RNS Number : 7036F Crimson Tide PLC 26 September 2024 The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time. Upon the publication of this announcement, this information is now considered to be in the public domain. 26 September 2024 Crimson Tide plc ("Crimson Tide", "the Company" or "Group") Interim results for the six months ended 30 June 2024 Crimson Tide plc (TIDE), the provider of the mpro5 process management app, is pleased to announce its unaudited interim results for the six months ended 30 June 2024. Financial headlines · Revenue growth of 3.3% to £3.1m (H1 2023: £3.0m) · EBITDA increased by £0.2m to £0.3m (H1 2023: £0.1m) · Gross margin increase to 88.2% (H1 2023: 84.3%) · Further ARR improvement to £5.94m (FY23: £5.75m) · Cash balance of £2.5m (H1 2023: £2.9m) Operational highlights · Marketing investment in FY23 now yielding expanding pipeline of opportunities · Completion of new mpro5 mobile app version - mpro5: Saturn · Tender finalist for global aviation company and Irish public service bodies - results expected in H2 · New web app version underway Jacqueline Daniell, Chair, commented, "This year has seen an improved product and more refined marketing producing a strong pipeline of opportunities. With a higher average deal size and a greater number of tender opportunities we have an increased sales cycle requiring a greater capacity to close. Therefore, we now expect trimmed back revenues for the full year, though nonetheless still anticipate good year-on-year EBITDA progress." Enquiries: Crimson Tide plc Jacqueline Daniell / Philip Meyers / Peter Hurter +44 1892 542444 Cavendish Capital Markets Limited (Nominated Adviser and Broker) Julian Blunt / Dan Hodkinson - Corporate Finance Andrew Burdis / Sunila De Silva - Corporate Broking +44 20 7220 0500 Alma PR (Financial PR) Josh Royston +44 7780 901979 Crimson Tide provides mpro5, the process management app. For further information, see mpro5.com and on Crimson Tide plc,https://crimsontide.co.uk/link/MrDYnP Chairman's Statement In my first set of results as Chair, I am pleased to report on the stability and solidity of performance. Although there is no doubt that some of last year's unexpected changes have continued to have an impact on the first half of this year, despite this, Crimson Tide's model has managed to sustain a robust gross margin of 88.2%, increasing it by nearly 4% points, whilst continuing to develop the long-term contracted revenue base with ARR moving out to £5.94m (FY2023: £5.75m). The process management app mpro5 has continued to be significantly enhanced and upgraded. The modernised mobile application was completed and implementation and rollout of the new improved platform will continue for the rest of the year. The commitments that were made to investment in marketing last year have resulted in a much expanded pipeline. We have experienced capacity issues in some areas of sales which has meant that in some instances, the time to close those opportunities has been considerably slower than anticipated, which combined with more opportunities going to tender this year has made leveraging top line growth difficult; nonetheless we have achieved revenue growth of 3.3% on the first half of last year and a very solid bottom line improvement. The unexpected offer period of two different takeover bids, extending throughout June also diverted management time, resource and contributed to slower execution during H1. Transitions this year have included a number of significant management changes, not only to accommodate succession plans but also to address the evolution of mpro5 and its potential expansion into additional sectors and propositions. Gaining noteworthy traction in the US remains a challenge, but the US operation continues to grow the number of good quality opportunities and take advantage of the two big technical upgrades in the product by working alongside partners as part of a wider IoT ecosystem. Overall, the pipeline has remained extremely strong with opportunities prevailing and secure. Our strong cash position means we are now able to invest in growth, taking advantage of the new sales opportunities to expand our sales team. New initiatives introduced will start to drive quality growth in 2025 and by adjusting and correcting the strategic focus in routes to market and operational efficiency for next year, Crimson Tide will have a very solid path for revenue and profitability. Jacqueline Daniell Chairman 26 September 2024 Chief Executive's Statement The first six months of this year have been a period of significant transition for Crimson Tide, presenting both challenges and opportunities. It is important to acknowledge that challenges of the nature that we've seen are rarely without difficulties, and this period has seen us showcase our combined resilience. Despite these challenges, our team has shown exceptional commitment, and their hard work is starting to pay off as we continue to drive forwards, underpinned by the inclusion in The Sunday Times Best Places to Work in 2024. We are building a stronger, more cohesive organisation, and this is reflected not only in our operational results but also in the morale and dedication of our workforce. As a product, mpro5 is in its best shape ever due to significant investments in development and refinement over recent months which have brought us to a point where we are confident in its competitive advantage and market readiness. This positions us well as we look to further expand our presence in key sectors in which we have expertise, such as facilities management, retail, and food safety. These sectors present considerable opportunities, particularly with large enterprises, and while we acknowledge that these opportunities often come with extended sales cycles, the long-term value they represent for Crimson Tide makes them a key focus of our strategy. Additionally, our opportunities in the USA are growing steadily. These prospects carry a higher average deal size, as expected, which is also encouraging. As regards outlook, our focus remains on closing these deals while ensuring a smooth and efficient onboarding process for all new customers. Given the increased sales cycle, our expectation is that revenue and EBITDA for H2 2024 will be broadly in line with H1 2024, evidencing good year on year EBITDA growth, albeit on flat revenues. While we may experience some exceptional churn towards the end of 2024 relating to a covid-era deal, our sales pipeline is in good health and we are confident in the opportunities ahead. There is work to be done, but it's exciting, and fruitful work, and we are collectively moving in the right direction and I believe we are well-positioned to deliver sustainable growth over the longer term. Together, we are building a stronger future for our company, and I look forward to what lies ahead. Philip Meyers CEO 26 September 2024 Financial Review Financial indicator Revenue Gross Profit EBITDA (Loss)/Profit before tax Annual recurring revenue (ARR) Cash Churn rate Six months ended 30 June 2024 £'000 3,142 2,771 328 (211) 5,940 2,502 1.2% Six months ended 30 June 2023 £'000 3,043 2,566 106 (471) 5,900 2,865 5.5% Year ended 31 December 2023 £'000 6,155 5,306 420 (305) 5,750 3,255 16.0% Revenue Revenue increased by 3.3% compared to the corresponding period in 2023, while Annual Recurring Revenue (ARR) increased to £5.94. Contracted long-term revenue exceeded 90% of total revenue and revenue churn was minimal at 1.2%. The geographic split of revenue remains consistent with the prior year, with a UK weighting of 92% of revenue (H1 2023: 91%). Cashflow and liquidity Cash at the period-end was £2.5m (H1 2023: £2.9m). Net cash from operating activities was an outflow of £77k (H1 2023: £28k inflow). Lease liabilities The Company entered into a new office lease agreement at the beginning of 2022. The lease liability is currently valued at £567k (H1 2023: £871k) and the related Right-of-Use asset recognised under IFRS16. The lease liability will be settled, and the related asset depreciated, over a 5-year period. Intangible assets Software development costs of £553k (H1 2023: £501k) were capitalised during the period under review, while amortisation amounted to £299k (H1 2023: £260k). The value of the capitalised software intangible asset at periodend was £3.6m (H1 2023: £3.0m). Other intangible assets related to goodwill, website development costs and incremental contract costs. Loss before taxation The Company made a loss before taxation of £211k (H1 2023: £471k loss). The loss was in line with management expectations and arose due to the additional amortisation associated with increased investment in the software platform. The enhanced software expenditure is expected to conclude by the 2024 year-end. Earnings per share Basic and diluted loss per share was 0.78p (H1 2023: 4.12p loss per share) during the period under review. 13,100 share options outstanding were not included in the calculation of diluted earnings per share because they are anti-dilutive in terms of IAS 33. Peter Hurter Group CFO 26 September 2024 Crimson Tide plc Condensed Consolidated Statement of Profit or Loss for the 6 months to 30 June 2024 Unaudited 6 Months ended 30 June 2024 £000 Unaudited 6 Months ended 30 June 2023 £000 Audited 12 Months ended 31 December 2023 £000 Revenue 3,142 3,043 6,155 Cost of Sales (371) (477) (849) Gross Profit 2,771 2,566 5,306 Other income Administrative expenses Finance costs - (8) - (2,964) (2,991) (5,942) (18) (38) (52) (Loss)/Profit before income tax expense (211) (471) (688) Taxation 160 200 383 (Loss)/Profit after taxation (51) (271) (305) Unaudited 6 Months ended 30 June 2024 Unaudited 6 Months ended 30 June 2023 Audited 12 Months ended 31 December 2023 Basic (pence) (0.78) (4.12) (4.64) Diluted (pence) (0.78) (4.12) (4.64) Unaudited 6 Months ended 30 June 2024 £000 Unaudited 6 Months ended 30 June 2023 £000 Audited 12 Months ended 31 December 2023 £000 (51) (271) (305) Exchange differences on translating foreign operations (91) (18) (19) Total comprehensive (loss)/Profit recognised in the period and attributable to equity holders of parent (142) (289) (324) (Loss)/Earnings per share Condensed Consolidated Statement of Comprehensive Income for the 6 months to 30 June 2024 (Loss)/Profit for the period Other comprehensive income/(loss) for period: Condensed Consolidated Statement of Financial Position at 30 June 2024 Unaudited As at 30 June 2024 £000 Unaudited As at 30 June 2023 £000 Audited As at 31 December 2023 £000 ASSETS Non-current assets Intangible assets Property, plant & equipment Right-of-use asset Total non-current assets 4,602 208 475 5,285 4,072 263 740 5,075 4,440 237 571 5,248 Current assets Trade and other receivables Cash and cash equivalents Total current assets 1,406 2,502 3,908 2,102 2,865 4,967 1,182 3,255 4,437 Total assets 9,193 10,042 9,685 1,264 148 1,412 1,669 194 1,863 1,514 199 1,713 419 419 677 677 468 468 Total liabilities 1,831 2,540 2,181 Net assets 7,362 7,502 7,504 Share capital 657 657 657 Share premium 5,590 5,590 5,590 Other reserves 336 460 427 Reverse acquisition reserve (5,244) (5,244) (5,244) Retained earnings 6,023 6,039 6,074 Total equity 7,362 7,502 7,504 LIABILITIES Current liabilities Trade and other payables Lease liabilities Total current liabilities Non-current liabilities Lease liabilities Total non-current liabilities EQUITY Condensed Consolidated Statement of Changes in Equity Six-month period ended 30 June 2024 (Unaudited) Balance at 31 December 2023 Loss for the period Share capital £000 Share premium £000 Other reserves £000 Reverse acq'n reserve £000 Retained earnings £000 Total £000 657 5,590 427 (5,244) 6,074 7,504 - - - - (51) (51) Translation movement Balance at 30 June 2024 - - (91) - - (91) 657 5,590 336 (5,244) 6,023 7,362 Six-month period ended 30 June 2023 (Unaudited) Share capital Share premium Other reserves Reverse acq'n reserve Retained earnings Total £000 £000 £000 £000 £000 £000 657 5,590 493 (5,244) 6,310 7,806 Loss for the period - - - - (271) (271) Cancelled share options - - (43) - - (43) Share options expense - - 28 - - 28 Translation movement - - (18) - - (18) 657 5,590 460 (5,244) 6,039 7,502 Retained earnings £000 Total £000 Balance at 31 December 2022 Balance at 30 June 2023 Condensed Consolidated Statement of Changes in Equity Year ended 31 December 2023 (Audited) Share capital £000 Share premium £000 Other reserves £000 Reverse acquisition reserve £000 Balance at 1 January 2022 657 5,590 493 (5,244) 6,310 7,806 Loss for the period - - - - (305) (305) Share options cancelled - - (69) - 69 - Share options expense - - 22 - 22 Translation movement - - (19) - - (19) 657 5,590 427 (5,244) 6,074 7,504 Balance at 31 December 2022 - Condensed Consolidated Statement of Cash flows For the 6 months to 30 June 2024 Unaudited 6 Months ended 30 June 2024 Unaudited 6 Months ended 30 June 2023 Audited 12 Months ended 31 December 2023 £000 £000 £000 (211) (471) (688) Amortisation of Intangible Assets 391 371 758 Depreciation of property, plant and equipment 34 35 74 Depreciation of right-of-use assets 96 133 206 Unrealised currency translation movement (91) (18) (19) Interest Paid 18 38 52 - (43) - 237 28 73 22 405 Increase in trade and other receivables (64) (256) 464 (Decrease)/increase in trade and other payables (250) 209 54 Cash (utilised)/generated by operations Cash flows from operating activities Loss before tax Adjustments for: Cancelled share options Share option expense Operating cash flows before movement in working capital and provisions (77) 26 923 Interest paid in cash - 2 (52) Income taxes received - - 407 Income taxes paid Net cash (used in)/generated from operating activities - - (24) (77) 28 1,254 (5) (34) (47) Purchases of other intangible assets - (300) (223) Development expenditure capitalised (553) (501) (1,163) Net cash used in investing activities (558) (835) (1,433) (Repayments of)/additions to lease liability (118) 54 (184) Net cash (used in)/ from financing activities (118) 54 (184) Net movement in cash and cash equivalents (753) (753) (363) Net cash and cash equivalents at beginning of period 3,255 3,618 3,618 Net cash and cash equivalents at end of period 2,502 2,865 3,255 Cash flows from investing activities Purchases of property, plant and equipment Cash flows from financing activities Crimson Tide Plc Notes to the Unaudited Interim Results for the 6 months ended 30 June 2024 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's shares are publicly traded on the London Stock Exchange's AIM market. The address of its registered office is Brockbourne House, 77 Mt. Ephraim, Tunbridge Wells, Kent, TN4 8BS. Basis of preparation The condensed consolidated interim financial statements ("interim financial statements") have been prepared using accounting policies that are consistent with those applied in the previously published financial statements for the year ended 31 December 2023, which have been prepared in accordance with UK-Adopted International Accounting Standards. The information for the period ended 30 June 2024 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 2023. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies and is available on the Company's website. 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. Key estimates and judgements used in the preparation of the interim financial statements remain unchanged from those noted in the published financial statements for the year ended 31 December 2023. Going concern The interim 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 three main regional centres of operation; one in the UK, the others in Ireland and the United States 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 and (ii) non-core software solutions, including reselling third party software and related development and support services. Segment information for the reporting periods is as follows: Unaudited 6 Months ended 30 June 2024 £000 Unaudited 6 Months ended 30 June 2023 £000 Audited 12 Months ended 31 December 2023 £000 2,891 2,985 5,612 251 58 543 3,142 3,043 6,155 Unaudited 6 Months ended 30 June 2024 £000 Unaudited 6 Months ended 30 June 2023 £000 Audited 12 Months ended 31 December 2023 £000 2,890 2,780 5,636 197 205 424 Revenue by business activity Mobility solutions and related development Software consultancy Revenue can be further analysed by geographic reason as follows: Revenue by geographic region UK Ireland US 55 58 95 3,142 3,043 6,155 3. Intangible assets Enterprise development expenditure Consumer focused development expenditure Website dev'ment costs £000 £000 4,824 550 Incremental contract costs Goodwill Total £000 £000 £000 £000 1,024 103 1,098 989 8,035 - 3 - - 553 5,371 1,024 106 1,098 989 8,588 Enterprise development expenditure Consumer focused development expenditure Website dev'ment costs Incremental contract costs Goodwill Total £000 £000 £000 £000 £000 £000 Cost At 1 January 2024 Additions At 30 June 2024 Amortisation and impairment At 1 January 2024 (2,304) (193) (57) (847) (190) Charge for the period (239) (60) (13) (79) - (391) (2,543) (253) (70) (926) (190) (3,986) Carrying amount at 30 June 2023 2,516 831 46 248 799 4,440 Carrying amount at 30 June 2024 2,828 771 36 172 799 4,602 At 30 June 2024 (3,595) 4. 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 6 Months ended 30 June 2024 Unaudited 6 Months ended 30 June 2023 Audited 12 Months ended 31 December 2023 (51) (271) (305) Reported basic earnings per share (pence) (0.78) (4.12) (4.64) Reported diluted earnings per share (pence) (0.78) (4.12) (4.64) Unaudited 6 Months ended 30 June 2024 Unaudited 6 Months ended 30 June 2023 Audited 12 Months ended 31 December 2023 No. '000 No. '000 No. '000 6,575 6,575 6,575 - - - Earnings per share Reported loss (£000) Weighted average number of ordinary shares Shares in issue at start of period Effect of shares issued during the period Weighted average number of ordinary shares for basic EPS Effect of share options outstanding Weighted average number of ordinary shares for diluted EPS 6,575 6,575 6,575 - - - 6,575 6,575 6,575 On 31 October 2023 the Company completed a 100:1 share consolidation exercise. Basic and diluted EPS were retrospectively adjusted in accordance with the requirements of IAS 33 to achieve comparability. At 30 June 2024 there were 131,000 (30 June 2023: 15,100,000; 31 December 2023: 131,000) share options outstanding. These share options were not included in the calculation of diluted earnings per share because they are antidilutive in terms of IAS 33. The reduction in share options relates to the resignation of certain employees who held options, and as a result, in accordance with the terms of the share option agreements, the options were cancelled. 5. Related party transactions Other than the interests of Directors, being in shares, share options and remuneration, no transactions with related parties were undertaken such as are required to be disclosed under International Accounting Standard 24. This information is provided by RNS, the news service of the London Stock Exchange. 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