The Group provides a trading update for the financial year ended 31 January 2021. A summary of the Group's unaudited revenue is as follows:
REVENUES (UNAUDITED) (£m)
Three months to
Twelve months to
31 Jan 2020
Total Checkit Connect
Total Checkit BEMS
Non - recurring
* Normalised sales illustrate sales that would have been included in the Group's financial results had Checkit UK Limited, which was acquired on 14 May 2019, been owned by the Group throughout both periods.
The business performed above the Board's expectations during Q4.
The Board believes that the Group's operating result for FY21 will be around 15% better than current market estimates (prior to any adjustment related to prior year re-statement).
Checkit Connect recurring revenues for Q4 grew 51% compared to the same period in the prior year, and closed FY21 at £5.1m (+33% compared to prior year).
Annual recurring revenue (ARR) grew by 46% to close at £5.7m (FY20 £3.9m), reflecting the increase in annualised contracted Revenues achieved during the year.
These results are in line with trends announced previously and reflect a combination of additional subscribers, price increases and a continued programme of converting existing maintenance contracts to subscription-based income during the year.
Checkit Connect non-recurring revenue declined compared to FY20 due to the conversion of maintenance contracts to subscription income, timing differences on Q4 Healthcare installations due to the UK's national roll out of the COVID-19 vaccine program and H1 pandemic related field service challenges.
Checkit BEMS experienced a stabilisation of its revenue in Q4 as construction activity returned following the challenges of COVID-19 restrictions in H1. The business unit saw a revenue decline of 5% in FY21 due to the pandemic related challenges in the first half of the year.
Cash as of 31 January 2021 was £11.5m (31 January 2020: £14.3m; 31 July 2020: £13.4m).
Following the announcement on 4 February 2021 regarding the acquisition of Tutela LLC and recruitment of two key senior hires, the Board is accelerating its growth plans in both Europe and in the US. This includes increasing investment in sales and marketing in FY22 designed to maximise subscriber volumes on the back of digital transformation trends which the Board believes will serve to accelerate ARR growth.
Restatement of prior year financial statements
Following the qualified Audit opinion in FY20, the Board revisited the assumptions made regarding its decision to fully impair the intangible assets in the FY20 financial statements due to the unforeseen impact of COVID-19.
In light of the resilient business performance, the group carried out a thorough impairment review of all balances related to the qualified audit opinion. From the work performed the Board has agreed with its auditors Grant Thornton that an adjustment should be made to restate FY20 financial statements.
The adjustment will result in an increase in intangible assets carried forward at 31 January 2020 and a reduction in the reported operating loss from continued operations. The full impact of restatement will be shared as part of the preliminary results announcement expected to be issued on 29 April 2021. These are non-cash accounting entries and so will have no effect on underlying profitability or cash position of the Group.
Forward looking statements
This document contains forward looking statements with respect to the business, strategy and plans of Checkit plc and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about Checkit or management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Checkit's actual future results may differ materially from the results expressed or implied in these forward-looking statements as a result of a variety of factors among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. The forward-looking statements contained in this document are made as of the date hereof, and Checkit undertakes no obligation to update any of its forward-looking statements.