Checkit PLC – Half-year Report

Checkit PLC – Half-year Report

Checkit plc (AIM: CKT, "Checkit" or the "Group") has published its results for the six months ended 31 July 2019 ("the "Period")





·      Group re-positioned to focus on Software as a Service ("SaaS") business opportunity of Checkit.

·      Following the disposal of Bulgin, Elektron Technology Plc changed its name to Checkit plc on 24 September 2019

·      Next Control Systems Limited acquired on 14 May 2019 for £8.8m net of cash in the business and renamed Checkit UK Limited ("CUK")

·      Contracts for the disposal of Elektron Technology UK Limited (owner of the Bulgin business - "Bulgin") exchanged on 31 July 2019 for gross proceeds of £105m (£94m net of adjustments and expenses). Completion took place on 24 September 2019, after the period end

·      Elektron Eye Technology ("EET"), the ophthalmic instruments business is non core and remains available for sale

·      The Board has announced that it expects to return up to £81m cash to shareholders by way of a tender offer for two ordinary shares for every three ordinary shares held at 65p per share. A circular is expected to be issued shortly

·      Capital Markets Day planned for 5 December 2019



·      Existing board members continue as directors: John Wilson steps down as CEO but remains on the board as a non-executive director. Keith Daley and Andy Weatherstone remain as Executive Chair and CFO respectively

·      Board composition will be reviewed after the distribution of cash to shareholders in light of the reshaped business

·      Active recruitment campaign to strengthen Checkit senior management team completed with a number of important new hires

·      The Group currently has approximately 190 staff on a full time equivalent (FTE) basis. As a result it is in a position to respond to demand that arises and scale its business significantly



·      Roll-out of a fully mobile, next generation Work Management app

·      Now generating commercial and operational insights to provide recommendations for retail application from mobile workflow sales data analysed by the Checkit Data Pipeline / Business Intelligence platform

·      Currently in development are capabilities to enable collaborative checklist working and automated analysis of sensor and building data



·      Following the disposal of Bulgin, we now have complete focus on Checkit (as enlarged by CUK) which continues to make good progress

·      Refocus on larger customers

·      A number of important contract wins.



·      Results for the period, as expected, characterised by a number of exceptional items and changes in the composition of the Group

·      Bulgin's results are classified as discontinued operations in the interim results. Its profit is shown as net of certain disposal expenses. The profit on disposal will be shown in the full year accounts as the transaction completed post the period end

·      Group revenue of £4.4m with £3.2m generated from Checkit and £1.2m from EET (H1 FY19: £0.4m from Checkit and: £1.2m from EET) (FY19: £1.0m and £2.6m respectively)

·      Operating loss of £3.0m (H1 FY19: £2.2m) after charging £0.2m CUK acquisition costs and increases in investment in sales and marketing, product development and other costs

·      LBITDA of £1.6m (H1 FY19 £1.2m). Cash burn (excluding acquisition) of £3.0m (HY19 £1.8m) as planned not least as a result of heavy expenditure on New Product Development,(NPD), Sales and Marketing



·      Current focus is on integrating CUK and a successful separation of Bulgin during the period of its Transitional Services Agreement

·      Full year accounts will show a number of significant exceptional items (not least the profit on the sale of Bulgin) relating to the changes in the Group during the year and consequent reorganisation costs

·      Several opportunities identified to accelerate move towards profitability

·      Many opportunities identified for cross selling and growing the business

·      Management can see a clear route to a strong and profitable business in the medium term

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