TIDMCKT
RNS Number : 3676M
Checkit PLC
14 September 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF UK MARKET ABUSE REGULATION . UPON THE PUBLICATION OF THIS
ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE WITHIN
THE PUBLIC DOMAIN.
14 September 2023
Checkit plc
("Checkit" or the "Group")
Interim results for the six months ended 31 July 2023
Checkit plc (AIM: CKT) announces its unaudited results for the
six months ended 31 July 2023 (the "Period" or "H1 FY24").
Highlights
-- Annual recurring revenue ("ARR"*) increased year on year by
+24% to GBP12.6m at period end (H1 FY23: GBP10.2m), including US
ARR, which grew +41% to GBP3.2m (H1 FY23: GBP2.3m)
-- H1 recurring revenue increased by +22% to GBP5.4m (H1 FY23: GBP4.4m)
-- Total Group revenue from continuing operations increased +19% to GBP5.7m (H1 FY23: GBP4.8m**)
-- Gross profit increased by +30% to GBP3.9m (H1 FY23: GBP3.0m).
Improved cost of sales efficiency resulted in improved gross
margins of 69% (H1 FY23: 63%**)
-- Operating efficiencies resulted in adjusted LBITDA*** from
continuing operations reducing by 47%to GBP1.9m (H1 FY23:
GBP3.5m**)
-- Cash at 31 July 2023 was GBP12.8m (31 January 2023: GBP15.6m)
-- The Board is confident of delivering an operating performance
ahead of expectations in the current financial year***
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."
The Group's management team will host a live webinar which will
include an opportunity for questions at 12:00 (BST) today. The
webinar can be accessed via the news area of the website at
https://www.checkit.net/news/ or by using this link:
https://www.investormeetcompany.com/checkit-plc/register-investor
NOTES
* Annual Recurring Revenue ("ARR") is defined as the annualised
value of contracted recurring revenue from subscription services as
at the period end, including committed annual recurring revenue
from new wins.
** Continuing operations only
*** Adjusted LBITDA is the loss on operating activities before
depreciation and amortisation, share based payment charges and
non-recurring or special items. Analysts' Adjusted LBITDA
expectations for FY24 range from GBP3.7m to GBP3.8m.
Checkit plc
www.checkit.net
Kit Kyte (Chief Executive Officer)
Greg Price (Chief Financial Officer) +44 (0) 1223 643 313
Singer Capital Markets (Nominated Adviser
& Broker)
Shaun Dobson / Harry Gooden / James
Fischer +44 (0) 207 496 3000
Chief Executive Officer's Statement
Amidst a continuing difficult economic environment, Checkit has
performed in line with our expectations in the first half of FY24,
generating an overall increase in ARR of 24% to GBP12.6m (FY22:
GBP10.2m). Checkit has continued to deliver against its land and
expand strategy with an exclusive focus on higher quality and
higher value recurring revenue growth.
Sales bookings have benefitted from a number of small wins with
potential for future upsell, supported by a master service
agreement signed with Compass Contract Services (U.K) Limited
("Compass") for the provision of CAM and CWM to their end users,
primarily in the food services sector. Since signing the MSA with
Compass, Checkit has entered into 3 new contracts with Compass and
is in discussion over further opportunities.
We have also secured our largest contract renewal, with John
Lewis plc, at GBP6m total contract value over three years. Although
the sales cycle has lengthened as a result of customer caution in
the current environment, our pipeline remains strong. We continue
to develop new customer relationships globally with a focus on
large multinational enterprise accounts and look for complementary
partnerships to accelerate our expansion.
The inflationary pressures have been successfully navigated to
date through the application of price increases and extending the
length of customer terms. Checkit will continue to execute against
its growth strategy and develop its cutting-edge technology, whilst
also applying increased focus on reducing operating costs,
preserving cash and accelerating its path to profitability.
The Augmented Worker - a platform to transform enterprise
productivity
Checkit works with hundreds of organisations across the globe,
ranging from the Global Fortune 500 to single site public health
providers. We automate tasks to free up their frontline workers. We
help them to do the right thing in the right place at the right
time, quickly and accurately. We give their managers insights that
pinpoint problems and drive improvements. The result: higher
productivity and quality and increased regulatory compliance.
We are on a mission to deliver technology that gets the most out
of people, augmenting their capacity to do what people are good at
- problem solving, customer service, decision making. We do this
by:
-- Integrating: connecting users to the real world using IoT
sensors. We process 14 billion readings a year, monitoring critical
items like blood and millions of pounds worth of food stocks.
-- Assisting: prompting users with intuitive workflows and the
information they need to do their job, allowing them to collaborate
in real-time. Mobile apps prompt when an action is due or when an
event detected by a sensor needs action. They provide a library of
guidance to be used as needed.
-- Managing: providing intelligence to help track compliance and
identify high and lowlights of performance across many locations.
Advanced data technology provides dashboards and uses artificial
intelligence to help optimise the performance of people, assets and
processes.
Our proven, reliable, single-source digital solution drives fast
and scalable efficiencies across the entire frontline workforce.
Checkit has helped customers uncover operational insights that have
led to transformational reductions in cost and risk and improved
employee, customer and patient experience.
Growth strategy and ambitions
We are meeting market demand with an unrivalled end-to-end
solution with powerful AI and predictive analytics capabilities
that provides meaningful insights and enables our customers to make
data driven decisions. We are on track to deliver our longer-term
objective: to become the market leader in augmented work management
for the deskless industry. We have successfully converted Checkit
into a pure-subscription business - with recurring revenues now
representing 95% of total revenue. This transition provides us with
visibility over future revenue, enabling us to deepen customer
relationships and opportunities to enhance contract values. We are
improving our customer value proposition through continued
investment in our data platform, which has the ability to integrate
third party technology, to create a market leading AI solution.
This is reflected in our loyal customer base, with a gross
retention rate at 98%. Our sales and marketing strategy is focused
around developing a higher quality sales pipeline across our target
sectors as well as further expansion into the US. In the meantime,
we remain focused on optimising our operating costs to accelerate
profitability and deliver value to our investors. Going forward, we
will consider compelling partner opportunities as an additional
scale opportunity. Of paramount importance will be our ability to
execute and scale the growth opportunity ahead of us whilst
targeting breakeven in FY26.
New business pipeline
The Group's focus is to continue building a high quality
pipeline across food retail, healthcare, facilities management,
care homes and biopharma verticals. Meanwhile, our "land and
expand" sales strategy is focused on the quality of our pipeline
with increased traction into mid and large enterprise accounts. The
split of the sales pipeline by target organisation size at the end
of the half year between tier one (large enterprise), tier two
(enterprise) and tier three (mid-size) targets was 64%, 22% and 15%
respectively. Checkit's new customer pipeline in the US - a key
growth market - now includes a number of multi-site organisations
across the healthcare, food retail and hospitality sectors. The US
is expected to become the largest contributor to Group
revenues.
Revenue growth
ARR growth has continued to grow in line with market
expectations during H1 FY24, despite the uncertain economic
environment, driven by consistent execution of our "land and
expand" strategy, as well as high net retention rates.
Checkit's ability to grow with its customers is seen in a net
retention rate of 113%* and a gross retention rate of 98%*. Over
50% of H1 FY24 ARR growth resulted from upsell and cross sell
within our current customer base, as customers continue to see the
productivity and efficiency benefits which the Checkit platform
enables, with the balance coming from new customer wins and
pricing.
The Group has also continued its strong performance in the US,
with 41% growth in ARR to GBP3.2m (H1 FY23: GBP2.3m).
ARR growth of 24% resulted in a consequent 22% growth in
reported recurring revenue of GBP5.4m (FY23: GBP4.4 m). Recurring
revenue growth reflects bookings achieved in FY23. A breakdown of
H1 FY24 revenue from continued operations is shown below.
Reported Revenue (GBP'm): Six months to
31 July 2023 31 July 2022 % Change
Actual Actual
ARR 12.6 10.2 +24%
Revenue
Recurring 5.4 4.4 +22%
Non-recurring 0.3 0.4 (21) %
Total Group 5.7 4.8 +19 %
* Net retention revenue ("NRR") is defined as the amount of
recurring revenue from existing customers retained over the period,
excluding new wins in the period. Gross retention revenue ("GRR")
is defined as the amount of recurring revenue from existing
customers retained over the period, excluding new wins or upsell /
expansion in the period.
Operating performance
Checkit's adjusted LBITDA for H1 FY24 of GBP1.9m reflects a
reduction of 47% vs. the prior year (H1 FY23: GBP3.6m). This
reflects both the strong growth in revenue in the period, as well
as unit cost efficiencies achieved.
Gross profit increased from GBP3.0m to GBP3.9m, with gross
margins improving from 63% to 69%, reflecting the increased
efficiency in hardware costs and procurement savings in platform
costs. Despite the increase in revenue, delivery cost was flat year
on year, as the Group was able to support its customers with
existing headcount.
Operating expenses in the period decreased by GBP0.7m to
GBP5.8m, a reduction of 12%. New product development spend totalled
GBP1.8m in H1 FY24 (H1 FY23: GBP2.0m), of which GBP0.9m was
capitalised (H1 FY23: GBP0.9m). Savings year on year reflected the
initiative to bring all work in-house, ceasing the use of
outsourced software development capacity, which resulted in
increased productivity.
The Group is reviewing the opportunities presented by
outsourcing for other areas of the business and plans to offshore
part of its customer support team in H2. This is expected to
increase the quality and performance of its service, while
delivering operational savings. This builds on the operational
efficiencies already delivered from automated call handling and
improved systems.
Cash
Cash at 31 July 2023 was GBP12.8m (GBP15.6m at 31 January
2022).
In H1 FY24, Checkit has followed a programme of controlled
investment, with the intention of achieving further ARR growth
alongside an accelerated path to profitability.
Cash outflows reduced significantly in the period, by almost 40%
to GBP2.9m (H1 FY23: GBP4.7m). This is in spite of an increase in
inventory of GBP1.0m, as the Group ensures its supply chain remains
resilient in face of global competition for components.
The Group continues to benefit from a strong balance sheet and,
in light of market conditions, will continue to execute against its
growth strategy and develop its technology, whilst also driving
further operating efficiencies on its path to profitability.
Product
Checkit's products help organisations to do frontline work
better, giving workers and managers tools that "augment" their
capabilities. We use AI and analytics to guide improvements and
identify opportunities, IoT sensors to automate previously manual
tasks and apps to support and record workflows. To date,
applications have focused on food service operations and ensuring
compliance in the storage of medical products and samples. However,
our capabilities are applicable across industries. Our
collaborative workflow has, for example, recently been adopted by
facilities managers in care homes to ensure that high levels of
safety are ensured and maintenance is performed efficiently. We are
currently investigating applications and developing propositions in
further sectors.
We have increased investment in our data platform over the last
year and are now applying the resulting capabilities, testing
machine learning models to help managers take proactive steps to
improve their operational efficiency. The resulting features are
expected to set us apart from competitors and to increase the value
created for customers. Our R&D team is now working on applying
the rapid developments in broader AI technologies, including large
language models, to our customers' problems.
As our solutions are sold further afield, it is essential that
third parties are able to implement our sensor solutions without
direct Checkit involvement. Accordingly, we have invested in
simplifying installation procedures and are using Checkit workflow
tools to guide and manage installations.
Elsewhere, we have continued to invest in improving our app
functionality across iOS and Android, as well as further improving
our resilience and performance to support our growth.
Outlook
We continue to execute against our growth strategy, with an
exclusive focus on high quality, high value subscription revenues
in our target verticals and geographies. The picture for the
business remains positive; high net revenue retention rates
underpin our land and expand strategy and continued contract
momentum. With an accelerated focus on operational efficiency, the
Board is confident in delivering an operating performance for FY24
ahead of current market expectations.
Consolidated statement of comprehensive income
unaudited interim results to 31 July 2023
Restated*
Unaudited Unaudited
Half Half Audited
year year Year
to to to
31 July 31 July 31 January
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------- --------- ---------- -----------
Revenue (Note 2) 5.7 4.8 10.3
Cost of sales (1.8) (1.8) (3.8)
------------------------------------------- --------- ---------- -----------
Gross profit 3.9 3.0 6.5
Operating expenses (5.8) (6.5) (12.9)
------------------------------------------- --------- ---------- -----------
Adjusted LBITDA** (1.9) (3.5) (6.4)
------------------------------------------- --------- ---------- -----------
Depreciation and amortisation (0.6) (0.4) (1.0)
Share-based payment charge (0.2) (0.1) (0.2)
Non-recurring or special items (Note
3) - (0.5) (4.8)
------------------------------------------- --------- ---------- -----------
Operating loss (2.7) (4.5) (12.4)
Finance income 0.2 - 0.1
------------------------------------------- --------- ---------- -----------
Loss before taxation (2.5) (4.5) (12.3)
Taxation (Note 4) 0.1 0.1 0.3
------------------------------------------- --------- ---------- -----------
Loss from continuing operations (2.4) (4.4) (12.0)
Loss from discontinued operations (Note
5) - (0.2) (0.3)
------------------------------------------- --------- ---------- -----------
Loss for the period attributable to equity
shareholders (2.4) (4.6) (12.3)
------------------------------------------- --------- ---------- -----------
Other comprehensive expense
Exchange differences on translation of
foreign operations - - -
Total other comprehensive income - - -
------------------------------------------- --------- ---------- -----------
Total comprehensive expense for the period
attributable to equity shareholders (2.4) (4.6) (12.3)
------------------------------------------- --------- ---------- -----------
Loss per share (Note 6)
Continuing (2.3)p (4.1)p (11.2)p
Discontinued - (0.2)p (0.3)p
------------------------------------------- --------- ---------- -----------
The accompanying notes form an integral part of this
consolidated interim financial information.
* See Note 8.
** Adjusted loss before interest, tax, depreciation and
amortisation "LBITDA" is calculated by taking operating profit and
adding back depreciation and amortisation, share-based payment
charges and non-recurring or special items.
Consolidated balance sheet
unaudited at 31 July 2023
Unaudited Unaudited Audited
31 July 31 July 31 January
2023 2022 2023
GBPm GBPm GBPm
-------------------------------------- --------- --------- -----------
Assets
Non-current assets
Goodwill arising on acquisition 0.2 4.5 0.2
Capitalised development costs 3.7 2.3 3.0
Other intangible assets 0.6 0.9 0.8
Property, plant and equipment 0.8 1.0 0.9
-------------------------------------- --------- --------- -----------
Total non-current assets 5.3 8.7 4.9
-------------------------------------- --------- --------- -----------
Current assets
Inventories 3.4 2.0 2.4
Trade and other receivables 3.1 4.1 4.5
Cash and cash equivalents 12.8 19.5 15.6
-------------------------------------- --------- --------- -----------
Total current assets 19.3 25.6 22.5
-------------------------------------- --------- --------- -----------
Total assets 24.6 34.3 27.4
-------------------------------------- --------- --------- -----------
Current liabilities
Trade and other payables 7.0 6.8 7.5
Lease liabilities 0.2 0.3 0.3
-------------------------------------- --------- --------- -----------
Total current liabilities 7.2 7.1 7.8
-------------------------------------- --------- --------- -----------
Non-current liabilities
Long-term provisions 0.4 0.3 0.4
Lease liabilities 0.3 0.4 0.3
Deferred tax - - -
-------------------------------------- --------- --------- -----------
Total non-current liabilities 0.7 0.7 0.7
-------------------------------------- --------- --------- -----------
Total liabilities 7.9 7.8 8.5
-------------------------------------- --------- --------- -----------
Net assets 16.7 26.5 18.9
-------------------------------------- --------- --------- -----------
Equity attributable to equity holders
of the parent
Called-up share capital 5.4 5.4 5.4
Share premium 23.3 23.3 23.3
Capital redemption reserve 6.4 6.4 6.4
Other reserves 0.5 0.2 0.3
Retained earnings (18.9) (8.8) (16.5)
-------------------------------------- --------- --------- -----------
Total equity 16.7 26.5 18.9
-------------------------------------- --------- --------- -----------
The accompanying notes form an integral part of this
consolidated interim financial information.
Consolidated statement of changes in equity
unaudited interim results to 31 July 2023
Capital
Share Share redemption Other Retained
capital premium reserve reserves earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- -------- -------- ----------- --------- --------- -----
At 1 February 2022 5.4 23.3 6.4 0.1 (4.2) 31.0
Loss for the period - - - - (4.6) (4.6)
--------------------- -------- -------- ----------- --------- --------- -----
Total comprehensive
income/(expense)
for the period - - - - (4.6) (4.6)
Share-based payments - - - 0.1 - 0.1
--------------------- -------- -------- ----------- --------- --------- -----
Transactions with
owners - - - 0.1 - 0.1
--------------------- -------- -------- ----------- --------- --------- -----
At 31 July 2022 5.4 23.3 6.4 0.2 (8.8) 26.5
Loss for the period - - - - (7.7) (7.7)
--------------------- -------- -------- ----------- --------- --------- -----
Total comprehensive
income/(expense)
for the period - - - - (7.7) (7.7)
Issue of new shares - - - 0.1 - 0.1
--------------------- -------- -------- ----------- --------- --------- -----
Transactions with
owners - - - 0.1 - 0.1
--------------------- -------- -------- ----------- --------- --------- -----
At 1 February 2023 5.4 23.3 6.4 0.3 (16.5) 18.9
Loss for the period - - - - (2.4) (2.4)
--------------------- -------- -------- ----------- --------- --------- -----
Total comprehensive
income/(expense)
for the period - - - - (2.4) (2.4)
Share-based payments - - - 0.2 - 0.2
--------------------- -------- -------- ----------- --------- --------- -----
Transactions with
owners - - - 0.2 - 0.2
--------------------- -------- -------- ----------- --------- --------- -----
At 31 July 2023 5.4 23.3 6.4 0.5 (18.9) 16.7
--------------------- -------- -------- ----------- --------- --------- -----
The accompanying notes form an integral part of this
consolidated interim financial information.
Consolidated statement of cash flows
unaudited interim results to 31 July 2023
Unaudited Unaudited
Half Half Audited
year year Year
to to to
31 July 31 July 31 January
2023 2022 2023
GBPm GBPm GBPm
--------------------------------------------- --------- --------- -----------
Net cash flows from operating activities
Loss before taxation
- From continuing operations (2.5) (4.5) (12.3)
- From discontinued operations - (0.2) (0.3)
Adjustments for:
Depreciation 0.2 0.2 0.5
Amortisation 0.4 0.6 1.0
Impairment of intangible assets and goodwill - - 4.3
Finance income (0.2) - -
Share based payments 0.2 0.1 0.2
--------------------------------------------- --------- --------- -----------
Operating cash flows before working capital
changes (1.9) (3.8) (6.6)
Decrease/(increase) in trade and other
receivables 1.4 (1.2) (1.7)
Increase in inventories (1.0) (0.2) (0.6)
(Decrease)/increase in trade and other
payables (0.5) 1.6 2.3
--------------------------------------------- --------- --------- -----------
Operating cash flows after working capital
changes (2.0) (3.6) (6.6)
Increase in provisions - - 0.1
--------------------------------------------- --------- --------- -----------
Cash used in operations (2.0) (3.6) (6.5)
Tax credit received 0.1 - 0.1
--------------------------------------------- --------- --------- -----------
Net cash outflows from operating activities (1.9) (3.6) (6.4)
--------------------------------------------- --------- --------- -----------
Investing activities
Interest received on bank deposits 0.2 - 0.1
Purchase of property, plant and equipment (0.1) - (0.2)
Investment in product development projects (0.9) (0.9) (1.8)
Investment in other intangibles - (0.2) (0.2)
Purchase of business (net of cash acquired) - - -
Disposal of businesses (net of cash sold) - 0.2 0.2
--------------------------------------------- --------- --------- -----------
Net cash used in investing activities (0.8) (0.9) (1.9)
--------------------------------------------- --------- --------- -----------
Financing activities
Issue of new shares - - -
Repayment of contract lease liabilities (0.1) (0.2) (0.3)
--------------------------------------------- --------- --------- -----------
Net cash (used in)/generated by financing
activities (0.1) (0.2) (0.3)
--------------------------------------------- --------- --------- -----------
Net (decrease)/increase in cash and cash
equivalents (2.8) (4.7) (8.6)
Cash and cash equivalents at the beginning
of the period 15.6 24.2 24.2
--------------------------------------------- --------- --------- -----------
Cash and cash equivalents at the end
of the period 12.8 19.5 15.6
--------------------------------------------- --------- --------- -----------
The accompanying notes form an integral part of this
consolidated interim financial information.
Notes to the unaudited interim results
to 31 July 2023
1. Accounting policies
The unaudited interim Group financial information is for the six
months ended 31 July 2023 and does not comprise statutory accounts
within the meaning of S.435 of the Companies Act 2006. The
unaudited interim Group financial statements have been prepared in
accordance with the AIM rules. This report should be read in
conjunction with the Group's Annual Report and Accounts for the
year ended 31 January 2023, which have been prepared in accordance
with UK-adopted International Accounting Standards in conformity
with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards. Fixed annual charges are
apportioned to the interim period on the basis of time elapsed.
Other expenses unless disclosed otherwise are accrued in accordance
with the same principles used in the preparation of the annual
accounts.
2. Segmental reporting - continuing operations
Revenues
The following table presents the different revenue streams of
Checkit:
Half Half
year year Year
to to to
31 July 31 July 31 January
2023 2022 2023
GBPm GBPm GBPm
------------------------------------- -------- -------- -----------
Recurring revenues from subscription
services 5.4 4.4 9.6
Consultancy & other services 0.3 0.4 0.7
------------------------------------- -------- -------- -----------
Total 5.7 4.8 10.3
------------------------------------- -------- -------- -----------
The Group considers its operations to be in the following
geographical regions:
Half Half
year year Year
to to to
31 July 31 July 31 January
2023 2022 2023
Geographic GBPm GBPm GBPm
--------------- -------- -------- -----------
United Kingdom 4.1 3.7 7.5
Rest of Europe 0.1 0.1 0.2
The Americas 1.5 1.0 2.6
--------------- -------- -------- -----------
Total 5.7 4.8 10.3
--------------- -------- -------- -----------
3. Non-recurring or special items
Non-recurring or special items are disclosed separately to
improve visibility of the underlying business performance.
Management has defined such items as costs associated with the
acquisition or disposal of businesses, restructuring, impairment of
goodwill, amortisation of acquired intangible assets and other
non-recurring items incurred outside the normal course of
business.
Half Half
year year Year
to to to
31 July 31 July 31 January
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------- --------- -------- -----------
Cash items
Restructuring and integration costs - - -
------------------------------------------- --------- -------- -----------
- - -
------------------------------------------- --------- -------- -----------
Non-cash items
Impairment of goodwill - - 4.3
Amortisation of acquired intangible assets - 0.5 0.5
------------------------------------------- --------- -------- -----------
- 0.5 4.8
----------------------------------------------------- -------- -----------
Total non-recurring or special items - 0.5 4.8
------------------------------------------- --------- -------- -----------
4. Taxation
The tax credit on the loss from continuing operations before
taxation has been estimated at GBP0.1m (H1 FY23: GBP0.1m; FY23:
GBP0.3m). The Group has in excess of GBP28m of tax losses carried
forward.
5. Discontinued operations
During the year ended 31 January 2023, the Group discontinued
its activity in Building Energy Management Systems. Consequently,
the results from this revenue stream are included as discontinued
operations.
Half Half
year year Year
to to to
31 July 31 July 31 January
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------------ --------- -------- -----------
Revenues - 0.6 0.6
Expenses - (0.8) (0.9)
Profit before tax - (0.2) (0.3)
Attributable tax - - -
------------------------------------------------ --------- -------- -----------
Profit after tax - (0.2) (0.3)
Profit from discontinued operation attributable
to equity shareholders - (0.2) (0.3)
------------------------------------------------ --------- -------- -----------
Foreign currency reserve reclassification - - -
------------------------------------------------ --------- -------- -----------
Other comprehensive income from discontinued
operations - (0.2) (0.3)
------------------------------------------------ --------- -------- -----------
6. Earnings per share
Earnings per share (EPS) is the amount of post-tax profit
attributable to each share (excluding those held by the
Company).
Basic EPS measures are calculated as the Group profit for the
period attributable to equity shareholders divided by the weighted
average number of shares in issue during the period.
Diluted EPS takes into account the dilutive effect of all
outstanding share options priced below the market price, in
arriving at the number of shares used in its calculation. However,
in this case, as set out in IAS 33, the potential ordinary shares
cannot be treated as dilutive as their conversion to ordinary
shares would decrease loss per share from continuing operations,
resulting in basic and diluted measures being the same.
31 July 31 July 31 January
2023 2022 2023
Key Million Million Million
------------------------------------ ---- -------- -------- ----------
Weighted average number of ordinary
shares for the purposes of basic
earnings per share A 108.0 108.0 108.0
------------------------------------ ---- -------- -------- ----------
31 July 31 July 31 January
2023 2022 2023
(Loss)/earnings for the period Key Million Million Million
------------------------------------- ---- -------- -------- ----------
Loss for the period B (2.4) (4.6) (12.3)
Loss from discontinued operations,
net of tax C - 0.2 0.3
------------------------------------- ---- -------- -------- ----------
Continuing loss for the period D (2.4) (4.4) (12.0)
Total non-recurring or special items
net of tax - 0.4 4.5
Continuing loss adjusted for EPS E (2.4) (4.0) (7.5)
------------------------------------- ---- -------- -------- ----------
31 July 31 July 31 January
Key 2023 2022 2023
--------------------------------- ------ ------- ------- ----------
Continuing EPS measures
Basic and diluted D/A (2.3)p (4.1)p (11.2)p
--------------------------------- ------ ------- ------- ----------
Adjusted continuing EPS measures
Basic and diluted E/A (2.3)p (3.7)p (6.9)p
--------------------------------- ------ ------- ------- ----------
Discontinued EPS measures
Basic and diluted (C)/A - (0.2)p (0.3)p
--------------------------------- ------ ------- ------- ----------
Total EPS measures
--------------------------------- ------ ------- ------- ----------
Basic and diluted B/A (2.3)p (4.3)p (11.5)p
--------------------------------- ------ ------- ------- ----------
7. Contingent liabilities
Further to the note included in the annual report for the year
ended 31 January 2023, Checkit plc and HMRC continue to be in
correspondence regarding matters of input tax recoverability. The
matter remains ongoing and no VAT assessment has been made. The
total amount of input tax claimed since VAT registration in July
2019 to August 2022 is GBP1.2m. The focus of correspondence relates
to Checkit plc's intention to make taxable charges of management
fees to its subsidiaries at the time. Specialist tax advice has
been sought throughout the correspondence and management does not
consider there to be merit in HMRC's position. Given the
uncertainty and materiality of the issue, we do not consider it
appropriate at this stage to provide for this and continue to
disclose it as a contingent liability.
8. Restatement
To align the presentation of discontinued operations in the
consolidated statement of comprehensive income as at 31 July 2022
with the treatment in the audited accounts as at 31 January 2023,
revenue and cost of sales have been reduced by GBP0.6m and
operating expenses have been reduced by GBP0.8m, with the overall
loss from continuing operations reducing by GBP0.2m. The overall
loss for the period attributable to equity shareholders remains
unchanged as a result of this reclassification.
9. Cautionary statement
This interim financial information has been prepared only for
the shareholders of Checkit plc as a whole and its sole purpose and
use is to assist shareholders to exercise their governance rights.
Checkit plc and its Directors and employees are not responsible for
any other purpose or use or to any other person in relation to this
report.
The report contains indications of likely future developments
and other forward-looking statements that are subject to risk
factors associated with, 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. Key risks and their mitigation have not changed
materially in the period from those disclosed on pages 28 to 31 of
the annual financial statements for the year ended 31 January
2023.
These and other factors could adversely affect the Group's
results, strategy and prospects. Forward-looking statements involve
risks, uncertainties and assumptions. They relate to events and/or
depend on circumstances in the future which could cause actual
results and outcomes to differ materially from those currently
anticipated. No obligation is assumed to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
10. Other information
The financial information in this statement does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The financial information in respect of the
year ended 31 January 2022 has been extracted from the statutory
accounts, which have been filed with the Registrar of Companies.
The independent auditor's report on those accounts was unqualified
and did not contain a statement under Sections 498(2) or 498(3) of
the Companies Act 2006.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR ZZGMLVFFGFZM
(END) Dow Jones Newswires
September 14, 2023 02:00 ET (06:00 GMT)
Checkit (LSE:CKT)
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