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  • Alex Schlch

Checkit HY results webinar

We were delighted to host the half year results webinar from Checkit when Chair Keith Daley and CFO Aysla Muir updated on the latest performance.

Checkit has gone through a lot of changes over recent years with a number of disposals and the acquisition last year of Next Control Systems so Keith started by describing the current focus of the business.

Checkit has transitioned to a software company which enables large and complex organisations to track and improve their operational performance in real time. The software they provide prompts people to take action, record timely data, enable management to track tasks, monitor performance and provide operational insights. The output from this is improvements to the customer experience, increased efficiency, better compliance and a reduction in business risk.



All valuable help to companies who are adjusting to a changing world and trying to find new improved ways of working. They need to work smarter, quicker, more collaboratively and save costs. Checkit helps to achieve all of this with a smarter approach to operations management.

Management said they combine well proven technology in a smarter way using mobile, digital, workflow and applying this to improve operations management.

New Finance Director Aylsa Muir talked through the financial performance in the first half which was impacted by Covid 19 but still reported growth and improvements in operating performance after very careful management of costs . Revenues grew 2% to £6.4m and within this the more interesting Checkit Connect revenue grew 15.1% and recurring revenue grew 23.4%. Recurring revenue growth was helped by moving clients to SAAS style contracts, increasing prices as well as a large customer going live during the period. They do have some exposure to the restaurant sector and offered some clients payment deferrals in the second quarter and these payments have now started again in Q3.

There was a cash outflow of £900k during the period which was particularly impressive given the £1m that was spent on NPD and £500k that was spent on the transitional service agreement costs (relating to the sale of Bulgin). It was helped by £500k share sale in the EBT but demonstrates that the company is much closer to cash flow positive and profitability than previous expectations.

Following the acquisition of Next Control Systems last year the businesses have been integrated and organised around two business segments: Checkit connect and Checkit BEMS. Checkit Connect is the SAAS focussed business that provides workplace management and automated monitoring services that generate recurring revenues. These services enable businesses to be more efficient and customer centric.

Checkit BEMS is profitable and cash generative but doesn’t offer the same growth potential. This is the legacy busines of the Next acquisition provide building and energy monitoring services. It is a good steady business and requires more on-site technical installation and service engineers.

On the customer front Checkit is targeting the largest tier 1 and tier 2 clients and finding that they are interested in what they have to offer. They have a predominantly UK customer base but a number of their clients are multi-national and are looking to use their services in other territories. Major customers across different industry verticals were identified as follows: Healthcare - NHS, Food retail - Waitrose, Large Franchisors – BP, Pharma - Astra Zeneca and Facilities Management - Sodexo.

A question was asked about the recently announced BP contract and the response was that it is going well, is part of a global framework agreement and they are hopeful of working in further geographies over time.

NPD is focussed on expanding to a browser version, integrating alerts into workflow management, adding additional languages, facilitating a self-install option which will enable the company to scale more quickly and at lower cost and finally setting brand standards for franchisors. This last element could enable increased penetration with some very big global franchisors building on the early success they have seen with BP.

Management talked confidently about the potential and have reinstated guidance. Their house brokers N+1 singer forecast revenues of £13.1m this year and a loss before tax of £3.8m. A recording of the webinar is on the Yellowstone Advisory YouTube channel and can be found here.

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