TIDMTIDE
RNS Number : 5408H
Crimson Tide PLC
07 April 2022
Crimson Tide plc
Preliminary Announcement of Results to 31 December 2021
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 2021.
Financial Highlights
-- Revenue increased by GBP0.6m to GBP4.1m (2020: GBP3.5m)
-- Annual Recurring Revenue (ARR) increased by 24% to GBP3.8m (2020: GBP3.1m)
-- EBITDA break-even (2020: GBP0.9m) following investment in platform and marketing
-- Capital fund raise yielded net GBP5.6m
-- Cash at year-end amounted to GBP5.7m (2020: GBP1.2m)
Operational Highlights
-- Continued sector expansion for mpro5
-- Master Services Agreement with Compass Group
-- Cisco Meraki partnership
-- Project wrkrz development
-- Talent acquisition in development, marketing and international
Barrie Whipp, Executive Chairman of Crimson Tide, commented:
"The year was transformational for Crimson Tide as, for the
first time in our history, we completed an institutional and
private investor fund raise to support the next chapter in our
growth. mpro5 continued to perform well with strong revenue growth,
and we reached annualised recurring revenue of cGBP4m just after
year-end. Our focus is now on sector and international growth,
particularly in the United States and Northern Europe. The new
versions of mpro5 for tradespeople and healthcare will certainly
expand our market and we are excited to develop our "one platform,
many apps" strategy with the new hires and investments afforded by
the fresh capital. Our key target is to double Annual Recurring
Revenue in the medium term. Partnerships with organisations such as
Cisco will assist us domestically and internationally to achieve
our goal."
About the Company
Crimson Tide plc is the provider of the full-service mobility
platform mpro5. mpro5 is delivered on smartphones, tablets, and
PDAs, and enables organisations to digitally 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 can 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 year saw a fundraise of GBP5.6m net of expenses which was
transformational for the Company. It has provided us with the
ability to invest in human resources, to continue with tech
development plans and marketing activity as well as allowing us the
freedom to add tradespeople (project wrkrz) and healthcare
(mpro5rx) to our offering. We are refining and upgrading our mpro5
platform to deal with the requirements of our existing and
potential clients. We have also been able to add appropriate
marketing activities for the first time in our history which the
team is confident will add to our exposure, both nationally and
internationally.
Our annual recurring revenue (ARR) has increased to over GBP4m
post year-end and this KPI is our focus to drive the business
forward. Our aim is to grow ARR through a range of methods: -
-- Increasing our footprint in existing verticals
-- Introducing our trade version of mpro5
-- Monetising our patient healthcare version of mpro5
-- International expansion
-- Future vertical market versions of mpro5
As can be implied from the above we have ambitious targets
through which we are looking to grow this key metric and we are
targeting an overall doubling in ARR over the medium term. Our
market knowledge and research tell us the above mechanisms are
available to us and underpin our confidence in the achievability of
this target.
Margin remains at c80% and churn has been low. Diversification
of the revenue model across our three brands will accommodate more
dynamic growth as we also look to cement our traditional long-term
enterprise revenue. mpro5's cash generation tempered our cash burn,
however larger investments in software and marketing are planned
during 2022. Our Balance sheet is strong, and we have taken the
decision to shorten our amortisation profile on Intangible software
assets to seven years.
Current expenditure is focused on development (GBP2m in the
coming months on platform and apps) and a further GBP1m on
marketing in the UK and US. Development expenditure will vary later
in the year as we balance the requirements for apps and the
platform, however the single platform upgrade should be largely
complete by the end of 2022. We aim to invest in the opportunity
with our new Cisco Meraki partnership, however our planned spend of
cGBP1m is dependent on a reliably functioning sensor supply
chain.
Developments internationally included new contracts in
Scandinavia as part of our Master Services Agreement with Compass
Group. Food quality is at the heart of Compass' offering, and we
are pleased to continue to expand across their international
footprint. Compass trades in forty-five countries and mpro5 is only
currently used in four of them; it is pleasing to note that mpro5
now processes school meal data and advises Compass on performance
across the UK. We continued to expand our contracted revenues
further with existing customers, thanks to our excellent service
and relationships. Our office in Raleigh, North Carolina is
operational, and we are building a pipeline including the World
Federation of Haemophilia in Canada for our healthcare version of
mpro5.
Project wrkrz has made progress and we have a working app with
many of the features we designed, with further versions to come.
Our branding and go to market campaigns are undergoing their final
iterations and we will announce a new brand for the application in
the coming weeks. Market research has helped us refine the
application and we are combining the engine of this product with
mpro5's existing technologies.
10% of UK employment is provided in the trades and increasingly
this skill base is become smarter and more professional in terms of
the use of technology. Of course, our tradespeople application will
evolve internationally, however our focus is currently only on the
UK & Ireland.
Our partnership ambitions have expanded due to our nascent
relationship with Cisco Meraki. We are the solution to the "what
happens now?" data endpoints of Meraki cameras and sensors and this
gives us the opportunity to attach ourselves to Cisco's global name
and marketing engine. Our IoT offering continues to be piloted in
rail and it is only the speed of client decision making that is
holding us up. We are developing our sensor offering further in
anticipation of demand from the Cisco Meraki community. Cisco has
over 270 locations in eighty-eight countries.
From our group marketing efforts, we are seeing wider demand for
our core mpro5 solutions. With an expanded marketing team and
budget, we are optimistic that more MQLs (marketing qualified
leads) will convert to SQLs (sales qualified leads).
Challenges have included recruitment and we are not alone in
seeing the effects of competition for technical staff and wage
inflation. As expected, in seeing our team grow to forty-eight
staff members we have been bedding in new staff as well as tasking
external contractors and outsource firms. In summary we are
extremely busy with development and marketing, while our
operational infrastructure is well set, save for a few extra hires.
Our product focus has aided us in a "one platform, many apps"
strategy and we are pursuing this with optimism and determination.
Underpinning our ambition is a growing and stable customer base
which provides high levels of profitable, recurring revenue. Our
goals and investment decisions are based on areas where we know
there is demand for our solutions and feedback to date supports
this. We are expanding marketing and deploying capital and 2022
will see a full year of a Company accelerating its growth. The
Board looks to the future with confidence.
Barrie RJ Whipp
Founder & Chairman
Chief Executive Officer's Statement
Fresh capital allowed us to proceed with investments in our
technical, marketing, and international departments. We have
remained pragmatic in an ever-changing talent acquisition
landscape, attracting the right talent to deliver our three-year
strategy and beyond. We have also leveraged our partner and
contractor networks to accelerate the implementation of our
strategic objectives - namely investing in new product offerings,
partner marketing, and growing internationally.
With user testing of our new consumer (Project Wrkrz) &
healthcare (mpro5rx) offerings complete and third-party research
positioning us as a disruptor in these spaces we begin to target
the new revenue streams they offer. These opportunities, coupled
with the growing mpro5 enterprise pipeline gives the Board reason
for optimism.
Our partner strategy with Cisco places us uniquely within their
Meraki marketplace, and I believe mpro5's unrivalled ability to
provide digital workflow and a "single pane of glass" will lead to
exciting opportunities in the coming months across Europe and the
Americas.
Our international revenue acquisition is underpinned by our
Master Service Agreement with Compass Group leading to a number of
mpro5 rollouts across Northern Europe. Having provided mpro5 to
Compass UK for many years culminating in them becoming the largest
mpro5 customer, we remain excited as these opportunities mature and
subscriptions grow.
Luke Jeffrey
CEO
Financial Review
Financial indicator Year ended Year ended
December December
2021 2020
GBP'000 GBP'000
----------- -----------
Revenue 4,114 3,542
----------- -----------
Gross profit margin 80.4% 80.9%
----------- -----------
EBITDA 14 946
----------- -----------
(Loss)/Profit before tax (575) 532
----------- -----------
Annual recurring revenue
(ARR) 3,804 3,060
----------- -----------
Cash 5,737 1,175
----------- -----------
Revenue
The Company's sustained focus of delivering long-term revenue at
a high margin contributed to revenue growth of 16% (2020: 21%) of
which 85% was recurring revenue. Annual recurring revenue (ARR) as
at 31 December 2021 of GBP3.8 million (2020: GBP3.06 million)
increased by 24%. During a challenging period of national
lockdowns, this was achieved by upselling additional modules to
existing customers, while also adding new clients at entry level
price points. Revenue churn during 2021 was negligible at 2.4%
(2020: 4.9%), continuing the trend of churn amongst small legacy
customers. The gross profit margin of 80.4% (2020: 80.9%) remained
above the Board's 80% target rate.
Cashflow and liquidity
Cash at year-end amounted to GBP5.74m (2020: GBP1.17m),
following a fund raise during April 2021 that yielded a net
GBP5.64m. In the light of investments in sales and marketing,
platform improvements and establishing an office in the USA, cash
generated by operations remained positive at GBP0.17m (2020:
GBP1.39m).
Trade receivables
Trade receivables at year-end amounted to GBP899k (2020:
GBP576k). The increase predominantly relates to two large customers
that migrated to new procurement platforms during the year, which
caused some delay in payment, which has unwound since the year end.
The Company did not experience a noticeable increase in trade
receivables or bad debt related to the pandemic.
Debt and finance costs
Loans and leases decreased to GBP103k (2019: GBP288k). Finance
charges amounted to GBP10k (2020: GBP29k).
Capitalisation of intangible asset
Software development costs of GBP485k (2020: GBP539k) relating
to the core mpro5 product were capitalised during the year, while
an additional GBP479k (2020: GBPnil) were capitalised relating to
the new project wrkrz product. Amortisation during 2021 amounted to
GBP388k (2020: GBP216k). The value of the capitalised software
intangible asset at year-end was GBP2.2m (2020: GBP1.64m). The
amortisation period of the mpro5 intangible asset will be reduced
from 10 to 7 years in 2022.
Tax
A deferred tax asset of GBP32k (2020: GBPnil) was expensed due
to timing differences between the tax base and net book value of
certain assets. No corporation tax charge has been included (2020:
GBPnil) due to the availability of historic tax losses.
Earnings per share
The average number of ordinary shares in issue during the year
was 596.1m (2020 457.5m). Basic and diluted loss per share was
0.10p (2020: 0.16p - earnings per share).
Crimson Tide plc
Unaudited Consolidated Statement of Profit or Loss
Year ended Year ended
December December
2021 2020
Notes GBP000 GBP000
------------------------------------------- ------ ----------- -----------
Revenue 4,114 3,542
Cost of Sales (807) (677)
------------------------------------------- ------ ----------- -----------
Gross Profit 3,307 2,865
Administrative expenses 2 (4,014) (2,309)
------------------------------------------- ------ ----------- -----------
(Loss)/Profit from operations (707) 556
Other income 142 5
Finance costs (10) (29)
------------------------------------------- ------ ----------- -----------
(Loss)/Profit before taxation (575) 532
Taxation 3 (32) 202
(Loss)/Profit for the year after taxation (607) 734
=========================================== ====== =========== ===========
(Loss)/Earnings per share
Basic (pence) 4 (0.10) 0.16
Diluted (pence) 4 (0.10) 0.16
Unaudited Consolidated Statement of Comprehensive Income
Year ended Year ended
December December
2021 2020
GBP000 GBP000
--------------------------------------------- ----------- -----------
(Loss)/Profit for the year after taxation (607) 734
Other comprehensive income/(loss) for the
year:
Exchange differences on translating foreign
operations 2 4
--------------------------------------------- ----------- -----------
Total comprehensive (loss)/profit for the
year (605) 738
============================================= =========== ===========
Unaudited Consolidated Statement of Financial Position
As at 31 As at 31
December December
2021 2020
GBP000 GBP000
-------------------------------- ---------- ----------
Non-current assets
Capitalised development costs 2,219 1,642
Other intangible assets 817 799
Equipment, fixtures & fittings 167 235
Right-of-use asset 36 92
Deferred tax asset - 32
---------------------------------- ---------- ----------
3,239 2,800
-------------------------------- ---------- ----------
Current assets
Inventories - 6
Trade and other receivables 1,351 1,221
Cash and cash equivalents 5,737 1,175
---------------------------------- ---------- ----------
7,088 2,402
-------------------------------- ---------- ----------
Total assets 10,327 5,202
---------------------------------- ---------- ----------
Current liabilities
Trade and other payables 1,180 907
Borrowings 5 8
Lease liabilities 98 181
---------------------------------- ---------- ----------
1,283 1,096
-------------------------------- ---------- ----------
Non-current liabilities
Borrowings - 5
Lease liabilities - 94
---------------------------------- ---------- ----------
- 99
-------------------------------- ---------- ----------
Total liabilities 1,283 1,195
---------------------------------- ---------- ----------
Net assets 9,044 4,007
================================== ========== ==========
Equity
Share capital 657 457
Share premium 5,590 148
Other reserves 481 479
Reverse acquisition reserve (5,244) (5,244)
Retained earnings 7,560 8,167
---------------------------------- ---------- ----------
Total equity 9,044 4,007
---------------------------------- ---------- ----------
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 2020 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
Issue of shares 200 5,442 5,642
Loss for the year (607) (607)
Translation movement 2 2
Balance as at
31 December 2021 657 5,590 481 (5,244) 7,560 9,044
========= ========= ========== ============= ========== ========
Crimson Tide plc
Unaudited Consolidated Statement of Cash Flows
Year ended Year
December ended
2021 December 2020
GBP000 GBP000
---------- --------------
Cash flows from operating activities
(Loss)/Profit before taxation (575) 532
Adjustments for:
Amortisation of intangible assets 388 216
Depreciation of property, plant, and
equipment 135 111
Depreciation of right-of-use assets 56 57
Unrealised currency translation gains 2 4
Finance costs 10 29
Operating cash flows before movements
in working capital 16 949
Decrease in inventories 6 6
Increase in trade and other receivables (130) (1)
Increase in trade and other payables 273 433
Cash generated from operating activities 165 1,387
Taxes received - 202
Interest paid in cash (10) (27)
Net cash generated from operating
activities 155 1,562
---------- --------------
Cash flows used in investing activities
Purchases of fixed assets (67) (21)
Purchases of other intangible assets (18) -
Development expenditure capitalised (965) (539)
Net cash used in investing activities (1,050) (560)
---------- --------------
Cash flows from financing activities
Net proceeds from share issue 5,642 -
Repayments of borrowings (8) (21)
Repayments of lease liability (177) (126)
Net cash from financing activities 5,457 (147)
---------- --------------
Net increase/(decrease) in cash and
cash equivalents 4,562 855
Net cash and cash equivalents at beginning
of period 1,175 320
Net cash and cash equivalents at end
of period 5,737 1,175
Notes to the Consolidated Financial Statements for the year
ended 31 December 2021
1) Significant accounting policies
i. Basis of preparation
The preliminary results for the period to 31 December 2021 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.
ii. Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and all 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.
iii. 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. Revenue from a contract to provide services is recognised
over time as the services are rendered based on either a fixed
price or an hourly rate.
2) Expenses
Loss before income tax includes the following specific
expenses:
2021 2020
GBP000 GBP000
Depreciation
Equipment, fixtures, and fittings 135 111
Buildings right-of-use assets 56 57
--------------------------- ----------------------
Total depreciation 191 168
=========================== ======================
2021 2020
GBP000 GBP000
Amortisation
Development software 261 216
Development software - impairment 127 -
--------------------------- ----------------------
Total amortisation 388 216
=========================== ======================
Auditors remuneration for:
Audit services 14 12
Auditing of accounts of associate 14 14
Other services supplied pursuant
to such legislation 6 6
--------------------------- ----------------------
34 32
--------------------------- ----------------------
3) Taxation
A deferred tax asset of GBP32k (2020: GBPnil) was expensed due
to timing differences between the tax base and net book value of
certain assets. No corporation tax charge has been included in the
consolidated accounts for the period ended 31 December 2021 (2020:
GBPnil) due to the availability of tax losses. For 2020 a research
and development tax credit of GBP202k was recognised in the
Consolidated Statement of Profit or Loss.
4) (Loss) / Earnings per share
The basic (loss)/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 (loss)/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 2021 31 December
2020
(Loss) / Earnings per share
Reported (loss)/profit for the
year (GBP000) (607) 734
Reported basic earnings per share
(pence) (0.10) 0.16
Reported diluted earnings per
share (pence) (0.10) 0.16
Year ended Year ended
31 December 31 December
2021 2020
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 596,116,371 457,486,234
Dilutive effect of options outstanding - 2,938,478
-------------- --------------
Weighted average number of ordinary
shares for diluted EPS 596,116,371 460,424,712
============== ==============
At 31 December 2021 there were 16,700,000 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 financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2021
or 31 December 2020. Statutory accounts for 2020, which were
prepared under IFRS, have been delivered to the Registrar of
Companies. The auditors have reported on the 2020 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 2021 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 June 2022.
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