Half Yearly Report

RNS Number : 1309P

Crimson Tide PLC

29 September 2011

 



Crimson Tide plc

("Crimson Tide" or "the Company")

Interim Results for the six months ended 30 June 2011

Crimson Tide, a leading service provider of mobile data solutions for business, (AIM: TIDE.L) is pleased to announce its unaudited interim results for the six months ended 30 June 2011.

Highlights

·      Revenue improved to £752k (H1 2010: £733k)

·      Profitable first half performance and well placed for H2

·      Cash balance of over £400k and minimal debt

·      Subscriber numbers in core business up 32%

·      mpro Gemini now available on Apple's iOS platform

·     Strong pipeline of significant new business leads

Barrie Whipp, Executive Chairman, commented;

"Against a backdrop where overall economic conditions have remained challenging we are pleased to have continued to be profitable in the first half of the year on increased revenue.  New deals have taken longer to negotiate and ultimately finalise but this is reflective of larger size transactions with larger organisations, which are by their nature more complex."

"Importantly, the long-term contracted subscriber base in our core mobile applications business has grown by 32% as we continue our focus away from software and consultancy. With our recent investments in products and marketing, healthy cash balances and a strong pipeline of significant new business opportunities, the Board remains confident of continued growth."                     

Enquiries:

Crimson Tide plc Barrie Whipp, Executive Chairman Stephen Goodwin, Chief Executive	01892 542444
W.H. Ireland Limited James Joyce / Chris Fielding	020 7220 1666
Threadneedle Communications Josh Royston / Alex White	020 7653 9850

Chairman's Statement

I am pleased to report the Company's interim results for the period to 30 June 2011, which show Turnover of £752k and a Profit Before Tax of £6k, in line with expectations.

The financial results do not completely reflect the progress made in the period, as we continue to expand our book of long-term contracted subscribers, at the expense of the traditional software and consultancy business. As we progress, contracted monthly subscription revenues are providing a larger percentage of total revenues and cash, and we are confident of further growth in the short and medium term.

Subscriber numbers grew by 32% in the period, with the significant rollouts to Associated Newspapers and two City Councils amongst others. We are working hard to close more significant deals in the second half of the year, a number of which have taken longer to negotiate than previously. As the margin on subscriber business continues to grow , the associated cash return means that we are well placed to finance additional subscriber business from our own resources with no reliance on debt funding. The additional capital raised in January enabled us to plan for subscriber growth with confidence and allowed us to invest in product development and marketing. We ended the period with over £400k in cash, having repaid the loan against our contracted receivables, with only a small debt remaining on the loan for the purchase of the business in Ireland in 2006.

Whilst the economy in the UK & Ireland continues to be challenging, we have seen no drop in potential demand for our mobile applications. The Directors are optimistic that the number of deals in the company's qualified pipeline will fuel further subscriber growth in the second half and beyond. Overheads are tightly controlled, contracted revenues continue to grow and we believe we are well placed to take advantage of deals in our traditional SME sector and some with organisations of a much larger nature.

Our actions to reduce costs in Ireland have paid dividends and the business there is operating at a breakeven level despite the difficulties in the economy. Applications in the medical field are led by our experiences in Ireland and we see substantial opportunities for mpro Gemini's healthcare applications, which include some groundbreaking work in nursing and patient care.

Our focus on subscriber business has been enhanced significantly by the investment made in our mpro gemini system. The software now allows faster rollout, is a substantial enhancement to our previous mobile solutions and is much more "out of the box" than previous versions. We have recently completed a version of mpro gemini on Apple's iOS platform and can now sell on iPhone and iPad, devices that are providing new opportunities in the increasingly device sensitive marketplace. Our roadmap plans versions for Android and Windows Phone 7 devices early next year.

Our staff, professional advisors and major shareholders have continued to support our efforts in a transitional period for the company. We thank them for their support.

Barrie Whipp

Executive Chairman

29 September 2011

Operating and Financial Review

I am pleased to report on our interim results for the six months to 30^th June 2011 and our achievements over this period. 

OPERATING REVIEW

As previously announced, the two tranches of additional finance raised in October 2010 and January 2011 secured much needed capital and ensured we could fund the demand from new subscribers previously held up.  The Chairman in his statement highlights an increase in new subscribers of 32% in the six months which, along with subscription renewals, has significantly increased the value of future contracted revenues from subscribers. 

Following the release of the subscriber "log-jam", we have been able to accelerate our drive for more subscribers.  We have invested in various marketing initiatives, including developing opportunities with our new channel partners.  In doing so we recognise that, to an extent, this has impacted profitability, but we are convinced this strategy will lead to more opportunities in the second half and beyond. 

We have also invested in developing and enhancing our mpro applications.  Improvements to mpro gemini fulfil the vast majority of functionality required by our subscriber users without the need for additional software development, allowing us to roll out our solutions to new and existing subscribers faster than previously.  We continue to expense a significant proportion of internal resources utilised in this regard with capitalised development time, that is the value of our applications on our balance sheet, still only £0.2m as at 30^th June 2011, ensuring that future earnings are not materially reduced by amortisation costs.

With the funding risk mostly eliminated in all but the most aggressive of growth scenarios, the most immediate issue we have to deal with is a better, more regular, rate of deal flow.  Over the latter part of the first half and into the summer, a number of deals that had either closed or were expected to close, could not be rolled out due to delays requested by these customers.  Whether these experiences were due to the current economic turmoil or for other reasons has yet to be identified.  We do know that our customers benefit from significant productivity and efficiency savings once they commence using our services.  We have been encouraged that over that period none of these deals were lost and more recently have started to move forward at a more acceptable pace.  Management will continue to adopt a watchful approach, balancing investing now for future growth and ultimately a more valuable company, with the more immediate requirement to deliver improving results.

FINANCIAL REVIEW

Turnover in the six months to 30^th June 2011 totalled £752,000, up from £733,000 in the same period in 2010 but this once again hides the improvement in core revenues as we continued the move away from lower margin activities and focused on subscriptions and related activities.  Subscription income increased by 64% to £311,000 in the first half of 2011 over the same period last year.  Comparing the same periods, income from mobile connections decreased by £100,000 leading management to conclude the recent sale of the connection book announced on 12^th September 2011.  The Company will continue this strategy of margin improvement from higher quality sales as it allows our people and working capital resources to focus on core activities and results in margin improvements as demonstrated by gross margin increasing to over 70% on average, up from 64% reported in 2010. 

Overheads remain under tight control but have increased in the first half 2011 as indicated above with £20,000 higher spend on marketing.  After amortisation, depreciation and interest, the Company is reporting a profit before tax of £6,000 for the six months to 30^th June 2011.

At 30^th June 2011 the Group had a cash balance of £422,000 after making loan repayments of £287,000 in the six month period and investing £183,000 in devices for subscribers contracting, in almost all cases, for a minimum of three years.

There have been no changes to Crimson Tide's accounting policies which can be found in the notes to the published 2010 Consolidated Financial Statements. 

Stephen Goodwin

Chief Executive

29 September 2011

Crimson Tide Plc

Unaudited Consolidated Income Statement for the 6 months to 30 June 2011

	Unaudited 6 Months ended 30 June 2011		Unaudited 6 Months ended 30 June 2010		Audited 12 Months ended 31 December 2010
	£000		£000		£000
Revenue	752		733		1,507
Cost of Sales	(224)		(236)		(538)
Gross Profit	529		497		969
Total operating expenses	(500)		(479)		(912)
Earnings before interest, tax, depreciation & amortisation	29		18		57
Depreciation & Amortisation	(16)		(10)		(28)
Profit from operations	13		8		29
Interest income	-		-		-
Interest payable and similar charges	(7)		(7)		(22)
Profit before taxation	6		1		7
Tax on profit on ordinary activities	-		-		-
Profit for the year attributable to equity holders of the parent	6		1		7
Profit/(loss) per share
Basic and diluted profit per Ordinary Share	0.00p		0.00p		0.00p

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months to 30 June 2011

	Unaudited 6 Months ended 30 June 2011		Unaudited 6 Months ended 30 June 2010		Audited 12 Months ended 31 December 2010
	£000		£000		£000
Profit/(loss) for the period	6		1		7
Other comprehensive income/(loss) for period:
Exchange differences on translating foreign operations	1		(8)		(4)
Total comprehensive loss recognised in the period and attributable to equity holders of parent	7		(7)		(3)

Unaudited Consolidated Statement Of Financial Position at 30 June 2011

	Unaudited As at 30 June 2011		Unaudited As at 30 June 2010		Audited As at 31 December 2010
	£000		£000		£000
Fixed Assets
Intangible assets	982		915		938
Equipment, fixtures & fittings	21		12		18
	1,003		927		956
Current Assets
Inventories	39		34		28
Trade and other receivables	697		416		646
Cash and cash equivalents	422		28		440
Total current assets	1,158		478		1,114
Total assets	2,161		1,405		2,070
Equity and liabilities
Equity
Share capital	7,335		6,210		6,760
Capital redemption reserve	49		49		49
Share premium	1,090		1,124		1,090
Other reserves	442		423		441
Reverse acquisition reserve	(5,244)		(5,244)		(5,244)
Retained earnings	(1,904)		(1,916)		(1,910)
Total Equity	1,768		646		1,186
Creditors
Amounts falling due within one year	385		465		884
Creditors
Amounts falling due after more than one year	8		294		-
Total liabilities	393		759		884
Total equity and liabilities	2,161		1,405		2,070

Unaudited Consolidated Statement Of Changes In Equity at 30 June 2011

	Share capital	Capital redemp-tion reserve	Share premium	Other reserves	Reverse acquis-ition reserve	Retained earnings	Total
	£000	£000	£000	£000	£000	£000	£000
Balance at 31 December 2009	6,210	49	1,124	431	(5,244)	(1,917)	653
Profit for the period	-	-	-	-	-	1	1
Translation movement	-	-	-	(8)	-	-	(8)
Balance at 30 June 2010	6,210	49	1,124	423	(5,244)	(1,916)	646
Balance at 31 December 2010	6,760	49	1,090	441	(5,244)	(1,910)	1,186
Proceeds from new shares issued in the period	575	-	-	-	-	-	575
Profit for the period	-	-	-	-	-	6	6
Translation movement	-	-	-	1	-	-	1
Balance at 30 June 2011	7,335	49	1,090	442	(5,244)	(1,904)	1,768

Unaudited Consolidated Statement Of Cashflows for the 6 months to 30 June 2011

	Unaudited 6 Months ended 30 June 2011		Unaudited 6 Months ended 30 June 2010		Audited 12 Months ended 31 December 2010
	£000		£000		£000
Cash flows from operating activities
Profit before tax	6		1		7
Adjustments for:
Amortisation of Intangible Assets	13		5		19
Depreciation of equipment, fixtures and fittings	3		5		8
Interest expense	7		7		22
Operating cash flows before movement in working capital and provisions	29		18		56
(Increase)/Decrease in inventories	(11)		(1)		5
(Increase)/Decrease in trade and other receivables	(55)		33		(197)
Increase/(Decrease) in trade and other payables	(230)		(67)		122
Cash (used)/generated in operations	(267)		(17)		(14)
Income taxes paid	-		-		-
Net cash (used)/generated in operating activities	(267)		(17)		(14)
Cash flows used in investing activities
Purchase of fixed assets	(42)		(52)		(99)
Interest received	-		-		-
Net cash used in investing activities	(42)		(52)		(75)
Cash flows from financing activities
Net proceeds on issues of shares	575		-		516
Interest paid	(7)		(7)		(22)
Net increase/(decrease) in borrowings	(287)		4		(18)
Net cash (used in)/from financing activities	281		(3)		476
Net (decrease)/increase in cash and cash equivalents	(28)		(72)		363
Net cash and cash equivalents at beginning of period	440		77		77
Net cash and cash equivalents at end of period	422		5		440

 

 

Analysis of net funds:
Cash and cash equivalents	422		28		440
Bank overdraft	-		(23)		-
	422		5		440
Other borrowing due within one year	(19)		(28)		(308)
Borrowings due after one year	-		(306)		-
Finance leases	(13)		(3)		(10)
Net funds/(debt)	390		(332)		122

 

 

 

 

Crimson Tide Plc

Notes to the Unaudited Interim Results for the 6 months ended 30 June 2010

1.  Basis of preparation of interim report

The information for the period ended 30 June 2011 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  It has been prepared in accordance with the accounting policies set out in, and is consistent with, the audited financial statements for the twelve months ended 31 December 2010.  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.

2.  Earnings per share

The calculation of the basic profit 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 profit 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  6 Months ended 30 June 2011	Unaudited  6 Months ended 30 June 2010	Audited  12 Months ended 31 December 2010
Basic and diluted profit per share
Reported profit (£000)	6	1	7
Reported profit per share (pence)	0.00	0.00	0.00

	Unaudited  6 Months ended 30 June 2011	Unaudited  6 Months ended 30 June 2010	Audited  12 Months ended 31 December 2010
	No. 000	No. 000	No. 000
Weighted average number of ordinary shares:
Shares in issue at start of period	387,986	332,986	332,986
Effect of shares issued during the period	46,257	-	11,904
Weighted average number of ordinary shares	434,243	332,986	344,890

3.  Availability of this announcement

Copies of the interim report will be despatched shortly to shareholders who have requested a printed copy. Copies of this announcement are available from the Company's office, Heathervale House, Vale Avenue, Royal Tunbridge Wells, Kent TN1 1DJ, and from the Company's website, www.crimsontide.co.uk.

 

END

 

 

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