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Checkit plc is listed on the AIM market and has a market cap of £38million. The company had £11.5m of net cash at the year ended 31st January 2021. The company provides advanced cloud-based services and devices that connect people, processes and places in real time. Their solutions improve company efficiency and productivity.

Full year results to 31st January 2021 were published on 29th April and we were delighted to have the management team present at the webinar covering a year with a difficult backdrop where they performed well. Present were Keith Daley Chair, Aylsa Muir CFO and Kit Kyte CCO. A recording of the webinar is available here.

The year started well but growth stalled with the onset on Covid-19 and budgets needed to be reset. Overall revenue grew to £13.2m, an increase of 3% and more than half is now either recurring or repeatable. The non-recurring component was most impacted by Covid as this is carried out by engineers visiting client sites and this was impossible for many months of the year. In that context, the company was pleased with the performance delivered, particularly the Annual Recurring revenue which grew 46% to £5.7million. Close control of costs resulted in the operating loss reducing to £3.1m which was after £2.5m being spent on new product development.

Looking closer at the revenue split, recurring revenue accounts for 39% of the total revenue. Repeatable business accounts for a further 14% and combined, these two components now account for 53% of revenue up from 47% last year. ARR has grown £700k from new subscriptions, £600k from converting existing ad hoc contracts, primarily in the healthcare sector, to subscription contracts and £500k from price increases. Aylsa commented that the learnings from this revenue growth have put them in a good place for further growth in recurring revenue in the current year.

The presentation then moved on to how the organisation has been restructured to reflect a more commercial focus. Key personnel have been recruited to head up sales namely Kit Kyte the CCO, and Steve Peck to lead the US business. Work is underway to ensure the company is in a position to scale quickly and internationally and the recent product update enabling ‘self-serve installation’ is a key part of this strategy. On the customer front, they are focussing on providing better customer experiences and working in partnership with their clients to find the optimal solutions to improve operational performance.

Building an organisation fit to meet the growth ambitions of the board has also involved spending some time creating the right culture with a shared vision and values. Of the 9 strong management team, only 2 have been with the company for more than 12 months, and they believe they now have the right team in place to deliver strong growth.

The new Chief Commercial Officer, Kit Kyte, explained that Checkit products make client operations intelligent, provide better insights and facilitate an agile operating model. Checkit use the phrase the “4C’s” to explain how this works. Manual/paper recorded data is Captured digitally which enables individuals and workplaces to Connect even when they are working apart. Shared data facilitates better Collaboration in real-time to ensure the right people know the right information at the right time. Digital information can be analysed which enables to Comprehend their business better, generate better insights which ultimately lead to identifying cost reduction, service improvement and revenue generating opportunities.

Specifically, Checkit products help manage, guide and execute operational activities. As an example, a front-line worker can automatically receive an alert from an IT device which triggers an action they need to take. They can complete the task, evidence they’ve done it and share it in real-time with others that need to know of its completion.

The company is very focussed on new product development to ensure their products provide what their customers are looking for and last year spent £2.5m on this area. There are three particular developments that they wanted to highlight: the launch of self-install functionality, the soon to be released sensor related alert which will trigger jobs and thirdly, support for Apple iOS which is particularly important to growth in the US market. All of these three developments will help scale quickly and internationally.

Globally Checkit defines their market as the 2.7bn deskless workers, which is obviously huge. Their focus is on 3 sectors of Healthcare, Retail and Restaurant & Hospitality which account for 767m workers. The sales strategy is to target the largest customers with sales above £100m. The company is already running pilots in 6 different countries outside of the UK and the recent US acquisition of Tutela LLC provides a good entrance to the US market. Although only recently acquired they are pleased with how the acquisition is bedding in and are already holding advanced conversations with a number of parties as well as transitioning sales to their ARR model.

There were a lot of questions at the end of the presentation and the key questions and responses are below.

Management confirmed they expect to become profitable in 2023 and are confident they have sufficient resources to achieve this.

In relation to a question on the BP contract, management say it is a very good partnership, they have expanded across a number of locations globally, it’s a very exciting time and there are aspirations for further growth.

Growth in the NHS has been very strong and this now accounts for approximately 30% of revenues.

Questions around competition were raised by a number of attendees and the company position is clear. It’s a very fragmented marketplace and there are a number of competitors who can offer some components of the Checkit solution but in their view no one offers a similar end to end solution. Providing a complete end to end solution is something they believe their customers want.

With regard to the simplicity of scaling, management reiterated that the company offers a single platform that is very configurable across common use-cases in different segments. The product does not require significant customisation between customers and as they build up a process library as they go into new markets it makes it easier to enter new markets using learnings from existing clients.

The acquisition of Tutela LLC has been a very positive experience so far. It adds a small but profitable US company operating in the US market. The US is a key market which could be 5-7x the size of the UK. The integration into Checkit has been excellent and the new US head, Steve Peck, has had an immediate impact. Already a number of contracts have been converted to recurring revenue contracts and the view is so far so good.

The Q1 trading statement is going to be issued on 13th May and it will be interesting to see how much of the positive revenue momentum has continued into the current year.

Management report that the year has started strongly - we will soon see what strong means.

A recording of the webinar is available here. If you would like further information on other webinars organised by Yellowstone Advisory, please contact

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