Last checked at 8 Jun 2009 07:00
8 JUNE 2009
Crimson Tide Plc
("Crimson Tide" or "the Company")
(A leading service provider of mobile data and software solutions for business)
Preliminary Announcement of Results to 31 December 2008
Highlights
Chairman's Statement
I am pleased to report the results for Crimson Tide plc for the year ended 31 December 2008, the second full year since our admission to AIM. Turnover and the EBITDA loss were in line with our expectations, which was especially pleasing given the difficult economic environment, and are a reflection of the prudent stewardship of the Company. Even more pleasing is the Board's confidence that losses will be substantially reduced in the first half of 2009 and that we will reach profitability on a month by month basis at the EBITDA level during the course of this year. The business continues to deliver results in line with management's expectations.
Since the summer of 2008, where we foresaw some of the economic issues affecting businesses, we have been careful to ensure that the Company was not over-geared in terms of debt or central overhead. Our focus in this period has been on the continued support of our software and consultancy business which has enabled the Company to weather the current downturn and maintain its financial improvement. Whilst management feels that the Company could have achieved more from its subscription based mobile data solutions if we had adopted a riskier profile, we feel that these results in such demanding conditions vindicate the Board's strategy.
Our business in Ireland has not been immune to the severe economic downturn in the Irish economy. An element of our business provides recurring revenue but the software market has proved difficult. Again, we have adjusted overhead accordingly and taken a substantial amount of risk out of the business. Our team in Ireland continue to be highly committed and have produced some fine work for our mobile data solutions sold in the UK.
We have recently agreed a significant partnership with Yes Telecom, a Vodafone company, where our solutions will be sold by Yes Telecom's channel dealers, a base of over 500 organisations across the UK. This will extend our sales reach and breadth of offerings and we are confident that we will be able to announce another significant partnership in the near future.
As we enter the second half of 2009, we will be introducing several exciting initiatives to enhance our services and results. We are planning to introduce our own communications architecture, with assistance from Microsoft, which will enable us to deliver applications more rapidly and eliminate a certain element of middleware costs from our gross margin. Furthermore, we have in development a number of solutions in the healthcare market which, we believe, will give us opportunities to commoditise part of our portfolio for a wide range of organisations in the sector.
In summary, once again we have delivered results that we expected. Economic times have been challenging and look set to remain so. Crimson Tide's management has acted to ensure stability and reduce the requirement for cash, and has plotted a course towards early profitability. We have also established a platform where growth will flow faster to the bottom line due to an improvement in margin on our mobile data solutions. We will continue to manage the business carefully, taking advantage of the wide range of opportunities available to us.
Shareholders with warrants issued in 2006 should be aware that the expiry date for these warrants is August, 20, 2009 ("Expiry Date"). These warrants give the holder the option to subscribe for Ordinary Shares in the Company at 1.5p per share, on or prior to the Expiry Date, otherwise they will lapse. Holders who wish to exercise their rights should write to the registered office of the Company, on or prior to the Expiry Date, and remit the subscription monies at 1.5p per share subscribed for either in cash or by bank transfer. Proceeds from the issue of new shares will be used in the ordinary course of business for working capital purposes.
Our staff have been loyal, committed and hard-working. I thank them and our partners for their efforts which we believe have positioned us well for the future in our exciting market.
Barrie Whipp
Executive Chairman
5 June 2009
Enquiries:
| Crimson Tide plc Barrie Whipp, Executive Chairman | 01892 542444 |
| W.H. Ireland Limited Tim Cofman-Nicoresti/Katy Birkin | 0121 265 6330 |
| Threadneedle Communications Graham Herring / Josh Royston | 020 7653 9850 |
Crimson Tide Plc
Unaudited consolidated income statement for the year ended 31 December 2008
| Group | |||||
| Year ended | Year ended | ||||
| 31 December 2008 | 31 December 2007 | ||||
| £000 | £000 | ||||
| Revenue | 1,776 | 1,674 | |||
| Cost of sales | (817) | (745) | |||
| Gross profit | |||||
| 959 | 929 | ||||
| Total operating expenses | (1,209) | (1,328) | |||
| Loss from operations | (250) | (399) | |||
| Interest income | 4 | 10 | |||
| Interest payable and similar charges | (33) | (19) | |||
| Loss before taxation | |||||
| (279) | (408) | ||||
| Tax on loss on ordinary activities | - | - | |||
| Loss for the year attributable to equity holders of the parent | |||||
| (279) | (408) | ||||
| Loss per share | |||||
| Basic and diluted loss per ordinary share (pence) | (0.09)p | (0.14)p | |||
Unaudited balance sheet as at 31 December 2008
| Group | ||||
| As at 31 December 2008 | As at 31 December 2007 | |||
| £000 | £000 | |||
| Fixed Assets | ||||
| Intangible assets | 868 | 889 | ||
| Equipment, fixtures & fittings | 24 | 29 | ||
| 892 | 918 | |||
| Current Assets | ||||
| Inventories | 39 | 25 | ||
| Trade and other receivables | 597 | 383 | ||
| Cash and cash equivalents | 89 | 175 | ||
| 725 | 583 | |||
| Total assets | 1,617 | 1,501 | ||
| Equity and liabilities | ||||
| Equity attributable to equity holders of the parent | ||||
| Share capital | 6,070 | 5,790 | ||
| Capital redemption reserve | 49 | 49 | ||
| Share premium | 1,058 | 1,006 | ||
| Other reserves | 430 | 507 | ||
| Reverse acquisition reserve | (5,244) | (5,244) | ||
| Retained earnings | (1,850) | (1,571) | ||
| 513 | 537 | |||
| Creditors | ||||
| Amounts falling due within one year | 791 | 862 | ||
| Creditors | ||||
| Amounts falling due after more than one year | 313 | 102 | ||
| Total liabilities | 1,104 | 964 | ||
| Total equity and liabilities | 1,617 | 1,501 | ||
|
| ||||
Unaudited statement of changes in equity for the year ended 31 December 2008
| Group | Share capital | Capital redemp-tion reserve | Share premium | Other reserves | Reverse acquisition reserve | Retained earnings | Total |
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | |
| Balance as at 1 January 2007 | 5,679 | 49 | 916 | 457 | (5,244) | (1,163) | 694 |
| Loss for the year | (408) | (408) | |||||
| Proceeds from new shares issued during the year | 110 | 96 | 206 | ||||
| Proceeds from warrants exercised during the year | 1 | 1 | |||||
| Shares to be issued for acquisition of IDL | 60 | 60 | |||||
| Additional costs for acquisition of IDL | (6) | (6) | |||||
| Translation movement | (10) | (10) | |||||
| Balance as at 31 December 2007 | 5,790 | 49 | 1,006 | 507 | (5,244) | (1,571) | 537 |
| Loss for the year | (279) | (279) | |||||
| Proceeds from new shares issued during the year | 248 | 24 | 272 | ||||
| Shares to be issued for acquisition of IDL | 32 | 28 | (60) | - | |||
| Convertible loan - equity component | 11 | 11 | |||||
| Translation movement | (28) | (28) | |||||
| Balance as at 31 December 2008 | 6,070 | 49 | 1,058 | 430 | (5,244) | (1,850) | 513 |
Note: "IDL" means Intelligent Data Limited, acquired by Crimson Tide plc on 7 December 2006
Unaudited consolidated cash flow statement for the year ended 31 December 2008
| Group | Group | ||||
| Year ended 31 December 2008 | Year ended 31 December 2007 | ||||
| £000 | £000 | ||||
| Cash flows from operating activities | |||||
| Loss from operations | (250) | (399) | |||
| Depreciation of equipment, fixtures and fittings | 11 | 10 | |||
| Amortisation of Intangible Assets | 42 | 41 | |||
| Operating cash flows before movements in working capital | (197) | (348) | |||
| (Increase)/decrease in inventories | (14) | 3 | |||
| (Increase)/decrease in trade and other receivables | (212) | 31 | |||
| (Decrease)/increase in trade and other payables | (164) | 30 | |||
| Cash used in operating activities | (587) | (284) | |||
| Income taxes paid | - | - | |||
| Net cash used in operating activities | (587) | (284) | |||
| Cash flows used in investing activities | |||||
| Acquisition of subsidiaries | - | (60) | |||
| Purchases of fixed assets | (27) | - | |||
| Interest received | 2 | 10 | |||
| Net cash used in investment activities | (25) | (50) | |||
| Cash flows from financing activities | |||||
| Net proceeds on issues of shares | 272 | 206 | |||
| Interest paid | (33) | (19) | |||
| Net increase/(decrease) in borrowings | 209 | (49) | |||
| Net cash from financing activities | 448 | 138 | |||
| Net decrease in cash and cash equivalents | (164) | (196) | |||
| Net cash and cash equivalents at beginning of period | 175 | 371 | |||
| Net cash and cash equivalents at end of period | 11 | 175 | |||
Crimson Tide Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2008
A) Significant accounting policies
a. Basis of preparation
The preliminary results for the period to 31 December 2008 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.
b. Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all of 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.
B) Taxation
No tax charge has been incorporated into the consolidated accounts for the period ended 31 December 2008 due to the availability of tax losses.
C) Loss per share
| Group | ||
| Year ended 31 December 2008 | Year ended 31 December 2007 | |
| Basic and Diluted Loss per share | ||
| Reported loss (£000) | (279) | (408) |
| Reported loss per share (pence) | (0.09)p | (0.14)p |
The loss per share has been calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of shares in issue calculated as follows:
| Year ended 31 December 2008 No. | Year ended 31 December 2007 No. | |||
| Weighted average number of ordinary shares: | ||||
| Opening balance | 290,940,440 | 279,899,089 | ||
| Effect of share placings | 16,728,346 | 6,298,630 | ||
| Effect of shares issued in acquisition Crimson Tide (IE) Ltd. | 2,139,178 | - | ||
| Effect of warrants exercised during year | 14,116 | 15,349 | ||
| Weighted average number of ordinary shares | 309,822,080 | 286,213,068 | ||
Due to the Group's loss for the periods, the diluted loss per share is the same as the basic loss per share.
The financial information set out above does not constitute the Company's statutory accounts for the periods ended 31 December 2008 or 31 December 2007. Statutory accounts for 2007, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors have reported on the 2007 accounts; their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2008 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 statutory accounts will be published on the Company's website www.crimsontide.co.uk.