Checkit's SaaS platform is designed to bring visibility to the operations of businesses with dispersed, deskless workforces. Checkit is focused on driving adoption of its software and over the last year has invested to support its shift to a pure SaaS business model. Net proceeds of £20m from the recent placing will be used to accelerate growth plans, with the US a particular focus. In our view, consistent growth in recurring revenues and an expanding customer base should help to reduce the valuation discount to software peers.

On an EV/sales multiple of 1.6x for FY22e and 1.9x for FY23e, Checkit trades at a significant discount to the UK software sector (5.4x current year sales, 4.2x next year sales) and US SaaS peers (16.0x CY, 12.3x NY sales). If Checkit were to trade on the UK average for FY23e, it would be worth 70p per share. Key triggers to help Checkit attract a multiple more in line with SaaS peers include evidence that customers are signing up to use its software, existing customers are expanding their usage and non-recurring revenues are being converted to subscription services. 

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