Checkit plc

("Checkit" or the "Company")

Strategic Plan to deliver accelerated profitability and sustainable growth

Checkit plc (AIM: CKT), the automated monitoring platform for operational leaders, announces the implementation of a comprehensive strategic plan to enhance operational efficiency and to accelerate profitability.

Strategic Plan Overview

In response to the evolving economic landscape in the US and UK - particularly the UK National Insurance increase and the introduction of US trade tariffs - which are contributing to uncertainty and caution among customers, the Company has taken steps to strengthen its financial position. A review of Checkit's operations and cost base, has resulted in the identification and implementation of measures expected to deliver annualised cash savings of approximately £3 million. The measures will involve one-off exceptional cash costs of approximately £0.4 million in the current year.

Key components of the programme include:

·      A Staff Productivity Programme: A carefully managed restructuring which (subject to a consultation process) will result in a reduced number of roles across various departments. This decision was made following a thorough evaluation to ensure that the Company remains agile and focused on its strategic objectives with an appropriate cost base. We acknowledge the contributions of all affected employees and are providing support during this transition.

·      Non-Staff Efficiency Measures: A programme to reduce non-staff-related expenditures, including reducing discretionary spending, renegotiating supplier contracts, and streamlining processes.

Cash Generation

The cost reduction programme is expected to yield annualised cash savings of approximately £3 million from quarter two of the current financial year, with the full benefit to be realised in the subsequent financial year. The implementation of these measures is expected to bring forward the point at which the Company starts to generate net cash inflows.

Growth Strategy

The Checkit management team have undertaken a comprehensive evaluation of the entire business. This in-depth review generated valuable insights that have now been embedded into our FY26 strategy and longer-term planning:

·    Our Go-to-Market (GTM) approach is designed to drive strong commercial performance while maintaining a disciplined investment profile. We aim to deliver healthy revenue retention and low churn, in line with top-quartile industry benchmarks as demonstrated by our 3-year average NRR of 111% and GRR of 97%.

·    The US remains the priority region responsible for driving new customer acquisition, supported by its broad range of target enterprises.  In FY25 23% of US bookings came from new customers. While recent US trade tariffs contribute to economic uncertainty, based on our current understanding, they are not expected to have a material impact on Checkit's revenue or cost base.

·    The successful launch of Asset Intelligence, a new ML / AI data module, that optimizes asset availability, reduces operating costs and delivers ROI, differentiates Checkit as a data orchestration platform for operational leaders.  Future product innovation will focus on further monetization of data "at ground level" as a source of high margin growth.

Outlook

The Board remains confident in Checkit's strategic direction and its positioning in key growth markets. Strong revenue retention across our almost entirely recurring revenue base, combined with the cost reduction initiatives, enhances the Company's financial resilience in a challenging economic environment. Together, these factors provide a solid foundation for delivering a profitable and cash-generative business.

Kit Kyte, Chief Executive Officer, commented:
"We are refining Checkit's operating model to improve efficiency, to enhance performance, and to accelerate our transition to profitability. By streamlining costs and focusing resources on key areas, we are strengthening the business for long-term success. Our commitment to delivering value to customers and shareholders remains our priority. I look forward to setting out our vision in more detail when we announce our preliminary results on 24 April 2025."

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