TIDMTIDE
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 GBP3.0m (H1 2022: GBP2.3m)
-- Annual recurring revenue (ARR) increase of 35.1% to GBP5.9m (H1 2022: GBP4.4m)
-- Gross margin of 84.3% (H1 2022: 84.5%)
-- EBITDA profit of GBP0.1m (H1 2022: loss of GBP0.3m)
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
Barrie Whipp / Jacqueline Daniell +44 1892 542444
finnCap Ltd (Nominated Adviser and Broker)
Corporate Finance: Julian Blunt / James
Thompson +44 20 7220 0500
Corporate Broking: Andrew Burdis
Alma PR (Financial PR)
Josh Royston +44 7780 901979
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 Six months Year
ended 30 ended 30 ended
June 2023 June 2022 31 December
GBP'000 GBP'000 2022
GBP'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
GBP5.9m. 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 GBP2.9m (H1 2022: GBP3.7m). Operating
cash flows before movements in working capital for the period was
an inflow of GBP28k (H1 2022: GBP813k 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
GBP871k (H1 2022: GBP883k) 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 GBP501k (H1 2022: GBP771k) were
capitalised during the period under review, while amortisation
amounted to GBP260k (H1 2022: GBP203k). 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 GBP3.0m
(H1 2022: GBP2.8m). 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 GBP512k (H1: 2022
GBP860k 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
GBP000 GBP000 GBP000
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
GBP000 GBP000 GBP000
(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
30 June 30 June 31 December
2023 2022 2022
GBP000 GBP000 GBP000
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
Share Share Other reserve Retained
capital premium reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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
Share Share Other reserve Retained
capital premium reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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
Share Share Other reserve Retained
capital premium reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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
GBP000 GBP000 GBP000
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 GBP200k 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
GBP000 GBP000 GBP000
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
GBP000 GBP000 GBP000
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
Enterprise focused development Website
development expenditure develop-ment Incremental
expenditure costs contract Goodwill Total
costs
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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
Enterprise focused development Website
development expenditure develop-ment Incremental
expenditure costs contract Goodwill Total
costs
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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 (GBP000) (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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