TIDMTIDE
RNS Number : 7776K
Crimson Tide PLC
13 April 2018
Crimson Tide plc
Preliminary Announcement of Results to 31 December 2017
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 2017.
Financial Highlights
-- Turnover up 22% to GBP2.28m (2016: GBP1.86m)
-- Profit Before Tax before exceptional item GBP359k (2016:
GBP352k) after significant investments in future growth
-- Strong cash position
Operational Highlights
-- mpro5 in use in over 200,000 locations
-- Geographic expansion underway
-- Internet of Things (IoT) now incorporated into mpro5
Barrie Whipp, Executive Chairman of Crimson Tide, commented:
"We are very excited by the early results of our continuing
growth strategy. In 2017 profitability was carefully maintained as
we invested GBP350k in new staff and marketing, where we believe we
will start to see benefits this year. Consequently it is not
unreasonable to say that profits would have almost doubled if we
had maintained our previous strategy and not invested in our future
expansion. This, however, was not the best course to plot for
shareholders as we see much larger opportunities ahead. We will
continue to invest in 2018, allowing us to be more ambitious for
future growth in our core markets but also in new geographic
locations. Our aim is to grow the Company more significantly in the
coming years and we are establishing a base to manage that
expansion"
About the Company
Founded in 1996 and quoted on the AIM market of the London Stock
Exchange since 2006, Crimson Tide plc is the provider of mpro5 -
smart mobility. mpro5 is delivered entirely cross platform
(Android, IOS, Windows) on smartphones, tablets and PDAs, and
enables organisations to transform their business and strengthen
their workforce by smart mobile working. mpro5 is a full mobility
service hosted in the cloud. The Company's contracts are provided
on a long term, contracted subscription basis and clients can
immediately see a return on their investment.
mpro5 has a growing healthcare division and helps people with
haemophilia, cholesterol issues and autism as well as new uses of
the platform to assist in the detection of counterfeit medicines.
There are a myriad of areas where mpro5 can be used to improve
healthcare practices.
Based in Royal Tunbridge Wells, the Company has expanded its
footprint and now has representation in Ireland, The Netherlands
and the United Arab Emirates as well as associated partnerships in
the United States and Australia.
Enquiries:
Crimson Tide plc
Barrie Whipp / Steve
Goodwin 01892 542444
W.H. Ireland Limited 020 7220 1666
James Joyce / Alex
Bond
Chairman's Statement
A year of investment in 2017, carrying on into 2018, has
represented a transformation in Crimson Tide in all areas of the
business. Over an eighteen-month period our headcount has doubled
and our investment in Sales and Marketing resource has increased
our visibility of opportunities, improved our brand and sees the
Company well placed for more aggressive growth. We aim to be bold
and to invest the cash that we have generated from top line growth
in expanding the business further.
Last year I reported that mpro5 was in use in over 100,000
locations in the UK & Ireland. This number has now doubled and
we have expanded into the Netherlands, where we have signed our
first subscriber transaction, and we have a formative sales
presence in the Middle East, United States and Australia. We will
continue to seek further geographic opportunities as appropriate,
without constructing large scale infrastructure. Our new
investments will be in sales and marketing, not bricks and
mortar.
Our inbound lead generation has increased dramatically as mpro5
becomes more widely known. Our word of mouth success has now been
augmented by new branding, visuals, case studies and videos. I
recommend viewing our YouTube channel to see the breadth of how
mpro5 is helping mobile work forces, healthcare professionals and
even patients through our range of workflow based platform.
Our Angular and Ionic framework implementation rolled out in
2017. The sheer scale of the implementation should not be
underestimated. mpro5 has never looked better or been easier to
use. Hosted in Microsoft Azure, our scalability and
internationalisation means that we can leverage our partner's
investment in infrastructure as well as security and data
management. We continue to invest in mpro5 and our focus now turns
to automated testing and further modules to support payment
processing. We will also be moving the outlying instances of mpro5
where a version has been produced for a specific client into the
main app store version of the mobile application.
We have recently developed two significant opportunities in the
healthcare sector. Firstly, our initial contract with the National
Health Service was signed during the year where we assist in estate
management at Addenbrookes Hospital. We are now engaged with an NHS
Trust where we will be providing mpro5 with time and attendance for
hospital staff. Large, strategic software sales to such huge public
bodies is fraught with danger. mpro5 provides a very tactical
solution which can assist in solving day to day issues with clear
ROI. Secondly, our success with a Global Health Organisation in
providing pilots in Tanzania and Indonesia provides huge excitement
for the use of mpro5 in a wider range of healthcare scenarios.
Perhaps the most exciting technical development has been the
implementation of our first Internet of Things (IOT) sensors
reporting on temperature, humidity and motion. Sensors are
continuously being improved and new types of sensor introduced. We
have chosen to be sensor agnostic and can move with this
ever-expanding market. The use of sensors to initiate and improve
workflows is of clear benefit to our existing client base and also
gives us new opportunities in the vertical markets we serve.
Financially, Crimson Tide has continued to increase turnover,
whilst managing our profitability carefully. In 2017, we chose to
target the maintenance of profitability and cash at a similar level
to the previous year and this was achieved on the back of growth of
22% at the turnover line. We had a small exceptional item in
respect of professional fees incurred on an aborted acquisition of
a business in a similar field to ourselves. The Directors believe
that this performance was very creditable, notwithstanding the fact
that a number of larger opportunities remain in the pipeline. The
Company is often underestimated in that its contracts are long term
and the gross margin is in excess of 90%.
Last year, we moved premises to accommodate our expansion and
now have a home at Oakhurst House, one of the premier business
addresses in Royal Tunbridge Wells. In 2018, we have decided to
invest even more in mpro5 and the opportunities in front of us.
These investments will, in the main, be in sales and marketing, to
take advantage of these opportunities.
There will be changes in focus this year where our branding will
start to eliminate references to Crimson Tide and focus on mpro5,
reducing any confusion between the corporate and commercial
branding. We are also reviewing our cadre of advisors and 2018 will
be a year of positive change in some structural parts of our
organisation.
Part of our organisational change in 2017 was the appointment of
Toby Hawkins as Sales and Marketing Director. Toby now leads a team
of 10 and is implementing our increased budget to generate new
leads. We have also formed a customer excellence team to assist
with onboarding and ensuring excellent relationships with new and
existing clients. I was delighted to recently announce the
promotion of Luke Jeffrey to Chief Executive Officer and Luke will
now be responsible for managing the day to day operations of the
business, giving me the opportunity to focus on business expansion
and seeking further opportunities for mpro5 in my position as
Executive Chairman.
In closing, I must say that our Company is, in many respects,
"below the radar" in that it has been quite conservatively run over
many years, ensuring that growth has been maintained, profitability
ensured and cash generated. It is time for Crimson Tide, through
mpro5, to take advantage of the clear opportunities in front of us.
The Directors are determined to invest in our platform and sales
and marketing to ensure that we take the Company to the next level.
We have the base and the people to do so and my thanks as ever go
out to our fantastic team who are passionate about our Company and
its future.
Barrie R. J. Whipp
Executive Chairman
13 April 2018
Financial Review
I am very pleased to comment on our results for the year to 31
December 2017.
Turnover increased by 22% from GBP1.86m in 2016 to GBP2.28m for
the twelve months to 31 December 2017. The vast majority of our
income continues to come from long-term subscriber agreements for
mpro5 and in 2017 included increased revenues from customers based
in mainland Europe and the US. Gross margin from subscription
business has been maintained at over 90%.
Operating costs have steadily increased but in a very planned
manner as previously communicated. Additional sales and marketing
staff costs and a significant increase in marketing spend are
investments in future growth. We have already seen an exciting
increase in sales opportunities as a result and expect growth in
long term subscription revenues to accelerate. Our business model
is highly operationally geared such that increases in sales
revenues are not matched by a proportionate increase in operating
costs.
Shareholders will be aware that we have doubled profits in each
of the previous four years but in 2016 took the strategic decision
to re-invest for faster growth in the medium term. Our 2017 results
include an exceptional item of GBP44k being legal and accounting
costs incurred on an aborted acquisition. Excluding this, 2017
profit before tax totalled GBP359k, a small increase on GBP352k
achieved in 2016. Capital allowances and tax losses brought forward
have kept the tax charge at a very low level.
Crimson Tide's balance sheet and operating cashflows remain
healthy. Cash generated from operating activities of GBP559k
improved in 2017 (2016: GBP491k) with the funds re-invested in
mpro5 and smartphone and tablet devices for subscribers. Funds were
also utilised to reduce debt used to fund these devices. We
finished the year with cash balances of GBP757k (2016: GBP878k) and
net funds have continued to increase since the year end.
There have been no changes to Crimson Tide's accounting policies
which can be found in the notes to the published 2016 Consolidated
Financial Statements available on our website,
www.crimsontide.co.uk.
Future Prospects
Over the course of 2018, the Company will continue to invest in
growth and target increased sales outside the UK. mpro5's
capabilities to increase efficiency and productivity apply equally
well in many other geographic areas and the Board are excited by
the opportunities to widen the Company's reach. We continue to work
hard on behalf of all stakeholders to drive growth and achieve the
targets we have set ourselves.
Stephen Goodwin
Finance Director
13 April 2018
Crimson Tide plc
Unaudited Consolidated Income Statement
Group
Year ended Year ended
December December
2017 2016
GBP000 GBP000
Revenue 2,275 1,860
Cost of Sales (231) (159)
----------- -----------
Gross Profit 2,044 1,701
Administration expenses (1,240) (1,009)
----------- -----------
Earnings before interest, tax,
depreciation & amortisation 804 692
Depreciation & amortisation (394) (303)
----------- -----------
Profit from continuing operations 410 389
Finance costs (51) (37)
----------- -----------
Profit before taxation 359 352
Tax (note B) (5) (4)
Net profit from continuing operations 354 348
Exceptional item (note C) (44) -
----------- -----------
Profit for the year attributable
to equity holders of the parent 310 348
=========== ===========
Earnings per share (note D)
Basic and diluted earnings per
Ordinary share (pence) 0.07 0.08
Unaudited Consolidated Statement of Comprehensive Income
Group
Year ended Year ended
December December
2017 2016
GBP000 GBP000
Profit for the year 310 348
Other comprehensive income/(loss)
for the year:
Exchange differences on translating
foreign operations (1) 1
----------- -----------
Total comprehensive profit for
the year 309 349
=========== ===========
Crimson Tide plc
Unaudited Statement of Financial Position
Group
As at As at
31 December 31 December
2017 2016
GBP000 GBP000
Fixed Assets
Intangible assets 1,698 1,522
Equipment, fixtures & fittings 611 750
2,309 2,272
------------- -------------
Current Assets
Inventories 8 7
Trade and other receivables 974 636
Cash and cash equivalents 757 878
------------- -------------
1,739 1,521
------------- -------------
Total Assets 4,048 3,793
=============
Equity and liabilities
Equity attributable to equity
holders of the parent
Share capital 454 453
Capital redemption reserve - -
Share premium 121 112
Other reserves 421 422
Reverse acquisition reserve (5,244) (5,244)
Retained earnings 7,069 6,759
------------- -------------
2,821 2,502
------------- -------------
Liabilities
Amounts falling due within one
year 868 769
Amounts falling due after more
than one year 359 522
------------- -------------
Total liabilities 1,227 1,291
------------- -------------
Total equity and liabilities 4,048 3,793
Crimson Tide plc
Unaudited Statement Of Changes In Equity
Group Share Capital Share Other Reverse Retained Total
capital redemption premium reserves acquisition earnings
reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance as
at 1 January
2016 7,335 49 1,090 421 (5,244) (1,618) 2,033
Retained profit
for the year 348 348
Capital reconstruction
(*) (6,890) (49) (1,090) 8,029 -
Share options
exercised 8 112 120
Translation
movement 1 1
--------- ------------ --------- ---------- ------------- ---------- --------
Balance as
at 31 December
2016 453 - 112 422 (5,244) 6,759 2,502
Retained profit
for the year 310 310
Share options
exercised 1 9 10
Translation
movement (1) (1)
--------- ------------ --------- ---------- ------------- ---------- --------
Balance as
at 31 December
2017 454 - 121 421 (5,244) 7,069 2,821
========= ============ ========= ========== ============= ========== ========
(*) At the Company's General Meeting on 26 January 2016
shareholders approved plans to undertake a capital reconstruction,
the purpose of which was to create positive retained earnings in
the Balance Sheet to allow the Company to, if appropriate, pay
dividends in the future. Shareholders also approved future share
buy-backs. Following a court hearing on 24 February 2016 the court
confirmed the reduction of capital of the Company. The nominal
value of each Ordinary Share in the Company reduced from one penny
to 0.1 pence per share and the Company's Deferred Shares of 19
pence each, Share Premium Account and Capital Redemption Reserve
were cancelled. Trading in the shares with a nominal value of 0.1
pence commenced on 25 February 2016.
Crimson Tide plc
Unaudited Consolidated Cash Flow Statement
Group
--------------------------
Year ended Year ended
31 December 31 December
2017 2016
GBP000 GBP000
Cash flows from operating activities
Profit for the year 310 352
Add back:
Amortisation of intangible assets 120 105
Depreciation of equipment, fixtures and
fittings 274 198
Profit on sale of assets - -
Interest expense 51 37
Operating cash flows before movements in
working capital 755 692
(Increase)/decrease in inventories (1) 8
Increase in trade and other receivables (338) (2)
Increase/(decrease) in trade and other payables 148 (203)
Cash generated from operating activities 564 495
Taxes paid (5) (4)
Net cash generated from operating activities 559 491
------------ ------------
Cash flows used in investing activities
Purchases of fixed assets (431) (675)
Sales of fixed assets - -
Net cash used in investing activities (431) (675)
------------ ------------
Cash flows from financing activities
Net proceeds from share issues 10 120
Interest paid (51) (37)
Net (decrease)/increase in borrowings (189) 422
Net cash from financing activities (230) 505
------------ ------------
Net (decrease)/increase in cash and cash
equivalents (102) 321
Net cash and cash equivalents at beginning
of period 859 538
Net cash and cash equivalents at end of
period 757 859
Crimson Tide plc
Group
--------------------------
Year ended Year ended
31 December 31 December
2017 2016
GBP000 GBP000
Analysis of net funds:
Cash and cash equivalents 757 878
Bank overdraft - (19)
757 859
Other borrowing due within
one year (280) (306)
Borrowings due after one year (359) (522)
Net funds 118 31
Notes to the Consolidated Financial Statements for the year
ended 31 December 2017
A) Significant accounting policies
a. Basis of preparation
The preliminary results for the period to 31 December 2017 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 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
A reduced corporation tax charge of GBP5,000 (2016: GBP4,000)
has been included in the consolidated accounts for the period ended
31 December 2017 due to the availability of tax losses.
C) Exceptional item
The Company incurred one-off legal fees of GBP37k and accounting
due diligence costs of GBP7k in preparation of an acquisition that
was subsequently aborted by the Company.
D) Earnings per share
Group
Year ended Year ended
31 December 31 December
2017 2016
Basic and Diluted Earnings
per share
Reported profit for the
year (GBP000) 310 348
Reported earnings per
share (pence) 0.07 0.08
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 Year ended
31 December 31 December
2017 2016
No. No.
Weighted average number
of ordinary shares:
Opening balance 453,486,234 445,486,234
Effect of 1m share options 52,055 -
issued during the year
Effect of 8m share options
issued during the year - 1,945,205
Weighted average number
of ordinary shares 453,538,289 447,431,439
============== ==============
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2017
or 31 December 2016. Statutory accounts for 2016, which were
prepared under IFRS, have been delivered to the Registrar of
Companies. The auditors have reported on the 2016 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 2017 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 audited
statutory accounts will be published on the Company's website
www.crimsontide.co.uk in May 2018.
This information is provided by RNS
The company news service from the London Stock Exchange
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