Key customer expansion: progress

CKT has today announced an expansion with “an integrated energy company” (believed to be BP) worth an incremental £0.25m in ARR for Checkit’s real time operations management capabilities, to be deployed to a further 150 UK franchisee sites. This follows on from an April announcement, where CKT won its first 50 franchisee cites, while previous to this, the company has rolled out to over 300 UK BP owned stores and as well internationally: in Australia and New Zealand. So further progress today, wh

Checkit - No intention to bid for Crimson Tide

On 26 June, Checkit announced that it did not intend to make a formal bid for Crimson Tide. Since Checkit’s original and revised all-equity proposals, another bidder, Ideagen, has expressed an intention to make an all-cash bid at a significantly higher price. Checkit will now refocus on organic growth and working towards profitability. Separately, an input VAT dispute with HMRC has concluded in Checkit’s favour, removing the related contingent liability.

Checkit - Potential bid for Crimson Tide

Checkit has announced a formal approach to the board of Crimson Tide, an AIM-listed provider of workflow management software, regarding a possible all-share offer for the company at a value of £12m. The Checkit board has attempted to engage the Crimson Tide board in constructive discussions several times over the last four years but discussions have never progressed. The company is announcing the terms of a possible offer to facilitate direct discussions with the shareholders of both companies b

Checkit - Signposting the path to profitability

In a tough trading environment, Checkit managed to grow FY24 revenue by 17% and reduce EBITDA losses by nearly half. The company has had a positive start to FY25 with new contract wins and the launch of a new module. Focus on growth from its existing customer base combined with strict cost control is helping Checkit to make steady progress towards its target of positive EBITDA and cash generation in FY27.

Within touching distance

New forecasts see Checkit turning EBITDA profitable in FYJan27 (and generating cash) as we see robust growth and disciplined cost management driving the company to these milestones, as evidenced in FY24 through +16% ARR gr’th. We believe this provides visibility on a material re-rating opportunity, as highlighted by CKT currently trading at a c.50% discount to peers, which otherwise looks anomalous given CKT’s other qualities, such as its attractive revenue model (93% recurring and 111% NRR) and

Checkit - New product launch and contract wins

Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.

Checkit - FY24 revenue and ARR in line, EBITDA ahead

Checkit’s FY24 trading update confirmed that revenue and year-end annual recurring revenue (ARR) were in line with our forecasts, up 17% and 16% respectively. Better cost control resulted in a smaller EBITDA loss than expected, highlighting good progress towards reaching profitability. Product development is focused on expanding into new verticals and enhancing the platform with tools to turn data into actionable insights.

Rounding out another good year

CKT has released a positive update, as FYJan24 EBITDA has come in slightly better at £-3.4m vs. £-3.6mE, meaning a c.50% y/y reduction in losses, thanks to; continued strong ARR progression (+16% to £13.3m – in line) alongside; effective cost control, reflecting a focus on efficient, recurring growth. This second quality is visible though impressive ‘existing customer metrics’, specifically GRR of +99% highlights strong customer retention, while +111% NRR speaks to continued up-selling/cross-sel

Checkit - Making good progress towards profitability

Checkit reported annual recurring revenue (ARR) growth of 24% y-o-y in H124, with more than half of the growth from upsells and cross-sells to its existing customer base. Revenue was 19% higher y-o-y and EBITDA losses nearly halved y-o-y. We have upgraded our FY24 EBITDA forecast on better gross margins and operating efficiencies. Recent contract wins provide upsell potential and the recent John Lewis contract renewal highlights the stickiness of the technology.

Scale, revenue quality & margins - all on the up

Interims are consistent with a prior update and show very respectable progress, with CKT achieving 24% ARR growth, recurring revs +22%, all while LBITDA has almost halved to £-1.9m thanks to improved gross margins and cost discipline. Other metrics and qualities continue to impress too: churn is negligible, upselling is consistently strong, furthermore CKT is now a 95% subscription business. We think these solid fundamentals, in combination with the company’s differentiating software and ambitio

Checkit - Trading on track in tough environment

Checkit made good progress in H124, growing annual recurring revenue (ARR) by 24% y-o-y and revenue by 19% y-o-y. Net revenue retention of 113% highlights the company’s ability to cross-sell and upsell, and the recent contract renewal with John Lewis and master service agreement with Compass provide further expansion opportunities. We maintain our forecasts.

Marching on & taking strides towards breakeven

CKT has released a positive H1 update to July, which highlights continued strong ARR growth of +24% y/y to £12.6m, while FCF burn has almost halved - from £-5.0m to £-2.8m and so means Checkit is making meaningful steps towards breakeven. Progress on both fronts is very supportive of the investment case in our view. Driving this, CKT has continued to see very encouraging growth in the US – ARR: +41% y/y to £3.2m, while adjacent to this, upsell/cross-sell deals (with existing customers) also cont

Checkit - Adapting growth strategy to market conditions

Over the last few years, Checkit has evolved its business to a subscription-based revenue model and adapted its operations to drive and support growth. Providing intelligent operations software for deskless workers, Checkit is focused on driving adoption of its software by large, multinational enterprises. Recent contract wins and upsells in the US show progress towards the target of generating the majority of annualised recurring revenue (ARR) in the US.

Checkit - Land-and-expand focus paying off

Having completed its transition to a subscription-based revenue model during the year, Checkit grew recurring revenue by 41% and total revenue by 22% in FY23. Year-end annual recurring revenue (ARR) was 28% higher y-o-y as the company successfully executed on its land-and-expand strategy. As flagged last year, the focus on accelerating profitability has slowed cash consumption. Management anticipates meeting current market expectations for FY24; our FY24 forecasts are substantially unchanged

It's a growth thing

Morning Note – 25 July 2024

musicMagpie - Strategically positioning for profitability

musicMagpie’s (MMAG’s) H124 results reflected several strategic decisions taken by the management team to improve profitability and cash generation. The decision to make the US a sourcing-only geography to benefit margins had a notable impact on revenues, with US revenues declining by more than half. Despite the double-digit decline in group revenue, the adjusted EBITDA margin remained relatively stable at 4.4% (H123: 4.5%), reflecting the focus on profitability. The outlook remains challenging,

PROGRESSIVE: Beeks Financial Cloud Group: FY update: an in-line year featuring significant double-digit growth

Following significant double-digit growth, Beeks announces that FY24 results (to 30 June) are in line with expectations. Revenue soared 27% Y/Y. We note a beat to FCF, a beat to net cash (6.58m vs 4.41m in FY23) and a beat to profitability all illustrative of improving unit economics. CEO Gordon McArthur comments that the record results are a testament to Beeks growing reputation. That Beeks did not suffer outage, or break SLAs, on 19 July will copper bottom that reputation. After that global IT

Fonix Mobile - FY24 +5-6% ahead, conservative FY25 upgrades of +3%

Fonix’s FY24 trading update shows gross profit growth of +18% to £17.9m or +6% ahead of our previous forecast, adjusted EBITDA growth of +18% to £13.7m or +5% ahead, and a confident outlook leads us to conservatively upgrade our FY25E gross profit, adjusted EBITDA, and EFCF by +3%. Robust progress with new and existing customers has driven FY24 growth in both mobile payments and mobile messaging of at least +16%, and UK gross profit growth of at least +15% has been boosted by the successful expa

PANMURE: UK Equity Research : Our Key Picks for 2024

PANMURE: UK Equity Research : Our Key Picks for 2024 – Q2 Update

Hardman & Co Healthcare Index: 2023 – Capital demands dent performance

The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (

Hybridan Small Cap Feast 07/07/23

Joiners: No joiners today. Leavers: Medica Group plc has left the Premium Segment of the Main Market. What’s cooking in the IPO kitchen?** Blackpoint Biotech plc, a medical cannabinoids company established to fulfil gaps in the medical cannabis market by creating products that provide fast onset of action and accurate dosing, intends to join intends to join the Access Segment of the AQSE Growth Market. Expected Admission 20 July 2023. Metals One Plc, a company focusing on acquiring natural resou

Hybridan Small Cap Feast - 24 June 2024

24th June 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour Dish of the day Admissions: Delistings: TUI AG (TUI.L) has left the Premium Segment of the Main Market. Bens Creek Group (BEN) has left AIM. What’s baking in the oven? ** Potential**** Initial Public Offerings: ITF announced: 19 June 2024: IntelliAM, an artificial intelligence co

National World Trading Update

National World has reported a Trading Update for the 21wks to 25th May in which revenues advanced +18% driven by acquisitions; we maintain our FY24 estimates.

The most exciting UK SMIDcap growth story?

Morning Note – 22 March 2024

Ingenta - FY23A Results – Diversification strategy on track

Ingenta has released FY23A annual results in-line with our expectations and the year-end trading update. The Group made significant progress during the year, with the Content division having a near-record year as customers bought upgraded products, and wins being seen in the key growth market of North America. The Commercial division also saw strategic successes through geographical expansion and building its presence in adjacent royalty segments such as music. Revenue grew 3% whilst Adj EPS gre

Intercede - An exceptional year shows the potential

Intercede has delivered revenue to March FY24 of £20m (+65% vs FY23) as expected, with profit and cash generation comfortably in line with the April trading update. Adj EBIT of £5.9m (vs £5.5mE; +479% vs FY23), and free cash flow of £9.0m (vs £8.9mE; +277% vs FY23), again outperformed forecasts that have been upgraded eight times already since 2022: original expectations accommodated £12m revenue, £0.6m adj EBIT and FCF of £0.4m. With the CMD having demonstrated the expanded product trio of MyID