Dear All
I dont see how these results can be described as poor. ARR growing at 17% and US ARR now at 26% and growing at almost 30%). The ARR growth rate is similar to last year which was only the second year of moving to a SaSS model so its reasonable to expect a small decline in growth but its still solid numbers. Most importatatny, they are delivering what they said they would do and are on track for profitability sometime in year 2026. I dont see how they will run out of cash as there is 9.0m in the bank and LEBITA will probably be 2m in 2025 and maybe 1m in 2026 so there should be sufficient cash left for investing in the business or a bolt on smaller M&A to help to accelerate to profitability. We will hear about this more in April. |
Agreed...poor results imo...
...to hold up the share price, with it's loss making, a much higher growth % was needed imo |
Hmm, it is losing less money. The free cash is falling but it is going to run out in 18 months if it continued at this rate.
But the rise in sales may save this slow motion crash.
Maybe this is pessimistic , but I do remember when this company used to make money. |
I like to see a share price rise on the eve of TU.
Not holding my breath mind... |
Trading update on Thursday at 2pmShould give details of advance on strong H1 sales and upbeat expectations. |
What do people think fair value is here ? |
Signs of life here |
Just checkit the market - 19.88p bid, 20.88 offered. I bought some. |
Run of sells this am taken the price to 23.5p ; that is rather gloomy. The race to true profitability continues. Let us hope the cash pile lasts. |
Of paramount importance will be our ability to execute and scale the growth opportunity ahead of us whilst targeting breakeven in FY26.That's a long way away and perfect execution is needed £18m - £20m ARR break even |
"There is an impressive amount of management speak in the statement" LOL.
Share price reacting as one would expect given the increased likelihood that the cash won't run out before they get to cashflow breakeven.
Personally I think the product will be a winner - just not sure about the valuation. I have a small holding with a net entry price of about 50p (from the free money era!) Kicking myself I didn't average, but hey ho. |
Interims better than expected I think; the loss is reduced and the cash burn is slowing down faster than last update predicted. Maybe it will turn into a winner after all.
There is an impressive amount of management speak in the statement:
Kit Kyte, Chief Executive Officer, commented:
"Checkit is on an accelerated track to profitability. We're scaling growth through our land and expand model, while prioritising operational efficiency and cost reduction. Despite the challenges in the wider economy, our diverse customer base and a product suite that is built to deliver operational efficiency uniquely positions us for market capture." |
TU thursday. |
Looks like a bit of a share price recovery; maybe the worst is behind CKT after all.... |
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 |
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