Last checked at 10 Aug 2023 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 CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.
10 August 2023
Checkit plc
("Checkit" or the "Group")
Trading update, notice of interim results and contract renewal
Checkit plc (AIM: CKT), the intelligent operations platform for the deskless worker, provides an unaudited trading update for the six months ended 31 July 2023 ("H1 FY24") and announces the renewal of a significant contract. The Group will publish its interim results on 14 September 2023.
(£'m) Reported | Six months to | ||
| 31 July 2023 Actual | 31 July 2022 Actual | % Change |
ARR | 12.6 | 10.2 | 24% |
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Revenue |
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Recurring | 5.4 | 4.4 | +22% |
Non-recurring | 0.3 | 0.4 | (21) % |
Total Group | 5.7 | 4.8 | 19 % |
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ARR growth has continued to grow in line with market expectations during H1 FY24, despite the uncertain economic environment, driven by consistent execution of our "land and expand" strategy, as well as high net retention rates.
Checkit's ability to grow with our customers is seen in a net retention rate of 113% and a gross retention rate of 98%. Over 50% of H1 FY24 ARR growth resulted from upsell and cross sell within our current customer base, as they continue to see the productivity and efficiency benefits which Checkit platform enables, with the balance coming from new customer wins and pricing.
The Group has also continued its strong performance in the US, with 41% growth in ARR to £3.2m (H1 FY23: £2.3m).
Recurring revenue growth reflects bookings achieved in FY23. Recurring revenue accounted for 95% of total revenue in H1 FY24.
Cash
Net cash at 31 July 2023 was £12.8m (31 January 2023: £15.6m).
In H1 FY24, Checkit has followed a programme of controlled investment, with the intention of achieving further ARR growth alongside an accelerated path to profitability.
The Group continues to benefit from a strong balance sheet and in light of market conditions, will continue to execute against its growth strategy and develop its technology, whilst also driving further operating efficiencies on its path to profitability.
Contract Renewal
Checkit announces the renewal of our Framework Agreement with John Lewis plc to provide connected workflow, automated asset monitoring and digital building management solutions with improved pricing for a further period of three years. The Framework Agreement and associated services have a total contract value across the three year term of c.£6m.
The agreement, effective from 1 August 2023, continues to provide Waitrose and John Lewis shops with the opportunity to benefit from Checkit's Connected Workflow Management (CWM), Connected Automated Monitoring (CAM) and Connected Building Management (CBM) services. Checkit will continue to provide services to over 270 Waitrose core branch stores, 60 Waitrose convenience branches, 30 John Lewis stores as well as offices and distribution centres for both John Lewis and Waitrose.
Separately in April 2023, Checkit signed a master service agreement (MSA) with Compass Contract Services (U.K) Limited ("Compass") for the provision of CAM and CWM to their end users, primarily in the food services sector. Since signing the MSA with Compass, Checkit has entered into 3 new contracts with Compass.
Kit Kyte, Chief Executive Officer, commented:
"In H1 FY24, we saw strong upsell and cross sell from existing customers as they look to streamline their organisations to improve efficiencies and reduce costs.
Underpinned by a robust balance sheet, strong pipeline of new business and increasing visibility, we look forward with confidence in the Group's long-term prospects."
NOTES
1. Annual Recurring Revenue ("ARR") is defined as the annual value of contracted recurring revenue as at the period end date.
2. 31 July 2023 reflects continuing operations only and is restated to exclude discontinued operations
3. Net revenue retention is defined as the amount of recurring revenue from existing customers retained over the period, excluding new wins in the last 6 months
Contacts:
Checkit plc +44 (0) 1223 643313
www.checkit.net
Kit Kyte (Chief Executive Officer)
Greg Price (Chief Financial Officer)
Singer Capital Markets (Nominated Adviser & Broker) +44 (0) 20 7496 3000
Shaun Dobson / Harry Gooden / George Tzimas
Forward looking statements
This announcement 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 announcement are made as of the date hereof, and Checkit undertakes no obligation to update any of its forward-looking statements.