REG - Crimson Tide PLC - Interim Results
25/09/2023 07:00
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RNS Number : 4157N Crimson Tide PLC 25 September 2023
25 September 2023
Crimson Tide plc
Interim results for the six months ended 30 June 2023
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 2023.
Financial headlines
· Revenue increase of 30.9% to £3.0m (H1 2022: £2.3m)
· Annual recurring revenue (ARR) increase of 35.1% to £5.9m (H1
2022: £4.4m)
· Gross margin of 84.3% (H1 2022: 84.5%)
· EBITDA profit of £0.1m (H1 2022: loss of £0.3m)
Operational highlights
· Consistent growth in core recurring revenue
· Resilient and high gross margins
· Return to EBITDA profitability
· Continued investment in product development and US
· Substantial progress on partnership strategy
Barrie Whipp, Founder and Chairman, commented,
"Progress in the first half of the year has been positive. We have experienced
strong revenue growth, and we have returned to EBITDA profitability as
planned. Annual Recurring Revenue has increased significantly, and our
pipeline has some very exciting opportunities. "
About the Company
mpro5 from Crimson Tide is a leading B2B app which facilitates enhanced
compliance, auditing and processes in any industry.
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 first half of the year has demonstrated very good progress. Revenue and
ARR growth both exceeded 30%, and our cash balance remains healthy. These
metrics were achieved in the light of an enterprise customer going into
administration, which will temper our second-half growth; however, we still
expect to achieve circa 20%. As planned, we have returned to profitability at
the EBITDA level following our growth investment phase, and we retain a
healthy cash balance, with no debt. Our gross margin remains robust.
Notable revenue increases included a significant Internet of Things ("IoT")
implementation for an NHS Trust, while further revenue has come from our 'land
and expand' strategy. IoT is a major focus area; we have sensor-driven
opportunities in the public and private sectors as well as in the US.
This period has been significant in terms of the mpro5 product. Our Saturn
release is ready to ship to our largest clients and represents a significant
upgrade in our core technologies. This significant upgrade to a single
repository codebase, using the latest Ionic framework, is expected to match
our previous platform's technology longevity (five years). The second half
will see further rollouts of Saturn and the development of our project to
implement a new version of our automation technology. With the focus on
mpro5 and its strong growth, we have deprioritised development and marketing
of the Beepro app. We will target a new B2C focused app, incorporating our
other individual user apps at a later date, however we have prudently removed
Beepro figures from our forecasts for the time being. We intend to undertake a
consolidation of our share capital in the coming months, as our business
should benefit from a more representative profile and lower bid-offer spread.
We have strengthened our Executive team by appointing a new Chief Marketing
Officer and Chief Operating Officer, and their focus is on continuing to
optimise our processes and enhance our partner marketing strategy. Our
pipeline is strong. We have returned, as planned, to operating Profit, and
with a strengthened management team, we look forward to the future with
confidence.
Barrie Whipp
Founder and Chairman
25 September 2023
Chief Executive's Statement
Crimson Tide's performance during the first half of 2023 signalled the
beginning of our enterprising scaling plans. The unparalleled growth in
revenue during the period has been the early result of investment in more
targeted marketing and sales approaches, the organisation of an engaged and
customer-focused team and our continued technology roadmap implementation.
Capital expenditure on our mobile platform has continued through the first
half of this year, and the new mobile product is being rolled out across our
customers, with the first customers currently going live. Initial feedback
from users has been overwhelmingly positive, and we believe the new platform
represents a world-leading mobile workflow experience. This fresh and
contemporary mobile application suite has provided a step change in the
quality and power of the user experience available to our customers.
Investment in the product to date has been transformative in how we develop
the platform going forward, increasing the velocity and scope for new
features. In the second half of the year, we will be focusing on the
automation part of the product and will be making a similar paradigm shift,
transforming both the software, service and operational sides of the business
and how customers are able to use more of mpro5's powerful features.
Because of external market conditions, Beepro development and marketing was
paused. In addition, there has been some natural churn of smaller historic
contracts where businesses have been unable to grow. Because of these factors
our focus will be on profitability, emphasising and prioritising customer
success. The successful development of the partner ecosystem, initiated in the
US and now being implemented throughout the organisation will mean revenue can
continue to grow.
Jacqueline Daniell
Group CEO
25 September 2022
Financial Review
Financial indicator Six months ended 30 June 2023 Six months ended 30 June 2022 Year ended 31 December 2022
£'000 £'000
£'000
Revenue 3,043 2,324 5,351
Gross Profit 2,566 1,964 4,468
EBITDA 106 (344) (406)
(Loss)/Profit before tax (471) (860) (1,688)
Annual recurring revenue (ARR) 5,900 4,368 5,750
Cash 2,865 3,731 3,618
Churn rate 5.5% 1.0% 3.8%
Revenue
Revenue increased by 30.9% compared to the corresponding period of 2022, while
Annual Recurring Revenue (ARR) increased by 35.1% to £5.9m. Contracted
long-term revenue exceeded 90% of total revenue and revenue churn was 5.5%.
MRR per customer has increased, reflecting our focus on higher value
customers. The geographic split of revenue remains consistent with the prior
year, with a UK weighting of 92% of revenue (H1 2022: 91%).
Cashflow and liquidity
Cash at the period-end was £2.9m (H1 2022: £3.7m). Operating cash flows
before movements in working capital for the period was an inflow of £28k (H1
2022: £813k outflow). The inflow relates to efficient use of working capital
underpinned by strong operating cashflow.
Lease liabilities
The Company entered into a new office lease agreement at the beginning of
2022. The lease liability is currently valued at £871k (H1 2022: £883k) and
the related Right-of-Use asset recognised under IFRS16. The lease liability
will be settled, and the related asset depreciated, over a 5-year period.
Intangible assets
Software development costs of £501k (H1 2022: £771k) were capitalised during
the period under review, while amortisation amounted to £260k (H1 2022:
£203k). H1 2022 marked significant investment in the Beepro platform which is
on pause. The value of the capitalised software intangible asset at period-end
was £3.0m (H1 2022: £2.8m). Other intangible assets related to goodwill,
website development costs and incremental contract costs. We continue to
invest in the core mpro5 product with some exciting enhancements planned for
H2.
Loss before taxation
The Company made a loss before taxation of £512k (H1: 2022 £860k loss). The
loss was in line with management expectations and arose due to the additional
amortisation associated with increased investment in the software platform.
Earnings per share
Basic and diluted loss per share was 0.07p (H1 2022: 0.13p loss per share)
during the period under review. 15.1 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 2023
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2023 2022 2022
£000 £000 £000
Revenue 3,043 2,324 5,351
Cost of Sales (477) (360) (883)
Gross Profit 2,566 1,964 4,468
Other income (8) 5 -
Operating expenses (2,452) (2,313) (4,887)
Operating (loss)/profit 106 (344) (419)
Finance costs (38) (21) (54)
Depreciation (168) (194) (261)
Amortisation (371) (301) (954)
(Loss)/Profit before taxation (471) (860) (1,688)
Taxation 200 - 445
(Loss)/Profit for the period attributable to equity holders of the parent
(271) (860) (1,243)
(Loss)/Earnings per share Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2023 2022 2022
Basic (pence) (0.07) (0.13) (0.19)
Diluted (pence) (0.07) (0.13) (0.19)
Condensed Consolidated Statement of Comprehensive Income
for the 6 months to 30 June 2023
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2023 2022 2022
£000 £000 £000
(Loss)/Profit for the period (271) (860) (1,243)
Other comprehensive income/(loss) for period:
Exchange differences on translating foreign operations (18) (14) (39)
Total comprehensive (loss)/Profit recognised in the period and attributable to
equity holders of parent
(289) (874) (1,282)
Condensed Consolidated Statement of Financial Position at 30 June 2023
Unaudited Unaudited Audited
As at As at As at 31 December 2022
30 June 30 June
2023 2022
£000 £000 £000
ASSETS
Non-current assets
Intangible assets 4,072 3,928 3,812
Property, plant & equipment 263 260 264
Right-of-use asset 740 795 703
Total non-current assets 5,075 4,983 4,779
Current assets
Trade and other receivables 2,102 1,406 1,646
Cash and cash equivalents 2,865 3,731 3,618
Total current assets 4,967 5,137 5,264
Total assets 10,042 10,120 10,043
LIABILITIES
Current liabilities
Trade and other payables 1,669 1,071 1,460
Borrowings - 1 -
Lease liabilities 194 136 170
Total current liabilities 1,863 1,208 1,630
Non-current liabilities
Lease liabilities 677 749 607
Total non-current liabilities 677 749 -
Total liabilities 2,540 1,957 2,237
Net assets 7,502 8,163 7,806
EQUITY
Share capital 657 657 657
Share premium 5,590 5,590 5,590
Other reserves 460 467 493
Reverse acquisition reserve (5,244) (5,244) (5,244)
Retained earnings 6,039 6,693 6,310
Total equity 7,502 8,163 7,806
Condensed Consolidated Statement of Changes in Equity
Six-month period ended 30 June 2023 (Unaudited)
Reverse acquisi-tion reserve
Share capital Share premium Other reserves Retained earnings
Total
£000 £000 £000 £000 £000 £000
Balance at 31 December 2022 657 5,590 493 (5,244) 6,310 7,806
Loss for the period - - - - (271) (271)
Cancelled share options (43) (43)
Share options expense - - 28 - - 28
Translation movement - - (18) - - (18)
Balance at
30 June 2023 657 5,590 460 (5,244) 6,039 7,502
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
Condensed Consolidated Statement of Changes in Equity
Year ended 31 December 2022 (Audited)
Reverse acquisi-tion reserve
Share capital Share premium Other reserves Retained earnings
Total
£000 £000 £000 £000 £000 £000
Balance at 1 January 2022 657 5,590 481 (5,244) 7,553 9.037
Loss for the period - - - - (1,243) (1,243)
Share options expense - - 51 - - 51
Translation movement - - (39) - - (39)
Balance at
31 December 2022 657 5,590 493 (5,244) 6,310 7,806
Condensed Consolidated Statement of Cash flows
For the 6 months to 30 June 2023
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 June 30 June 31 December
2023 2022 2022
£000 £000 £000
Cash flows from operating activities
Loss before tax (471) (860) (1,688)
Adjustments for:
Amortisation of Intangible Assets 371 301 954
Depreciation of property, plant and equipment 35 103 149
Depreciation of right-of-use assets 133 91 112
Unrealised currency translation movement (18) (14) (39)
Interest Paid 38 3 54
Cancelled share options (43) - -
Share option expense 28 - 51
Operating cash flows before movement in working capital and provisions 73 (376) (407)
Decrease in inventories - - -
Increase in trade and other receivables * (256) (327) (567)
Increase/(Decrease) in trade and other payables 209 (89) 300
Cash generated/(utilised) by operations 26 (792) (674)
Finance costs 2 (21) (54)
Income taxes received - - 445
Net cash (used in)/ generated from operating activities 28 (813) (283)
Cash flows from investing activities
Purchases of property, plant and equipment (34) (196) (246)
Purchases of other intangible assets ** (300) (176) (218)
Development expenditure capitalised (501) (771) (1,266)
Net cash used in investing activities (835 ) (1,143 ) (1,730)
Cash flows from financing activities
Repayments of borrowings - (4) (5)
Additions to/(Repayments of) lease liability 54 (45) (100)
Net cash (used in)/ from financing activities 54 (49) (105)
Net movement in cash and cash equivalents (753) (2,005) (2118)
Net cash and cash equivalents at beginning of period 3,618 5,736 5,736
Net cash and cash equivalents at end of period 2,865 3,731 3,618
* R&D tax claim accrual of £200k is non-cash and therefore not included
in the movement of trade and other receivables.
** Includes ROU asset
Crimson Tide Plc
Notes to the Unaudited Interim Results for the 6 months ended 30 June 2023
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 2022, which have been prepared in accordance
with UK-Adopted International Accounting Standards.
The information for the period ended 30 June 2023 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 2022. A copy
of the statutory accounts for that period has been delivered to the Registrar
of Companies and is available on the Company's website. 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.
Key estimates and judgements used in the preparation of the interim financial
statements remain unchanged from those noted in the published financial
statements for the year ended 31 December 2022.
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 and (ii) non-core
software solutions, including reselling third party software and related
development and support services.
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
2023 2022 2022
£000 £000 £000
Revenue by business activity
Mobility solutions and related development 2,985 2,109 4,854
Software consultancy 58 215 497
3,043 2,324 5,351
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
2023 2022 2023
£000 £000 £000
Revenue by geographic region
UK 2,780 2,123 4,891
Ireland 205 201 442
US 58 - 18
3,043 2,324 5,351
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 2023 3,658 1,024 91 887 799 6,459
Additions 501 - - 130 - 631
At 30 June 2023 4,159 1,024 91 1,017 799 7,090
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 2023 (1,893) (47) (26) (681) - (2,647)
Charge for the period (185) (74) (15) (97) - (371)
At 30 June 2023 (2,078) (121) (41) (778) - 3,018
Carrying amount at 30 June 2023 2,081 903 50 239 799 4,072
Carrying amount at 30 June 2022 1,861 926 82 260 799 3,928
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
2023 2022 2022
Earnings per share
Reported loss (£000) (471) (860) (1,243)
Reported basic earnings per share (pence) (0.07) (0.13) (0.19)
Reported diluted earnings per share (pence) (0.07) (0.13) (0.19)
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2023 2022 2022
No. '000 No. '000 No. '000
Weighted average number of ordinary shares
Shares in issue at start of period 657,486 657,486 657,486
Effect of shares issued during the period - - -
Weighted average number of ordinary
shares for basic EPS 657,486 657,486 657,486
Effect of share options outstanding - - -
Weighted average number of ordinary
shares for diluted EPS 657,486 657,486 657,486
At 30 June 2023 there were 15,100,000 (30 June 2022: 16,700,000; 31 December
2022: 24,300,000) share options outstanding. These share options were not
included in the calculation of diluted earnings per share because they are
antidilutive in terms of IAS 33. The reduction in share options relates to the
resignation of certain employees who held options, and as a result, in
accordance with the terms of the share option agreements, the options were
cancelled.
5. Related party transactions
Other than the interests of Directors, being in shares, share options and
remuneration, no transactions with related parties were undertaken such as are
required to be disclosed under International Accounting Standard 24.
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