TIDMTIDE
RNS Number : 3310U
Crimson Tide PLC
01 April 2021
Crimson Tide plc
Preliminary Announcement of Results to 31 December 2020
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 2020.
Financial Highlights
-- Revenue increased by 21% to GBP3,542k (2019: GBP2,921k)
-- EBITDA increased by 22% to GBP946k (2019: GBP775k)
-- Profit before tax increased by 51% to GBP532k (2019: GBP352k)
-- Cash at year-end increased to GBP1.175m (2019: GBP320k)
Operational Highlights
-- Secured additional long term, contracted subscriber
agreements with new and existing clients
-- Contribution from Partner programme underpinning confidence in strategic direction
-- IoT and machine automation capability gaining traction and
increasing pipeline of opportunities
-- Continued investment in people and functionality to maximise opportunity
-- Completed migration to new ERP system to enable scale
Barrie Whipp, Executive Chairman of Crimson Tide, commented:
"Crimson Tide has once again delivered a very good year of
progress across all of our key metrics and invested in more staff
and innovation to continue to drive the business forward. We have
clear opportunities in terms of the mpro5 product, upsell to our
existing clients and expansion of the partner channel. Add to this
international opportunities and enhancement of our healthcare and
IoT capabilities and we can clearly see that the Company has
significant momentum to take us to the next level"
About the Company
Crimson Tide plc is the provider of the full service mobility
platform mpro5 - #notjustanapp. mpro5 is delivered on smartphones,
tablets and PDAs, and enables organisations to transform their
business and strengthen their workforce by smart mobile working.
mpro5 is hosted in the cloud on Microsoft Azure. The Company's
contracts are provided on a long term, contracted subscription
basis and clients immediately experience a return on their
investment.
mpro5 is used in over 260,000 sites in logistics,
transportation, healthcare & retail.
Enquiries:
Crimson Tide plc
Barrie Whipp / Luke Jeffrey +441892 542444
finnCap Ltd (Nominated Adviser and +4420 7220 0500
Broker)
Julian Blunt / James Thompson -
Corporate Finance
Andrew Burdis - Corporate Broking
Alma PR (Financial PR) +44 7780 901979
Josh Royston
Chairman's Statement
The investments that we have made over many years from our own
resources resulted in a very pleasing year for our Company in 2020
in circumstances that none of us could have foreseen. The long term
contracted subscription revenues that we added, extended and
enhanced gives us a very solid platform to become more expansive in
our ambitions, given the significant market opportunity we can
clearly see.
The onset of the pandemic displayed our ability to seamlessly
extend our already flexible working structure and our cloud-based
services were uninterrupted and more relevant than ever before. We
expect our staff to be agile and they displayed superbly their
ability to react to circumstances that affected our clients. We
experienced very limited take up of an offer of payment holidays to
our clients and also gained new ones because of our positive
response to challenges that all organisations faced and continue to
face.
2020 saw our executive board really excel in their duties. We
are busy across all areas of the business and our internal systems
and management information show that our client satisfaction is
high, that we are innovating to help our clients take their
businesses to new levels of compliance, reporting and key
performance metrics.
Our partner channel has grown not only in number, but in
attributable revenues and it is this strategy that will enable us
to grow domestically and internationally. We expanded our footprint
in the Middle East, Europe and North America and whilst these
markets contribute only a modicum of income, they are demonstrating
real demand for mpro5 and the benefits it can bring.
We continue to innovate in IoT (the internet of things) and have
been working hard on pilots to demonstrate the benefits of machine
information to our clients. There is pent up demand for IoT and we
feel that we are at a key point, where the only delays are a result
of clients needing to review their own strategies before committing
to this exciting technology. mpro5 is very well placed to take
advantage of this technology.
Looking ahead, I see clear opportunities for Crimson Tide,
particularly in IoT, healthcare and international markets. Our
partner first marketing strategy showed its first significant
benefits in 2020 and we are going to be working hard to expand the
channel.
With a committed team, clear market opportunity and with mpro5
being in the most advanced state ever, I am extremely confident in
our future. In a difficult year for many, our staff have been
absolutely excellent and are fundamental to our success. I thank
every one of them for their sterling efforts. I would particularly
like to thank Robert Todd, who resigned as a Non-Executive Director
to focus on his own business. Following the year end we welcomed
Jacqueline Daniell to the Board as a Non-Executive Director and
look forward to benefitting from Jacqui's excellent counsel in the
future.
Barrie RJ Whipp
Founder & Chairman
Chief Executive Officer's Statement
Introduction
I am delighted with the progress that the business has made
during the course of the year. The unforeseeable circumstances of
the global pandemic have proven the resilience of Crimson Tide's
business model and highlighted the strength of our focus on
building long term, contracted subscriber revenue. Furthermore, the
shift away from office based working has increased the need for the
kind of agile automation and analytics tools on which mpro5 has
built its reputation and we have seen engagement levels increase
and sales cycles shorten.
Results
Revenues increased by 21% to GBP3.54 million (FY19: GBP2.92
million), which is a reflection of new client wins as well as
expanding our reach within existing clients. The majority of our
client base is enterprise grade and delivery continued unabated
through the pandemic. Some of our smaller clients were affected and
we were proud to support them with payment holidays where
appropriate. In total, customer churn of less than 5% was an
excellent performance and in line with the high standards that we
set ourselves. Our client contracts are typically long term in
nature and we have renewed a number over the course of the year
which gives us further strength in future visibility. EBITDA
improved by 22% to GBP946k (FY19: GBP775k) despite the ongoing
investments being made, a reflection of our strong financial
discipline. Cash at the year end was particularly strong at GBP1.17
million (FY19: GBP320k).
There is no doubt that recognition of mpro5 is growing within
the marketplace and leading to ever greater adoption. To date,
marketing efforts have been centred around those business areas in
which we have strong reference clients, we aim to strengthen our
marketing capabilities in the coming year. With our new partner
first model, we have had considerable success over the course of
the year in the rail and retail sectors. In rail we are
increasingly being seen as a disruptor to outdated ways of working
and we have been able to create and adapt solutions which have
transformed the way in which organisations operate. Similarly, in
the retail sector we have been able to expand our offering within
one of the UK's leading supermarket chains whilst also securing a
five year contract with one of Britain's leading neigbourhood
retailers.
Our reach continues to broaden as mpro5's reputation continues
to grow along with the recognition that our platform is truly
industry agnostic. During the financial year we were pleased to
welcome Cadent, who handle Britich Gas infrastructure management,
Student Roost, a student accommodation firm and Capita, a multi
service group, as new clients.
Operational Developments
We have continued to invest across all aspects of our business
as we strive to remain the most innovative, configurable and agile
digital transformation platform available. Investments made in
prior years in IoT capabilities are continuing and this year we
have deployed more sensors than in any prior period, providing an
ever greater number of data points which can be used to benefit our
clients in a variety of ways. A multitude of sensors supply
temperature, humidity, motion and other data directly into mpro5.
We have also introduced new capabilities into our rules engine to
allow for powerful job scheduling, and leveraged machine learning
for automated anomaly detection in real-time. We are already seeing
a considerable uptake of our IoT offering, as evidenced by the
agreement signed with Incentive QAS f or the purposes of IoT-driven
cleaning compliance at London's CityPoint skyscraper.
Further technological improvements include enhancements made to
the mpro5 web client, including the launch of the customer portal
which enables our clients' customers to use mpro5. As well as
providing another layer of functionality for our clients and
embedding us deeper within their organisation, it also helps to
introduce our technology to a wider audience. Similarly, we have
continued development of a solution specifically designed for use
in healthcare applications. mpro5 is already used for various
healthcare scenarios and our reach has broadened with a pilot
project with the World Federation of Haemophilia which is currently
in the process of being rolled out. This award gives us further
confidence that, with ongoing investment, we can make a real
difference in delivering greater patient outcomes. Internally, we
completed our transition to a new ERP system which will prove
highly beneficial as we scale.
The Company has also invested in people, strengthening the
technical teams to help deliver the ongoing improvements already
described, as well as strengthening marketing as we look to
continue to grow our partner programmes and take full advantage of
the opportunity they represent. One of the most pleasing aspects of
the year has been the progress of our partnerships. We have a much
greater understanding of how we can work together with partners and
the benefits that each party can bring, with their ability to
introduce our market leading solutions to enterprise level
organisations significantly shortening the sales cycle. The revenue
contribution this year was pleasing and endorses our strategy, with
the potential to add significant scale in domestic and
international markets.
Outlook
The current financial year has started in line with our
expectations. We continue to see a healthy pipeline of
opportunities and we have a number of pilot projects underway which
we hope to convert into ongoing agreements. As more and more
industries continue along the path of digital transformation and as
mpro5 continues its focus on adding exceptional functionality we
expect to add incremental long term, contracted, subscriber
revenues through both existing and new engagements, directly and
increasingly through our growing partner programme. We maintain
great confidence in the future.
Luke Jeffrey
CEO
Financial Review
The financial results for 2020 reflect another year of strong
growth for Crimson Tide with solid performances across all of the
Company's financial KPI's.
Financial indicator Year Year Increase
ended ended
December December
2020 2019
GBP'000 GBP'000 %
---------- ---------- ---------
Revenue 3,542 2,921 21%
---------- ---------- ---------
Gross profit 2,865 2,546 13%
---------- ---------- ---------
EBITDA 946 775 22%
---------- ---------- ---------
Profit before tax 532 352 51%
---------- ---------- ---------
Cash from Operations 1,387 358 287%
---------- ---------- ---------
Revenue
The Company's focus on growing its partner channel contributed
to revenue growth of 21%. Annual recurring revenue (ARR) as at 31
December 2020 was GBP3.06 million (2019: GBP2.36 million). The
Total Contract Value (TCV) at this date was GBP7.17 million (2019:
GBP6.1 million). Revenue churn remained low at 4.9% (2019: 7.5%).
While the gross profit margin has reduced slightly, the Board is
confident that it will remain above its 80% target rate.
The interim results for 2020 included one-off hardware revenue
of approximately GBP170k that was recognised due to the
requirements of IFRS15. As part of growing its partner channel
strategy, the Board has decided that the Company will no longer
offer hardware on long-term subscriptions. IoT sensors and other
hardware that interface with the mpro5 platform will be supplied by
specialist partners.
Cashflow and liquidity
Cash at year-end increased by GBP855k to GBP1.17m (2019:
GBP320k). An R&D tax credit contributed GBP202k (2019: GBPnil)
to this increase. The Company made use of HMRC's VAT deferral
option during the first half of 2020. VAT of GBP138k was deferred
and will be repaid in instalments in terms of HMRC's VAT deferral
payment scheme.
Trade receivables
Trade receivables at year-end amounted to GBP452k (2019:
GBP649k). The Company did not experience a noticeable increase in
trade receivables or bad debt related to the pandemic. The
recognition requirements of IFRS15 referred to above caused an
increase of GBP102k to accrued income at year-end.
Debt and finance costs
Loans and leases decreased to GBP288k (2019: GBP433k). This
amount includes lease liabilities amounting to GBP96k (2019:
GBP152k) related to right-of-use assets in respect of office rental
capitalised in terms of IFRS16.
Capitalisation of intangible asset
Software development costs of GBP539k (2019: GBP385k) were
capitalised during the year, while amortisation during 2020
amounted to GBP216k (2019: GBP171k). The value of the capitalised
software intangible asset at year-end was GBP1.64m (2019:
GBP1.32m).
Tax
An R&D tax credit of GBP202k (2019: GBPnil) has been
recognised in the Consolidated Statement of Profit or Loss. No
other corporation tax charge has been included (2019: GBPnil) due
to the availability of historic tax losses.
Earnings per share
The average number of ordinary shares in issue during the year
was 457.5m (2019 457.5m). Basic and diluted earnings per share was
0.16p (2019: 0.08p).
Crimson Tide plc
Unaudited Consolidated Statement of Profit or Loss
Year ended Year ended
December December
2020 2019
GBP000 GBP000
------------------------- ----------- -----------
Revenue 3,542 2,921
Cost of Sales (677) (375)
-------------------------- ----------- -----------
,
Gross Profit 2,865 2,546
Administrative expenses (2,309) (2,285)
-------------------------- ----------- -----------
Profit from operations 556 261
Other income 5 135
Finance costs (29) (44)
-------------------------- ----------- -----------
Profit before taxation 532 352
Taxation 202 -
Profit for the year 734 352
========================== =========== ===========
Earnings per share
Basic (pence) 0.16 0.08
Diluted (pence) 0.16 0.08
Unaudited Consolidated Statement of Comprehensive Income
Year ended Year ended
December December
2020 2019
GBP000 GBP000
--------------------------------------------- ----------- -----------
Profit for the year 734 352
Other comprehensive income/(loss) for the
year:
Exchange differences on translating foreign
operations 4 (3)
--------------------------------------------- ----------- -----------
Total comprehensive profit for the year 738 349
============================================= =========== ===========
Unaudited Consolidated Statement of Financial Position
As at 31 As at 31
December December
2020 2019
GBP000 GBP000
-------------------------------- ---------- ----------
Non-current assets
Capitalised development costs 1,642 1,319
Other intangible assets 799 799
Equipment, fixtures & fittings 235 325
Right-of-use asset 92 149
Deferred tax asset 32 32
---------------------------------- ---------- ----------
2,800 2,624
-------------------------------- ---------- ----------
Current assets
Inventories 6 12
Trade and other receivables 1,221 1,220
Cash and cash equivalents 1,175 320
---------------------------------- ---------- ----------
2,402 1,552
-------------------------------- ---------- ----------
Total assets 5,202 4,176
---------------------------------- ---------- ----------
Current liabilities
Trade and other payables 907 474
Borrowings 8 31
Lease liabilities 181 228
---------------------------------- ---------- ----------
1,096 733
-------------------------------- ---------- ----------
Non-current liabilities
Borrowings 5 9
Lease liabilities 94 165
---------------------------------- ---------- ----------
99 174
-------------------------------- ---------- ----------
Total liabilities 1,195 907
---------------------------------- ---------- ----------
Net assets 4,007 3,269
================================== ========== ==========
Equity
Share capital 457 457
Share premium 148 148
Other reserves 479 475
Reverse acquisition reserve (5,244) (5,244)
Retained earnings 8,167 7,433
---------------------------------- ---------- ----------
Total equity 4,007 3,269
---------------------------------- ---------- ----------
Crimson Tide plc
Unaudited Consolidated 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 2019 457 148 478 (5,244) 7,081 2,920
Profit for the
year 352 352
Translation movement (3) (3)
Balance as at
31 December 2019 457 148 475 (5,244) 7,433 3,269
Profit for the
year 734 734
Translation movement 4 4
Balance as at
31 December 2020 457 148 479 (5,244) 8,167 4,007
========= ========= ========== ============= ========== ========
Crimson Tide plc
Unaudited Consolidated Statement of Cash Flows
Group
--------------------------
Year ended Year ended
31 December 31 December
2020 2019
GBP000 GBP000
Cash flows from operating activities
Profit before taxation 532 352
Adjustments for:
Amortisation of intangible assets 216 171
Depreciation of property, plant and
equipment 111 148
Depreciation of right-of-use assets 57 58
Unrealised currency translation gains 4 (3)
Finance costs 29 44
Operating cash flows before movements
in working capital 949 770
Decrease in inventories 6 3
Increase in trade and other receivables (1) (317)
Increase/(decrease) in trade and other
payables 433 (98)
Cash generated from operating activities 1,387 358
Taxes received 202 -
Net cash generated from operating
activities 1,589 358
------------ ------------
Cash flows used in investing activities
Purchases of fixed assets (21) (72)
Development expenditure capitalised (539) (385)
Interest paid in cash (21) (34)
Net cash used in investing activities (581) (491)
------------ ------------
Cash flows from financing activities
Repayments of borrowings (27) (34)
Repayments of lease liability (60) (61)
Repayment of lease liability (IFRS16) (66) (65)
Net cash from financing activities (153) (160)
------------ ------------
Net increase/(decrease) in cash and
cash equivalents 855 (293)
Net cash and cash equivalents at beginning
of period 320 613
Net cash and cash equivalents at end
of period 1,175 320
Crimson Tide plc
Group
--------------------------
Year ended Year ended
31 December 31 December
2020 2019
GBP000 GBP000
Analysis of net funds:
Cash and cash equivalents 1,175 320
Borrowings and leases due within one
year (189) (259)
Borrowings and leases due after one
year (99) (174)
Net funds 887 (113)
In addition to net funds, the Group has an overdraft facility of
GBP250,000 in place.
Notes to the Consolidated Financial Statements for the year
ended 31 December 2020
1) Significant accounting policies
a. Basis of preparation
The preliminary results for the period to 31 December 2020 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. Revenue recognition
Revenue is recognised at an amount that reflects the
consideration to which the consolidated entity is expected to be
entitled in exchange for transferring goods or services to a
customer. For each contract with a customer, the consolidated
entity: identifies the contract with a customer; identifies the
performance obligations in the contract; determines the transaction
price which takes into account the time value of money; allocates
the transaction price to the separate performance obligations on
the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises revenue
when or as each performance obligation is satisfied in a manner
that depicts the transfer to the customer of the goods or services
promised.
2) Taxation
A research and development tax credit of GBP201,908 (2019:
GBPnil) has been recognised in the Consolidated Statement of Profit
or Loss. No other corporation tax charge has been included in the
consolidated accounts for the period ended 31 December 2020 (2019:
GBPnil) due to the availability of tax losses.
3) 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 2020 31 December
2019
Earnings per share
Reported profit for the year
(GBP000) 734 352
Reported basic earnings per share
(pence) 0.16 0.08
Reported diluted earnings per
share (pence) 0.16 0.08
Year ended Year ended
31 December 31 December
2020 2019
No. No.
Weighted average number of ordinary
shares:
Opening balance 457,486,234 457,486,234
Weighted average number of ordinary
shares for basic EPS 457,486,234 457,486,234
Dilutive effect of options outstanding 2,938,478 7,427,083
-------------- --------------
Weighted average number of ordinary
shares for diluted EPS 460,424,712 464,913,317
============== ==============
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2020
or 31 December 2019. Statutory accounts for 2019, which were
prepared under IFRS, have been delivered to the Registrar of
Companies. The auditors have reported on the 2019 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 2020 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 2021.
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