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Crimson Tide PLC Interim Results

28/09/2021 6:59am

UK Regulatory (RNS & others)


Crimson Tide (LSE:TIDE)
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TIDMTIDE

RNS Number : 1268N

Crimson Tide PLC

28 September 2021

28 September 2021

Crimson Tide plc

Interim results for the six months ended 30 June 2021

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 2021.

Financial headlines

   --      Turnover increase of 13.8% to GBP2,015k (H1 2020: GBP1,770k) 
   --      EBITDA increase of 12.5% to GBP529k (H1 2020: GBP470k) 
   --      Profit before tax increased by 11.3% to GBP286k (H1 2020: GBP257) 

-- Fundraise of GBP5.6m (net of fees) finalised during April 2021, of which GBP250k spent in H1

Operational highlights

   --      Expansion of food safety use of mpro5 
   --      Early progress on micro business version 
   --      UAT completed for patient version of mpro5 
   --      Raleigh, NC established as US base 
   --      Significant hires in sales, marketing and development 

Barrie Whipp, Founder and Chairman, commented,

"With the completed fundraise for expansion purposes, we are set to experience a new phase of growth as a business. We are now in a position to deliver our version of mpro5 for micro/nano business while mpro5 continues to perform strongly in our key enterprise sectors of transport, facilities management and retail. We are about to experience a period of significant expenditure on growth, which will change our profile in H2 2021 and 2022, with the firm belief that we have a bright future ahead".

About the Company

Crimson Tide plc is the provider of mpro5 - a leading, cloud-based, cross-platform, SaaS mobile workflow solution. mpro5 enables organisations to drive efficiencies through mobile data capture, Internet of Things sensors, process automation, and real-time analytics. Supporting over 100,000 users across multiple countries and industries, mpro5 is provided on multi-year subscription basis driving immediate return on investment for its users.

Enquiries:

 
 Crimson Tide plc 
  Barrie Whipp / Luke Jeffrey                                             +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 demonstrated the robustness of our long-term subscription model for mpro5, whilst setting us up for the largest capital raise in our history. With early wins in the food safety sector as well as the utility vertical, we were able to demonstrate the sound business model that attracted several highly respected investors in the AIM market to participate in our fundraising in April.

Our increased capital base and cash generated from mpro5's existing operations saw cash increase to in excess of GBP6.5m, and we are now in the early days of implementing the strategy presented to investors. We are addressing client feature requests for the core mpro5 platform which inherently enhances our sales process. Our enterprise deals, by their nature, can have longer lead times, however our abilities in IoT and dashboarding are making mpro5 even more compelling. We are currently focused on the transport, facilities management and retail sectors and our key model is to "land and expand" with enterprise clients. Part of this strategy is to be able to assist them wherever their business is located.

Internationally, we have established mpro5 Inc, based in Raleigh, North Carolina. This is not a grand physical strategy but a tactical approach, where our US CEO, Mark Self can approach existing clients (or clients of clients) as well as establish partnerships and relationships. Our mpro5 demo systems and marketing material can help us add new business based upon existing use cases. We have expanded into Scandinavia: whilst only in a very small way to date, this is an excellent example of how mpro5's value in the UK & Ireland is replicable with international clients in their other geographic markets. Adding the World Federation of Haemophilia to our subscription base also represents a highly exciting opportunity. Our patient app, previously applicable to patients with haemophilia has been completely reengineered to suit any condition where patients need to report usage of medication as well as verification that the medicine is in date, applicable to them and not counterfeit. We are as excited with the opportunities in this sector as any of our business verticals.

Project wrkrz, our version of mpro5 for micro/nano business is undergoing first stage development as well as market research, branding and technical stack progress on an ongoing basis. We aim for release in Q2, 2022 and it should be noted that many of the new learnings are also relevant to future developments in mpro5. Our market research indicates that there is a clear market for this low touch version of mpro5 in the trades sector and will see significant investment in the coming years.

This has been an important half year for Crimson Tide plc. With the capital backing that we have previously lacked, we can now invest in some of the opportunities that we know exist, as well as major partner acquisition, integration and more aggressive R&D. We feel that we can now market our business aggressively. I encourage you to visit mpro5.com to view our case studies and marketing material. This business has never been so well set. The addition of a Head of Marketing, US CEO and Jacqueline Daniell, as a new Non-Executive Director, has strengthened our executive and board significantly.

We are keenly focused on expanding the business in our key sectors, whilst exploring geographic opportunities and developing our micro business and patient versions of the mpro5 platform. We have strengthened our team, identified our marketing and development partners and will press ahead with ambition and optimism.

Barrie Whipp

Founder and Chairman

28 September 2021

Financial Review

 
 Financial indicator    Six months   Six months   Increase    Year ended 
                         ended 30       ended                 31 December 
                         June 2021     30 June        %          2020 
                          GBP'000       2020                    GBP'000 
                                       GBP'000 
 Revenue                  2,015        1,770       13.8%        3,542 
                       -----------  -----------  ---------  ------------- 
 Gross profit             1,652        1,404       17.7%        2,865 
                       -----------  -----------  ---------  ------------- 
 EBITDA                    529          470        12.5%         946 
                       -----------  -----------  ---------  ------------- 
 Profit before tax         286          257        11.3%         532 
                       -----------  -----------  ---------  ------------- 
 

The half-year financial results for 2021 reflect double-digit growth across all the key financial indicators.

Revenue

Revenue growth remained robust during the period, with monthly recurring revenue as at 30 June 2021 at cGBP300,000 (H1 2020: cGBP235,000). Consultancy fees contributed GBP178,000 to revenue during the period (H1 2020: GBP255,000). Revenue churn during the period remained low at 1.4% (H1 2020: 3.9%). Geographically the revenue split remained consistent to that of the prior year, with the UK contributing 92% of revenue (H1 2020: 93%).

Cost of Sales and gross profit

The gross profit margin of 82% remained above the Board's target rate of 80% (H1 2020: 79%).

Other income

Other income reflects the sale of legacy hardware devices. The nature of this is not recurring.

Cashflow

Operating cash flows before movement in working capital increased to GBP530,000 (H1 2020: GBP476,000). Although cash generated by operations of GBP111,000 (H1 2020: GBP1.03 million) appears to have decreased, this is mostly an effect of the measures that the Board put in place during the first lockdown in 2020 to preserve cash, with the subsequent correction taking place during the current period. Cash prior to the fundraise in April was cGBP1m. Following the successful raise of GBP5.6 million (net of fees) at the end of April, the Company has spent approximately GBP250,000 on initiatives highlighted during the fundraise process. It is expected that this amount will increase during H2 2021. Investment in marketing will also increase, under the guidance of the newly appointed Head of Global Marketing.

Lease liabilities

Loans and leases decreased to GBP205,000 (H1 2020: GBP410,000) and obligations will conclude during the following 18 months. No new leases were entered into during the period under review.

Intangible asset

Software development costs of GBP259,000 (H1 2020: GBP229,000) were capitalised during the period under review, while amortisation amounted to GBP123,000 (H1 2020: GBP100,000). The value of the capitalised software intangible asset at period-end was GBP1.8 million (H1 2020: GBP1.45 million).

Earnings per share

Following the issue of 200 million ordinary shares on 23 April 2021, the total number of ordinary shares in issue at period end was 657,486,234 (H1 2020: 457,486,234). Basic and diluted earnings per share was 0.05p (H1 2020: 0.06p) during the period under review.

Crimson Tide plc

Condensed Consolidated Statement of Profit or Loss

for the 6 months to 30 June 2021

 
                                        Unaudited   Unaudited      Audited 
                                         6 Months    6 Months    12 Months 
                                            ended       ended     ended 31 
                                          30 June     30 June     December 
                                             2021        2020         2020 
                                           GBP000      GBP000       GBP000 
 
 Revenue                                    2,015       1,770        3,542 
 Cost of Sales                              (363)       (366)        (677) 
 
 Gross Profit                               1,652       1,404        2,865 
 Other income                                 123           -            5 
 Administrative expenses                  (1,477)     (1,128)      (2,309) 
                                       ----------  ----------  ----------- 
 Operating profit                             298         276          561 
 Finance costs                               (12)        (19)         (29) 
 
 Profit before taxation                       286         257          532 
 Taxation                                       -           -          202 
                                       ----------  ----------  ----------- 
 
 Profit for the period attributable 
  to equity holders of the parent             286         257          734 
                                       ==========  ==========  =========== 
 
 Earnings per share                     Unaudited   Unaudited      Audited 
                                         6 Months    6 Months    12 Months 
                                            ended       ended     ended 31 
                                          30 June     30 June     December 
                                             2021        2020         2020 
 Basic earnings per Ordinary Share          0.05p       0.06p        0.16p 
 Diluted earnings per Ordinary Share        0.05p       0.06p        0.16p 
 
 
 

Condensed Consolidated Statement of Comprehensive Income

for the 6 months to 30 June 2021

 
                                          Unaudited   Unaudited      Audited 
                                           6 Months    6 Months    12 Months 
                                              ended       ended     ended 31 
                                            30 June     30 June     December 
                                               2021        2020         2020 
                                             GBP000      GBP000       GBP000 
 
 Profit for the period                          286         257          734 
 
   Other comprehensive income/(loss) 
   for period: 
 Exchange differences on translating 
  foreign operations                              1           6            4 
 
 
 Total comprehensive profit recognised 
  in the period and attributable to 
  equity holders of parent                      287         263          738 
                                         ==========  ==========  =========== 
 
 

Condensed Consolidated Statement of Financial Position at 30 June 2021

 
                                  Unaudited   Unaudited     Audited 
                                      As at       As at    As at 31 
                                    30 June     30 June    December 
                                       2021        2020        2020 
                                     GBP000      GBP000      GBP000 
 ASSETS 
 Non-current assets 
 Intangible assets                    2,577       2,247       2,441 
 Property, plant & equipment            189         291         235 
 Right-of-use asset                      64         121          92 
 Deferred tax asset                      32          32          32 
                                 ----------  ----------  ---------- 
 Total non-current assets             2,862       2,691       2,800 
                                 ----------  ----------  ---------- 
 
 Current assets 
 Inventories                              6           6           6 
 Trade and other receivables          1,474       1,018       1,221 
 Cash and cash equivalents            6,596       1,052       1,175 
                                 ----------  ----------  ---------- 
 Total current assets                 8,076       2,076       2,402 
                                 ----------  ----------  ---------- 
 
   Total assets                      10,938       4,767       5,202 
                                 ----------  ----------  ---------- 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables               741         820         907 
 Borrowings                               7          18           8 
 Lease liabilities                      134         221         181 
                                 ----------  ----------  ---------- 
 Total current liabilities              882       1,059       1,096 
                                 ----------  ----------  ---------- 
 
   Non-current liabilities 
 Borrowings                               -           8           5 
 Lease liabilities                       64         163          94 
                                 ----------  ----------  ---------- 
 Total non-current liabilities           64         171           9 
 
 Total liabilities                      946       1,230       1,195 
                                 ----------  ----------  ---------- 
 
 Net assets                           9,992       3,537       4,007 
                                 ----------  ----------  ---------- 
 
 EQUITY 
 Share capital                          657         457         457 
 Share premium                        5,644         148         148 
 Other reserves                         481         480         479 
 Reverse acquisition reserve        (5,244)     (5,244)     (5,244) 
 Retained profits                     8,454       7,696       8,167 
                                 ----------  ----------  ---------- 
 
 Total equity                         9,992       3,537       4,007 
                                 ----------  ----------  ---------- 
 

Condensed Consolidated Statement of Changes in Equity

Six-month period ended 30 June 2021 (Unaudited)

 
                                                                    Reverse 
                                                               acquisi-tion 
                       Share     Share premium        Other         reserve     Retained 
                     capital                       reserves                     earnings     Total 
                      GBP000            GBP000       GBP000          GBP000       GBP000    GBP000 
 Balance at 31 
  December 2020          457               148          479         (5,244)        8,167     4,007 
 
 Shares issued           200             5,496            -               -            -     5,696 
 Profit for the 
  period                   -                 -            -               -          286       286 
 Translation 
  movement                 -                 -            2               -            1         3 
 Balance at 
  30 June 2021           657             5,644          481         (5,244)        8,454     9,992 
 
 

Six-month period ended 30 June 2020 (Unaudited)

 
                                                                     Reverse 
                                                                acquisi-tion 
                       Share     Share premium        Other          reserve     Retained 
                     capital                       reserves                      earnings     Total 
                      GBP000            GBP000       GBP000           GBP000       GBP000    GBP000 
 Balance at 31 
  December 2019          457               148          475          (5,244)        7,433     3,269 
 
 Profit for the 
  period                   -                 -            -                -          257       257 
 Translation 
  movement                 -                 -            5               -             6        11 
 Balance at 
  30 June 2020           457               148          480          (5,244)        7,696     3,537 
 
 

Condensed Consolidated Statement of Changes in Equity

Year ended 31 December 2020 (Audited)

 
                                                                     Reverse 
                                                                acquisi-tion 
                       Share     Share premium        Other          reserve     Retained 
                     capital                       reserves                      earnings     Total 
                      GBP000            GBP000       GBP000           GBP000       GBP000    GBP000 
 
 Balance at 1 
  January 2020           457               148          475          (5,244)        7,433     3,269 
 
 Profit for the 
  period                   -                 -            -                -          734       734 
 Translation 
  movement                 -                 -            4                -            -         4 
 Balance at 
  31 December 
  2020                   457               148          479          (5,244)        8,167     4,007 
 
 

Condensed Consolidated Statement of Cash flows

For the 6 months to 30 June 2021

 
                                            Unaudited   Unaudited       Audited 
                                             6 Months    6 Months     12 Months 
                                                ended       ended         ended 
                                              30 June     30 June   31 December 
                                                 2021        2020          2020 
                                               GBP000      GBP000        GBP000 
Cash flows from operating activities 
Profit before tax                                 286         257           532 
Adjustments for: 
Amortisation of Intangible Assets                 123         100           216 
Depreciation of property, plant 
 and equipment                                     80          66           111 
Depreciation of right-of-use assets                28          28            57 
Unrealised currency translation 
 movement                                           1           6             4 
Interest paid                                      12          19            29 
                                            ---------   ---------  ------------ 
Operating cash flows before movement 
 in working capital and provisions                530         476           949 
Decrease in inventories                             -           6             6 
(Increase)/decrease in trade and 
 other receivables                              (253)         202           (1) 
(Decrease)/increase in trade and 
 other payables                                 (166)         346           433 
                                            ---------   ---------  ------------ 
Cash generated by operations                      111       1,030         1,387 
Income taxes received                               -           -           202 
Interest paid in cash                            (10)        (15)          (27) 
                                            ---------   ---------  ------------ 
Net cash from operating activities                101       1,015         1,562 
                                            ---------   ---------  ------------ 
 
Cash flows from investing activities 
Purchases of property, plant and 
 equipment                                       (34)        (32)          (21) 
Development expenditure capitalised             (259)       (229)         (539) 
                                            ---------   ---------  ------------ 
Net cash used in investing activities            (293)      (261)         (560) 
                                            ---------   ---------  ------------ 
 
Cash flows from financing activities 
Net proceeds from share issues                  5,696           -             - 
Repayments of borrowings                          (6)        (14)          (21) 
Repayments of lease liability                    (77)         (8)         (126) 
                                            ---------   ---------  ------------ 
Net cash from financing activities              5,613        (22)         (147) 
                                            ---------   ---------  ------------ 
Net increase in cash and cash equivalents       5,421         732           855 
 
Net cash and cash equivalents at 
 beginning of period                            1,175         320           320 
                                            ---------   ---------  ------------ 
Net cash and cash equivalents at 
 end of period                                  6,596       1,052         1,175 
                                            ---------   ---------  ------------ 
 

Crimson Tide Plc

Notes to the Unaudited Interim Results for the 6 months ended 30 June 2021

   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 has its listing on AIM. The address of its registered office is Oakhurst House, 77 Mt. Ephraim, Tunbridge Wells, Kent, TN4 8BS.

Basis of preparation

The condensed consolidated interim financial statements ("interim financial statements") have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting using accounting policies that are consistent with those applied in the previously published financial statements for the year ended 31 December 2020, which have been prepared in accordance with IFRS as adopted by the European Union.

The information for the period ended 30 June 2021 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 2020. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies. 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.

Going concern

The 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 two main regional centres of operation; one in the UK, the other in Ireland 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, (ii) non-core software solutions, including reselling third party software and related development and support services, and (iii) hardware sales to existing customers.

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 
                                       2021             2020          2020 
 Revenue by business activity 
 Mobility solutions and related 
  development                            1,837         1,290         3,212 
 Software consultancy                      178           255           330 
 Hardware sales                              -           225             - 
                                  ------------  ------------  ------------ 
                                         2,015         1,770         3,542 
                                  ------------  ------------  ------------ 
 

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 
                                     2021             2020          2020 
 Revenue by geographic region 
 UK                                    1,855         1,640         3,233 
 European Union                          140           118           275 
 Rest of the world                        20            12            34 
                                ------------  ------------  ------------ 
                                       2,015         1,770         3,542 
                                ------------  ------------  ------------ 
 
   3.    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 
                                    2021             2020          2020 
 Earnings per share 
 Reported profit (GBP000)               286           257           734 
 Reported basic earnings per 
  share (pence)                        0.05          0.06          0.16 
 Reported diluted earnings 
  per share (pence)                    0.05          0.06          0.16 
 
 
 
                                          Unaudited     Unaudited       Audited 
                                          6 Months       6 Months     12 Months 
                                            ended           ended      ended 31 
                                           30 June        30 June      December 
                                            2021             2020          2020 
                                            No. 000       No. 000       No. 000 
 Weighted average number of 
  ordinary shares 
 Shares in issue at start of 
  period                                    457,486       457,486       457,486 
 Effect of shares issued during              76,243             -             - 
  the period* 
                                       ------------  ------------  ------------ 
 Weighted average number of 
  ordinary 
  shares for basic EPS                      533,729       457,486       457,486 
 Effect of share options outstanding            291             -         2,939 
                                       ------------  ------------  ------------ 
 Weighted average number of 
  ordinary 
  shares for diluted EPS                    534,020       457,486       460,425 
                                       ------------  ------------  ------------ 
 
 

*200 million ordinary shares were issued on 23 April 2021.

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