Checkit plc ends sale process as adjusted EBITDA reaches £0.3M

A six-month search for a buyer ended without a transaction on Sept. 28, as the company at its centre released its July-half accounts. Checkit plc LONCKT, the AIM-listed provider of connected monitoring and workflow software for frontline operations, reported £0.3 million in adjusted EBITDA and confirmed that its formal sale process had ended.

The interim announcement put adjusted EBITDA from continuing operations at a £0.3 million profit for the six months to July 31, 2026, compared with a £0.9 million loss a year earlier. That is a measure before depreciation, amortisation, share-based payments and special items, rather than a statement of net profit.

The board's last public takeover price marker was a 30p-a-share floor for proposals, set on Sept. 8. Checkit's decision to terminate the process removes that proposal threshold as a near-term benchmark; the Sept. 28 results instead give holders revenue, cash and retention figures against which to judge the standalone business.

Revenue from continuing operations rose to £6.3 million from £6.1 million a year earlier. Cash at July 31 was £2.9 million, compared with £3.0 million at the start of the fiscal year. Management scheduled a shareholder webinar for 2 p.m. BST on Sept. 29 to discuss the half-year results.

The Board Set a 30p Proposal Floor

Checkit launched the formal sale process on March 26 after reviewing strategic options. The board said it had received six unsolicited expressions of interest over the preceding nine months, but was not then in active discussions with anyone about an offer for its ordinary shares under the UK Takeover Code.

The March announcement said discussions up to that point had concerned an asset sale outside the code. By opening a formal sale process for the entire issued and to-be-issued share capital, the board sought a wider field of potential acquirers and more flexibility to discuss a whole-company transaction. It warned that no offer was certain.

In its Sept. 8 update, Checkit said some prospective buyers had carried out detailed due diligence and it had received several non-binding indicative proposals. The board would not consider proposals below 30p a share and expected to conclude the process around its interim results if it did not receive a proposal capable of progressing toward a firm-offer announcement.

The 30p floor was a board condition for considering a proposal, not a price agreed by a buyer. The Sept. 28 interim release states that the sale process has ended, and it does not identify a successful bidder or a transaction price. That leaves the economics of the continuing business, rather than a disclosed bid, as the company's next measurable test.

Recurring Sales Rose as Costs Fell

Recurring revenue from continuing operations rose four per cent to £6.1 million in the July 2026 half year, accounting for 97 per cent of the £6.3 million total. A year earlier, recurring revenue was £5.8 million and represented 96 per cent of sales. The modest revenue increase sits beside a £1.2 million improvement in adjusted EBITDA, which the company attributes to cost reductions and operating leverage.

Annual recurring revenue, or ARR, increased five per cent on a constant-currency basis to £12.8 million at July 31 from £12.3 million a year earlier. Checkit defines ARR as annualised contracted subscription revenue at the period end, including committed revenue that has not yet begun. It is therefore a forward-looking contract measure, not the same thing as sales recognised during the six months.

New bookings rose to £0.7 million from £0.6 million, while churn fell to £0.5 million from £0.8 million in the year-earlier half. The board's two-year plan calls for faster ARR growth, making future bookings and churn a direct test of that target. Earlier Mugglehead coverage of a software vendor's new customer contracts also separated contracted business from revenue recognised in the period.

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Checkit retired a legacy product serving one customer, removing £1.6 million of ARR and about £0.7 million of annualised cost. The company classifies that product as a discontinued operation, so its continuing-operation comparisons exclude it. Concentrating development on a single cloud platform is one part of the board's newly adopted two-year plan.

Cash generated from continuing operations was £0.3 million in the July 2026 half, against a £2.3 million outflow a year earlier. That improvement gives the board a cash measure alongside adjusted EBITDA, while the £2.9 million period-end balance shows how much liquidity was on hand when the sale process closed.

“Our task now is straightforward: deepen our position in Medical, focus Retail investment on high-quality multi-site opportunities, complete the move to one cloud platform and continue to improve commercial performance,” Checkit chief executive Kit Kyte said in the Sept. 28 interim announcement.

The two-year framework targets net revenue retention of 105 to 110 per cent, up from 102 per cent. It also targets gross retention above 95 per cent, against a current 94 per cent. These are targets, not reported results. Management's 2 p.m. BST Sept. 29 webinar is the next dated opportunity for shareholders to question how it will reach them after the bid process ended.