Crimson Tide Regulatory News (TIDE)

30 Nov 2006 18:16

Crimson Tide PLC30 November 2006 Crimson Tide plc 30 November 2006 ("Crimson Tide" or "the Company") Acquisition and Trading Update • Conditional acquisition of Intelligent Data Limited for an initial consideration of £220,000 • Crimson Tide trading good with key performance indicators encouraging • Marketing campaign under way • Loss for the year to 31 December 2006 to be in line with expectations • Increasing flow of potential customers Crimson Tide (AIM: TIDE), a growing provider of wireless mobile data solutions,today announces the proposed acquisition of Intelligent Data Limited ("Intelligent Data"), a private company specialising in mobile data solutions andtime and attendance software, for an initial consideration of £220,000.Intelligent Data, which employs 8 people, is based in Dublin, Ireland. TheCompany is also updating the market on current trading. Acquisition of Intelligent Data The Board is pleased to announce that it has entered into a conditional sharepurchase agreement for the acquisition of Intelligent Data, a company providingmobile data solutions and other software solutions. The Board expects theconditions to be satisfied within the next five working days. Laurence D'Arcy,the Managing Director of Intelligent Data, will remain with Intelligent Datawhich will be renamed Crimson Tide (IE) Limited. The acquisition will give theCompany access to Intelligent Data's mobile data solutions, expand the customerbase and give geographical expansion for Crimson Tide's own mobile datasolutions. In the year ended 31 December 2005, Intelligent Data reported a profit beforetax of €41,000 (c£28,000), on turnover of €863,000 (c£583,000). Net assets at31 December 2005 were €203,000 (c£137,000). Intelligent Data's turnover for theyear to 31 December 2006 is expected to be in the region of €1m (c£675,000),earning a small profit before taxation similar to last year. Intelligent Datahas over 400 customers and will continue to trade as before but, in addition,will be able to add the Crimson Tide solutions to its portfolio. Crimson Tidewill also sell Intelligent Data's solutions in the UK. The acquisition will be funded by the issue of 4 million ordinary shares and£120,000 from a new loan facility with HSBC, and is expected to be earningsenhancing in the first year of acquisition. Additional new shares with a marketvalue of £60,000 will be issued to the vendors on 30 April, 2008 provided thatIntelligent Data's sales for the year ending 31 December 2007 exceed €1,000,000.In addition, options over 4,800,000 of the Company's ordinary shares (at anexercise price of 2.5 pence per share, half exercisable if 2007 sales exceed€1.25 million (c£844,000) and half exercisable if 2008 sales exceed €1.6 million(c£1,080,000) plus any shortfall in 2007 sales below €1 million (c £675,000))will be granted to Laurence D'Arcy and Trond Iversen, members of IntelligentData's management team. IAF Securities Limited acted as adviser to The Company in respect of thistransaction. Trading Update The Company's current trading is good with key performance indicators showingpositive trends as more customers are being attracted to the Company's mobiledata solutions. Demand for email solutions is strong and the Company'sopportunity pipeline is increasing. The Company continues to work with selectedsuppliers to develop a wider range of mobile solutions, including mobileintranet, mobile defence and mobile forms, to meet the increasing demand formore complex solutions. Although these contracts take longer to negotiate, theywill be more lucrative in the longer term due to their higher margins. The Company's new marketing plan is in the early stages of implementation and isstarting to show positive results in terms of awareness and interest in theCompany's solutions. This is expected to increase as the consistency ofmarketing continues. Crimson Tide Mpro Limited (the main operating subsidiary) is required by AIMregulations to announce its trading figures for the nine months to 31 July 2006;this period being before the acquisition of that company in the reverse takeoverby A. Cohen & Co plc in August 2006. Turnover in the period was £662,000 (9months to 31 July 2005: £455,000) with a loss before interest, tax, depreciationand amortisation ("EBITDA") of £15,000 (9 months to 31 July 2005: £123,000 loss) The Company will announce its full year results for the year ended 31 December2006, which will include trading since the reverse takeover as well as the costsof A. Cohen & Co. Plc, by the end of March 2007. The Board expects to report aloss for the year to 31 December 2006 of around £275,000 at the EBITDA levelexcluding the costs of the reverse takeover by A. Cohen & Co. Plc. This is inline with the Directors' expectations and the views expressed at the time of theadmission document. The loss before tax will be due to increased investment inmarketing to generate growth in sales, additional AIM related costs and thecosts incurred by A. Cohen & Co. Plc before the reverse takeover. The on-goingmarketing spend will increase in 2007 to accelerate growth in sales and afurther loss is expected in the next financial year. The Directors anticipatethe full benefit of the marketing activities undertaken in 2006/7 to be seen inthe financial year to 31 December 2008. Barrie Whipp, Executive Chairman of Crimson Tide, said: "I am pleased with the progress of the Group in the short period since admissionto AIM. The business is implementing its marketing plan and we are seeing anincreasing flow of potential customers for our mobile data solutions which areattracting a range of interest against the backdrop of a growing marketplace.The addition of Intelligent Data gives us a larger client base, geographicalexpansion and good people. We will continue to seek further acquisitions wherewe can grow the range of mobile data solutions we offer as well as broadeningour geographic footprint." For further information contact: Crimson Tide plcBarrie Whipp (Executive Chairman) 01892 542444Stephen Goodwin (Chief Executive) Cubitt ConsultingBrian Coleman Smith/Leanne Denman 020 7367 5100 About Crimson Tide: • Crimson Tide plc is a growing provider of mobile data solutions on handheld devices and smartphones • The Company supplies solutions on a subscription basis, to a wide range of customers including small & medium size enterprises as well as larger organisations such as the NHS. • Founded in 1996 Crimson Tide completed the reverse takeover of A. Cohen & Co. Plc admitting to AIM in August 2006 This information is provided by RNS The company news service from the London Stock Exchange