Checkit (LSE:CKT) — Final results for the Year Ended 31 January 2025

0:00 Good afternoon, and welcome to the CHECKIT PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Kit Kite, CEO. Good afternoon, sir. Good afternoon, and good afternoon, everybody, and thank you for attending the annual results webinar for the full year '25. There's a fair bit to get through, so we'll move very quickly into this. Just to introduce the presentation team myself, KitKIT, CEO, and also introducing, for the first time, Chris Shaw as CFO for his annual results debut. So thank you, and welcome, Chris.

0:55 So we've got a few bits to get through in today's agenda. I will start off with the highlights of the year that was FY '25, before covering off strategy updates, particularly important for those that are new to the company, and potentially new investors, before handing over to Chris, who'll take us through the financials in more detail, and then we'll cover off the outlook for the year that we're currently in and open up to questions and q and a, which will be moderated by Alex Slick. Okay. So we're very pleased with what we consider to be a strong performance for FY '25. Just going from the top, so sales performance, recurring revenue bookings, ARR, up 33% year on year to £2,100,000 of ARR booked in the year, which we're very happy with, which flowed through to ARR growth of 8% to 14,400,000, up from 13.3.

1:44 That was dampened slightly by some exceptional churn, which Chris will take us through, where, otherwise, it would have been nearer sort of 16%. Revenue, of course, flowed through very strongly to 17% in the year to £14,100,000. And in line with our sustainable growth and accelerated profitability, we continued with our improvement by a further 33% down to £2,300,000. Net cash at the start of this year was was strong at £5,100,000. A couple of points I'll I'll make here now. Our net revenue retention of a 107%, again, we're very happy with. And just as a reminder, our our three year average around net revenue retention is about a 111%. We aim to try and get as close to a 110% on an ongoing basis as we can. So, again, very pleased with that.

2:33 It's a very solid example of land to expand our work. And I'll touch on some of the product innovation features that we released in the second half of last year, namely asset intelligence, the ML AI module, and we'll go into that in a minute. Okay. So in terms of strategy, for those that are new to the company, I'm gonna briefly summarize and make as clear as we as I can who who indeed we are and what we do. So starting from the top, you know, this CHECKIT's an organization that serves particularly large multinational companies or organizations, companies that have hundreds, if not thousands, of different locations each of which are the same. And, particularly, we are selling into the operations area, so the chief operations officer.

3:18 And what they receive, what they get at their level is what what I'd call a single pane of glass view as to the operational performance, the operational excellence that exists within their frontline operational footprint. Okay? So k think KPIs, think dashboards, think graphs, think predictive analytics, ways of managing cost out of the system. Now that's facilitated by our two core products, the first being a sophisticated Internet of Things sensor ecosystem. So in each of these these locations, there are built assets. Think fridges, freezers, plasma storage, blood storage, vaccine storage, assets, need automated monitoring, and they need automated telemetry reporting. That is facilitated by our Internet of Things ecosystem that provides a wealth of data for the first time for an organization because this data would have previously manually recorded and manually checked.

4:12 So that is an automation opportunity for these organizations. And alongside that, we have a task management platform that sits in the hand of a worker, in a iOS device or an Android device or an I or a tablet, and that guides and prioritizes them through their daily tasks, checks, and processes. The two products are symbiotically linked, meaning that data is shared between them. So, for example, if you're a worker, working in a food retail location and an asset fails, an asset goes down, that triggers an automatic alert to the worker who can then respond in real time to resolve the issue, thus preventing things like stock loss or any other further damaged brand reputation that would typically occur in these large disparate organizations. As I mentioned, in both instances, these tools are generating a vast quantity of data, data that was analog in the first place for these large businesses that has become digital. Okay?

5:03 So CHECKIT is that first digital step towards a more cohesive solution. On that data, we can then build sophisticated ML and AI modules such as asset intelligence, which then adds even further ROI to an operational leader by way of cost out or cost x cost efficiency or indeed operational excellence, and we'll talk on that in a bit. Okay. So if you're new to CHECKIT investment story, I want to call out a few key points here for why CHECKIT's a very investable company in the in the current market. And so and the first thing to note is the market that we operate. So I've alluded to the fact that we that we specifically sell to large multinational enterprises with, you know, hundreds of thousands, tens of thousands sometimes of the same type of footprint serving their customers. Now the the the operational workers that that form part of that footprint are typically very underserved from a technology perspective.

5:59 So whilst there's a lot of noise and hype around the ability for something like generative artificial intelligence to disrupt, you know, knowledge worker SaaS based industries, ours actually is very under under disrupted and underutilized. And so that is something that CHECKIT can bring to bear from an automation and digital standpoint. So we get in there first on the ground, create an automation and digital footprint from which you can then add more value adding AI tooling to make it more effective. As I as I mentioned, ours is a company that is successful when we have, net revenue retention, so that's our ability to upsell and cross sell customers at about a 110% and above. So, effectively, we land a customer at any size within our target footprint, and then we build and scale them over time. So think of someone like BP, who's one of our largest customers.

6:49 We're in over a thousand locations now. That's The UK. It's Netherlands. It's Luxembourg. It's Australia. It's New Zealand. And with with you know, many thousands more for us to keep going into. And then we couple that with typically pretty low industry industry leading low attrition rates. So our gross revenue retention number is typically around 95, 96%, and that's where we entered it. So we could hit those two metrics, then the question becomes a very targeted approach to net new logo acquisition, and we'll talk on how that's been, benefiting the business in a bit. By way of, geographical expansion, North American market, particularly The US where I'm actually speaking to you from today, is our key international market for expansion for reasons that are quite are quite obvious in terms of the size of the market and the homogeneity of the customers.

7:40 And I'll be pleased to take you through how successful we've been with The US so far, in in a little bit. Again, this is a business that is a predominantly subscription based rev recurring revenue business. And what do I mean by that? I mean that 94% of our total revenue base is recurring revenue now, and that's on a three year typical three year minimum term. That's very attractive because it provides stickiness of the revenue profile, a lot of future visibility of future earnings, and indeed, acts as a risk mitigant, especially in today's quite volatile macroeconomic environment. And as we mentioned a few weeks back, we delivered a update to the market that we're we've always been pursuing the accelerated path to profitability. We have chosen to prioritize that as the main effort this year by tip by way of a £3,000,000 annual cost out exercise, which Chris will talk to you of in some detail. So that provides us with a significant degree of assurance around profitability by the very start of next year. So that, again, is is encouraging.

8:41 So the market opportunity, I've touched upon some of the the, the macro factors that are working. But, effectively, CHECKIT sits at the confluence of two key industries. So the first being the global workforce management market, which is valued about $11,000,000,000 and growing at a CAGR of 12%. And the second is the way that the global smart sensor market, so Internet of Things devices, valued at 65,000,000,000, growing at a CAGR of 19%. And CHECKIT is a leader in both of these, but, in particular, the confluence of both of those into a single platform. And and the hardware enabled SaaS component of that makes this a very sticky product with customers, hence, the load churn that we typically produce. Now the workers we go after, so called deskless workers, frontline operational workers, are still unbelievably, given given what's happening there, still very underserved from a technology perspective. You know? So 73% of them are still using pen and paper to do their work, which is just mind boggling, really. And whether or not, they're either using Excel spreadsheets or they're using very ineffective tools that don't really speak to each other.

9:44 And this is the the automation and additional opportunity to check it because we come in and we put that first layer on the ground from which you can then build up. This pickup provides a lot of meaningful insight for operational leaders to then drive cost out of the system or drive operational excellence. In terms of the markets in which we we focus, I'll just take you through the ARR split so you can see see why does do we do what we do? Health care as a space. So think the NHS. Think private hospitals. Think private care homes. Think blood plasma providers. That's 50%, five zero, of our ARR now. And particularly sticky industry for us, given that it's a high margin space and it's heavily compliant and regulatory led, and our and our products provide that first layer of data aggregation into that space. Alongside that, we have about 35% of our ARR coming from food retail.

10:38 So think, again, the BP use case or someone like or Waitrose John Lewis. And then the remainder sort of twenty, twenty five percent comes from hospitality customers, which were our traditional customer when we first built the product, brought the company, and and it scaled up from there. As I said, The US market is our primary and and priority international expansion market. Just it's five times the size of Europe in terms of spend. Even now with a slightly more volatile macro environment, you know, those companies still require automation. They still need to drive cost out. They still need to become digital, and they're very similar use cases to what we have in Europe. So that's very exciting for us.

11:22 Now I wanna talk to you very briefly about what the growth strategy looks like then. I'll point you towards the top line first. I mentioned The US market and US market growth, and we'll see how that's developing. Again, I'll I'll I'll I'll label the point around our ability. This is an organization that grows by landing a customer at whatever size of footprint and then expanding that customer over a number of years through upsell, cross sell, and minimizing the amount of churn that comes through the system. So NRR and GRR also important to this business. Again, a ours is a business with very high levels of recurring revenue, so stickiness and future visibility of earnings. This is important for us. And and as we're prioritizing this year, the main effort for this business is to bring forwards profitability as quickly as we can, and we have a lot a lot of confidence, and we'll take you through what that now means as per the cost out exercise that we're currently driving as well.

12:14 In terms of r and d and innovation, you know, product is still the most invested part of our business. We we will continue, despite the cost access, to to focus on very specific value adding innovation opportunities. And where necessary, if there's a customer led, customer paid for opportunity, we'll get behind that. So, again, we remain focused on driving that in the business. So The U The US, for those of the new, we we entered The US market about four years ago, standing start, and we're very pleased with the progress. Right? So it's now 26% of of of group ARR in the business. The bridgehead has been established. We're in all but two states within The US. And from a sales perspective, we've grown ARR in The US top set year on year, so it's the fastest growing market, which is exactly what we'd want it to be. There's a huge amount of potential here. Untapped, we're still we're still got plenty to go after.

13:06 But what I will say from an investment perspective, we have now built a and established a go to market leadership structure with go to market organic sales and marketing based in The US, and I'm pleased with the progress we're making. Indeed, we've got a sort of midterm objective for The US to contribute more than 50% of sales in a given year to the business and indeed, in time, 50% of revenues. So that's the the expectation and the pressure we're putting on The US, but we remain confident with the way we're delivering. I won't lay to the point on subscription revenues, but what what I will say, of course, is that there's a there's a direct correlation between sales bookings from a recurring revenue perspective and the ARR that generates and then the ARR that then flows through to recurring revenue and then total revenue as a whole. And, again, as I can as you can see, really positive numbers there from sort of 8% ARR through to 17% recurring revenue and indeed total revenue of 17%.

14:01 And then just to touch on GRR and and then NRR for the year, we we report NRR of a 107%, and GRR slightly lower than we'd normally expect. It's still very good at 92%. So I'll take you through a couple of customer use cases to try and bring this to life. Those those those those of us who are watching from The UK and London who like a bit of spice, like a bit of a boutique feel will be familiar with a company called Deschum. Deschum is one of our, you know, one of our favorite customers for a number of reasons. Whilst we're in only 13 of 13 locations with them, it's a great example of the full stack of our product at work. So, you know, so what's going on in inside, Tushima? And and not forget, this is a it's a company that's now expanding to The US as well. Behind the scenes, you've got all of the assets, the cookers, the hot holds, anything that requires Bluetooth probing and ability to check inventory and and and better manage your production planning. That's being facilitated by CHECKIT's sensor ecosystem, the telemetry reporting.

15:00 At the same time, the workers where whose main effort should be serving as much product to customers and indeed driving an improved customer experience, They're able to do that because they're using the CHECKIT task management system to guide them through their tasks, but also to minimize the likelihood of duplication of effort and, frankly, to, be able to respond in real time to any outages in their assets so that what they're not doing is constantly going back and checking things rather than serving customers. All of this then provides a wealth of data that allow Dishoom to make very specific operational excellence decisions, where best to have people work in a restaurant, what types of food and product, how how best to minimize the likelihood of wasted stock and wasted produce, and this then drives, frankly, a better customer experience. So they're very happy with us, and we're very happy with the relationship.

15:48 On the other hand, you might look at someone like the Royal Devon University, Health Care Trust or even use this as an example for the NHS as a whole. This is an organization where we're in a 178 different hospitals, 86 different trusts. Actually, if I were to aggregate the ARR from all of the different NHS locations, it would be our single largest customer north of £2,300,000 of ARR. But what's really exciting about what we do at the NHS, it is a heavily, obviously, heavily compliant, heavy heavy regulatory led environment with very precious, stock and assets. And so CHECKIT provides what we call an automated monitoring solution for health care. So all of the the fixed assets that look after critical products such as bloods or vaccines or in pharmacy locations are fully automated and monitored by a CHECKIT by the CHECKIT system. This then frees up nurses and other workers to spend more time with patients, which, of course, in the NHS's case is highly valuable given the the the exceptionally stretched nature of the organization.

16:48 Now so when someone like the CQC will do a snap inspection on on an NHS location, for any failed audit, that's typically a £50,000 fine. And so CHECKIT's ability to provide data and then data that goes back years as a as a as a an assurance of the validity of the regulator exercise becomes highly sought after. It's a very proven solution, one from which we can then add some of the AI ML modules that I mentioned earlier. So I'm gonna hand over to Chris now, and he'll take you through the financials in a bit more detail. Thank you, Kits. Just a little bit of background on myself, given this is my first IMC presentation with CHECKIT. I've worked in finance for the past twenty five years in a in a variety of different industries, but my most recent role was CFO at Smart Space Software PLC, which is another AIM listed SaaS business.

17:40 Smart Space is actually taken private, which is to our left net, transaction, which valued that business at four times ARR. I'd like to start off by taking you through the financial highlights. I think that these demonstrate delivery on our core objectives for FY '25. First of all, you can see that we had 17% year on year revenue growth, taking us to £14,100,000 And secondly, delivery of efficient operations. You can see our gross margin increased by three percentage points to 70%, and our EBITDA losses continue to reduce by 33% to GBP 2,300,000.

18:17 I would say that the single largest contributor to these improvements was the expansion of our contract with BP. We delivered our services to an additional 400 sites in Australia and New Zealand during the year.

18:32 For me, the value proposition at CHECKIT really boils down to the quality of our earnings, and you can see this from these four core pillars I've got at the bottom of this page here. So first of all, our our revenue is 94% recurring in nature, giving us a a high degree of financial predictability and consistent cash flows, and it reduces our reliance upon new sales to maintain momentum. Secondly, our contracts are typically three years in length at the outset, and they then move on to a twelve month rolling contract. Again, this gives us a stable revenue base and reduces the risk of churn. And where we do get indications of churn, we have twelve months to prevent the loss. As Kip mentioned, we have a a strong net revenue retention of a 107%, demonstrating our ability to execute, land, expand, and our gross revenue retention of 92%.

19:19 And in fact, if you look back over the the past three years, the average rate has been 97%.

19:25 Again, it's a strong metric for the business. So obviously, slightly down on the in the current period compared to the the average over the past three years, and I'll go into a bit more detail on what that churn is made up of in the next slide. You can see here the movement in ARR during FY 'twenty five is made up of three main constituent parts. First of all, expansion ARR from our existing customer base. We had 2,000,000 pounds of expansion ARR, which represents 15% of our opening ARR position.

20:00 Secondly, we had 200,000 pounds of new customer ARR during the year. Again, this is a great source of future expansion revenue, and it's also an area to focusing on maximizing for FY '26. The churn and contraction ARR of 1,000,000 pounds, you can see what that's made up of on the from the pie chart on the right hand side. First of all, we have 400,000 pounds of churn and contraction for what I would describe as our core customers. This is obviously an area which we try to minimize, but at 400,000 pounds, that represents just 3% of our opening ARR. The other two items I would say were unusual in nature. So firstly, we had 300,000 pounds of churn and contraction from low value and lower margin customers. A low value customer is what we describe as a customer which typically operates from a single site and with an ARR of less

20:51 than 10,000. And a low margin customer would be a customer where we have direct costs associated with providing services to that customer, which are also lost as part of the churn process. And finally, we had 400,000 pounds of churn and contraction from what I've described as a prior period tidy up. There's a a few different things in there, but as an example, what might happen is a customer will place an order, and the final delivered services may be the greater or more than that original or greater or less than the original order, and therefore, it will come through either as expansion revenue or churn or contraction revenue. As we said in the announcement today, we expect our churn to stabilize for FY 'twenty six at the levels that we've seen in FY 'twenty five.

21:38 And again, we accepted expected a similar breakdown between exceptional and core as we've seen in FY twenty five. This slide shows you the improving operational efficiency within the business. You can see that our gross margin has increased from 54% in f y twenty two to 70% in f y twenty five. What this means is that whilst we have a 68% increase in revenues over this three year period, we have a 113% increase in gross profit. This obviously is what's driving us towards profitability.

22:17 And just going a little bit more into operational gearing, you can see here that we have a a 23% year on year increase in gross profit, taking us to £9,800,000 in FY '25. And at the same time, our operating costs increased by just 5%. This 5% increase is largely a result of inflationary pressure. We have just announced that we're putting through a annualized £3,000,000 of cost saving through the business. That program has already started. We expect it to be largely complete by the end of May. It's focused on a couple of areas in particular. It is it is spread out throughout the entire business, but focused on a couple of areas, and those will be both the capitalized and non capitalized product spend and also go to market spend.

23:05 The impacts from this cost reduction exercise will be seen from q two of the current financial year onwards, but, obviously, the full impact will only come through in the next year. And we expect restructuring costs somewhere in the region of £400,000 relating to this program.

23:25 This slide demonstrates the progress that we've made in reducing our EBITDA losses. You can see that they've reduced some GBP 6,400,000 in FY 'twenty three to £2,300,000 in FY 'twenty five. We expect this trend to continue in the future years. So for the current financial year, FY 'twenty six, we expect to be approaching breakeven on an EBITDA level. And for next financial year, FY '27, we expect to be EBITDA profitable. We are being conservative in our revenue growth assumptions given the uncertain market conditions. We're not factoring in winning any of the large opportunities that we have in our pipeline, and we're just assuming run rate growth. Revenue growth is also going to be impacted by the reduced go to market spend as we focus on profitability.

24:17 This slide shows you the movement in cash during FY 'twenty five. You can see that we consumed GBP 3,900,000 during the year, which is down 40% in comparison to the prior year where we consumed £6,600,000 We had £5,100,000 at the beginning of FY 'twenty six. The cost reduction program, which we're putting through, together with some modest revenue growth assumptions, will deliver us to cash flow breakeven in calendar year 2026.

24:45 That's it for me, and I'll hand you back to Kit. Thanks very much, Chris. Look. So we're we're very excited. We're happy with the performance that we've been delivering so far, and we're actually very, very enthusiastic about our ability to drive through profitability ahead of schedule whilst maintaining the the core infrastructure of our go to market and our ability to keep growing both both locally and internationally. That is continues to be demonstrated by a land expand NRR GRR model as referred to already. The the the real focus of this business becomes very targeted acquisition of net new customers, which is something we expect more to see more of in The US, but indeed also in The UK. And as Chris mentioned, that is not something we've factored into our modeling. So actually, it's a model, which we'd expect to or hope to achieve on the upside.

25:33 Indeed, the the drive to profitability is the main effort of this year whilst maintaining the sanctity of our go to market and £3,000,000 of annualized cost savings will be delivered, and we're executing as we speak. And therefore, from the board's perspective, we are confident of achieving, if not beating, our EBITDA and cash flow projections both this year and next. And with that, I would like to, I suppose, hand over to Alex, and we can open up the floor and up for the panel for questions.

26:02 K. Chris, thank you very much for your presentation this afternoon. And if I may just bring back all your cameras. And ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed by our investor dashboard. Alex, as you can see, we received a number of questions throughout today's presentation. And if I could just hand back to you to read out the questions and give responses where appropriate to do so, I'll pick up from you at the end. Thank you. Here's the first question that we've received in today. In your financial modeling of your base case and cautious case scenarios, at what level does cash or debt, net net cash debt, bottom out?

26:55 Thanks, Alex. I mean, I will actually just hand this straight over to Chris who could give guidance on that. Yeah. I mean, as you probably see from the analyst notes which we put out today, we're expecting our cash to bottom out at around about the the £2,000,000 level, which will be where we are at the end of the current financial year, and we therefore expect to be approaching to be to be cash flow positive in the next financial year. So it would go up from that, for FY '27, which is calendar year 2026.

27:26 Okay. Next question is also on the financials. Have you approached lending institutions to assess their attitude to lending against your recurring revenue streams? Should borrowings be desirable or indeed necessary? If so, what has been the response?

27:42 Again, I'll I'll I'll I'll hand this over to Chris, but I I I think the the argument there is borrowings will not be necessary, but they may they may become a a useful backstop to to generate should we want to pursue other activities. And then that's our thinking on this, but I'll I'll hand over to Chris to be a bit more explicit. Yep. That's right. I mean, we have approached borrowing institutions, and we have had indicative offers that if we wanted to go ahead with some borrowing, we could we could do that. I think as as Kip mentioned, I guess, don't need it in our cash flow projections. We're confident that we won't need to to to take any borrowings, but I guess there's scenarios there where where potentially we may get a a a large new contract where we need working capital to finance that or some of the kind of acquisition which we may need to to use borrowing

28:34 for that kind of scenario. But in our normal day to day activities in terms of our forecasting, we're not we're not planning to use any borrowing in those those scenarios. Okay. Thank you. Question here, going across the pond to The US. Given the opinions of, RFK Junior, is there not some concern that opportunities in either the medical monitoring or hospitality industry could dry up overnight? That's, yeah, that's an interesting question. I mean, look, I think, I suppose I've been out in The US the last few months as well, actually, before the current administration came in, and so it's been interesting to to be be in the middle of the mood music. From our perspective, just touching on the hospitality piece. So whilst hospitality is about 2020% of our total ARR base, it's actually not a core focus particularly in The US.

29:25 And so and so just to be clear on the core focus in US, it is the health care customers that would be either blood plasma providers or health care private health care companies or indeed what we call senior living. So on the health that's that's the health care side. So the senior living use case is actually very interesting for us. So, you know, a number of our net new logo acquisitions towards the back end of last year were actually senior living. So care homes, typically, there are and there's there's quite a significant amount of private equity ownership within that. It is sits sits in our sweet spot of being a both a high margin industry, but also low digital maturity and indeed with a, frankly, growing customer base and and growing demand from a demographic perspective. I don't we don't see any indications of that changing given some of the characters in the current administration.

30:14 But, of course, look, in the very, very near term, when we're talking, you know, month to month, there there might be some contraction or some length of sales cycles as, frankly, everyone makes sense of what the week's latest policy is. So we don't anticipate there being too much direct impact onto our business. And the majority of our medical monitoring blood plasma customers are secured from from a contractual basis, three year terms. So, you know, that that that gives us a good foundation to build from. Thank you. Question here about the Dishoom, contract. How long did it take to get from five to 13 locations, and how many are there for you to go for? What product technology did you displace? Yeah. I use this as an example. I use this as a way of talking about just the the London expand for someone like CHECKIT in the in the space that we play in more generally. So in terms of, you know, we I think we got we're in all of their locations.

31:07 So 13 is all of their locations, certainly in The UK, although they have announced to expand into The US. So that could be quite exciting for us. The I mean, that was achieved over a period of about three, four years, maybe, I think, just just under five. And, again, what product tech did did we displace? In common with a lot of our customers, more than 50% of these are what what we we call call greenfield locations, so there was no product tech in place beforehand. This was a forward thinking organization that needed understood it needed to embrace automation and digital to both get cost out, but also to enhance customer experience and indeed employee retention. So that's a good example of someone like. I think I might even expand this this example and and talk about someone like BP where I said we're in just over a thousand locations, including all of The UK service stations, you know, Netherlands, Luxembourg, also, as Chris mentioned, we rolled out across, I think, some 400 locations last year in Australia and New Zealand.

32:03 That was also an organization, BP, that didn't have a tech footprint for dealing with retail operations. But since since we've rolled out the CHECKIT platform, we've built various ML and AI tools on top of this, one of which would be a proprietary tool called CPM, which enables BP to be much more forensic around production planning. So this is their ability to forecast what the product demand will be by service station, by location, by time of day, by time of year, thus minimizing the amount of wastage in terms of stock and also allowing to, I suppose, positively influence their revenue footprint. And this is very, very valuable for for a customer like BP. And, indeed, they've they've said to us a few times they've looked to see whether there's a comparable tool on the market given what we provide, and they haven't found one. So this is a good example of what what we would call an an aspect of hardware enabled SaaS plus plus SaaS, and then you start building products on top and you get a sticky customer.

32:59 Thank you. On the revenue front here, £200,000 of new customer ARR in an entire year is poor. What makes you think that sales can deliver what they need to in FY '26? Thanks, Alex. Well, I mean, first thing I'd say is I don't think it's actually poor. As I said, our sales performance of, I think, 2,100,000 total ARR bookings in the year was up 33%. And in terms of net new customer acquisition, actually, that 200 k is spread across about five or customers. So, actually, on an average size, that's sort of $35.40 k's worth of ARR per customer. That's actually not unusual for this type of business. Remember, this is a business for which you're very selective about the types of new customer you bring on board. You'd rather bring on board one BP customer in a or BP equivalent customer in a year and then expand it over three or four years than than bring on board lots of small, low margin, non expansionary customers, which then become churn risk down the line. So that's very much part of our strategy. So I think it's actually the question is what's the type of customer we bring into the into the pipeline?

34:08 And and so by talking of the pipeline, and we haven't mentioned it in the slides, but our pipeline is sitting at just over 16,000,000 of of ARR. So that's about 48,000,000 total contract value. That's the most healthy it's been since I've been in the business. And indeed, within that pipeline, there are more large mid to large size opportunities than we've ever had. And as Chris has mentioned, we're exceptionally conservative in our modeling of how that will flow through. So that's the the hope and the pressure on the system is to then find a way to beat the the expectations we have in in the budget. And so that's that's how we'll do it. We spent a couple years building up the go to market infrastructure. So we've got the right leadership both in Europe and indeed North America and indeed the right salespeople and the right supporting assets around it. And so that's why we have confidence even though we're gonna take the amount of cost out of the business that we're talking about. We're actually retaining the sanctity of that infrastructure to to allow us to be able to beat. It's more of a question of timing, I think, and phasing, particularly given what's happening in the market, and that's something that's not entirely under our control.

35:11 Got a question here which is sort of linked to that. So you've you've answered some of the parts, but I'm gonna ask it because it's probably worth reiterating some points here. How can you be happy with the drive towards profitability when it will only be achieved through the 3,000,000 cost saving initiatives? And was this always the plan, or are sales down versus forecast? Well, as as I mentioned, sales were actually up versus forecast. We had a bit of strong year last year, we we'd expect to be able to deliver something similar this year, Although the timing, the phasing out may not be fully within our control. I think the fact that the macroeconomic conditions are so volatile and the fact that, actually, there is a premium placed upon profitability, and this is something we've been working towards over the last couple of years, have have made it quite clear that actually prioritizing profitability as a main effort under those circumstances, that's a lever that we've got control of.

36:03 We've got full control of it. And And so so we've we've lent into it quite aggressively. And so that's, for us, is is from a board perspective, is the necessary action to take whilst retaining the sanctity of the rest of the rest of the business. Thank you. I think we've probably got time for for one more question, so I'm gonna ask that now. And apologies if we haven't had time to ask all the questions that have come through. But last question here is, what's the principal objection of potential customers to adopting a service like yours? That's a good question. Right? I think the when we don't win a deal or we lose a deal, it's it's quite rare that we're losing a deal to, competition. So this is you know, it's quite a fragmented space. I mean, the principal objection will still be, associated with inertia.

36:49 So these are these are customers who are making their first step into the digital automation world. They're very used to doing things the way they've always been done. That's the kind of that's the typical question. And, you know, you you're still spending money. So you need to demonstrate a really, really strong ROI statement when you're selling into these customers. Some of them are more mature, and they get it, and they understand it, and then you can you can lean into it. Some of them are more cautious. And, you know, I think, you know, the operational environment that they that they're they're working under, they've got they've got tensions to balance. So they might have budget allocated, and then they have budget removed quite quickly by an aggressive CFO. So that something that that that we come up come across from time to time. And we see long sales cycles. This this is this is an issue which has very long sales cycles, but once you then get in, it becomes very sticky, particularly with our product set. Set. So So this this is is something something that that you you incrementally build over time. You land and expand. You bring in the right new customers, and we've we've become very focused on how we execute from a sales perspective. So that's that's our that's our our main effort.

37:52 Kick, Chris, thank you for answering all those questions you can from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the investor meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Kick, could I please just ask you for a few closing comments? Yeah. Thanks. I mean, look, as I said, we're we're we're we're not only happy with the performance we've delivered in the last twelve months, but we're actually very excited about the prospect for the business going forwards, particularly given some of the measures we've taken by way of profitability. And this puts a really firm foundation from from which to then, you know, recontinue our focus on top line growth, and we'll be excited to keep people updated on how that's performing as the year progresses. K. Chris, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations?

38:44 This will only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of CHECKIT PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.