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Checkit plc: Growing Strongly

Checkit is listed on the AIM segment of the London Stock Exchange and has a market capitalisation of approximately £41m. The company’s suite of software automates manual tasks to improve productivity, provide better management insights, increases regulatory compliance and helps mitigate customers against inflationary pressures. The company is in the process of transitioning to a pure SAAS business.



Full year results to 31 January 2022 were published on 28th April and we were delighted to have Kit Kyte, CEO, Greg Price CFO and Will Maunder-Taylor, VP of Global sales present and talk about the company’s prospects. A recording of the webinar is available here.


Kit started with the highlights from a very successful year. The first figure to be mentioned was the value of the pipeline which stood at £15.4m at the year end. Bearing in mind their contracts have a minimum length of 3 years this represents a total contract value of at least £45m and provides management with confidence in growth going forward. In the last financial year growth in ARR was 43% to £8.2m and forecasts for this year are for growth of 46%. Management commented in the RNS that they are performing in line with market expectations. Sales bookings during the year were £3.5m ARR, again a significant improvement on last year. Overall revenues fell by 7% to £13.3m but this reflects the transitions to a pure SAAS business and the exiting of one-off sales. The company ended the year with net cash of £24.2m after completing a £21m fund raise.


For the newcomers to Checkit, Kit went on to describe the company in more detail. Checkit is a platform which enables deskless workers to carry out their work in a digital manner. It comprises of IoT devices (sensors, tablets), augmented by an IT infrastructure. Checkit brings the deskless worker in the 21st century and provides management insightful real time operational data to help them manage their business.


Checkit has a clearly differentiated product in the marketplace. They provide clients with an end-to-end solution, are a listed and regulated entity and have deep domain knowledge across their 3 core verticals of healthcare, food retail and franchise.


The deskless industry is large, estimated to comprised almost 2.7bn people. Over 73% of deskless workers still record tasks on paper and have been underserved by technology. This is inefficient, unproductive and demoralising for employees. It also prevents the activities of deskless workers from being recorded and therefore hidden from management view. The dark operations are the activities and interactions between people, assets and things and the Checkit platform shines a light on all of these activities and enables management teams to make real time decisions to improve business performance. What was invisible is now visible.

Technology spend of £210b annually goes into the global knowledge worker market which is made up of c1bn individuals. If technology investment for the deskless industry of c2.7bn individuals caught up it could potentially be worth £570bn in annual technology spend.

This market is still very much untapped and underpenetrated. Checkit is focused on 3 verticals: healthcare, food retail and restaurant/leisure which account for 800m workers but there are many adjacent sectors which provide similar opportunities. Ther are 2bn deskless workers in the Education, Manufacturing, Transport and Logistics sectors which they could also target too.


Checkit aims to be the market lead in workflow management for the deskless industry and intends to grow their US presence so that it is the largest contributor to ARR and has invested accordingly.

The strategy to achieve this is as follows.

1. Converting Checkit into a pure SAAS business. Focussing on recurring business only and moving away from non-core or 1x revenue sales with the exception of professional services sales accompanying ARR sales

2. Accelerate to scale and global growth. Investment is being made particularly in sales and marketing

3. Transform the operating model and culture. Creating processes by which we run our company are as agile and digital as possible. Great strides have been made in creating a business with one company, one mission, one platform and one culture


To illustrate the move to a pure SAAS business, Kit took a deeper dive into the £15.4m pipeline. This has grown significantly but almost more importantly the focus of the pipeline is completely different to the past. Checkit already has 600 customers but has long tail of small clients. The pipeline is now focussed on Tier 1 clients which make up 54% of the pipeline, Tier 2 clients make up 37% and Tier 3 only accounts for 9% of the pipeline. Larger Enterprise clients have a larger contract size, are much stickier, and provide opportunities to expand over time.


A couple of examples were then provided on the opportunity of Tier 1 clients. BP is one of Checkits’ largest Tier 1 customers. Checkit provides services to the Wild Bean Cafe through IoT assets in the hot cupboards and fridges, tablets and the Checkit IT infrastructure. All the deskless workers have handheld tablets which guide workers through tasks (like store opening and ensuring goods are in the right place), ensure health and safety compliance and collect data. They are currently in just over 320 UK locations and data is aggregated through dashboards to operational management to inform business decisions. Globally there are 21k locations (14k franchise and 7k company owned) and Checkit is in just over 1000 locations across the UK, Netherlands, Luxembourg, Australia and New Zealand. The global opportunity at BP was described as north of a £10m ARR account.


The NHS was given as another example of a great client which now accounts for over £2m of ARR. Checkit is in 86 trust and over 350 sites. Checkit monitors blood storage and helps to prevent loss. Stock loss at the NHS is approximately £350m/ year so this is a big opportunity. They also use the platform to save time and reduce the administrative burden.

Global Head of Sales Will Maunder Taylor then went through a couple of customer examples. The first example involved a global facilities management customer with over 10,000 locations. The company was paper based and so had no visibility on what different locations were or were not doing until Checkit was introduced. One of the Checkit advantages is that it is easy to install and requires only a small amount of training. The solution provides management with real time data via a dashboard and in two locations the client has already reported achieving savings of £56k on food wastage alone.


The second example was a digital exemplar NHS trust and Checkit is working with a number of them. The NHS trust wanted to improve patient safety, greater visibility on blood wastage and a digital audit trail. Again implementation was very quick and an estimated 500 blood packs have been saved already. There have also been significant staff time savings with real time data meaning that there is a clear audit trail and no unnecessary chasing of staff to complete tasks. The training requirements for new or agency staff are also much less and has resulted greater staff retention.


In the UK market Checkit acquired Tutela in Jan 2021 and hired a new MD shortly afterwards. There is now a team of 5 sales reps and 10 operations executive. Sales are growing ahead of expectations and the Grifols deal with a value of £2.7m is the largest contract signed by Checkit. Initially it is going into over 300 locations and there is a lot of scope to expand this.

The financial highlights illustrate the strong progress made over the last year. The ARR growth at 43% clearly shows how the company is focussed on the ARR model and is the second consecutive year of ARR growth above 40%. Secondly the £4.7m loss is a result of the investment in the business to grow and will over time allow that growth to become sustainable.


The ARR growth came predominantly from new business across all sectors but especially healthcare and retail and also from better pricing and upselling to existing clients. Recurring revenue represents 51% of total revenue, was 75% in the last quarter of the year and is expected to continue to increase as the transition to a pure SAAS business continues. ARR of £8.2m is ahead of the £6.8m recurring revenue and is an indicator of future revenue growth.

Looking at the cost side of the equation, sales and marketing is the smallest component but grew at 80%. Operations is the largest component but should fall as the company moves away from the BEMS business. Finally, the company has a strong balance sheet with net cash of £24.2m making them well placed to fund growth.


To finish Kit said he was very confident about the outlook for the year ahead but mindful of the macro-economic climate and inflationary pressures that exist. Checkit expects another year of strong recurring revenue growth.


This was an excellent set of results and presented very clearly by the Checkit management team. The transition to a pure SAAS business continues at a good pace and the size of the market provides a significant opportunity. They have already delivered very good growth but it feels the best is yet to come.


A recording of the webinar can be found on the Yellowstone Advisory YouTube channel or by clicking here.


If you would like to receive information about future Yellowstone Advisory webinars, please email info@yellowstoneadvisory.com. Follow us on twitter @ystoneadvisory.

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