(Alliance News) - Workflow software firm Checkit PLC said Tuesday its interim loss deepened despite revenue rising sharply, as costs surged on the sale of its previously cornerstone business.
For the six months ended July, pretax loss deepened to GBP3.0 million from GBP2.2 million the year prior. This was despite revenue rising to GBP4.4 million from GBP1.6 million the year before.
Profit performance was hurt by cost of sales and operating expenses surging ahead of revenue growth.
"In the six months to 31 July 2019 the group experienced by far its most significant change since flotation in 1948," Checkit Chair Keith Daley said. "It sold Bulgin, the original bedrock of the group, to concentrate on the business of digital transformation through its real-time operations management platform. We are excited by the opportunities that we have identified."
In September, Checkit - then known as Elektron Technology PLC - sold connectors and components maker Bulgin for GBP105 million. The business is now focused on its Checkit work management software.
"The current focus is on integrating CUK and a successful separation of Bulgin during the 12 months transitional services period," Daley said. "Whilst this is a complex task we have made a good start. The full year accounts will show a large number of exceptional items relating to the changes in the group during the year and consequential reorganisation costs."
"We have already identified several opportunities for improvement of profitability," Daley added. "Our focus is on the tremendous opportunity we are working to realise in the medium to long term and so it is important here to ensure that any measures taken in the short term do not stifle growth."
"We therefore intend to continue our investment in new product development and sales and marketing with a view to increasing our competitive advantage and growing revenue," Daley continued. "Management is targeting Ebitda profitability in the medium term."
Shares in Checkit were 0.6% lower at 53.70 pence in London on Tuesday.
By Ahren Lester; ahrenlester@alliancenews.com
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Checkit (CKT)