Final Results

Checkit PLC

21 April 2026

 

Checkit plc

("Checkit", the "Company" or the "Group")

Final results for the Year Ended 31 January 2026

Checkit plc (AIM: CKT), the automated monitoring and operational intelligence platform for frontline-led organisations, is pleased to report its audited results for the year ended 31 January 2026 ("FY26"). The annual report for FY26 will be published ahead of the Company's Annual General Meeting, which shall take place on 22 May 2026.

FY26 HIGHLIGHTS

·      Adjusted EBITDA* profitability achieved, improving by 113% to a profit of £0.3m, ahead of the break-even result indicated in the pre-close trading update (FY25: loss of £2.3m)

·      Annual Recurring Revenue ("ARR")** of £14.3m, a reduction of 1%, but up 2% at constant currency, and underlying ARR growth of 5% excluding a single large US customer reduction relating to unused services

·      Structural reduction in cost base delivered through completion of a £4m cost saving programme

·      Net cash of £3.0m at year end (£2.7m at 31 July 2025), reflecting a cash-generative H2

·      High-quality revenue base maintained, with recurring revenue of £13.2m representing 96% of total revenue (FY25: £13.1m)  

·      Launch of a redesigned user interface and improved user experience, leveraging AI in the development process to accelerate delivery, improve operational efficiency, and enhance customer engagement.

Strategic Outlook

·      On 26 March 2026, the Board announced its decision to commence a Formal Sale Process by seeking offers for the Group. The Board is of the view that, under private ownership, a combination of cost normalisation (including removal of public company costs), operational leverage from platform scaling, and strategic and revenue synergies could support substantial profitable growth in the near to medium term. The Board believes this creates a compelling opportunity for acquirers which is not currently reflected in the Company's valuation.

·      During FY27, the Board will prioritise long-term scalability by executing the strategic retirement of a legacy product which to date has diverted resources from Checkit's core product suite. This is a critical enabler for total platform unification and the launch of our next-generation solution in FY27. As a result, workflow management capabilities will be available to 100% of our customer base, with medical customers, representing around 60% of the total, gaining access for the first time. This move more than doubles our penetration potential and clears the path for aggressive customer expansion. The associated reduction in legacy costs, combined with improved operational efficiencies, secures our trajectory of further profitable growth.

Kit Kyte, CEO of Checkit, commented:

"FY26 was a pivotal year for Checkit. We completed a structural reset of the business, delivered Adjusted EBITDA profitability ahead of our plan and generated cash in the second half. Importantly, we have strengthened the quality, visibility and durability of our recurring revenue base through long-term renewals and disciplined commercial execution, while continuing to build a scalable, hardware-enabled software platform."

NOTES

* Adjusted EBITDA is the earnings on operating activities before depreciation and amortisation, share based payment charges and non-recurring or special items.

** Annual Recurring Revenue ("ARR") is defined as the annualised value of contracted recurring revenue from subscription services as at the period end, including committed annual recurring revenue from new wins. Constant currency comparatives are calculated using exchange rates prevailing at 31 January 2026.

Checkit plc www.checkit.net Kit Kyte (Chief Executive Officer) Kris Shaw (Chief Financial Officer)	[phone]
Singer Capital Markets (Nominated Adviser and Broker) Shaun Dobson / Peter Steel / James Fischer	[phone]

CHAIRMAN'S STATEMENT

FY26 represented a significant milestone for Checkit, with the Group achieving second half EBITDA profitability and positive cash flow. This outcome reflects the focus, discipline and sustained effort of the executive team and colleagues across the business.

The Board continues to be acutely aware of shareholder concerns regarding the Company's valuation.

During the year we received six unsolicited expressions of interest from potential acquirers of the business and assets of Checkit plc. This led to the Board's decision to commence a Formal Sale Process under the Takeover Code announced on 26 March 2026. At the time of writing, that process is still ongoing and further announcements will be made as appropriate.

The announcement of a Formal Sale Process does not represent a firm intention by any person to make an offer and there can be no certainty that any offers will be made as a result of the Formal Sale Process, that any sale will be concluded, nor as to the terms on which any offer may be made.

Whilst the share price has recovered strongly in percentage terms from the 2025 low, particularly following the announcement of the Formal Sale Process, it remains well below levels we believe reflect the Group's potential.

It remains for me to thank Chief Executive Officer Kit Kyte, Chief Financial Officer Kris Shaw, the senior leadership team and all staff in the UK and US for their contributions. Delivering a substantial improvement in EBITDA profitability and cash flow in a challenging operating environment is a notable achievement and provides a strong platform on which to build.

Keith Daley

Chair

CEO'S STATEMENT

FY26 was a pivotal year for Checkit. We reinforced financial discipline, strengthened its operational foundations and positioned it for the next phase of development.

Formal Sale Process - Unlocking Strategic Value

The Formal Sale Process reflects our view that Checkit has reached a clear strategic inflexion point and that the current public market valuation does not fully reflect its quality, scalability and long-term potential. The combination of hardware-enabled software, deeply embedded customer workflows and a growing data and AI capability represents a differentiated and relatively scarce asset within the operational intelligence market.

We believe that a structured process provides the best opportunity to crystallise value for shareholders and to accelerate the next phase of the Company's development, potentially under an ownership structure with greater strategic flexibility and access to appropriately valued capital.

Importantly, the commencement of the Formal Sale Process does not alter our strategy or operating priorities. Our focus remains on execution, delivering for customers and continuing to strengthen the platform, all with a view of capitalising on the long-term growth opportunities in our markets.

Financial Performance

Our primary objective during FY26 was clear: to establish a sustainable financial model while continuing to invest in the long-term value of the platform. This was delivered.

Adjusted EBITDA for the year was profitable at £0.3 million, ahead of previous board expectations, compared with a loss of £2.3 million in FY25. The second half of the year generated positive Adjusted EBITDA and positive operating cash flow. The Group delivered £4.0 million of annualised cost savings and was cash flow breakeven for ten consecutive months, finishing the year with net cash of £3.0 million.

Recurring revenue increased to 96% of total revenue and Annual Recurring Revenue reached £14.3 million, up 2% at constant currency and 5% on an underlying basis excluding a single large US customer contraction. Revenue of £13.7 million reflected a continued shift away from lower-quality non-recurring activity and towards contracted recurring revenue.

These results represent a structural improvement in the business. Checkit now operates from a materially lower breakeven EBITDA profitability point with improved operating leverage and greater financial resilience.

Executing the reset

During the year we simplified the cost structure, streamlined internal processes and focused investment on areas of highest strategic return. Annualised operating costs were reduced materially while preserving our go-to-market capability and core product investment.

We strengthened commercial execution by sharpening our vertical focus and concentrating resources on enterprise customers where our operational intelligence platform delivers the strongest return on investment (ROI). This 'inch wide, mile deep' approach continues to drive strong renewal rates and deeper customer relationships.

Customer expansion remained an important source of growth. Many customers expanded their deployments across additional locations and use cases, demonstrating the scalability of the platform and the strength of our land-and-expand model.

We also made significant progress in product development. Continued investments in Asset Intelligence and connected device capabilities have strengthened the platform's ability to capture and analyse operational data in real time. These capabilities are central to the value delivered to customers and form the foundation for future AI-enabled services.

Taken together, the actions have transformed Checkit into a simpler, more focused and more scalable business.

A changing technology landscape

The broader technology environment is undergoing profound change.

AI is accelerating a structural repricing of traditional pure-play software businesses. Application-layer SaaS models without embedded physical integration are increasingly exposed to commoditisation risk. High gross margin alone is no longer a guarantee of defensibility and, in some cases, may indicate vulnerability to AI-enabled disruption.

Checkit does not share this vulnerability. We operate at the intersection of connected devices, embedded sensors, workflow digitisation and advanced analytics. Our platform captures operational data at the frontline of physical processes in environments where AI enhances the system's value rather than replacing it. This integration of hardware and software creates a defensible moat rooted in operational embedment.

The data generated by connected devices and digital workflows becomes increasingly valuable as analytics and AI capabilities develop. Our Asset Intelligence capability is an early example of this shift, enabling customers to move from reactive processes toward predictive and outcome-based operations. This evolution positions Checkit as an operational intelligence platform embedded within customer workflows rather than a standalone software application.

Hybrid platforms combining devices, connectivity and software analytics have demonstrated strong economic characteristics at scale, including durable customer relationships, high renewal rates and attractive operating leverage. Our strategy is aligned with this proven operating model.

Across the broader IoT and operational intelligence sector, scaled operators have demonstrated that disciplined capital allocation and selective bolt-on acquisitions can strengthen recurring revenue density and accelerate operating leverage. The combination of organic land-and-expand growth with carefully targeted inorganic additions has proven effective in deepening vertical capability, increasing ARR per customer and improving the overall quality and predictability of revenue. As Checkit continues to strengthen its financial position, we see selective inorganic opportunities as a natural extension of our strategy where they enhance our operational intelligence platform and support long-term value creation.

Asset Intelligence is central to this evolution. It integrates connected sensors, real-time condition monitoring, workflow automation and advanced analytics to provide customers with predictive insight into asset performance. By capturing continuous operational data at the edge, the platform enables early fault detection, reduced downtime, improved compliance and measurable cost savings. As structured operational data accumulates, predictive accuracy improves, increasing customer value and deepening platform embedment across sites and use cases.

From financial discipline to strategic repositioning

The improvements achieved in FY26 allow the Company to move into its next phase from a position of strength.

As we enter FY27, management remains focused on improving profitability and maintaining financial discipline. At the same time, we are sharpening strategic focus and continuing the transition toward a more concentrated operational intelligence platform. This includes continued discipline in customer selection, prioritisation of enterprise deployments where the platform delivers the greatest value, and ongoing simplification of the business where activities do not align with long-term strategic objectives.

This disciplined approach allows us to strengthen the platform while preserving strategic flexibility in a market that is undergoing rapid structural change.

Strategy in execution

We aim to enhance profitability and cashflow by:

·      Expanding within the installed base through additional sites and use cases

·      Increasing ARR density through larger enterprise deployments

·      Continuing development of AI-enabled operational intelligence capabilities

·      Improving productivity in new product development by using increasingly sophisticated AI tools

·      Concentrating resources on the core platform

·      Pursuing selective inorganic opportunities in a consolidating market

Growth will be delivered through three clear mechanisms. First, expansion within the installed base, as customers deploy the platform across additional sites, regions and operational workflows. Second, deeper monetisation of data through Asset Intelligence and analytics-led modules that increase average revenue per customer and strengthen recurring revenue density. Third, disciplined acquisition of new enterprise customers within focused verticals where the ROI opportunity is clear and deployment scalability is proven.

An area of focus in FY27 is the United States, which represents our largest and most scalable addressable market. We are increasing executive attention and commercial discipline in this region to ensure stronger enterprise engagement, improved conversion rates and deeper account expansion. The US market combines operational complexity, multi-site scale and ROI-driven procurement dynamics that align well with Checkit's operational intelligence proposition.

While we remain disciplined in capital allocation, we believe that prioritising markets where organic growth is structurally strongest enhances both standalone performance and long-term strategic value. As deployments scale across sites and use cases, customers generate increasing volumes of operational data. This data underpins additional analytics capability and creates opportunities for further platform adoption over time. The combination of land-and-expand economics, recurring revenue visibility and expanding data value provides a strong foundation for long-term growth.

Outlook

Looking ahead, the Board and management remain focused on disciplined growth, sustained profitability and strategic clarity.

Our priority for FY27 is to build on the progress achieved in FY26 while accelerating high-quality ARR growth of the core platform. This will be achieved through deeper enterprise penetration in focused vertical markets, continued expansion of Asset Intelligence capabilities, and selective inorganic opportunities that enhance revenue density and platform strength.

I believe that Checkit is positioned to deliver durable growth in an evolving technology landscape and to create short, medium and long-term shareholder value.

Kit Kyte

Chief Executive Officer

FINANCIAL REVIEW

EBITDA profitability achieved

FY26 was a year of significant financial and operational progress for Checkit, marked by decisive actions to improve profitability, strengthen cash generation, and position the Group for sustainable long-term growth.

During the year, we executed a substantial operational restructuring programme, which materially reduced our cost base and accelerated our path to profitability. These actions delivered annualised cost savings of approximately £4.0 million, fundamentally reshaping the Group's operating model and creating a more scalable platform from which future incremental revenue can drive meaningful profitable growth.

As a result of these actions, the Group achieved an important financial milestone, delivering full-year positive Adjusted EBITDA of £0.3 million. This was driven by a significant improvement in performance across the year, with Adjusted EBITDA improving from a loss of £0.5 million in H1 to a positive £0.8 million in H2, demonstrating the effectiveness of the restructuring programme and the inherent operating leverage within the business. The second half was also cash generative, reflecting both improved profitability and disciplined working capital management.

With a materially lower cost base now established, the business is well positioned for profitable future growth and cash generation.   

Revenue

Total revenue for FY26 was £13.7 million (FY25: £14.1 million), a reduction of 2% year-on-year. This primarily reflects a reduction in non-recurring revenue from £1.0 million to £0.5 million, consistent with our strategic focus on subscription-based recurring revenue. Recurring revenues represented 96% of total revenue (FY25: 94%).

Recurring revenue increased to £13.2 million (FY25: £13.1 million or £13.0 million at constant currency), representing 2% growth on a constant currency basis. Performance was impacted by the reduction in ARR from a large US customer, following the removal of unutilised services as part of a new three year contract. Excluding the impact of this customer contraction, underlying ARR growth was 5%, net revenue retention¹ was 104%, and gross revenue retention was 95%. 

Operating Costs and Adjusted EBITDA

The cost reduction programme implemented from May 2025 impacted all areas of the business and has materially reshaped the Group's cost base. Headcount was reduced from 165 to 117 employees, with changes weighted towards the product function, aligning resources more closely with current strategic priorities.

Total annualised cost savings of £4.0 million, comprise £3.2 million of staff cost reductions and £0.8 million of savings across other operating expenses. As a result, the Group's EBITDA breakeven ARR threshold has reduced materially, improving financial resilience and increasing operating leverage as revenue scales.

Operating expenses charged to the income statement reduced by 18% year-on-year. The full annualised benefit of the restructuring programme will be reflected in FY27. The Group's operating costs for the year are set out below:

	FY26 £m	FY25 £m
Product management and development	3.3	4.4
Sales and marketing	2.2	3.0
Operations	2.4	2.5
Central costs	3.7	4.6
Total operating costs	11.6	14.5
Less: capitalised development	(1.8)	(2.4)
Total charged in income statement	9.8	12.1

Non-recurring or special items

Non-recurring and special items in the year totalled £1.1 million (FY25: £0.5 million). These costs primarily relate to the operational restructuring undertaken during the year, transaction-related costs and other one-off items that are not considered part of the Group's underlying performance.

	FY26 £m
Restructuring costs	0.8
Transaction costs	0.2
Intangible asset impairment	0.1
Total non-recurring or special items	1.1

Restructuring costs of £0.8 million principally comprise redundancy and notice pay arising from the headcount reduction implemented from May 2025.

Transaction costs of £0.2 million relate to professional fees incurred in connection with the proposed acquisition of Crimson Tide, which did not complete.

The £0.1 million intangible impairment reflects a prudent reassessment of certain legacy capitalised development assets following the reprioritisation of the product roadmap.

Taxation

The Group remains loss making at a consolidated level and therefore no UK corporation tax charge has arisen for the year.

Notwithstanding this, a current tax charge of less than £0.1 million has been recognised in respect of profits generated by certain overseas subsidiary companies, which are subject to local corporation tax regimes. In addition £0.1m of overseas tax expense has been recognised in relation to prior periods.

At 31 January 2026, the Group had approximately £32 million of carried forward taxable losses. No deferred tax asset has been recognised in respect of these losses due to the uncertainty regarding the timing of future taxable profits.

Claims in relation to R&D tax for the year amounted to £0.2 million, arising under the UK Research and Development Expenditure Credit ("RDEC") regime. The credit is treated as taxable income and is therefore subject to UK corporation tax.

Following changes to the UK R&D tax credit regime the presentation of the credit has been amended. The RDEC income has been recognised above the line within other operating income and therefore contributes to operating profit and EBITDA. In the prior year, the equivalent R&D credit was recognised within the tax line. This change in presentation reflects the updated accounting treatment under the revised scheme and does not alter the underlying economic benefit to the Group.

EPS - continuing operations

The weighted average number of shares in issue in FY26 was 108.0 million (FY25: 108 million). Loss per share (basic and diluted) was 2.6 pence (FY25: 3.3 pence).

As the Group reported a loss for the year, potentially dilutive share options have not been included in the calculation of diluted loss per share, as their inclusion would be anti-dilutive. Accordingly, basic and diluted loss per share are the same for FY26.

Cash

As at 31 January 2026, the Group's cash balance was £3.0 million (FY25: £5.1 million).

Net cash outflow for the year was materially reduced, with annual cash consumption decreasing by 46% year-on-year. Cash outflow was weighted towards the second quarter of the year, reflecting restructuring costs and the pre-restructuring cost base. Following the implementation of the cost reduction actions, the Group delivered cashflow breakeven in the second half of FY26.

The improvement in cash performance reflects the combination of Adjusted EBITDA profit, improved gross margins and disciplined working capital management. This is reflected in the improvement in net cash outflow from operating activities, which reduced from £1.2 million in FY25, to £0.1 million in FY26.

The Group remains debt free and did not undertake any refinancing or equity fundraising activity during the year.

Kris Shaw

Chief Financial Officer

¹ Net revenue retention ("NRR") is defined as the amount of recurring revenue from existing customers retained over the year, excluding new wins in the last 12 months. Gross revenue retention ("GRR") is defined as the amount of recurring revenue from existing customers retained over the period, excluding new wins or upsell/expansion in the period.

Consolidated statement of comprehensive income

year ended 31 January 2026

		Notes	2026 £m	2025 £m
	Revenue	2	13.7	14.1
	Cost of sales		(3.8)	(4.3)
	Gross profit		9.9	9.8
	Other operating income		0.2	-
	Operating expenses	3	(9.8)	(12.1)
	Adjusted EBITDA*		0.3	(2.3)
	Depreciation and amortisation		(1.6)	(1.5)
	Share-based payment charge		(0.2)	(0.1)
	Non-recurring or special items		(1.1)	(0.5)
	Operating loss		(2.6)	(4.4)
	Finance income		-	-
	Loss before taxation		(2.6)	(4.4)
	Taxation	5	(0.2)	0.8
	Loss for the year attributable to equity shareholders		(2.8)	(3.6)
	Other comprehensive income/(expense)
	Exchange differences on translation of foreign operations		(0.1)	-
	Total comprehensive loss for the year attributable to equity shareholders		(2.9)	(3.6)
	Loss per share
	Basic EPS	6	(2.6)p	(3.3)p
	Diluted EPS	6	(2.6)p	(3.3)p

*Adjusted earnings before interest, tax, depreciation and amortisation "EBITDA" is calculated by taking operating profit and adding back depreciation & amortisation, share-based payment charge and non-recurring or special items (note 8)

Consolidated balance sheet

as at 31 January 2026

	Notes	2026 £m	2025 £m
Assets
Non-current assets
Goodwill arising on acquisition	7	0.2	0.2
Other intangible assets	7	6.6	6.1
Property, plant and equipment		0.5	0.9
Total non-current assets		7.3	7.2
Current assets
Inventories		3.4	3.9
Trade and other receivables		2.7	3.7
Cash and cash equivalents		3.0	5.1
Total current assets		9.1	12.7
Total assets		16.4	19.9
Current liabilities
Trade and other payables		7.4	7.9
Lease liabilities		0.2	0.2
Total current liabilities		7.6	8.1
Non-current liabilities
Long-term lease liabilities		0.1	0.4
Long-term provisions		0.3	0.3
Total non-current liabilities		0.4	0.7
Total liabilities		8.0	8.8
Net assets		8.4	11.1
Equity attributable to the owners of the Company
Called up share capital		5.4	5.4
Share premium		23.3	23.3
Capital redemption reserve		6.4	6.4
Other reserves		0.8	0.6
Translation reserve		(0.1)	-
Retained earnings		(27.4)	(24.6)
Total equity		8.4	11.1

Consolidated statement of changes in equity

year ended 31 January 2026

	Share capital £m	Share premium £m	Capital redemption reserve £m	Other reserves £m	Translation reserve £m	Retained earnings £m	Total £m
At 31 January 2024	5.4	23.3	6.4	0.5	-	(21.0)	14.6
Loss for the year	-	-	-	-	-	(3.6)	(3.6)
Total comprehensive income for the year	-	-	-	-	-	(3.6)	(3.6)
Share-based payments	-	-	-	0.1	-	-	0.1
At 31 January 2025	5.4	23.3	6.4	0.6	-	(24.6)	11.1
Loss for the year	-	-	-	-	-	(2.8)	(2.8)
Other comprehensive income	-	-	-	-	(0.1)	-	(0.1)
Total comprehensive income for the year	-	-	-	-	(0.1)	(2.8)	(2.9)
Share-based payments	-	-	-	0.2	-	-	0.2
At 31 January 2026	5.4	23.3	6.4	0.8	(0.1)	(27.4)	8.4

Consolidated statement of cash flows

year ended 31 January 2026

	Notes	2026 £m	2025 £m
Net cash outflow from operating activities	6	(0.1)	(1.2)
Investing activities
Interest received on bank deposits		-	0.1
Purchase of property, plant and equipment		-	(0.2)
Investment in product development projects		(1.8)	(2.4)
Net cash used in investing activities		(1.8)	(2.5)
Financing activities
Repayment of lease liabilities		(0.2)	(0.2)
Net cash utilised by financing activities		(0.2)	(0.2)
Net decrease in cash and cash equivalents		(2.1)	(3.9)
Cash and cash equivalents at the beginning of the year		5.1	9.0
Cash and cash equivalents at the end of the year		3.0	5.1

1.     Basis of Preparation 

The financial information set out in this announcement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the Year ended 31 January 2026 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 20 April 2026 and which, if adopted by the members at the Annual General Meeting, will be delivered to the Registrar of Companies for England and Wales. 

The financial information for the Year ended 31 January 2025 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 23 April 2025 and which have been delivered to the Registrar of Companies for England and Wales.

The reports of the auditor on both these financial statements were unqualified, did not include any references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

The information included in this announcement has been prepared on a going concern basis under the historical cost convention, and in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board ("IASB") that are effective as at the date of these financial statements.

The Company is a public limited Company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.

2. Segmental reporting

Management provides information reported to the Chief Operating Decision Maker ("CODM") as a single operating segment for the purpose of assessing performance and allocating resources. The CODM is the Chief Executive Officer.

The Group's main activities are the supply of Connected Workflow Management, automated monitoring, Internet of Things ("IoT"), and operational insight-based products and services.

Revenue by type

The following table presents the different revenue streams of Checkit:

	2026 £m	2025 £m
Recurring revenues from subscription services	13.2	13.1
Consultancy and other services	0.5	1.0
Total	13.7	14.1

Geographical information

The Group considers its operations to be in the following geographical regions:

	Revenue from external customers
	2026 £m	2025 £m
United Kingdom	9.6	9.5
The Americas	3.5	3.8
Rest of World	0.6	0.8
Total	13.7	14.1

Information about major customers

During FY26, the Group had one customer who generated revenues of 13% of total revenue (FY25: 13%).

Revenue expected to be recognised

The Group expects to recognise revenue amounting to £5.3m (2025: £4.7m) in FY26 relating to performance obligations from existing contracts that are unsatisfied or partially satisfied as at 31 January 2026.

3. Operating loss

	2026 £m	2025 £m
Operating loss is stated after charging:
Product development costs expensed	2.0	2.0
Depreciation on owned property, plant and equipment	0.1	0.2
Depreciation on right-of-use assets	0.2	0.2
Amortisation on development costs	1.0	0.9
Amortisation on computer software	0.3	0.2
Auditor's remuneration:
- fees payable to the Company's auditor for the audit of the Company's annual accounts	0.1	0.1
- fees payable to the Company's auditor for the audit of the Company's subsidiaries pursuant to legislation	0.0	0.0
Total audit fees for audit services	0.1	0.1
Tax services	-	-
Total auditor's remuneration	0.1	0.1
Non-recurring or special items:
- restructuring and integration costs	0.8	0.2
- HMRC investigation	-	0.2
- Transaction costs	0.2	0.1
-  intangible asset impairment	0.1	-
Total non-recurring or special items	1.1	0.5

Cooper Parry Group Limited was paid £nil for non-audit services (2025: £nil).

4. Net cash flows from operating activities

		2026 £m	2025 £m
Loss before interest and taxation
- from continuing operations		(2.6)	(4.4)
Adjustments for:
Depreciation		0.3	0.4
Amortisation		1.3	1.1
Share-based payments		0.2	0.1
Operating cash flow before working capital changes		(0.8)	(2.8)
Decrease/(increase) in trade and other receivables		1.0	1.6
Decrease/(increase) in inventories		0.5	(0.1)
Increase/(decrease) in trade and other payables		(0.8)	(0.1)
Operating cash flow after working capital changes		(0.1)	(1.4)
Increase/(Decrease) in provisions		(0.1)	0.1
Cash utilised by operations		(0.2)	(1.3)
Tax charge / (credit) on continuing operations		0.1	0.1
Net cash outflow from operating activities		(0.1)	(1.2)

5. Taxation

(a) Analysis of tax credit for the year

	2026 £m	2025 £m
Current taxation:
UK corporation tax (credit) on loss for the year	-	(0.3)
Adjustment in respect of prior periods	0.2	(0.5)
Total current taxation	0.2	(0.8)
Deferred tax:
Total deferred taxation	-	-
Tax credit on continuing operations	0.2	(0.8)

(b) Factors affecting taxation credit for the year

The effective tax rate for the year was 25% (2025: 25%).

	2026			2025
	£m				£m
Loss on ordinary activities before taxation	(2.6)				(4.4)
Loss on ordinary activities multiplied by weighted average standard rate of corporation tax in the UK of 25%	(0.7)				(1.1)
Effects of:
Expenses not deductible for tax purposes	-				0.6
Income not taxable	-				(0.8)
Temporary differences not recognised	0.7				0.6
Adjustment is respect of prior periods	0.2				(0.6)
R&D tax credit	-				0.5
	0.2				(0.8)

(c) Factors that may affect future taxation charges

Deferred taxation assets amounting to £8.1m (2025: £7.4m) have not been provided in respect of unutilised income tax losses of £32.3m (2025: £29.5m) that can only be carried forward against future taxable income of that same trade as there is currently insufficient evidence that these assets will be recovered.

6. Earnings per share

Earnings per share (EPS) is the amount of post-tax profit attributable to each share (excluding those held by the Company). Basic EPS measures are calculated as the Group profit for the year attributable to equity shareholders divided by the weighted average number of shares in issue during the year. Diluted EPS takes into account the dilutive effect of all outstanding share options priced below the market price, in arriving at the number of shares used in its calculation.

Both of these measures are also presented on an adjusted basis, to remove the effects of non-recurring or special items, being items of both income and expense which are sufficiently large, volatile or one-off in nature, to assist the reader of the financial statements to get a better understanding of the underlying performance of the Group. The Note below demonstrates how this calculation has been performed.

	Key	2026 m	2025 m
Weighted average number of shares for the purpose of basic earnings per share	A	108.0	108.0
Dilutive effect of employee share options1		-	-
Weighted average number of shares for the purpose of diluted earnings per share	B	108.0	108.0

	Key	£m	£m
Loss for the year	C	(2.8)	(3.6)
Total non-recurring or special items net of tax		0.9	0.4
Loss for adjusted EPS	D	(1.9)	(3.2)

	Key	2026	2025
EPS measures
Basic and diluted1 EPS	C/A	(2.6)p	(3.3)p
Adjusted EPS measures
Adjusted basic and diluted1 EPS	D/A	(1.8)p	(2.9)p

The adjusted EPS information is considered to provide a fairer representation of the Group's trading performance.

Total earnings per share for the year attributable to equity shareholders

	Key	2026	2025
EPS measures
Basic EPS	C/A	(2.6)p	(3.3)p
Diluted EPS1	C/B	(2.6)p	(3.3)p

1       In the current and prior year, the impact of employee share options has been excluded from the diluted EPS calculation as their effect would be anti-dilutive, reflecting the loss from continuing operations for the year.

7. Intangible assets

	Development costs £m	Computer software £m	Acquired intangible assets £m	Goodwill £m	Total £m
Cost
At 1 February 2024	11.8	1.0	4.3	4.5	21.6
Additions	2.4	-	-	-	2.4
Disposals	-	-	-	-	-
At 31 January 2025	14.2	1.0	4.3	4.5	24.0
Additions	1.8	-	-	-	1.8
Disposals	(6.0)	-	-	-	(6.0)
At 31 January 2026	10.0	1.0	4.3	4.5	19.8
Amortisation
At 1 February 2024	7.5	0.5	4.3	4.3	16.6
Charge for the year	0.9	0.2	-	-	1.1
Disposals	-	-	-	-	-
At 31 January 2025	8.4	0.7	4.3	4.3	17.7
Charge for the year	1.0	0.3	-	-	1.3
Disposals	(6.0)	-	-	-	(6.0)
At 31 January 2026	3.4	1.0	4.3	4.3	13.0
Carrying amount
At 31 January 2025	5.8	0.3	-	0.2	6.3
At 31 January 2026	6.6	-	-	0.2	6.8

Acquired intangible assets are made up of the separately identified intangibles acquired with the purchase of Next Control Systems in May 2019 and those acquired with the purchase of Checkit LLC in February 2021.

Impairment testing for goodwill

The Group identifies cash-generating units (CGUs) at the operating company level, as this represents the lowest level at which cash inflows are largely independent of other cash inflows. Goodwill acquired in a business combination is allocated, at acquisition, to the groups of CGUs that are expected to benefit from that business combination.

Goodwill relates to the acquisition of Checkit UK Limited in May 2019 and of Checkit LLC in February 2021. The goodwill in relation to Checkit UK Limited has been fully impaired.

Goodwill values have been tested for impairment by comparing them against the "value in use" in perpetuity of the relevant CGU group. The value in use calculations were based on projected cash flows, derived from the latest forecasts prepared by management and budgets approved by the Board, discounted at CGU specific, risk adjusted, discount rates to calculate their net present value.

Key assumptions used in "value in use" calculations

The calculation of "value in use" is most sensitive to the CGU specific operating and growth assumptions that are reflected in management forecasts for the five years to January 2031. CGU specific operating assumptions are applicable to the forecasted cash flows and relate to revenue forecasts and forecast operating margins in each of the operating companies and are based on the strategic plans for the Group. Long-term growth rates are capped at 1%.

The revenue growth rates used in the cash flow forecast are based on management's expectations of the future opportunities for the Checkit platform and the ability to upsell to existing customers on a global basis, including the planned US expansion. The forecasts include the costs associated with delivering the Checkit platforms, which are directly linked to the forecast sales growth.

Discount rates are based on estimations of the assumptions that market participants operating in similar sectors would make, using the Group's economic profile as a starting point and adjusting appropriately. Sensitivity to the discount rate has been applied to evaluate impairment testing using discount rates ranging from 25% to 50%.

The carrying value of goodwill in relation to the acquisition of Checkit LLC has not identified any impairment.

8. Non-GAAP performance measures

A reconciliation of non-GAAP performance measures to reported results is set out below:

Profit measures - EBITDA

	2026 £m	2025 £m
EBITDA	0.3	(2.3)
Depreciation and amortisation	(1.6)	(1.5)
Share-based payment charge	(0.2)	(0.1)
Non-recurring or special items	(1.1)	(0.5)
Operating loss for the year	(2.6)	(4.4)

 

END