REG - Crimson Tide PLC - Preliminary Results <Origin Href="QuoteRef">CTID.L</Origin>

Crimson TideAnnouncement

02/04/2015 07:12

RNS Number : 2520J
Crimson Tide PLC
02 April 2015
Crimson Tide plc
Preliminary Announcement of Results to 31 December 2014
Crimson Tide plc ("Crimson Tide" or "the Company"), a leading service provider of mobility solutions for business, is pleased to announce its unaudited preliminary results for the year ended 31 December 2014. 
Financial Highlights

 Profit Before Tax ahead of expectations at 84k (2013: 20k) 
 Strong cash generation
 Net funds at year end of 180k (2013: Net debt 46k)
Operational Highlights
 Contracted subscribers at record levels
 Landmark global agreement signed with major food & beverage company
 Further significant advances in our mpro5 software
Barrie Whipp, Executive Chairman of Crimson Tide, commented: 
"Undoubtedly 2014 was our most significant year. With record subscriber numbers and excellent cash generation we are investing in an ever improving pipeline. We believe that mpro5 has evolved to be a true leader as a mobility platform in a wide range of markets."
Enquiries: 
Crimson Tide plc
Barrie Whipp, Executive Chairman
 01892 542444


W.H. Ireland Limited
James Joyce / James Bavister
020 7220 1666 




Chairman's Statement
I am pleased to report on Crimson Tide's performance for the year to 31 December 2014. Undoubtedly this was the most significant year in our history. In terms of contracted subscribers we reached record levels and this translated into profitability, real cash generation and visible forward revenues. mpro5 has reached new levels of power, sophistication and scalability. 
We were delighted with the landmark agreement with the major food and beverage company signed in September last year. This contract is truly global in its scope and rollout has already taken place in Australia, with Germany and North America next on our schedule. mpro5 is being used as the default Estimated Time of Arrival and Proof of Delivery system worldwide for this household name company. 
mpro5 underwent several new releases in the year, and the efficiency of our platform gives us the ability to deliver scalable solutions on the Microsoft Azure platform. Our system is now available in a number of languages with more on the way. The Azure platform gives us the availability to deliver globally and we aim to capitalize on the opportunity we have, including looking at geographic expansion, through partner channels. We have added a wide range of new functionality on the mobile devices and it is testament to the robustness of the platform that new smartphone, tablet and phablet devices work seamlessly with the software. A major upgrade to our operating websites is planned in 2015, where we will be using the latest MVC web technology to give our clients true cutting edge scheduling, reporting and alerting functionality with new graphic representations. 
We signed an exclusive distribution partnership in Ireland with Vodafone and the first transaction completed was for one of Ireland's best known companies, Joseph Brennan (Bread) Ltd. Brennan's is one of Ireland's most recognisable brands, and we are delighted that the delivery of their products is managed with mpro5. The system enables delivery drivers to eliminate paper and enhance the customer experience. We are hopeful that the Vodafone partnership will bear more fruit this year.
Continuing in Ireland, we have further enhanced our system for people with haemophilia for St James' hospital. The system was converted to the cross platform mpro5 system, and working with St James' we were able to add useful questionnaires including some specifically designed for children.
We have also continued to develop our system for people with autism. The system is currently being rolled out to its second geographic location in Cheshire, and we have interest in the system from a number of police constabularies. 
Healthcare continues to give us a range of exciting opportunities, including asset scanning in hospitals as well as designing question flow based systems that can be used on a wider scale. The global conversation with the food and beverage client has given us confidence that the Company can play a part on the world stage. The Microsoft Azure platform gives us the infrastructure, scalability and internationalisation possibilities that allow us into markets that were not available to us a few years ago.
Financially, we produced creditable results. Our turnover was similar to that in the previous year, with a small effect due to the Euro Sterling exchange rate, but Profit before Tax increased fourfold. We still have tax losses brought forward and have cash facilities to expand.
As a company that finances equipment and development in advance, a strong indicator of our performance is cash in hand and net cash. I was very pleased that while repaying 120k of our HSBC loan we still generated net cash into the business. Early in 2015 we also secured financing facilities with Lombard Technical Services which allowed us to repay the HSBC loan in full. Available cash and facilities stands at c 750k with only 240k due to Lombard.
We have been working with an insurable risks version of mpro5 in supermarkets for some time and whilst these transactions are, by their nature, subject to pilot agreements we remain confident that once the mpro system has been successfully rolled out there is a possibility that we become the de facto standard in respect of insurance claim defence systems within the retail environment. This is but one example - opportunities in our mobility space are almost unlimited. We continue to become involved in ever larger projects and believe this trend will continue.
During the second half of 2014 we worked on tailoring mpro5 for the collection of data from patients and clinicians in respect of the outbreaks of pandemics, we are hopeful of further progress in this area in 2015. 
We continue to work on larger opportunities and we are finding that mpro5 resonates at the large enterprise level as well as with SMEs. 
I am very pleased that we are well placed in terms of our banking and finance relationship with NatWest and Lombard. Whilst we have cash available to fund the subscriber growth planned, our strategy is to match fund subscriber agreements and Lombard have done a sterling job in structuring facilities to meet our requirements.
We have been fortunate to have the commitment of our loyal and talented staff. I am very appreciative of their efforts and offer my thanks to them.
In late 2014, we agreed to add Sam Roberts to our management team as Sales & Marketing Director. Sam joined us in late February 2015 and we are already seeing an enhanced pipeline from his efforts. Rowley Ager decided he had reached his retirement age at our last Board Meeting and has been replaced as a Non-Executive Director by Robert Todd. I thank Rowley sincerely for his service since becoming a Director when we floated on AIM. Robert is a shareholder and has been a friend of the Company for many years. I welcome Robert and Sam to the Board.
Barrie R. J. Whipp
Executive Chairman
2nd April 2015


Operating and Financial Review
I welcome the opportunity to report on our results for the year to 31 December 2014 and review the performance of the business during this period.
OPERATING REVIEW
Over recent years, we have progressively reduced non-core activities to focus on providing our own software to a range of businesses. In 2014, Crimson Tide's mpro5 solution really came of age and we are now trading at a new level, with the opportunity to not only close more deals, but also the potential to win bigger contracts with large organisations. The contract wins we have announced throughout the year, exemplified by our global agreement with one of the world's largest food companies, have benefitted profitability to some extent in 2014, but the terms of our subscription model mean that these deals will generate greater returns in 2015 and beyond.
2014 also marks a transformation in our customers' recognition of the financial returns they benefit from by using mpro5. Previously our initial sales effort required us to explain in detail the productivity gains and efficiencies that could be realised by using mpro5 on a hand-held smartphone or tablet device. Nowadays, the wide-spread use of these powerful devices means customers immediately understand where and how they will generate a significant return from an mpro5 solution.
During 2014, we have continued with our strategy of investing significant time and effort throughout the year to regularly upgrade and enhance mpro5's functionality for both the mobile client and back-end websites. This has proved successful as we have continued to see subscription contracts with existing customers renewed or extended throughout the year, supporting our belief that once mpro5 becomes an integral part of a customer's day to day processes, an alternative solution is rarely considered. Currently valued at less than 0.5m in our balance sheet, our mpro5 intangible asset, has enabled us to accumulate future contracted revenues of over 2m; a multiple expected to continue to increase.
Finally a brief tribute to all Crimson Tide's employees. The challenges referred to above placed greater pressure and responsibility on every member of staff. They responded accordingly and over the year have ensured that our customers' requirements are fully understood and catered for wherever possible. Their teamwork has permitted us to maintain a lower level of monthly operating expenditure with improved operational efficiency, while building on our reputation for first rate support. We have created a solid platform on which we continue to build a very successful business. 
FINANCIAL REVIEW
Turnover in 2014 at 1.21m was broadly similar to last year's 1.27m but with overall gross margin increasing to 86% in 2014 from 80% in 2013 due to proportionately more subscription business, gross profit for the year totalled 1.04m (2013: 1.02m). 
After deducting overheads of 714k (2013: 727k), depreciation/amortisation of 238k (2013: 253k) and lower interest costs, we are able to report a Profit Before Tax of 84k, four times higher than the 20k achieved in 2013.
The Group generated strong net cashflows of 439k (2013: 376k) from its operating activities. After funding new devices for subscribers, investing in mpro5, and reducing debt by 119k, we increased our net cash by 107k. Crimson Tide finished the year with Net Funds of 180k versus Net Debt of 46k in 2013. Our cash balance at the year-end of 239k has since increased as a result of significant receipts from trade debtors and the new facilities negotiated with Lombard Technical Services. 
There have been no changes to Crimson Tide's accounting policies during 2014. These can either be found in the notes to the published 2013 Consolidated Financial Statements or the 2014 Financial Statements when published in a few weeks' time. .
PRINCIPAL RISKS AND UNCERTAINTIES
The Board of Directors and management team continually review key performance indicators and business trends, as well as regular financial information, to help identify future risks and uncertainties in the business. 
The principal risks and uncertainties facing the business remain unchanged as they potentially stem from attempts to accelerate growth, for example by increasing spending on marketing, if this utilises cash resources that are then not available to fund devices for new subscribers. The level of risk however, is now significantly reduced. Operating cashflows generated by our growing contracted subscriber book provide increasing amounts of cash to re-invest in the business. Furthermore, the new facilities offered by NatWest and Lombard mentioned in the Executive Chairman's statement, provide additional means to finance new devices and accelerate growth.
FUTURE PROSPECTS
The outlook for Crimson Tide has never been more positive. The achievements in 2014, together with the resources available to us, mean we are very well placed to invest in growth. The operational gearing in our business model means that a significant proportion of increased contracted revenues will continue to improve our long-term profitability. The Board remain very encouraged by the prospects for the business.
Stephen Goodwin
Finance Director
2nd April 2015


Crimson Tide plc
Unaudited Consolidated Income Statement


Group


Year ended December 2014

Year ended December 2013


000

000
Revenue 

1,210

1,268
Cost of Sales

(166)

(250)





Gross Profit

1,044

1,018
Administration expenses

(714)

(727)





Earnings before interest, tax, depreciation & amortisation

330

291
Depreciation & amortisation

(238)

(253)





Profit from operations

92

38
Interest income

-

-
Finance costs

(8)

(18)





Profit before taxation

84

20
Tax 

-

-










Profit for the year attributable to equity holders of the parent

84

20





Earnings per share (Note C)




Basic and diluted earnings per Ordinary share (pence) 

0.02

0.00
Unaudited Consolidated Statement of Comprehensive Income

Group

Year ended December 2014

Year ended December 2013

000

000
Profit for the year
84

20
Other comprehensive income/(loss) for the year:



Exchange differences on translating foreign operations
(9)

3




Total comprehensive profit for the year 
75

23


Crimson Tide plc
Unaudited Statement of Financial Position 

Group

As at 31 December 2014

As at 31 December 2013


000

000

Fixed Assets




Intangible assets
1,260

1,224

Equipment, fixtures & fittings
339

417


1,599

1,641

Current Assets




Inventories
30

48

Trade and other receivables
563

496

Cash and cash equivalents
239

132


832

676






Total Assets
2,431

2,317






Equity and liabilities




Equity attributable to equity holders of the parent




Share capital
7,335

7,335

Capital redemption reserve
49

49

Share premium
1,090

1,090

Other reserves
426

435

Reverse acquisition reserve
(5,244)

(5,244)

Retained earnings
(1,786)

(1,870)


1,870

1,795

Liabilities




Amounts falling due within one year
561

463

Amounts falling due after more than one year
-

59

Total liabilities
561

522






Total equity and liabilities
2,431

2,317


 

 



Crimson Tide plc
Unaudited Statement Of Changes In Equity 
Group 
Share capital
Capital redemption reserve
Share premium
Other reserves
Reverse acquisition reserve
Retained earnings
Total

000
000
000
000
000
000
000
Balance as at 1 January 2013
7,335
49
1,090
432
(5,244)
(1,890)
1,772
Profit for the year





20
20
Translation movement



3


3
Balance as at 31 December 2013
7,335
49
1,090
435
(5,244)
(1,870)
1,795
Profit for the year





84
84
Translation movement



(9)


(9)
Balance as at 31 December 2014
7,335
49
1,090
426
(5,244)
(1,786)
1,870


Crimson Tide plc
Unaudited Consolidated Cash Flow Statement 



Group



Year ended 
31 December 2014

Year ended 
31 December 2013



000

000
Cash flows from operating activities





Profit before taxation


84

20
Add back:





Amortisation of intangible assets


83

102
Depreciation of equipment, fixtures and fittings


154

151
Interest expense


8

18






Operating cash flows before movements in working capital


329

291
Decrease/(Increase) in inventories


18

(7)
(Increase)/Decrease in trade and other receivables


(67)

16
Increase in trade and other payables


159

76






Cash generated from operating activities


439

376






Taxes paid


-

-






Net cash generated from operating activities


439

376






Cash flows used in investing activities 





Purchases of fixed assets


(205)

(425)
Interest received


-

-






Net cash used in investment activities


(205)

(425)






Cash flows from financing activities





Interest paid


(8)

(18)
Net decrease in borrowings


(119)

(122)






Net cash from financing activities


(127)

(140)






Net increase/(decrease) in cash and cash equivalents


107

(189)






Net cash and cash equivalents at beginning of period 


132

321






Net cash and cash equivalents at end of period


239

132






Crimson Tide plc

Group

Year ended 
31 December 2014


Year ended 
31 December 2013 

000


000
Analysis of net funds:




Cash and cash equivalents
239


132
Bank overdraft
-


-






239


132





Other borrowing due within one year
(58)


(117)
Borrowings due after one year
-


(58)
Finance leases 
(1)


(3)





Net funds/(debt)
180


(46)





Notes to the Consolidated Financial Statements for the year ended 31 December 2014
A) Significant accounting policies 
a. Basis of preparation
The preliminary results for the period to 31 December 2014 are unaudited. The consolidated financial statements of Crimson Tide plc will be prepared and approved by the Directors in accordance with applicable law and International Financial Reporting Standards, incorporating International Accounting Standards (IAS) and Interpretations (collectively IFRSs) as endorsed by the European Union.
b. Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all of its subsidiaries.
On an acquisition, fair values are attributed to the Group's share of net assets. Where the cost of acquisition exceeds the values attributable to such net assets, the difference is treated as purchased goodwill, which is capitalised and subjected to annual impairment reviews. The results of acquired companies are brought in from the date of their acquisition.


c. Changes in accounting policy
No changes in accounting policies, including new or amended IFRSs, are expected to have an impact on the Company's financial results.
d. Revenue recognition
Subscription income and support and maintenance income is credited to turnover in equal monthly instalments over the period of the agreement. There is no recognition in the Consolidated Income Statement of the contracted value of future revenues.
B) Taxation
No corporation tax charges have been included in the consolidated accounts for the periods ended 31 December 2014 and 31 December 2013 due to the availability of tax losses.
C) Earnings per share

Group

Year ended
31 December 2014
Year ended
31 December 
2013
Basic and Diluted Earnings per share


Reported profit (000)
84
20
Reported earnings per share (pence)
0.02
0.00
The earnings per share has been calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of shares in issue calculated as follows:


Year ended
31 December 
2014
No.

Year ended
31 December 2013
No.
Weighted average number of ordinary shares:




Opening balance

445,486,234

445,486,234
Effect of share placing during the year

-

-
Weighted average number of ordinary shares

445,486,234

445,486,234





The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2014 or 31 December 2013. Statutory accounts for 2013, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors have reported on the 2013 accounts; their report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for 2014 which are prepared under accounting standards adopted by the EU will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting. The statutory accounts will be published on the Company's website www.crimsontide.co.uk by the end of May 2015.

This information is provided by RNS
The company news service from the London Stock Exchange
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