
- Transaction costs 0.2 0.1
- intangible asset impairment 0.1 -
Total non-recurring or special items 1.1 0.5
Cooper Parry Group Limited was paid £nil for non-audit services (2025:
£nil).
4. Net cash flows from operating activities
2026 2025
£m £m
Loss before interest and taxation
- from continuing operations (2.6) (4.4)
Adjustments for:
Depreciation 0.3 0.4
Amortisation 1.3 1.1
Share-based payments 0.2 0.1
Operating cash flow before working capital changes (0.8) (2.8)
Decrease/(increase) in trade and other receivables 1.0 1.6
Decrease/(increase) in inventories 0.5 (0.1)
Increase/(decrease) in trade and other payables (0.8) (0.1)
Operating cash flow after working capital changes (0.1) (1.4)
Increase/(Decrease) in provisions (0.1) 0.1
Cash utilised by operations (0.2) (1.3)
Tax charge / (credit) on continuing operations 0.1 0.1
Net cash outflow from operating activities (0.1) (1.2)
5. Taxation
(a) Analysis of tax credit for the year
2026 2025
£m £m
Current taxation:
UK corporation tax (credit) on loss for the year - (0.3)
Adjustment in respect of prior periods 0.2 (0.5)
Total current taxation 0.2 (0.8)
Deferred tax:
Total deferred taxation - -
Tax credit on continuing operations 0.2 (0.8)
(b) Factors affecting taxation credit for the year
The effective tax rate for the year was 25% (2025: 25%).
2026 2025
£m £m
Loss on ordinary activities before taxation (2.6) (4.4)
Loss on ordinary activities multiplied by weighted average standard rate of (0.7) (1.1)
corporation tax
in the UK of 25%
Effects of:
Expenses not deductible for tax purposes - 0.6
Income not taxable - (0.8)
Temporary differences not recognised 0.7 0.6
Adjustment is respect of prior periods 0.2 (0.6)
R&D tax credit - 0.5
0.2 (0.8)
(c) Factors that may affect future taxation charges
Deferred taxation assets amounting to £8.1m (2025: £7.4m) have not been
provided in respect of unutilised income tax losses of £32.3m (2025: £29.5m)
that can only be carried forward against future taxable income of that same
trade as there is currently insufficient evidence that these assets will be
recovered.
6. Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each
share (excluding those held by the Company). Basic EPS measures are calculated
as the Group profit for the year attributable to equity shareholders divided
by the weighted average number of shares in issue during the year. Diluted EPS
takes into account the dilutive effect of all outstanding share options priced
below the market price, in arriving at the number of shares used in its
calculation.
Both of these measures are also presented on an adjusted basis, to remove the
effects of non-recurring or special items, being items of both income and
expense which are sufficiently large, volatile or one-off in nature, to assist
the reader of the financial statements to get a better understanding of the
underlying performance of the Group. The Note below demonstrates how this
calculation has been performed.
Key 2026 2025
m m
Weighted average number of shares for the purpose of basic earnings per share A 108.0 108.0
Dilutive effect of employee share options1 - -
Weighted average number of shares for the purpose of diluted earnings per B 108.0 108.0
share
Key £m £m
Loss for the year C (2.8) (3.6)
Total non-recurring or special items net of tax 0.9 0.4
Loss for adjusted EPS D (1.9) (3.2)
Key 2026 2025
EPS measures
Basic and diluted1 EPS C/A (2.6)p (3.3)p
Adjusted EPS measures
Adjusted basic and diluted1 EPS D/A (1.8)p (2.9)p
The adjusted EPS information is considered to provide a fairer representation
of the Group's trading performance.
Total earnings per share for the year attributable to equity shareholders
Key 2026 2025
EPS measures
Basic EPS C/A (2.6)p (3.3)p
Diluted EPS1 C/B (2.6)p (3.3)p
1 In the current and prior year, the impact of employee share
options has been excluded from the diluted EPS calculation as their effect
would be anti-dilutive, reflecting the loss from continuing operations for the
year.
7. Intangible assets
Development Computer Acquired Total
costs software intangible £m
£m £m assets Goodwill
£m £m
Cost
At 1 February 2024 11.8 1.0 4.3 4.5 21.6
Additions 2.4 - - - 2.4
Disposals - - - - -
At 31 January 2025 14.2 1.0 4.3 4.5 24.0
Additions 1.8 - - - 1.8
Disposals (6.0) - - - (6.0)
At 31 January 2026 10.0 1.0 4.3 4.5 19.8
Amortisation
At 1 February 2024 7.5 0.5 4.3 4.3 16.6
Charge for the year 0.9 0.2 - - 1.1
Disposals - - - - -
At 31 January 2025 8.4 0.7 4.3 4.3 17.7
Charge for the year 1.0 0.3 - - 1.3
Disposals (6.0) - - - (6.0)
At 31 January 2026 3.4 1.0 4.3 4.3 13.0
Carrying amount
At 31 January 2025 5.8 0.3 - 0.2 6.3
At 31 January 2026 6.6 - - 0.2 6.8
Acquired intangible assets are made up of the separately identified
intangibles acquired with the purchase of Next Control Systems in May 2019 and
those acquired with the purchase of Checkit LLC in February 2021.
Impairment testing for goodwill
The Group identifies cash-generating units (CGUs) at the operating company
level, as this represents the lowest level at which cash inflows are largely
independent of other cash inflows. Goodwill acquired in a business combination
is allocated, at acquisition, to the groups of CGUs that are expected to
benefit from that business combination.
Goodwill relates to the acquisition of Checkit UK Limited in May 2019 and of
Checkit LLC in February 2021. The goodwill in relation to Checkit UK Limited
has been fully impaired.
Goodwill values have been tested for impairment by comparing them against the
"value in use" in perpetuity of the relevant CGU group. The value in use
calculations were based on projected cash flows, derived from the latest
forecasts prepared by management and budgets approved by the Board, discounted
at CGU specific, risk adjusted, discount rates to calculate their net present
value.
Key assumptions used in "value in use" calculations
The calculation of "value in use" is most sensitive to the CGU specific
operating and growth assumptions that are reflected in management forecasts
for the five years to January 2031. CGU specific operating assumptions are
applicable to the forecasted cash flows and relate to revenue forecasts and
forecast operating margins in each of the operating companies and are based on
the strategic plans for the Group. Long-term growth rates are capped at 1%.
The revenue growth rates used in the cash flow forecast are based on
management's expectations of the future opportunities for the Checkit platform
and the ability to upsell to existing customers on a global basis, including
the planned US expansion. The forecasts include the costs associated with
delivering the Checkit platforms, which are directly linked to the forecast
sales growth.
Discount rates are based on estimations of the assumptions that market
participants operating in similar sectors would make, using the Group's
economic profile as a starting point and adjusting appropriately. Sensitivity
to the discount rate has been applied to evaluate impairment testing using
discount rates ranging from 25% to 50%.
The carrying value of goodwill in relation to the acquisition of Checkit LLC
has not identified any impairment.
8. Non-GAAP performance measures
A reconciliation of non-GAAP performance measures to reported results is set
out below:
Profit measures - EBITDA
2026 2025
£m £m
EBITDA 0.3 (2.3)
Depreciation and amortisation (1.6) (1.5)
Share-based payment charge (0.2) (0.1)
Non-recurring or special items (1.1) (0.5)
Operating loss for the year (2.6) (4.4)
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