REG - Crimson Tide PLC - Interim Results
27/09/2022 07:00
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RNS Number : 7033A Crimson Tide PLC 27 September 2022
27 September 2022
Crimson Tide plc
Interim results for the six months ended 30 June 2022
Crimson Tide plc ("Crimson Tide" or "the Company"), the provider of the mpro5 solution is pleased to announce its unaudited interim results for the six months ended 30 June 2022.
Financial headlines
· Revenue increase of 15.3% to £2.3m (H1 2021: £2.0m)
· Annual recurring revenue (ARR) increase of 22.7% to £4.4m (H1
2021: £3.6m)
· Gross margin of 84.5% (H1 2021: 84.9%)
· EBITDA loss post-investment programme of £(0.3)m (H1 2021:
+£0.3m)
Operational highlights
· Consistent growth in core recurring revenue
· Contract wins since period end will contribute to H2 ARR
· Resilient gross margins
· Continued investment in product development, marketing activity
and US opportunity using funds raised
· Substantial progress on single-platform strategy
Barrie Whipp, Founder and Chairman, commented,
"Our focus on high-margin, long-term contracted revenue continues, and we are
on track with our key internal metrics. Our single platform strategy should
allow us to add further annual recurring revenue in wider vertical and
geographic sectors."
About the Company
Crimson Tide's mpro5 platform allows organisations to complete simple or
complex processes and compliance obligations on any modern smart device. The
Company's high-margin, long-term contracted revenues model underpins growth in
a wide range of vertical and geographic markets. mpro5 is provided as a fully
interactive service, including reports, alerting, KPIs and sensor data, as
well as integrating with clients' back-end systems. mpro5 quickly embeds
itself into our clients' operations.
Enquiries:
Crimson Tide plc +44 1892 542444
Barrie Whipp / Jacqueline Daniell
finnCap Ltd (Nominated Adviser and Broker) +44 20 7220 0500
Corporate Finance: Julian Blunt / James Thompson
Corporate Broking: Andrew Burdis
Alma PR (Financial PR) +44 7780 901979
Josh Royston
Chairman's Statement
The half year to 30th June represented a one-year milestone from our fundraise
in 2021. The purpose of the raise was to prosecute opportunities across our
business, and I am pleased to report good progress in those areas.
It is important firstly to highlight mpro5's core enterprise business, which
continues to add high-quality, high-margin business on long-term contracts.
Our core ARR metric moved ahead well year on year, up 22.7% to £4.4m (H1
2021: £3.6m). Our performance at the revenue line was equally solid, with
growth coming from a range of existing, expanding customer requirements and
new transactions. Contract wins were particularly pleasing in continental
Europe under our Master Services Agreement with Compass Group. Our high margin
ensures that much of the revenue translates to cash, with mpro5 revenues
bolstering our opportunities to invest in growth. Our bottom line will
continue to be impacted in the short term by higher than normal investment
expenditure utilising the funds raised in 2021, albeit slightly less than
expected in the period with some delayed marketing expenditure and delays in
recruitment.
Our investment in our "one platform, many apps" strategy is progressing very
well. This platform will not only support mpro5 but also future development of
our other applications in small business, healthcare and other vertical
markets. A new web client will be rolled out in the coming months, followed by
a new version of our mpro5 mobile app in Q1 2023. These technologies will
fast-track further developments to market, using the latest technologies and a
single repository code base for the first time.
Our app for small businesses is currently undergoing its first iteration app
store release. Extensive feedback has informed the functionality of this
release and will flow through into incremental releases in the coming year. We
believe the small business market we addressed when we started our mobile
solutions will find the app store version compelling. Our experience marketing
this application gives us insight into opportunities for mpro5 and our new
healthcare app, which is next in line in our one platform, many app strategy.
Our business in the United States is now established with four full-time staff
in Raleigh, NC. A pipeline has been established, and we are working hard to
expand this and close our first contracts. Our US operation is also
progressing well with our relationship with Cisco, where we are demonstrating
mpro5's IoT capabilities.
It is appropriate to mention that two significant contract wins closed in the
three weeks following the half year. These contracts have been under
discussion for some months and will positively impact the second half and
notably the ARR. It is also important to mention that, in August, Jacqueline
Daniell assumed the role of Group CEO, and I am very optimistic about further
progress under Jacqui's leadership of the executive team.
Our focus on high-margin, long-term contracted revenue continues, and we are
on track with our key internal metrics. Our single platform strategy should
allow us to add further ARR in wider vertical and geographic sectors.
Barrie Whipp
Founder and Chairman
27 September 2022
Chief Executive's Statement
Crimson Tide's performance during the first half of 2022 has really begun to
illustrate the business growth we have planned. Although we are still only in
the relatively early stages of post-fundraise investment deployment, a lot has
been achieved and solid foundations set allowing all areas of the business to
effectively scale.
Investment in the Development Roadmap has already achieved technology
scalability. Working inside a single flexible platform means that we can
support new applications for new markets, currently manifested in the mpro5
platform being made available to smaller businesses. Investment in the product
means we can offer the features, functionality and usability that our
customers want. Our internal teams can work more efficiently and empower users
thus also scaling the service element of our offering. Insights and metrics
measuring the customer experience of our product and service have long
demonstrated loyalty and suggest a brand of world-class potential. This year's
growth in revenue, long-term contract commitments and low churn are the recent
validations of the value of the product.
Continued investment in marketing has resulted in a significant increase in
sales pipelines, both in the UK and the US. An initial outbound marketing
focus at the beginning of the year launched a digital program of activity,
content creation and partner collateral. Later in the year, this was
complemented with an inbound approach, resulting in go-to-market strategies
for a range of business sectors and territories. The overall effect has seen
specific deal activity being directly attributed to marketing investment.
The outlook is extremely promising. A focused organisation with a unique
product and service combination, a strong pipeline and visibility of revenue
means we can be confident about reaching our targets and longer-term
ambitions.
Jacqueline Daniell
Group CEO
27 September 2022
Financial Review
Financial indicator Six months ended 30 June 2022 Six months ended 30 June 2021 Year ended 31 December 2021
£'000
£'000
£'000
Revenue 2,324 2,015 4,114
Gross profit 1,964 1,711 3,483
EBITDA (344) 588 183
(Loss)/Profit before tax (860) 286 (582)
Annual recurring revenue (ARR) 4,368 3,600 3,804
Cash 3,731 6,596 5,736
Churn rate 1% 1.4% 2.4%
Revenue
Revenue increased by 15.3% compared to the corresponding period of 2021, while
Annual Recurring Revenue (ARR) increased by 22.7% to £4.4m. Contracted
long-term revenue exceeded 90% of total revenue and revenue churn remained
negligible. The geographic split of revenue remains consistent with the prior
year, with a UK weighting of 91% of revenue (H1 2021: 92%).
Cashflow and liquidity
Cash at the period-end was £3.7m (H1 2021: £6.6m). Operating cash flows
before movements in working capital for the period was an outflow of £376k
(H1 2021: £530k inflow). This outflow is in line with management expectations
and the Company's previous communication following the capital fundraise in
2021. The funds were utilised on additional marketing expenditure and
territorial expansion in North America to enable further revenue growth.
Lease liabilities
The company entered into a new office lease agreement at the beginning of
2022. This created a lease liability of £883k with a related Right-of-Use
asset. The lease liability will be settled, and the related asset depreciated,
over a 5-year period.
Intangible assets
Software development costs of £771k (H1 2021: £259k) were capitalised during
the period under review, while amortisation amounted to £203k (H1 2021:
£123k). The value of the capitalised software intangible asset at period-end
was £2.8m (H1 2021: £1.8m).
Other intangible assets related to goodwill, website development costs and
incremental contract costs.
Loss before taxation
The Company made a loss before taxation of £860k (H1: 2021 £286k profit).
The loss was in line with management expectations and arose due to the
investments in sales and marketing and territorial expansion in North America
as mentioned above. The current market forecast is for the Company to return
to profitability in 2024.
Earnings per share
Basic and diluted loss per share was 0.13p (H1 2021: 0.05p earnings) during
the period under review. 16.7 million share options outstanding were not
included in the calculation of diluted earnings per share because they are
anti-dilutive in terms of IAS 33.
Crimson Tide plc
Condensed Consolidated Statement of Profit or Loss
for the 6 months to 30 June 2022
Unaudited Restated Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
£000 £000 £000
Revenue 2,324 2,015 4,114
Cost of Sales (360) (304) (631)
Gross Profit 1,964 1,711 3,483
Other income 5 123 142
Operating expenses (2,313) (1,246) (3,442)
Operating (loss)/profit (344) 588 183
Finance costs (21) (12) (10)
Depreciation (194) (108) (185)
Amortisation (301) (182) (570)
(Loss)/Profit before taxation (860) 286 (582)
Taxation - - (32)
(Loss)/Profit for the period attributable to equity holders of the parent
(860) 286 (614)
(Loss)/Earnings per share Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
Basic (pence) (0.13) 0.05 (0.10)
Diluted (pence) (0.13) 0.05 (0.10)
Condensed Consolidated Statement of Comprehensive Income
for the 6 months to 30 June 2022
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
£000 £000 £000
(Loss)/Profit for the period (860) 286 (614)
Other comprehensive income/(loss) for period:
Exchange differences on translating foreign operations (14) 1 2
Total comprehensive (loss)/profit recognised in the period and attributable to
equity holders of parent
(874) 287 (612)
Condensed Consolidated Statement of Financial Position at 30 June 2022
Unaudited Restated Unaudited Audited
As at As at As at 31 December 2021
30 June 30 June
2022 2021
£000 £000 £000
ASSETS
Non-current assets
Intangible assets 3,928 2,959 3,282
Property, plant & equipment 260 189 167
Right-of-use asset 795 64 36
Deferred tax asset - 32 -
Total non-current assets 4,983 3,244 3,485
Current assets
Inventories - 6 -
Trade and other receivables 1,406 1,038 1,079
Cash and cash equivalents 3,731 6,596 5,736
Total current assets 5,137 7,640 6,815
Total assets 10,120 10,884 10,300
LIABILITIES
Current liabilities
Trade and other payables 1,071 741 1,160
Borrowings 1 7 5
Lease liabilities 136 134 98
Total current liabilities 1,208 882 1,263
Non-current liabilities
Lease liabilities 749 64 -
Total non-current liabilities 749 64 -
Total liabilities 1,957 946 1,263
Net assets 8,163 9,938 9,037
EQUITY
Share capital 657 657 657
Share premium 5,590 5,590 5,590
Other reserves 467 481 481
Reverse acquisition reserve (5,244) (5,244) (5,244)
Retained earnings 6,693 8,454 7,553
Total equity 8,163 9,938 9,037
Condensed Consolidated Statement of Changes in Equity
Six-month period ended 30 June 2022 (Unaudited)
Reverse acquisi-tion reserve
Share capital Share premium Other reserves Retained earnings
Total
£000 £000 £000 £000 £000 £000
Balance at 31 December 2021 657 5,590 481 (5,244) 7,553 9,037
Loss for the period - - - - (860) (860)
Translation movement - - (14) - - (14)
Balance at
30 June 2022 657 5,590 467 (5,244) 6,693 8,163
Six-month period ended 30 June 2021 (Unaudited)
Reverse acquisi-tion reserve
Share capital Share premium Other reserves Retained earnings
Total
£000 £000 £000 £000 £000 £000
Balance at 31 December 2020 457 148 479 (5,244) 8,167 4,007
Shares issued 200 5,442 - - - 5,642
Profit for the period - - - - 286 286
Translation movement - - 2 - 1 3
Balance at
30 June 2021 657 5,590 481 (5,244) 8,454 9,938
Condensed Consolidated Statement of Changes in Equity
Year ended 31 December 2021 (Audited)
Reverse acquisi-tion reserve
Share capital Share premium Other reserves Retained earnings
Total
£000 £000 £000 £000 £000 £000
Balance at 1 January 2021 457 148 479 (5,244) 8,167 4,007
Shares issued 200 5,442 - - - 5,642
Profit for the period - - - - (614) (614)
Translation movement - - 2 - - 2
Balance at
31 December 2021 657 5,590 481 (5,244) 7,553 9,037
Condensed Consolidated Statement of Cash flows
For the 6 months to 30 June 2022
Unaudited Restated Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£000 £000 £000
Cash flows from operating activities
(Loss)/Profit before tax (860) 286 (582)
Adjustments for:
Amortisation of Intangible Assets 301 123 570
Depreciation of property, plant and equipment 103 80 129
Depreciation of right-of-use assets 91 28 56
Unrealised currency translation movement (14) 1 2
Finance costs 3 12 10
Operating cash flows before movement in working capital and provisions (376) 530 185
Decrease in inventories - - 6
Increase in trade and other receivables (327) (253) (215)
(Decrease)/increase in trade and other payables (89) (166) 253
Cash (utilised)/generated by operations (792) 111 229
Finance costs (21) (10) (10)
Net cash (used in)/ generated from operating activities (813) 101 219
Cash flows from investing activities
Purchases of property, plant and equipment (196) (34) (61)
Purchases of other intangible assets (176) - (90)
Development expenditure capitalised (771) (259) (964)
Net cash used in investing activities (1,143 ) (293 (1,115)
Cash flows from financing activities
Net proceeds from share issues - 5,696 5,642
Repayments of borrowings (4) (6) (8)
Repayments of lease liability (45) (77) (177)
Net cash (used in)/ from financing activities (49) 5,613 (5,457)
Net movement in cash and cash equivalents (2,005) 5,421 4,561
Net cash and cash equivalents at beginning of period 5,736 1,175 1,175
Net cash and cash equivalents at end of period 3,731 6,596 5,736
Crimson Tide Plc
Notes to the Unaudited Interim Results for the 6 months ended 30 June 2022
1. General information and basis of preparation
Crimson Tide plc is a public company, limited by shares, and incorporated and
domiciled in the United Kingdom. The Company's shares are publicly traded on
the London Stock Exchange's AIM market. The address of its registered office
is Brockbourne House, 77 Mt. Ephraim, Tunbridge Wells, Kent, TN4 8BS.
Basis of preparation
The condensed consolidated interim financial statements ("interim financial
statements") have been prepared using accounting policies that are
consistent with those applied in the previously published financial statements
for the year ended 31 December 2021, which have been prepared in accordance
with IFRS as adopted by the UK.
The information for the period ended 30 June 2022 has neither been audited nor
reviewed and does not constitute statutory accounts as defined in section 434
of the Companies Act 2006.
The interim financial statements should be read in conjunction with the
consolidated financial statements for the year ended 31 December 2021. A copy
of the statutory accounts for that period has been delivered to the Registrar
of Companies. The auditor's report on those accounts was unqualified and did
not contain statements under section 498 (2) or (3) of the Companies Act 2006.
Going concern
The interim financial statements are prepared on the going concern basis. The
financial position of the Company, its cash flows and liquidity position are
described in the interim financial statement and notes. The Company has the
financial resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
2. Revenue and operating segments
The Group has three main regional centres of operation; one in the UK, the
others in Ireland and the United States but the Group's resources, including
capital, human and non-current assets are utilised across the Group
irrespective of where they are based or originate from. The Board is the chief
operating decision maker ("CODM"). The CODM allocates these resources based on
revenue generation, which due to its high margin nature and the Group's
reasonably fixed overheads, in turn drives profitability and cashflow
generation. The Board consider it most meaningful to monitor financial results
and KPIs for the consolidated Group, and decisions are made by the Board
accordingly.
In due consideration of the requirements of IFRS 8 Operating Segments, the
Board consider segmental reporting by (i) business activity, by turnover, and
(ii) region, by turnover to be appropriate. Business activity is best split
between (i) the strategic focus of the business, i.e. mobility solutions and
the resulting development services that emanate from that, (ii) non-core
software solutions, including reselling third party software and related
development and support services, and (iii) hardware sales to existing
customers.
Segment information for the reporting periods is as follows:
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
£000 £000 £000
Revenue by business activity
Mobility solutions and related development 2,109 1,837 3,766
Software consultancy 215 178 348
2,324 2,015 4,114
Revenue can be further analysed by geographic reason as follows:
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
£000 £000 £000
Revenue by geographic region
UK 2,123 1,855 3,735
European Union 201 160 379
2,324 2,015 4,114
3. Intangible assets
Consumer focused development expenditure
Enterprise development expenditure Website develop-ment costs
Incremental contract costs
Goodwill Total
£000 £000 £000 £000 £000 £000
Cost
At 1 January 2022 2,937 479 18 742 799 4,975
Additions 324 447 74 102 - 947
At 30 June 2022 3,261 926 92 844 799 5,922
Consumer focused development expenditure
Enterprise development expenditure Website develop-ment costs
Incremental contract costs
Goodwill Total
£000 £000 £000 £000 £000 £000
Amortisation and impairment
At 1 January 2022 (1,197) - - - (496) - (1,693)
Charge for the period (203) - (10) (88) - (301)
At 30 June 2022 (1,400) - (10) (584) - (1,994)
Carrying amount at 30 June 2022 1,861 926 82 260 799 3,928
Carrying amount at 30 June 2021 1,778 - - 382 799 2,959
4. Earnings per share
The calculation of the basic earnings per share is based on the profit
attributable to ordinary shareholders and the weighted average number of
ordinary shares in issue during the period.
The calculation of the diluted earnings per share is based on the profit per
share attributable to ordinary shareholders and the weighted average number of
ordinary shares that would be in issue, assuming conversion of all dilutive
potential ordinary shares into ordinary shares.
Reconciliations of the profit and weighted average number of ordinary shares
used in the calculation are set out below:
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
Earnings per share
Reported (loss)/profit (£000) (860) 286 (614)
Reported basic earnings per share (pence) (0.13) 0.05 (0.10)
Reported diluted earnings per share (pence) (0.13) 0.05 (0.10)
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2022 2021 2021
No. '000 No. '000 No. '000
Weighted average number of ordinary shares
Shares in issue at start of period 657,486 457,486 457,486
Effect of shares issued during the period* - 76,243 138,630
Weighted average number of ordinary
shares for basic EPS 657,486 533,729 596,116
Effect of share options outstanding - 291 -
Weighted average number of ordinary
shares for diluted EPS 657,486 534,020 596,116
*200 million ordinary shares were issued on 23 April 2021.
At 30 June 2022 there were 16,700,000 (30 June 2021: 16,700,000; 31 December
2021: 16,700,000) share options outstanding. These share options were not
included in the calculation of diluted earnings per share for the period ended
30 June 2022 and the year ended 31 December 2021 because they are
anti-dilutive in terms of IAS 33.
5. Prior period restatement
During the 2021 financial year, it was identified that under IFRS 15, costs
that are incremental to obtaining a contract should be capitalised. There was
therefore a reclassification applied from prepayments to intangible assets of
£246,218 (2020: £357,138). The impact of this had £nil impact on reserves
and £nil impact on total assets.
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