Checkit revenue drops 30% amid transition to subscription business

(Alliance News) - Checkit PLC on Thursday said total revenue fell by nearly a third in the past six months, as its rise in recurring revenue failed to make up for the drop in non-recurring revenue.

The Cambridge-based workflow management software provider reported that total revenue in the six months to July 31 fell by 31% to GBP5.4 million from GBP7.9 million the year before.

Non-recurring revenue dropped significantly, by 79% to GBP1.0 million from GBP4.8 million; however recurring revenue climbed 44% to GBP4.4 million from GBP3.1 million.

Checkit explained that the fall in non-recurring revenue was in line with the board's expectations. "The group is now wholly focused on delivering recurring revenue from its technology solutions, rather than one-off projects with minimal software input," it explained.

The company added that recurring revenue accounted for 82% of total revenue in the six months. This was up from 39% in the first six months of financial year 2022 and further demonstrates Checkit's "successful" transition into a subscription business, it said.

Checkit said annual recurring revenue was in line with market expectations for the first half of the financial year. The annual value of contracted recurring revenue at July 31 rose 48% to GBP10.2 million from GBP6.9 million a year before.

Additional bookings growth has been flat compared to last year, the company said, blaming wider market conditions for slowing its pipeline progression.

Cash at July 31 was GBP19.5 million, compared to GBP24.2 million the year before, Checkit added.

Chief Executive Officer Kit Kyte said: "Our performance in the first half of the year shows how critical Checkit is to our customers' operations and how we can help businesses facing growing pressure to ensure that operations are efficient, compliant and sustainable.

"The resilience of the company in navigating the challenges caused by the pandemic and current macroeconomic back drop, has been encouraging."

Checkit will release its full interim results on September 15.

Checkit shares were down 1.0% to 28.70 pence each in London on Thursday morning.

By Sophie Rose; sophierose@alliancenews.com

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