TIDMTIDE
RNS Number : 4736X
Crimson Tide PLC
30 April 2019
Crimson Tide plc
Preliminary Announcement of Results to 31 December 2018
Crimson Tide plc ("Crimson Tide" or "the Company"), the provider
of the mpro5 solution, is pleased to announce its unaudited
preliminary results for the year ended 31 December 2018.
Financial Highlights
-- Profit Before Tax ahead of market expectations at GBP69k
(2017: GBP309k) after significant new investments in sales and
marketing to accelerate growth potential
-- Turnover increased to GBP2.40m (2017: GBP2.28m) reflecting
higher percentage of SaaS contracts
-- Equipment operating lease debt decreased by over 40% to
GBP376k (2017: GBP639k) with net funds doubling to GBP237k (2017:
GBP118k)
Operational Highlights
-- mpro5's Internet of Things and Time & Attendance modules
maturing and seeing first rollouts, including temperature, humidity
lux, motion sensors, NFC, fingerprint, and facial recognition
-- New solutions sales channel offering data SIM, Mobile Device
Management, and managed hardware subscription services
-- Partner network contributing maiden revenues in Rail sector
-- NHS contracts expanding
Barrie Whipp, Executive Chairman of Crimson Tide, commented:
"A year of significant investment in new Sales & Marketing
resource, whilst still producing profitability and net cash, sees
Crimson Tide well set for growth. mpro5 has evolved into a gold
standard mobility system used in over 260,000 sites and is poised
for even wider opportunities"
About the Company
Crimson Tide plc is the provider of mpro5 - #notjustanapp. 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 on Microsoft Azure. The Company's contracts are provided on a
long term, contracted subscription basis and clients can
immediately see a return on their investment.
mpro5 is used in over 260,000 sites in facilities management,
healthcare, transportation and logistics.
Enquiries:
Crimson Tide plc
Barrie Whipp / Luke Jeffrey 01892 542444
Arden Partners 020 7220 1666
John Llewellyn-Lloyd /
Dan Gee-Summons
Chairman's Statement
2018 was a year when the Board of Crimson Tide plc took the
decision to increase the Company's sales and marketing effort quite
dramatically, to allow us to create a platform for increased growth
in the future. We asked stakeholders to recognise that such
investment would be reflected in the bottom line profitability but
that it would stand us well in the future. Management expectations
were for a break even result for the year. I am very pleased that,
in the light of adding some very senior sales people and their
associated costs, as well as increasing our marketing, we were not
only profitable but exceeded market expectations.
We are very confident in our new sales team, consisting of
director level appointments in Partner sales, Enterprise sales and
Solution sales and the team has already increased our pipeline. Our
first partner sales were reflected in a new sector to Crimson Tide,
the rail industry, where we completed transactions with Northern
Rail and Chiltern Rail.
We have ambitious plans for growth with both IT channel and OEM
partners, where we are now recognised as a Solution Partner for
Samsung. In Enterprise sales, we are focused on larger
transactions, including international opportunities. We have
secured further business from existing clients and are hopeful that
our new offerings in solution sales, such as Mobile Device
Management, data SIMs and the Internet of Things (IOT) will open
opportunities with new and existing clients.
Our marketing efforts are seeing very positive results in terms
of pipeline and the gearing that these opportunities give us for
2019 and beyond are in excess of at any time in the past.
Internationally, we have restructured our Middle East efforts by
appointing a partner to manage the transactions that we have
completed and to employ our sales representative in the region. Our
partner will manage existing contracts, first line support and will
also market mpro5 for us to its own client base. We continue to see
interest in Northern Europe for mpro5 including some new interest
in Scandinavia.
Our efforts in healthcare have been part of a longer strategy
and we continue to see a wide range of opportunity. We are
currently enhancing mpro5 for people with autism and our pilots for
a global regulatory organisation have been a success, with a
substantial increase in reported cases of falsified medicines. We
have also completed further work in the reporting of clinical usage
of a drug for the treatment of high cholesterol with a large
American pharma company. Healthcare business takes some time to
come to fruition.
In terms of mpro5, our upgrade to the mobile application with
our Apollo release has seen further enhancements in terms of a Time
& Attendance module, which has already been sold to a number of
clients and a significant upgrade in the underlying codebase allows
even more features and improved performance. This has now been
followed by an upgrade to our web infrastructure with Project 13,
where we have modernised some of our core technologies on Microsoft
Azure.
mpro5 is continually improved by client feedback and our two
major investments at present are in location-based services and
facial and fingerprint recognition. We continue to increase our
development staff to ensure that we remain at the cutting edge of
both mobile and web technologies.
In many ways, the most exciting addition to mpro5 has been our
Internet of Things module and the certification of related sensors,
gateways and network technologies. IOT is now available with mpro5
with approved sensors for temperature, humidity, lux, CO2 and
motion sensors, which can trigger mpro5 Jobs and Flows
automatically. We are experiencing high levels of interest in mpro5
with IOT and now have a dedicated sales resource and presales
consultant.
Crimson Tide's organogram now shows 34 members of staff. I
recall that not more than a few years ago this figure was 14. It
shows that we have invested short term profits into growth; mpro5
has never been more widely used, with over 260,000 sites
benefitting from our technology.
Financially, we grew at the turnover level, and increased the
number of software only contracts. Additions to base subscribers
were good in the second half of 2018, a trend that has continued
into 2019. As I mentioned at the start of my statement, we took
controlled risks in terms of growth at the sales level with a view
to a breakeven result and overachieved with a small profit. Our
cash position improved even in the light of over GBP250k of device
finance repaid.
Operationally the day to day running of the business is now in
the hands of Luke Jeffrey who, with over a year in the role is now
putting his own stamp on the organisation. In 2018 we recruited
Peter Hurter as Financial Controller and Peter will succeed Steve
Goodwin as Finance Director in 2019. Steve has agreed to remain as
a Non-Executive Director.
During 2018, we recognised that we had the capacity to set a
strategy for more investments in the Company and that the
investment in increased sales and marketing resource was going to
be an investment for the future, with associated costs now. The
Board believes we took the right decision. We have an enviable
pipeline and our sales team is focused on delivery. The Company is
set well for the future.
Barrie R. J. Whipp
Executive Chairman
30 April 2019
Financial Review
I am very pleased to comment on our results for the year to 31
December 2018.
As previously communicated, the Company's strategy is one of
continuing investment in the growth of the business. In 2018 the
Company re-invested the vast majority of its profits generated from
long term subscription contracts to achieve this aim. Human
resources, focused particularly on software development and future
sales, were added throughout the year along with targeted marketing
expenditure. The Company has maintained a profit before tax for the
year of GBP69k (2017: GBP309k), better than the market's
expectation of breakeven, on turnover up 5% to GBP2.40m (2017:
GBP2.28m), reflecting more software-only contracts.
International subscribers are beginning to be added. To ensure
the Company is positioned to take full advantage of the
opportunities that are emerging, further investment in the
Company's international operations was made during 2018. This
expenditure, along with the higher other operating expenses noted
above, have added over GBP300k more costs than in 2017, excluding
amortisation and depreciation. The Company's management keep close
track on this spend to ensure these investments are wisely targeted
with the aim of achieving faster growth in future years.
Notwithstanding this expenditure, the Company has largely
maintained its cash balances, which totalled over GBP600k at the
year end, whilst continuing to repay debt used to finance mobile
devices for subscribers. Borrowings decreased by over 40% to
GBP376k (2017: GBP639k) and net funds finished the year at GBP237k
(2017: GBP118k).
Crimson Tide's balance sheet remains healthy. Intangible fixed
assets includes goodwill of GBP0.8m (2017: GBP0.8m) and the cost of
our mpro5 software, GBP1.1m at the 2018 year end (2017: GBP0.9m),
During the year, the underlying platform on which our mpro5
software operates was upgraded and "Internet of Things" technology
incorporated to further add to users' capabilities. The Company
believes this additional investment has already created new
opportunities including the ability to utilise sensor-based
functionality.
The Group has previously not made fair value adjustments to
intra-group loans denominated in currencies other than Sterling as
the amounts were considered immaterial. Due to the decline in the
value of Sterling to Euro in 2016, an adjustment to the fair value
of intra-group loans denominated in Euro has become necessary. The
adjustment did not impact Earnings per Share or Diluted Earnings
per Share as reported in the prior year.
Future Prospects
Cash generation from organic business continues to be strong.
Additional functionality and international expansion is expected to
accelerate long term contracted revenue growth. Margins close to
90% and high operational gearing leads the Directors to believe
that the majority of these increased revenues will positively
impact profit before tax. The market for cloud, mobility and
Internet of Things is undoubted and mpro5 provides clients with
these fully inclusive services on a subscription basis. With the
planned addition of a new biometric time and attendance module to
mpro5 and an opportunity pipeline higher than ever before, the
Board is excited about the continuing development of the Company
and its future prospects.
Stephen Goodwin
Finance Director
30 April 2019
Crimson Tide plc
Unaudited Consolidated Income Statement
Group
Year ended Year ended
December December
2018 2017
GBP000 GBP000
As restated
- Note E
Revenue 2,398 2,275
Cost of Sales (324) (231)
----------- ------------
Gross Profit 2,074 2,044
Administration expenses (1,581) (1,246)
) )
Exceptional item (note B) - (44)
----------- ------------
Earnings before interest, tax, depreciation
& amortisation 493 754
Depreciation & amortisation (384) (394)
----------- ------------
Profit from operations 109 360
Finance costs (40) (51)
----------- ------------
Profit before taxation 69 309
Tax (note C) - (5)
Profit for the year attributable to equity
holders of the parent 69 304
=========== ============
Earnings per share (note D)
Basic earnings per Ordinary share (pence) 0.02 0.07
Diluted earnings per Ordinary share (pence) 0.01 0.07
Unaudited Consolidated Statement of Comprehensive Income
Group
Year ended Year ended
December December
2018 2017
GBP000 GBP000
As restated
- Note E
Profit for the year 69 304
Other comprehensive income/(loss) for the
year:
Exchange differences on translating foreign
operations - 5
----------- ------------
Total comprehensive profit for the year 69 309
=========== ============
Crimson Tide plc
Unaudited Statement of Financial Position
Group
As at 31 As at 31 As at 1
December December January
2018 2017 2017
GBP000 GBP000 GBP000
As restated As restated
- Note E - Note E
Fixed Assets
Intangible assets 1,904 1,698 1,522
Equipment, fixtures & fittings 401 611 750
----------
2,305 2,309 2,272
---------- ------------ ------------
Current Assets
Inventories 15 8 7
Trade and other receivables 935 974 636
Cash and cash equivalents 613 757 878
---------- ------------ ------------
1,563 1,739 1,521
---------- ------------ ------------
Total Assets 3,868 4,048 3,793
========== ============
Equity and liabilities
Equity attributable to equity
holders of the parent
Share capital 457 454 453
Share premium 148 121 112
Other reserves 478 478 473
Reverse acquisition reserve (5,244) (5,244) (5,244)
Retained earnings 7,081 7,012 6,708
---------- ------------ ------------
2,920 2,821 2,502
---------- ------------ ------------
Liabilities
Amounts falling due within
one year 723 868 769
Amounts falling due after more
than one year 225 359 522
---------- ------------ ------------
Total liabilities 948 1,227 1,291
---------- ------------ ------------
Total equity and liabilities 3,868 4,048 3,793
Crimson Tide plc
Unaudited Statement Of Changes In Equity
Group Share Share Other Reverse Retained Total
capital premium reserves acquisition earnings
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance as at
1 January 2017
as previously
stated 453 112 422 (5,244) 6,759 2,502
Prior year adjustment
- Note E 51 (51) -
--------- --------- ---------- ------------- ---------- --------
Balance as at
1 January 2017
as restated 453 112 473 (5,244) 6,708 2,502
Retained profit
for the year 310 310
Share options
exercised 1 9 10
Translation movement (1) (1)
Prior year adjustment
- Note E 6 (6) -
--------- --------- ---------- ------------- ---------- --------
Balance as at
31 December 2017
as restated 454 121 478 (5,244) 7,012 2,821
Retained profit
for the year 69 69
Share options
exercised 3 27 30
Balance as at
31 December 2018 457 148 478 (5,244) 7,081 2,920
========= ========= ========== ============= ========== ========
Crimson Tide plc
Unaudited Consolidated Cash Flow Statement
Group
--------------------------
Year ended Year ended
31 December 31 December
2018 2017
GBP000 GBP000
As restated
- Note E
Cash flows from operating activities
Profit before taxation 69 309
Add back:
Amortisation of intangible assets 141 120
Depreciation of equipment, fixtures and
fittings 243 274
Interest expense 40 51
Unrealised currency translation losses - 6
Operating cash flows before movements in
working capital 493 760
Increase in inventories (7) (1)
Decrease/(increase) in trade and other receivables 70 (338)
(Decrease)/increase in trade and other payables (15) 143
Cash generated from operating activities 541 564
Taxes paid (32) (5)
Net cash generated from operating activities 509 559
------------ ------------
Cash flows used in investing activities
Purchases of fixed assets (380) (431)
Sales of fixed assets - -
Net cash used in investing activities (380) (431)
------------ ------------
Cash flows from financing activities
Net proceeds from share issues 30 10
Interest paid (40) (51)
Net decrease in borrowings (263) (189)
Net cash from financing activities (273) (230)
------------ ------------
Net (decrease)/increase in cash and cash
equivalents (144) (102)
Net cash and cash equivalents at beginning
of period 757 859
Net cash and cash equivalents at end of
period 613 757
Crimson Tide plc
Group
--------------------------
Year ended Year ended
31 December 31 December
2018 2017
GBP000 GBP000
Analysis of net funds:
Cash and cash equivalents 613 757
Bank overdraft - -
613 757
Other borrowing due within one year (151) (280)
Borrowings due after one year (225) (359)
Net funds 237 118
Notes to the Consolidated Financial Statements for the year
ended 31 December 2018
A) Significant accounting policies
a. Basis of preparation
The preliminary results for the period to 31 December 2018 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) 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.
C) Taxation
A reduced corporation tax charge of GBPnil (2017: GBP5,000) has
been included in the consolidated accounts for the period ended 31
December 2018 due to the availability of tax losses.
D) Earnings per share
The basic earnings per share has been calculated by dividing the
profit attributable to ordinary shareholders by the weighted
average number of shares in issue during the period.
The diluted earnings per share has been calculated by dividing
the profit attributable to ordinary shareholders by the weighted
average number of shares that would be in issue, assuming
conversion of all dilutive potential ordinary shares into ordinary
shares.
Reconciliation of the weighted average number of shares used in
the calculations are set out below.
Group
Year ended Year ended
31 December 2018 31 December
2017
Earnings per share
Reported profit for the year
(GBP000) 69 309
Reported basic earnings per share
(pence) 0.02 0.07
Reported diluted earnings per
share (pence) 0.01 0.07
Year ended Year ended
31 December 31 December
2018 2017
No. No.
Weighted average number of ordinary
shares:
Opening balance 454,486,234 453,486,234
Effect of 3m share options issued 493,151 -
during the year
Effect of 1m share options issued
during the year - 52,055
-------------- --------------
Weighted average number of ordinary
shares for basic EPS 454,979,385 453,538,289
Effect of options outstanding 8,580,357 11,282,258
-------------- --------------
Weighted average number of ordinary
shares for basic EPS 463,559,742 464,820,547
============== ==============
E) Prior year adjustment
Group Share Share Other Reverse Retained Total
capital premium reserves acquisition earnings
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance as at
1 January 2017
as previously
stated 453 112 422 (5,244) 6,759 2,502
Effect of intra-group
foreign currency
fair value adjustment 51 (51) -
--------- --------- ---------- ------------- ---------- --------
Balance as at
1 January 2017
as restated 453 112 473 (5,244) 6,708 2,502
The Group has previously not made fair value adjustments to
intra-group loans denominated in currencies other than Sterling as
the amounts were considered immaterial. Due to the decline in the
value of Sterling to Euro in 2016, an adjustment to the fair value
of intra-group loans denominated in Euro has become necessary.
This adjustment has the effect of reducing the Group's profit
for the prior year, while increasing the value of the Group's Irish
subsidiary. The Irish subsidiary's value is increased by means of
the Cumulative Translation Adjustment, which forms part of "Other
Reserves" on the Consolidated Statement of Financial Position. The
increase in the Cumulative Translation Adjustment is reported in
the Consolidated Statement of Comprehensive Income.
The adjustment did not impact Earnings per Share or Diluted
Earnings per Share as reported in the prior year.
Year ended
December
2017
GBP000
Administration expenses
Decrease in profit for the financial year (6)
-----------
The following table summarises the impact of the prior period
error on the financial statements of the Group.
Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income
Year ended
December
2017
GBP000
Other comprehensive income/(loss) for
the year:
Increase in exchange differences on translating
foreign operations 6
-----------
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2018
or 31 December 2017. Statutory accounts for 2017, which were
prepared under IFRS, have been delivered to the Registrar of
Companies. The auditors have reported on the 2017 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 2018 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 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEFFUUFUSEEL
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