REG - Crimson Tide PLC - Interim Results
26/09/2024 07:00
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RNS Number : 7036F Crimson Tide PLC 26 September 2024
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time. Upon the publication of this announcement, this information is now considered to be in the public domain.
26 September 2024
Crimson Tide plc
("Crimson Tide", "the Company" or "Group")
Interim results for the six months ended 30 June 2024
Crimson Tide plc (TIDE), the provider of the mpro5 process management app, is pleased to announce its unaudited interim results for the six months ended 30 June 2024.
Financial headlines
· Revenue growth of 3.3% to £3.1m (H1 2023: £3.0m)
· EBITDA increased by £0.2m to £0.3m (H1 2023: £0.1m)
· Gross margin increase to 88.2% (H1 2023: 84.3%)
· Further ARR improvement to £5.94m (FY23: £5.75m)
· Cash balance of £2.5m (H1 2023: £2.9m)
Operational highlights
· Marketing investment in FY23 now yielding expanding pipeline of
opportunities
· Completion of new mpro5 mobile app version - mpro5: Saturn
· Tender finalist for global aviation company and Irish public
service bodies - results expected in H2
· New web app version underway
Jacqueline Daniell, Chair, commented,
"This year has seen an improved product and more refined marketing producing a
strong pipeline of opportunities. With a higher average deal size and a
greater number of tender opportunities we have an increased sales cycle
requiring a greater capacity to close. Therefore, we now expect trimmed back
revenues for the full year, though nonetheless still anticipate good
year-on-year EBITDA progress."
Enquiries:
Crimson Tide plc +44 1892 542444
Jacqueline Daniell / Philip Meyers / Peter Hurter
Cavendish Capital Markets Limited (Nominated Adviser and Broker) +44 20 7220 0500
Julian Blunt / Dan Hodkinson - Corporate Finance
Andrew Burdis / Sunila De Silva - Corporate Broking
Alma PR (Financial PR) +44 7780 901979
Josh Royston
Crimson Tide provides mpro5, the process management app. For further
information, see mpro5.com and on Crimson Tide plc,
https://crimsontide.co.uk/link/MrDYnP (https://crimsontide.co.uk/link/MrDYnP)
Chairman's Statement
In my first set of results as Chair, I am pleased to report on the stability
and solidity of performance. Although there is no doubt that some of last
year's unexpected changes have continued to have an impact on the first half
of this year, despite this, Crimson Tide's model has managed to sustain a
robust gross margin of 88.2%, increasing it by nearly 4% points, whilst
continuing to develop the long-term contracted revenue base with ARR moving
out to £5.94m (FY2023: £5.75m).
The process management app mpro5 has continued to be significantly enhanced
and upgraded. The modernised mobile application was completed and
implementation and rollout of the new improved platform will continue for the
rest of the year. The commitments that were made to investment in marketing
last year have resulted in a much expanded pipeline. We have experienced
capacity issues in some areas of sales which has meant that in some instances,
the time to close those opportunities has been considerably slower than
anticipated, which combined with more opportunities going to tender this year
has made leveraging top line growth difficult; nonetheless we have achieved
revenue growth of 3.3% on the first half of last year and a very solid bottom
line improvement. The unexpected offer period of two different takeover
bids, extending throughout June also diverted management time, resource and
contributed to slower execution during H1.
Transitions this year have included a number of significant management
changes, not only to accommodate succession plans but also to address the
evolution of mpro5 and its potential expansion into additional sectors and
propositions. Gaining noteworthy traction in the US remains a challenge, but
the US operation continues to grow the number of good quality opportunities
and take advantage of the two big technical upgrades in the product by working
alongside partners as part of a wider IoT ecosystem.
Overall, the pipeline has remained extremely strong with opportunities
prevailing and secure. Our strong cash position means we are now able to
invest in growth, taking advantage of the new sales opportunities to expand
our sales team. New initiatives introduced will start to drive quality growth
in 2025 and by adjusting and correcting the strategic focus in routes to
market and operational efficiency for next year, Crimson Tide will have a very
solid path for revenue and profitability.
Jacqueline Daniell
Chairman
26 September 2024
Chief Executive's Statement
The first six months of this year have been a period of significant transition
for Crimson Tide, presenting both challenges and opportunities. It is
important to acknowledge that challenges of the nature that we've seen are
rarely without difficulties, and this period has seen us showcase our combined
resilience. Despite these challenges, our team has shown exceptional
commitment, and their hard work is starting to pay off as we continue to drive
forwards, underpinned by the inclusion in The Sunday Times Best Places to Work
in 2024. We are building a stronger, more cohesive organisation, and this is
reflected not only in our operational results but also in the morale and
dedication of our workforce.
As a product, mpro5 is in its best shape ever due to significant investments
in development and refinement over recent months which have brought us to a
point where we are confident in its competitive advantage and market
readiness. This positions us well as we look to further expand our presence in
key sectors in which we have expertise, such as facilities management, retail,
and food safety. These sectors present considerable opportunities,
particularly with large enterprises, and while we acknowledge that these
opportunities often come with extended sales cycles, the long-term value they
represent for Crimson Tide makes them a key focus of our strategy.
Additionally, our opportunities in the USA are growing steadily. These
prospects carry a higher average deal size, as expected, which is also
encouraging. As regards outlook, our focus remains on closing these deals
while ensuring a smooth and efficient onboarding process for all new
customers. Given the increased sales cycle, our expectation is that revenue
and EBITDA for H2 2024 will be broadly in line with H1 2024, evidencing good
year on year EBITDA growth, albeit on flat revenues.
While we may experience some exceptional churn towards the end of 2024
relating to a covid-era deal, our sales pipeline is in good health and we are
confident in the opportunities ahead. There is work to be done, but it's
exciting, and fruitful work, and we are collectively moving in the right
direction and I believe we are well-positioned to deliver sustainable growth
over the longer term. Together, we are building a stronger future for our
company, and I look forward to what lies ahead.
Philip Meyers
CEO
26 September 2024
Financial Review
Financial indicator Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
£'000 £'000
£'000
Revenue 3,142 3,043 6,155
Gross Profit 2,771 2,566 5,306
EBITDA 328 106 420
(Loss)/Profit before tax (211) (471) (305)
Annual recurring revenue (ARR) 5,940 5,900 5,750
Cash 2,502 2,865 3,255
Churn rate 1.2% 5.5% 16.0%
Revenue
Revenue increased by 3.3% compared to the corresponding period in 2023, while
Annual Recurring Revenue (ARR) increased to £5.94. Contracted long-term
revenue exceeded 90% of total revenue and revenue churn was minimal at 1.2%.
The geographic split of revenue remains consistent with the prior year, with a
UK weighting of 92% of revenue (H1 2023: 91%).
Cashflow and liquidity
Cash at the period-end was £2.5m (H1 2023: £2.9m). Net cash from operating
activities was an outflow of £77k (H1 2023: £28k inflow).
Lease liabilities
The Company entered into a new office lease agreement at the beginning of
2022. The lease liability is currently valued at £567k (H1 2023: £871k) 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 £553k (H1 2023: £501k) were capitalised during
the period under review, while amortisation amounted to £299k (H1 2023:
£260k). The value of the capitalised software intangible asset at period-end
was £3.6m (H1 2023: £3.0m). Other intangible assets related to goodwill,
website development costs and incremental contract costs.
Loss before taxation
The Company made a loss before taxation of £211k (H1 2023: £471k loss). The
loss was in line with management expectations and arose due to the additional
amortisation associated with increased investment in the software platform.
The enhanced software expenditure is expected to conclude by the 2024
year-end.
Earnings per share
Basic and diluted loss per share was 0.78p (H1 2023: 4.12p loss per share)
during the period under review. 13,100 share options outstanding were not
included in the calculation of diluted earnings per share because they are
anti-dilutive in terms of IAS 33.
Peter Hurter
Group CFO
26 September 2024
Crimson Tide plc
Condensed Consolidated Statement of Profit or Loss
for the 6 months to 30 June 2024
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2024 2023 2023
£000 £000 £000
Revenue 3,142 3,043 6,155
Cost of Sales (371) (477) (849)
Gross Profit 2,771 2,566 5,306
Other income - (8) -
Administrative expenses (2,964) (2,991) (5,942)
Finance costs (18) (38) (52)
(Loss)/Profit before income tax expense (211) (471) (688)
Taxation 160 200 383
(Loss)/Profit after taxation (51) (271) (305)
(Loss)/Earnings per share Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2024 2023 2023
Basic (pence) (0.78) (4.12) (4.64)
Diluted (pence) (0.78) (4.12) (4.64)
Condensed Consolidated Statement of Comprehensive Income
for the 6 months to 30 June 2024
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2024 2023 2023
£000 £000 £000
(Loss)/Profit for the period (51) (271) (305)
Other comprehensive income/(loss) for period:
Exchange differences on translating foreign operations (91) (18) (19)
Total comprehensive (loss)/Profit recognised in the period and attributable to
equity holders of parent
(142) (289) (324)
Condensed Consolidated Statement of Financial Position at 30 June 2024
Unaudited Unaudited Audited
As at As at As at 31 December 2023
30 June 30 June
2024 2023
£000 £000 £000
ASSETS
Non-current assets
Intangible assets 4,602 4,072 4,440
Property, plant & equipment 208 263 237
Right-of-use asset 475 740 571
Total non-current assets 5,285 5,075 5,248
Current assets
Trade and other receivables 1,406 2,102 1,182
Cash and cash equivalents 2,502 2,865 3,255
Total current assets 3,908 4,967 4,437
Total assets 9,193 10,042 9,685
LIABILITIES
Current liabilities
Trade and other payables 1,264 1,669 1,514
Lease liabilities 148 194 199
Total current liabilities 1,412 1,863 1,713
Non-current liabilities
Lease liabilities 419 677 468
Total non-current liabilities 419 677 468
Total liabilities 1,831 2,540 2,181
Net assets 7,362 7,502 7,504
EQUITY
Share capital 657 657 657
Share premium 5,590 5,590 5,590
Other reserves 336 460 427
Reverse acquisition reserve (5,244) (5,244) (5,244)
Retained earnings 6,023 6,039 6,074
Total equity 7,362 7,502 7,504
Condensed Consolidated Statement of Changes in Equity
Six-month period ended 30 June 2024 (Unaudited)
Reverse acq'n reserve
Share capital Share premium Other reserves Retained earnings
Total
£000 £000 £000 £000 £000 £000
Balance at 31 December 2023 657 5,590 427 (5,244) 6,074 7,504
Loss for the period - - - - (51) (51)
Translation movement - - (91) - - (91)
Balance at
30 June 2024 657 5,590 336 (5,244) 6,023 7,362
Six-month period ended 30 June 2023 (Unaudited)
Reverse acq'n 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
Condensed Consolidated Statement of Changes in Equity
Year ended 31 December 2023 (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 5,590 493 (5,244) 6,310 7,806
Loss for the period - - - - (305) (305)
Share options cancelled - - (69) - 69 -
Share options expense - - 22 - - 22
Translation movement - - (19) - - (19)
Balance at
31 December 2022 657 5,590 427 (5,244) 6,074 7,504
Condensed Consolidated Statement of Cash flows
For the 6 months to 30 June 2024
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Cash flows from operating activities
Loss before tax (211) (471) (688)
Adjustments for:
Amortisation of Intangible Assets 391 371 758
Depreciation of property, plant and equipment 34 35 74
Depreciation of right-of-use assets 96 133 206
Unrealised currency translation movement (91) (18) (19)
Interest Paid 18 38 52
Cancelled share options - (43) -
Share option expense - 28 22
Operating cash flows before movement in working capital and provisions 237 73 405
Increase in trade and other receivables (64) (256) 464
(Decrease)/increase in trade and other payables (250) 209 54
Cash (utilised)/generated by operations (77) 26 923
Interest paid in cash - 2 (52)
Income taxes received - - 407
Income taxes paid - - (24)
Net cash (used in)/generated from operating activities (77) 28 1,254
Cash flows from investing activities
Purchases of property, plant and equipment (5) (34) (47)
Purchases of other intangible assets - (300) (223)
Development expenditure capitalised (553) (501) (1,163)
Net cash used in investing activities (558 ) (835 ) (1,433)
Cash flows from financing activities
(Repayments of)/additions to lease liability (118) 54 (184)
Net cash (used in)/ from financing activities (118) 54 (184)
Net movement in cash and cash equivalents (753) (753) (363)
Net cash and cash equivalents at beginning of period 3,255 3,618 3,618
Net cash and cash equivalents at end of period 2,502 2,865 3,255
Crimson Tide Plc
Notes to the Unaudited Interim Results for the 6 months ended 30 June 2024
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 2023, which have been prepared in accordance with
UK-Adopted International Accounting Standards.
The information for the period ended 30 June 2024 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 2023. 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 2023.
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
2024 2023 2023
£000 £000 £000
Revenue by business activity
Mobility solutions and related development 2,891 2,985 5,612
Software consultancy 251 58 543
3,142 3,043 6,155
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
2024 2023 2023
£000 £000 £000
Revenue by geographic region
UK 2,890 2,780 5,636
Ireland 197 205 424
US 55 58 95
3,142 3,043 6,155
3. Intangible assets
Consumer focused development expenditure
Enterprise development expenditure Website dev'ment costs
Incremental contract costs
Goodwill Total
£000 £000 £000 £000 £000 £000
Cost
At 1 January 2024 4,824 1,024 103 1,098 989 8,035
Additions 550 - 3 - - 553
At 30 June 2024 5,371 1,024 106 1,098 989 8,588
Consumer focused development expenditure
Enterprise development expenditure Website dev'ment costs
Incremental contract costs
Goodwill Total
£000 £000 £000 £000 £000 £000
Amortisation and impairment
At 1 January 2024 (2,304) (193) (57) (847) (190) (3,595)
Charge for the period (239) (60) (13) (79) - (391)
At 30 June 2024 (2,543) (253) (70) (926) (190) (3,986)
Carrying amount at 30 June 2023 2,516 831 46 248 799 4,440
Carrying amount at 30 June 2024 2,828 771 36 172 799 4,602
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
2024 2023 2023
Earnings per share
Reported loss (£000) (51) (271) (305)
Reported basic earnings per share (pence) (0.78) (4.12) (4.64)
Reported diluted earnings per share (pence) (0.78) (4.12) (4.64)
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended 31
30 June 30 June December
2024 2023 2023
No. '000 No. '000 No. '000
Weighted average number of ordinary shares
Shares in issue at start of period 6,575 6,575 6,575
Effect of shares issued during the period - - -
Weighted average number of ordinary
shares for basic EPS 6,575 6,575 6,575
Effect of share options outstanding - - -
Weighted average number of ordinary
shares for diluted EPS 6,575 6,575 6,575
On 31 October 2023 the Company completed a 100:1 share consolidation exercise.
Basic and diluted EPS were retrospectively adjusted in accordance with the
requirements of IAS 33 to achieve comparability.
At 30 June 2024 there were 131,000 (30 June 2023: 15,100,000; 31 December
2023: 131,000) 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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