Crimson Tide Regulatory News (TIDE)

I am pleased to review our operating and financial performance over the first half of 2016 and comment on our results for the six months to 30 June 2016.

Operating Review

The year commenced on a very positive note following the earlier than expected full rollout of the Company's mpro5 solution with one of the country's leading retailers. This highlighted two factors; one, the ease with which we were able to organise and install our mpro5 solution nationwide and two, the value placed on mpro5 by our customers, immediately allowing them to reap the operational and financial benefits from adopting the solution. mpro5 has since started to be implemented elsewhere in the retail sector and we announced in July 2016 a new pilot with another retailer to monitor store safety, cleanliness and security.

The flexibility of our mpro5 solution means it is able to generate value across a wide range of different markets. Elsewhere, in healthcare, we remain very encouraged by the number of opportunities we are working on including a pilot project for the serialisation and verification of pharmaceutical products. Here, mpro5 provides barcode scanning and cloud‐based synchronisation services via Microsoft Azure, which enables real‐time information to be uploaded, quickly verified and communicated to users. Job scheduling, tracking, bespoke dashboards, all add value ensuring mobile users are able to work most efficiently. Our investment in mpro5 continues and we aim to make sure it remains a leading solution as technological advances continue apace.

The nature of some of our business is moving to bigger, enterprise solutions. The customer's commitment is unchanged, signing a subscriber agreement for typically an initial thirty-six month term. However, our pricing in these cases reflects the large numbers of users expected. Furthermore, we are finding more opportunities abroad and as mentioned in the Chairman's statement, we are investing in overseas sales resources and related marketing to be able to progress these most effectively. The positive cashflows we are generating together with the security of funding available from Lombard Technical Services to finance devices provided as part of our solution, means the Company's directors are comfortable with this increased expenditure. There may as a result be some short term impact on our rate of profitability growth but we expect over the medium term to generate additional revenues and greater profits.

Financial Review

Turnover for the six months to 30 June 2016 increased to £845k, up 25% on the same period in 2015. With gross profit margins still over 90% and operating margins before depreciation, amortisation and interest of 33%, up from 29% in 1H 2015, the additional investments previously made in staff have been more than compensated for by increased profitability.

After depreciation, amortisation and interest costs, the Group achieved a profit of £122k in the first half 2016 (1H 2015: £60k).

There have been no changes to Crimson Tide's accounting policies which can be found in the notes to the published 2015 Consolidated Financial Statements available on our website, www.crimsontide.co.uk.

It should be noted, however, that early in 2016, the Company completed its capital reconstruction and now has positive retained earnings in the Balance Sheet to allow the Company to, if appropriate, pay dividends in the future. Shareholders also approved future share buy-backs at the General Meeting, again if thought by the directors to be appropriate. This exercise together with the positive cashflows generated by the Group means the financial position of Crimson Tide looks favourable at the half year and has further improved since as net funds have continued to increase.

Future Prospects

The outlook for the business remains very positive. Our mpro5 solution has continually proved a sound investment for our customers even as these customers have become more sizable and/or more geographically spread. The Board and team at Crimson Tide are working hard on behalf of shareholders to ensure that our reputation and success continue to advance.

Stephen Goodwin

Finance Director

22 September 2016

Unaudited Consolidated Income Statement for the 6 months to 30 June 2016

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months to 30 June 2016

Unaudited Consolidated Statement of Financial Position at 30 June 2016

Unaudited Consolidated Statement of Changes In Equity at 30 June 2016

(*) At the Company's General Meeting on 26 January 2016 shareholders approved plans to undertake a capital reconstruction, the purpose of which was to create positive retained earnings in the Balance Sheet to allow the Company to, if appropriate, pay dividends in the future. Shareholders also approved future share buy-backs. Following a court hearing on 24 February 2016 the court confirmed the reduction of capital of the Company. The nominal value of each Ordinary Share in the Company reduced from one penny to 0.1 pence per share and the Company's Deferred Shares of 19 pence each, Share Premium Account and Capital Redemption Reserve were cancelled. Trading in the shares with a nominal value of 0.1 pence commenced on 25 February 2016.

Unaudited Consolidated Statement of Cashflows for the 6 months to 30 June 2016

Notes to the Unaudited Interim Results for the 6 months ended 30 June 2016

1. Basis of preparation of interim report

The information for the period ended 30 June 2016 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 2015. 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 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: