Yes a load of old gits like me.
I find it more useful for strategy than individual share picking ; for instance how to plan tax avoidance. Free sites don't tend to me systematic and I wonder about the vested interests on many of them. |
Does anyone still read the IC? |
Simon Thompson tipped in IC this weekend, encouraged by recent contracts and the plan to reach profit in 2025. FWIW. |
Only £1.1m growth in ARR since 31/01/23, they didn't mention that |
Not as bad as I feared and a new Compass contract is welcome. The cash burn continues though. Doesn't appear to be any mention of the dividend...
Only joking about the dividend. |
TU Thursday. Not for the feint- hearted I suspect. |
 CHECKIT (CKT)
This company presented at Mello this month.
They are in the business of digital transformation from paper-based processes. This is like Eagle Eye who digitised the whole paper process of “Loyalty cards and promotions.” It is also like Kainos who have digitised many processes in the Public Sector, including the Passport Office. At Mello, Rosemary Banyard of Downing Unique Opportunities Fund spelt out how this process was followed in renewing her passport. It took 6 days with notifications at each step of the way. It is one of her major holdings.
Techinvest does not cover it as they would need to see stronger top line growth before viewing the company as a potential investment. This is because it will remain loss making for the next two years.
The CEO was an officer in the Gurkhas for 7 years which included service in Iraq and Afghanistan. He then worked for an International Technology company for 7 years prior to becoming CEO of Checkit 2 years ago.
The first service is workforce management. This identifies real time workflow for deskless workers, which is more efficient compared to paper, and more effective. (42m workflows)
The second component is IOT sensors which link the data, leading to operational improvement. (42b sensor readings) In applying both components in relation to it largest client, John Lewis, who use both workforce management/IOT.They demonstrated the following savings with 22k endpoints monitored. £3.6m in food wastage savings; £24m in repurposed staff time and £0.6m in optimised energy savings. The return on the investment by JL is rapid.
They have a contract with BP using their AI algorithm to predict food demand. Currently they are present in 441 forecourts with the potential to roll out to 4900 over time. They also have Compass and Greggs as clients in the food retail area.
In the Health Care sector, they mentioned the Hallmark Care Homes Group who have a heavy reliance on paper-based processes. This is another example of the digital transformation.
In Biopharma Temperature compliance is essential for research materials and manual and paper processes are prone to error. Over 90 NHS Trusts are using some component of their technology and others may follow.
Restaurants are another market where they are active.
They hope to expand further in the US and become market leaders in augmented workflow. (IOT sensors + software + analytics)
FY revenue to Jan 2023 showed ARR £11.5m up 28%; recurring revenue was £9.6m up 41%; total revenue £10.3m up 22%. Cash £15.6m (18.3p/share) The transfer to recurring revenue is complete and is now 93% total revenue. Loss £7.3m and forecast loss over next 2 years £9m (ref Edison) Breakeven is anticipated in 2026 with ARR between £18-£20m. Retention rates are 116% which reflects their “land and expand approach.” They are accumulating tax credits of £100-£120k pa. The US has expanded from £0.4m in 2021 to £1.5m to £2.8m this year. The sales cycle varies according to region/size of contract from 18 months to 90 days. They have 500 customers in the UK/EU.
D and A Holdings hold 21.76%; Keith Daley holds 19.37% (Ch and NED); HIT 9.42% and about 50% are in public hands. CEO holds 0.1% and CFO 0.05%.
This summary has been sourced from their Mello presentation; IMC investor presentation in Feb 2023, their results presentation in April 2023, and Simon Thompson in the IC, who makes it one of his bargain shares for 2023 @ 29p. I have bought an initial holding at 24.5p. |
Just to remind shareholders and prospective investors, Checkit will be presenting on the 24th of May this week at Mello2023.
We have created a two day physical investor conference (23rd & 24th May) at the Clayton Hotel and Conference Centre in Chiswick that will include 15 top quality keynote speakers, 12 educational workshops and panel sessions, 50 exhibiting companies plus over 80 company presentations for investors to evaluate and understand their current or future investments. We will also be hosting a live BASH session, analysing lots of additional companies!
For a £25 bonus add-on price delegates at Mello2023 are also invited to make it a three day visit and join us for the Mello2023 Virtual event the day after, Thursday 25th May.
Tickets are still available and if you would like one at half price then enter the code MMTADVFN50. |
Just to let shareholders and prospective investors know that Checkit will be presenting on the 24th of May next week at Mello2023.
We have created a two day physical investor conference (23rd & 24th May) at the Clayton Hotel and Conference Centre in Chiswick that will include 15 top quality keynote speakers, 12 educational workshops and panel sessions, 50 exhibiting companies plus over 80 company presentations for investors to evaluate and understand their current or future investments. For a £25 bonus add-on price delegates at Mello2023 are also invited to make it a three day visit and join us for the Mello2023 Virtual event the day after, Thursday 25th May.
Tickets are still available and if you would like one at half price then enter the code MMTADVFN50. |
I like the increasing ARR (£11.5m) they have previously stated £18m - £20m ARR is needed for break even
At 20% CAGR of ARR suggests profitability during FY26
At 30% CAGR of ARR suggests profitability during FY25
Sufficiently funded to reach cash break-even |
From Simon Thompson at the IC
Global supply chain challenges, the rising cost of labour and increased compliance requirements mean that the premium on simplifying deskless operations has never been more relevant.
This is good news for Cambridge-based Checkit (CKT:29p), a technology group that provides customers with a workflow management software platform that delivers data-driven remote monitoring and automated systems surveillance to manage their teams of deskless workers. Digitising the scheduling and reporting of workflows can enhance staff efficiency and retention rates, operational insight and compliance.
By targeting five key verticals (retail, healthcare, facilities management, franchise and biopharma), large organisations (two-thirds of sales pipeline), and expansion in the US (24 per cent of annual recurring revenue ARR), the group has doubled ARR to £11.5mn over the past two years. Gross margin is improving, too, rising from 61 per cent in the first half to 64.8 per cent in the second half of the latest financial year to help drive down the cash loss from £3.7mn to £2.7mn, respectively.
Cash burn also fell 17 per cent in the second half, adding weight to the belief that net cash of £15.6mn (14.4p) should see Checkit through to cash profitability. The directors are currently predicting that the business will turn cash profitable in the financial year to 31 January 2026, but it could happen sooner if the group outperforms. For the new financial year, expect the cash loss to be slashed from £6.4mn to £3.7mn based on 21 per cent higher revenue of £12.5mn.
Key drivers of move to profitability
Key to maintaining the progress will be converting the new customer sales pipeline in the US, a key growth market that is five times larger than the UK, and expanding services to existing customers through the group’s ‘land and expand’ customer strategy.
A good example is Checkit’s contract with BP (BP.). The oil giant uses a Checkit-developed artificial intelligence (AI) algorithm in its Food to Go outlets to reduce food wastage by accurately predicting the number of cooked items sold during the day and providing data insights to improve decision-making. Checkit doubled its footprint with BP by rolling out its platform across 441 BP forecourts in Australia and New Zealand. The plan is to scale up the contract to 4,900 locations within three years, representing a quarter of BP’s global network of service stations.
A positive outlook statement and a drive to accelerate the path to profitability are highly supportive of the investment case for one of my 2023 Bargain Shares. Buy. |
Not sure there's much evidence of the "path to profitability accelerated". |
Bit of a mixture isn't it? Is the cash pile falling faster than the positive outlook is rising? |
any views on these results?
looks good to me.
Half mc is in cash |
Finals Monday. |
Yes, seems that way. One of the directors bought 250,000 shares at this price 23/24p only in January. |
Hmm, this seems to have returned to a steady fall again. |
Simon Thompson has posted it as a BUY in IC , positive about the US expansion and that revenue and cash is ahead of expectations. |
A race between a cash burn and an increasing income. Guess it is all still rather in the balance whether this becomes a niche company or a failed one. |
Nice update ARR increasing 30% annually.
Cash at £15.6m, giving a cash runway of 24 months at the current burn rate |
Ah yes I see ; it is quite a detailed and positive article. |
ST got it in as one of his bargain share for 2023 |
Up 6p on opening, this might be interesting, no RNS. Much more volume than usual too. |
As usual, nothing you think might be on list, uninspiring. Only rise because ST has tipped them. |
LDGARIXGATCNSCICKTTMTCMLCTL |
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