Checkit Share Discussion Threads

[thelongandtheshortandthetall] 16/1/2020 18:57

Thanks to gersemi23.. I've posted it here because this thread has a chart.
A good write up:

gersemi23 Oct '19 - 12:34 - 6 of 62
0 1 0
with thanks to ST at the IC -

Checkit’s global sales opportunity

23 Oct-2019


Shareholders in technology group Checkit (CKT:55p), formerly known as Elektron Technology, are on course for bumper £81m cash return in November following the recently completed disposal of Bulgin, a world-class designer and maker of hermetically-sealed (air and watertight), fail-safe circular connectors. A circular will be sent to shareholders in the coming days that will offer them the chance to tender their shares at 65p on the basis of two shares repurchased for every three held. That’s a 48 per cent premium to the 44p entry point in my November Alpha Report.

Checkit will retain net cash of £14m to develop its business, a sum that will be augmented when its non-core Elektron Eye Technology (EET) business, a developer of portable analysers that are used to detect age-related macular degeneration, is sold off. That unit has just reported operating profit of £100,000 on revenue of £1.2m in the half year to 31 July 2019, so it could perhaps fetch £1.8m in the current market.

Based on 62m shares in issue post the tender offer, Checkit’s pro-forma market capitalisation of £21.7m (using a share price of 35p) will be two-thirds backed by cash (22p a share post tender). Also, Checkit acquired Fleet-based Next Control Systems (NCS), a leader in high-end service-based temperature monitoring for healthcare and life sciences within the UK, and data-related building energy management system services, for a net consideration of £8.8m (14p a share) in May 2019, representing 6.6 times its annual cash profit.

This means that the value in NCS, which has now been renamed Checkit UK, and retained cash, back the company's market capitalisation in full, implying shareholders are getting a free ride on Checkit’s proprietary work management ‘software as a service’ (Saas) business that has been designed to replace paper-based systems with a centralised, interactive cloud-based way of managing the multitude of tasks that staff have to carry out on a daily basis. Analyst Paul Hill at Equity Development estimates that more than £15m (24p a share post tender) has been invested in developing the system, thus creating “a wide competitive moat against UK rivals such as Crimson Tide (TIDE), Trailsuite and Kelsius”.

Admittedly, Checkit is lossmaking, but it is growing quickly and is targeting a near £6bn market for work management software, remote wireless sensing and remote building energy management in both the UK and the US. The client list already includes a roll call of blue chips including John Lewis, Center Parcs, BP, British Land and the NHS, highlighting how the company’s exciting suite of mobile apps, wireless sensors and data analytics can be deployed across multiple sectors including retail, healthcare, leisure and hotels both to monitor and enhance the operational performance of clients’ businesses.

Moreover, the directors are expanding their geographic reach. Chairman Keith Daley revealed during our results call this morning that the company “hopes to sign a multi-branch contract with a large European food retailing group shortly”. The focus is increasingly on the largest national and multinational customers. They are exploiting cross-selling opportunities with Checkit UK’s client base, too.

True, Checkit is lossmaking and is expected to rack up cumulative cash losses of £6m in the three financial years to 31 January 2022, by which time annual revenue (excluding EET) should have ratcheted up from £11.6m to £20.5m, according to Mr Hill. But the point is that this is a business that should be able to maintain that underlying sales growth rate of 20 per cent a year and is highly operationally geared, so once it turns cash profitable (Equity Development has a £1.3m cash profit forecast in the 2022/23 financial year on revenue of £25m), it will become increasingly profitable thereafter.

The shares look underpriced to me so, although I would recommend tendering two-thirds of your holdings to bank a hefty profit on part of your holding, thus giving yourselves a free ride on the balance, I would certainly advise holding onto the rump. Tender shares.Shareholders in technology group Checkit (CKT:55p), formerly known as Elektron Technology, are on course for bumper £81m cash return in November following the recently completed disposal of Bulgin, a world-class designer and maker of hermetically-sealed (air and watertight), fail-safe circular connectors. A circular will be sent to shareholders in the coming days that will offer them the chance to tender their shares at 65p on the basis of two shares repurchased for every three held. That’s a 48 per cent premium to the 44p entry point in my November Alpha Report.

[wad collector] 07/1/2020 16:56

The company seems to be a bit of a cross-roads , it needs some decisive leadership about where it is going and how fast to push Checkit. Yes has lots of applications , but it is not the only player in all the games. Will Mr Daley perform? I am not a holder at present but am a customer.

[matt123d] 18/12/2019 09:05

Added some at 29p here, see if it can bounce 20% or so.

[jane deer] 10/12/2019 12:08

The broker/ nominee with less shareholders in this stock, the greater the chance of deviation (good and bad) away from the average. I used HL, I received 89.9%.

[jaf111] 06/12/2019 08:33

Interesting tender allocation variance

I got just under 92% in ISA account....My friend, using same broker got 100% in trading account. She will be buying the 1086 Nyetimber that I intend to celebrate with!!!

Another person using a different broker got just under 90%
Have heard, but cant verify that tender allocation for one broker was only 80%. If true that is quite a difference!

[sharw] 05/12/2019 17:18

Looks as if ii allowed them to be traded from 16 20 - there is a sell of 5447 shares at 16 22. 5447 is exactly 8.38% (ii residue factor and each nominee will differ on this) of 65,000.

Anyway, will raise a virtual glass to you JAF111

[jaf111] 05/12/2019 16:49

Market was open at 4pm but sale blocked.....hopefully will be ok tomorrow
Suspect other brokers have not blocked sale of rump since CKT shares fell back in last 30 minutes of trading!
Still looks like a very nice profit so going to splash out on some 1086 Nyetimber to get the festive season off to a good start!

[sharw] 05/12/2019 16:38

Now sorted on ii with the same % as previously reported in my post 43 with cash received and remainder in CKT shares but (JAF111) not able to check if can trade as market now closed.

[johndoe23] 05/12/2019 16:08

I've got two lines with no value, one with assured accepted and assured rejected

[jaf111] 05/12/2019 15:53

cash received (II) but not able to sell rump....figs as before

[sharw] 05/12/2019 15:29

ii getting in a right state over this - the two lines I described previously have been replaced today by one line showing original number of CKT shares but these are not available to trade.

[johndoe23] 05/12/2019 14:57

Still nothing...

[bwm2] 05/12/2019 10:41

I'm told that I will get value today

[jaf111] 05/12/2019 08:45

not me as yet

[castleford tiger] 05/12/2019 08:34

anyone paid out yet?

[macc1] 02/12/2019 17:30

Sorry the previous link was incorrect. Here is the video of Keith Daley presenting at the investor event:

[macc1] 02/12/2019 11:06

Video of CEO Keith Daley presenting to investors at the Yellowstone / Five Minute Pitch TV event in October:

[sharw] 29/11/2019 20:49

Yes, higher than I thought also. As I said previously the nominee a/c is treated as one shareholder so there must have been quite a number of holders within the nominee who didn't tender at all.

[jaf111] 29/11/2019 20:34

Looks like the same for me.....use II
Very pleased if this is the actual result.....over 90% accepted in tender is certainly higher than I expected!

[sharw] 29/11/2019 20:04

Anyone else had action resulting from tender yet? It looks as if shares not accepted in the offer have now been credited to Crest a/cs.

My holding where I tendered 100% is now shown in 2 lines with 8.38% shown as CKT Ord and 91.62% shown as "associated with tender offer".

[sharw] 28/11/2019 12:43

The mcap you quote is based on the existing number of shares but 2/3rds of them will be redeemed next week for 65p following the tender offer.

[mister md] 28/11/2019 10:54

Is the marketcap really 80 m here ?

from the interims:
Group revenue of GBP4.4m with GBP3.2m generated from Checkit and GBP1.2m from EET (H1 FY19: GBP0.4m from Checkit and: GBP1.2m from EET) (FY19: GBP1.0m and GBP2.6m respectively)

-- Operating loss of GBP3.0m (H1 FY19: GBP2.2m) after charging GBP0.2m CUK acquisition costs and increases in investment in sales and marketing, product development and other costs

and expects to be profitable over the "medium term"

Not a screaming bargain in my view ?

[fillipe] 28/11/2019 10:33

Ask ticking up nicely, now (edit) 45p.

f

[castleford tiger] 28/11/2019 09:11

Simon
Hope you are well
Market cap is ..... covered by cash and what we paid for
Next Control Systems at £8.8m.

So its a pure play on management getting scale here.

Could you drop in on the MFX board when you get a moment please.

Finally don't miss the DART story as it has £25 a share all over it within a year.

Tiger