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 30th 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 30th 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 30th 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 12th 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 30th June 2011.

 

At 30th 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)

 







 

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.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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