Singers update following good trading update10 Aug 2023 11:31
"CKT has released a positive H1 update to July, which highlights continued strong ARR growth of +24% y/y to £12.6m, while FCF burn has almost halved - from £-5.0m to £-2.8m and so means Checkit is making meaningful steps towards breakeven. Progress on both fronts is very supportive of the investment case in our view. Driving this, CKT has continued to see very encouraging growth in the US – ARR: +41% y/y to £3.2m, while adjacent to this, upsell/cross-sell deals (with existing customers) also continues to be an important theme, thus providing predictable underlying growth. NRR of 113% also highlights this, while similarly, GRR continues to be very healthy too (at 98%) and reflects the mission critical nature and strong ROI of CKT’s hardware and software, in our opinion. In view of this very solid start, we our maintain our FY24 & 25 expectations - looking for continued healthy growth and a further narrowing of P&L losses profile, such that, in our view, it’s very conceivable CKT could reach breakeven in FY26 - and importantly – with existing cash resources. This increasing likelihood seems at odds with the company’s very modest 2x mkt cap/sales multiple and herein lies the opportunity."
This business is doing very well in a difficult market.