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13 May 2021 07:00
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF UK MARKET ABUSE REGULATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.
13 May 2021
Checkit plc
("Checkit" or the "Group")
Trading update
Checkit plc (AIM: CKT) announces an unaudited trading update for the three months to 30 April 2021:
| ||||||
Revenue for three months to | ||||||
| 30 Apr 2021 | 30 Apr 2020 * | % Change
| |||
Checkit Connect: | ||||||
Recurring | 1.4 | 1.1 | +30% | |||
Non-recurring | 0.3 | 0.6 | (47) % | |||
Total Checkit Connect | 1.7 | 1.7 | +1% | |||
Checkit Connect US (Tutela LLC)**: | ||||||
Recurring | 0.1 | 0.1 | +18% | |||
Non-recurring | 0.3 | 0.2 | +32% | |||
Total US | 0.4 | 0.3 | +29% | |||
Total Checkit BEMS (Non-recurring) | 2.2 | 1.7 | +27% | |||
Checkit Group: | ||||||
Recurring | 1.5 | 1.2 | +29% | |||
Non-recurring | 2.8 | 2.5 | +9% | |||
Total Group | 4.3 | 3.7 | +15% | |||
* Prior year revenue has been normalised to illustrate sales that would have been included in the Group's financial results had Tutela LLC, which was acquired on 4 February 2021, been fully owned by the Group throughout both periods. Excluding the acquisition of Tutela LLC, prior year Group revenue was £3.5m
** Checkit Connect US is introduced as a new reporting unit and is shown in GBP on a constant currency basis at a rate of 1.38 USD/GBP
Overall Group revenue grew by 15% and recurring revenue by 29% compared to the prior year on a normalised* basis.
Annual recurring revenue (ARR) saw an increase of £0.4m (+7%) in the quarter to close at a run rate of £6.1m, predominantly driven by new subscription contracts going live with customers.
Checkit Connect
Reported recurring revenue growth continues to reflect the benefits of year-on-year ARR growth realised in the quarter.
Some of the Group's larger hospitality customers impacted by lockdown measures were given the opportunity to take payment and service deferrals. This negatively affected Q1 reported numbers and is expected to unwind in Q2 as lockdown measures continue to ease.
The decline in non-recurring revenue compared to Q1 FY21 is primarily driven by timing and the on-going repositioning towards a subscription-based pricing model adopted across the Group during FY21.
Checkit US (Tutela LLC)
Checkit US is introduced for FY22 reporting and reflects the performance of the newly created US based business unit incorporating the Q1 acquisition of Tutela LLC.
US revenue grew by 29% in Q1 (on a constant currency basis**) and includes 18% growth in recurring revenue, which was driven by new subscriptions.
An initiative to convert customers to recurring subscription contracts is already underway.
Checkit BEMS
Checkit BEMS sales grew by 27% compared to the prior year due to a significant project delivered in the quarter and the impact of COVID-19 on prior year results in Q1 FY21.
Cash
Cash as at 30 April 2021 was £10.9m (31 January 2021: £11.5m).
During the period, the Group acquired Tutela LLC for £0.6m. Against this, the closing cash position benefitted from the disproportionate weighting of customer annual payments received in Q1 compared to other periods in the year. An unwinding of this cash benefit is expected during FY22.
Outlook
The Board remains confident in the outlook for the business.
As previously announced, during the current financial year, investment in sales, marketing and product will be increased to take advantage of the significant opportunities available for Checkit.
Forward looking statements
This document contains forward looking statements with respect to the business, strategy and plans of Checkit plc and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about Checkit or management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Checkit's actual future results may differ materially from the results expressed or implied in these forward-looking statements as a result of a variety of factors among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. The forward-looking statements contained in this document are made as of the date hereof, and Checkit undertakes no obligation to update any of its forward-looking statements.
Checkit plc +44 (0) 1223 643313
www.checkit.net
Keith Daley (Executive Chair)
Aylsa Muir (Chief Financial Officer)
N+1 Singer (Nominated Adviser & Broker) +44 (0) 20 7496 3000
Shaun Dobson / George Tzimas (Corporate Finance)
Rachel Hayes (Corporate Broking)
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