(AIM: CKT ) told investors that its performance remains encouraging and that it is on track to reach profitability despite the ongoing disruption of the COVID-19 pandemic in its half-year report for the six months ended 31 July 2020.
The group reported a revenue increase of 2.3% to £6.4m 1H21 (1H20: £6.2m) mostly as a result of the Group’s recently established operational unit, Checkit Connect, which grew 15.1% to £3.4m (1H20: £2.9m) with recurring revenues accounting for almost all of this growth due to price increases and the rollout of a large customer contract.
The company said it has also continued to invest successfully in new product development and product maintenance, with £1m spent in the 1H21 (1H20: £1.2m).
During the period the Company donated monitoring equipment to the new Nightingale hospitals, which in turn has helped the Company promote both its products and brand within the sector and to senior NHS leaders.
Operating loss before exceptional items for 1H21 was significantly reduced to £1.5m from a loss of £2.9m in 1H20 as a result of the business executing its subscription pricing strategy as well as measures put in place to reduce costs through the COVID-19 crisis.
Cash as at 31 July 2020 ‘exceeded expectations’ and closed at £13.4m. Checkit said the improved position was aided by ‘H1 cash-saving initiatives, a strong focus on working capital and a £0.5m receipt from the sale of shares previously held by the Employee Benefit Trust.’
Shares in Checkit have improved from lows of 36p over the past three months to open at 46.5p this morning.
While COVID-19 has ‘significantly impacted some previously targeted customer sectors’, notably leisure and hospitality, the group continues to work with major Tier 1 clients with an increased focus on the healthcare sector.
Looking ahead, Checkit said it will continue to invest cash wisely, continuing its cautious approach shown to ensure it maintains momentum throughout the 2H20.
Checkit said its focus is ‘in the right place,’ and that it is setting itself up to navigate through uncertainty and to successfully execute against its own strategic objectives.
Although managing through the current economic uncertainty remains a priority, the Board said it remains confident about the outlook and has therefore reinstated financial guidance.
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