Checkit — Contract expansions drive order intake

TMT

Checkit

Contract expansions drive order intake

H125 results

Software and comp services

12 September 2024

Price	23p
Market cap	£25m
Net cash (£m) at end H125		7.0

Shares in issue	108.0m
Free float	56%
Code	CKT

Primary exchange	AIM
Secondary exchange	N/A

Share price performance

%	1m	3m	12m
Abs	(11.5)	0.0	(11.5)
Rel (local)	(11.7)	(0.7)	(19.3)

52-week high/low

30.5p

18.5p

Business description

Checkit optimises the performance of people, processes and physical assets with its intelligent operations software. It is headquartered in Cambridge, UK, and has operations centres in Fleet, UK, and Tampa, US.

Next events

FY25 trading update

February 2025

Analyst

Katherine Thompson

+44 (0)20 3077 5700

tech@edisongroup.com

Edison profile page

Checkit is a research client of Edison Investment Research Limited

In H125, Checkit reported year-on-year growth in annual recurring revenue (ARR) of 9%, with strong order intake partially offset by higher churn. Existing customers contributed more than half of ARR growth, evidence of the land and expand strategy at work. The company maintains its short- and medium-term outlook, including its target to reach EBITDA break-even in FY27, with the narrowing H125 EBITDA loss confirming progress towards this. We maintain our ARR, revenue and EBITDA forecasts and reduce our cash forecasts to reflect one-offs and higher R&D investment.

Year end	Revenue (£m)	ARR (£m)	PBT* (p)	EPS* (p)	DPS (p)	EV/sales (x)
01/23**	10.3	11.5	(7.3)	(6.9)	0	1.7
01/24	12.0	13.3	(4.2)	(4.1)	0	1.5
01/25e	14.2	15.3	(3.8)	(3.5)	0	1.3
01/26e	16.9	17.5	(2.6)	(2.4)	0	1.1

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Continuing operations only.

H125 order intake up 38% y-o-y

In H125, Checkit reported ARR growth of 9% y-o-y to £13.8m, with new order intake of £1.2m (+38% y-o-y) partially offset by higher-than-average churn (gross revenue retention (GRR) was 95%). Revenue increased 16% y-o-y to £6.7m and the EBITDA loss reduced to £1.4m from £1.9m in H124. Net cash at the end of H125 was £7.0m. Net revenue retention (NRR) was 109% and more than half of ARR growth was from upselling and cross-selling to existing customers, as they expanded their use of Checkit’s technology to additional sites and added extra functionality, including the first sales of the recently launched Asset Intelligence module.

Outlook maintained for FY25

Management anticipates achieving consensus revenue and EBITDA forecasts for FY25 and believes it is on track to reach EBITDA break-even in FY27, with adequate cash resources to achieve this. We maintain our ARR, revenue and EBITDA forecasts for FY25–27 and reduce our net cash forecasts to reflect one-off costs in H125 and slightly higher capitalisation of development costs as the company focuses on product development.

Valuation: ARR growth to reduce the discount

On an EV/sales multiple of 1.3x for FY25e and 1.1x for FY26e, Checkit trades at a material discount to the UK software sector (3.1x current year sales, 2.8x next year sales) and US SaaS peers (5.8x current year, 5.0x next year). If Checkit were to trade on the UK average for FY25, it would be worth 47p per share and moving to trade in line with US SaaS peers would imply a valuation of 83p. We would expect the shares to re-rate as the company approaches break-even. Sustained ARR growth will be the key trigger for Checkit to attract a multiple more in line with SaaS peers, evidenced by customers signing up to use its software and existing customers expanding their usage.

Review of H125 results

Exhibit 1 summarises Checkit’s financial performance in H125. Management noted that trading was in line with its expectations.

Exhibit 1: H125 results highlights

£m	H125	H124	y-o-y
Revenue	6.7	5.7	16%
Gross profit	4.5	3.9	12%
Gross margin	68%	69%	-1pp
Adjusted EBITDA	(1.4)	(1.9)	-24%
Normalised operating profit	(2.2)	(2.5)	-11%
Reported operating profit	(2.7)	(2.7)	2%
Normalised PBT	(2.2)	(2.3)	-3%
Reported PBT	(2.7)	(2.5)	10%
Normalised net income	(2.3)	(2.3)	3%
Reported net income	(2.6)	(2.4)	10%
Normalised basic EPS (p)	(2.2)	(2.1)	3%
Reported basic EPS (p)	(2.4)	(2.3)	4%
Net cash	7.0	12.8	-45%
Period end ARR	13.8	12.6	9%
Recurring revenue/total revenue	94%	95%

Source: Checkit

Revenue increased 16% y-o-y, while ARR increased 9% y-o-y. Gross profit increased by 12%, with the gross margin reducing by 1pp to 68% as the company incurred set-up costs in Australia and New Zealand for one of its largest contracts. Operating costs before depreciation and amortisation totalled £5.9m, broadly in line with H124. Overall, this resulted in the adjusted EBITDA loss reducing from £1.9m in H124 to £1.4m in H125 and normalised operating loss reducing from £2.5m in H124 to £2.2m in H125. The company reported two one-off items – £0.2m in costs for the HMRC VAT recoverability case (which the company won) and £0.2m in costs relating to restructuring and the bid for Crimson Tide (since withdrawn) – and share-based payments of £0.1m. After these charges, the company reported an operating loss of £2.7m, flat versus H124.

Net cash reduced from £12.8m at the end of H124 and £9.0m at the end of FY24 to £7.0m at the end of H125. Benefiting from a working capital inflow of £1.2m, the company reported a £0.5m net cash outflow from operating activities, capex of £0.2m, capitalised development costs of £1.2m and lease payments of £0.1m, resulting in a total reduction in cash of £2.0m in H125.

Business update

ARR order intake £1.2m (+38% y-o-y)

The ARR of orders received in H125 was £1.2m, up 38% y-o-y. The company noted that more than half of this came from cross-selling and upselling to existing customers and the remainder from sales to new customers and price increases.

During H125, ARR increased by £0.5m from £13.3m at the end of FY24 to £13.8m at the end of H125 and was 9% higher year-on-year. The company noted that NRR was 109%, compared to 113% in H124 and 111% in FY24.

The company saw GRR of 95%, with churn of 5% equating to lost ARR of c £0.7m. This is a higher level of churn than in FY24, when it ran at c 1%. Churn was generated from a) a retail customer not renewing a non-core managed service and b) several small low-margin hospitality customers not renewing. We would expect churn to return to more normalised levels from H225.

The company continues to focus on expansion in the US market, growing ARR by 13% y-o-y to £3.7m (27% of group ARR).

Upselling and cross-selling more than half of ARR growth

In April, Checkit signed a contract with an existing customer, an integrated energy company (we believe BP), worth £252k over three years (c £84k per year). This is to provide real-time operations management capability to 50 franchisees in the UK and is being installed in tranches over FY25. Franchises for this customer represent double the opportunity compared to owned locations globally. In July, the contract was extended to 150 additional franchises for a further £250k per year, to be installed in tranches over 32 months.

In April, Checkit also announced that it had signed contracts with a combined minimum value of £165k over three years with a multinational food service company (we believe Compass) for the provision of connected automated monitoring and connected workflow management products to end-users in four additional locations.

In June, the company announced a contract expansion with Octapharma Plasma in the US. Octapharma is expanding its use of the Checkit platform by integrating tactical temperature monitoring units into its existing monitoring system. The contract is worth £718k over three years (c £239k per year).

First Asset Intelligence customers signed up

The recently launched Asset Intelligence module applies advanced analytics and machine learning to IoT data to analyse the condition of monitored appliances to predict issues before they escalate, identify operational inefficiencies and provide greater visibility of asset performance. In June, Checkit signed its first customer for this module and has since signed a second customer.

Outlook and changes to forecasts

The board expects to meet consensus forecasts for FY25. It continues to believe that Checkit will reach EBITDA break-even in FY27 (CY26) and is confident the company has sufficient resources to achieve this. We maintain our ARR, revenue and EBITDA forecasts. Based on the level of capitalised development costs in H125, we have increased our annual forecasts for capitalised development costs from £1.6m to £2.0m in FY25. The combination of one-off costs and higher capitalised development costs results in a lower net cash forecast for FY25, reducing from £5.5m to £5.0m, as well as reducing forecasts for FY26 and FY27.

Exhibit 2: Changes to forecasts

£m	FY25e				FY26e				FY27e
£m	Old	New	Change	y-o-y	Old	New	Change	y-o-y	Old	New	Change	y-o-y
Revenues	14.2	14.2	0.1%	18.1%	16.9	16.9	0.1%	19.2%	19.0	19.0	0.1%	12.3%
Gross profit	9.7	9.7	-0.2%	21.1%	11.7	11.7	0.1%	20.3%	13.6	13.6	0.1%	16.4%
Gross margin	68.5%	68.3%	-0.2%	1.7%	69.0%	69.0%	0.0%	0.7%	71.5%	71.5%	0.0%	2.5%
EBITDA	(2.3)	(2.3)	0.1%	-32.7%	(0.9)	(0.9)	0.1%	-59.0%	0.8	0.8	0.1%	-190.0%
EBITDA margin	-16.1%	-16.1%	0.0%	12.2%	-5.6%	-5.6%	0.0%	10.6%	4.5%	4.5%	0.0%	10.0%
Normalised operating profit	(3.8)	(3.9)	2.7%	-17.3%	(2.7)	(2.8)	3.7%	-27.0%	(1.2)	(1.2)	0.0%	-59.3%
Normalised operating margin	-26.7%	-27.4%	-0.7%	11.7%	-16.2%	-16.8%	-0.6%	10.6%	-6.1%	-6.1%	0.0%	10.7%
Reported operating profit	(4.0)	(4.6)	16.1%	-9.3%	(2.9)	(3.1)	4.8%	-33.5%	(1.4)	(1.4)	2.9%	-54.7%
Reported operating margin	-28.1%	-32.7%	-4.5%	9.8%	-17.4%	-18.2%	-0.8%	14.4%	-7.1%	-7.4%	-0.2%	10.9%
Normalised PBT	(3.4)	(3.8)	11.9%	-10.4%	(2.5)	(2.6)	4.0%	-30.3%	(1.0)	(1.0)	-0.1%	-63.8%
Reported PBT	(3.6)	(4.5)	26.3%	-2.2%	(2.7)	(2.9)	5.1%	-36.4%	(1.2)	(1.2)	3.4%	-58.5%
Normalised net income	(3.4)	(3.8)	11.9%	-14.5%	(2.5)	(2.6)	4.0%	-30.3%	(1.0)	(1.0)	-0.1%	-63.8%
Reported net income	(3.6)	(4.4)	23.5%	-2.2%	(2.7)	(2.9)	5.1%	-35.0%	(1.2)	(1.2)	3.4%	-58.5%
Normalised basic EPS (p)	(3.1)	(3.5)	11.9%	-14.5%	(2.3)	(2.4)	4.0%	-30.3%	(0.9)	(0.9)	-0.1%	-63.8%
Reported basic EPS (p)	(3.3)	(4.1)	23.5%	-2.2%	(2.5)	(2.7)	5.1%	-35.0%	(1.1)	(1.1)	3.4%	-58.5%
Net debt/(cash)	(5.5)	(5.0)	-8.8%	-44.1%	(4.0)	(3.5)	-12.8%	-30.4%	(4.6)	(3.8)	-18.3%	8.3%
ARR	15.3	15.3	0.1%	15.1%	17.5	17.5	0.1%	14.5%	20.1	20.1	0.1%	14.5%

Source: Edison Investment Research

Valuation

Exhibit 3: Peer sales multiples

	EV/Sales (x)		Revenue growth (%)
	CY	NY	CY	NY
Checkit	1.3	1.1	18.1	19.2
UK software - average	3.1	2.8	10.7	11.0
UK software - median	2.4	2.3	9.6	9.3
US SaaS software - average	5.8	5.0	12.8	13.0
US SaaS software - median	4.9	4.4	12.0	11.9

Source: Edison Investment Research, LSEG Data & Analytics (at 10 September)

In the table above, we summarise the EV/sales multiples for the UK software sector and US SaaS software companies. Checkit continues to trade at a discount to both groups. In our view, consistent growth in ARR combined with progress towards profitability should reduce this discount.

Once Checkit reaches EBITDA break-even, operational leverage should support rapid margin expansion. If Checkit were to trade at the average sales multiple for the UK software sector, this would imply a share price of 46.7p. We have performed a reverse discounted cash flow analysis to ascertain what growth/profitability would be required to reach the 46.7p. Using a WACC of 8%, a long-term growth rate of 3% and our forecasts to FY27, we estimate that trending down revenue growth from FY28 to FY33 (a CAGR of 8.3% in FY27–34e) and growing EBITDA margins to 21% by FY34 would be required to reach a valuation of 46.7p per share. If the company could maintain revenue growth at the same level as FY27, we estimate that EBITDA margins could increase to 32% by FY34 and EBIT margins to 23%, resulting in a per-share value of 90.6p.

Exhibit 4: Financial summary

	£'m	2019	2020	2021	2022	2023	2024	2025e	2026e	2027e
31-January		IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS
INCOME STATEMENT
Revenue		1.0	9.8	13.2	8.4	10.3	12.0	14.2	16.9	19.0
Cost of Sales		(1.0)	(7.2)	(6.7)	(3.8)	(3.8)	(4.0)	(4.5)	(5.2)	(5.4)
Gross Profit		0.0	2.6	6.5	4.6	6.5	8.0	9.7	11.7	13.6
EBITDA		(2.3)	(4.9)	(2.5)	(5.6)	(6.4)	(3.4)	(2.3)	(0.9)	0.8
Normalised operating profit		(4.4)	(6.5)	(3.1)	(6.1)	(7.4)	(4.7)	(3.9)	(2.8)	(1.2)
Amortisation of acquired intangibles		(0.1)	(1.0)	(1.3)	(1.4)	(0.5)	(0.1)	0.0	0.0	0.0
Exceptionals		0.0	(1.7)	(0.9)	(1.0)	(4.3)	(0.1)	(0.5)	0.0	0.0
Share-based payments		0.0	0.0	0.0	0.0	(0.2)	(0.2)	(0.2)	(0.2)	(0.2)
Reported operating profit		(4.5)	(9.2)	(5.3)	(8.5)	(12.4)	(5.1)	(4.6)	(3.1)	(1.4)
Net Interest		0.0	0.1	0.0	0.0	0.1	0.5	0.1	0.2	0.2
Joint ventures & associates (post tax)		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Exceptionals		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Profit Before Tax (norm)		(4.4)	(6.4)	(3.1)	(6.1)	(7.3)	(4.2)	(3.8)	(2.6)	(1.0)
Profit Before Tax (reported)		(4.5)	(9.1)	(5.3)	(8.5)	(12.3)	(4.6)	(4.5)	(2.9)	(1.2)
Reported tax		0.0	0.1	0.3	0.3	0.3	0.1	0.1	0.0	0.0
Profit After Tax (norm)		(4.4)	(6.4)	(3.1)	(6.1)	(7.5)	(4.4)	(3.8)	(2.6)	(1.0)
Profit After Tax (reported)		(4.5)	(9.0)	(5.0)	(8.2)	(12.0)	(4.5)	(4.4)	(2.9)	(1.2)
Minority interests		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Discontinued operations		8.6	89.8	0.6	1.4	(0.3)	0.0	0.0	0.0	0.0
Net income (normalised)		(4.4)	(6.4)	(3.1)	(6.1)	(7.5)	(4.4)	(3.8)	(2.6)	(1.0)
Net income (reported)		4.1	80.8	(4.4)	(6.8)	(12.3)	(4.5)	(4.4)	(2.9)	(1.2)

Basic ave. number of shares outstanding (m)		178	161	62	68	108	108	108	108	108
EPS - basic normalised (p)		(2.5)	(4.0)	(5.2)	(9.0)	(6.9)	(4.1)	(3.5)	(2.4)	(0.9)
EPS - diluted normalised (p)		(2.5)	(4.0)	(5.2)	(9.0)	(6.9)	(4.1)	(3.5)	(2.4)	(0.9)
EPS - basic reported (p)		2.3	50.2	(7.2)	(10.0)	(11.4)	(4.2)	(4.1)	(2.7)	(1.1)
Dividend (p)		0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00

Revenue growth (%)		N/A	880.0	34.7	(-36.4)	22.6	16.5	18.1	19.2	0.0
Gross Margin (%)		0.0	26.5	49.2	54.8	63.1	66.7	68.3	69.0	71.5
EBITDA Margin (%)		(230.0)	(50.0)	(18.9)	(66.7)	(62.1)	(28.3)	(16.1)	(5.6)	4.5
Normalised Operating Margin		(440.0)	(66.3)	(23.5)	(72.6)	(71.8)	(39.2)	(27.4)	(16.8)	(6.1)

BALANCE SHEET
Fixed Assets		5.0	8.5	6.8	8.3	4.9	5.8	6.7	7.0	7.0
Intangible Assets		2.9	7.3	6.0	7.3	4.0	5.0	5.8	6.2	6.3
Tangible Assets		1.7	1.2	0.8	1.0	0.9	0.8	0.9	0.8	0.7
Investments & other		0.4	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Current Assets		19.5	19.8	17.5	29.0	22.5	17.3	13.1	11.0	10.9
Stocks		4.3	1.7	1.1	1.8	2.4	3.8	3.4	2.7	1.9
Debtors		5.1	3.4	4.4	2.9	4.5	4.5	4.7	4.9	5.2
Cash & cash equivalents		10.1	14.3	11.5	24.2	15.6	9.0	5.0	3.5	3.8
Other		0.0	0.4	0.5	0.1	0.0	0.0	0.0	0.0	0.0
Current Liabilities		(7.9)	(5.6)	(5.9)	(5.7)	(7.8)	(8.0)	(8.9)	(9.7)	(10.6)
Creditors		(7.6)	(5.1)	(5.6)	(5.2)	(7.5)	(7.8)	(8.7)	(9.5)	(10.4)
Tax and social security		(0.3)	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Short term borrowings		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other		0.0	(0.5)	(0.3)	(0.5)	(0.3)	(0.2)	(0.2)	(0.2)	(0.2)
Long Term Liabilities		(0.3)	(1.3)	(0.8)	(0.6)	(0.7)	(0.5)	(0.5)	(0.5)	(0.5)
Long term borrowings		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other long term liabilities		(0.3)	(1.3)	(0.8)	(0.6)	(0.7)	(0.5)	(0.5)	(0.5)	(0.5)
Net Assets		16.3	21.4	17.6	31.0	18.9	14.6	10.4	7.7	6.8
Minority interests		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Shareholders' equity		16.3	21.4	17.6	31.0	18.9	14.6	10.4	7.7	6.8

CASH FLOW
Op Cash Flow before WC and tax		(2.3)	(4.9)	(2.5)	(5.6)	(6.4)	(3.4)	(2.3)	(0.9)	0.8
Working capital		(0.5)	(1.0)	0.3	0.2	0.1	(1.2)	1.1	1.4	1.2
Exceptional & other		9.1	5.3	(0.7)	0.4	(0.2)	(0.1)	(0.5)	0.0	0.0
Tax		(0.5)	(0.5)	0.0	0.1	0.1	0.0	0.1	0.0	0.0
Net operating cash flow		5.8	(1.1)	(2.9)	(4.9)	(6.4)	(4.7)	(1.6)	0.5	2.1
Capex		(2.2)	(0.3)	(0.3)	(2.3)	(2.2)	(2.1)	(2.2)	(2.0)	(1.8)
Acquisitions/disposals		1.3	84.2	0.3	0.0	0.2	0.0	0.0	0.0	0.0
Net interest		0.0	0.1	0.0	0.0	0.1	0.5	0.1	0.2	0.2
Equity financing		0.0	(77.9)	0.5	20.2	0.0	0.0	0.0	0.0	0.0
Dividends		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other		0.0	(0.8)	(0.4)	(0.3)	(0.3)	(0.3)	(0.3)	(0.2)	(0.2)
Net Cash Flow		4.9	4.2	(2.8)	12.7	(8.6)	(6.6)	(3.9)	(1.5)	0.3
Opening net debt/(cash)		(5.2)	(10.1)	(14.3)	(11.5)	(24.2)	(15.6)	(9.0)	(5.0)	(3.5)
FX		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other non-cash movements		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Closing net debt/(cash)		(10.1)	(14.3)	(11.5)	(24.2)	(15.6)	(9.0)	(5.0)	(3.5)	(3.8)

Source: Checkit, Edison Investment Research

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No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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General disclaimer and copyright

Australia

New Zealand

United Kingdom

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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