Last checked at 25 Sep 2008 14:20
The following text relates to an announcement RNS 2324E released at 7:00am on 25 September 2008. In the previous announcement there was an erroneous amount of 553,191 above the correct gross profit figure in each of the three columns in the Unaudited Consolidated Income Statement. This has now been removed.
Crimson Tide Plc
("Crimson Tide" or "the Company")
(A leading service provider of mobile data solutions for business)
Announcement of Interim Results to 30 June 2008
Highlights
Barrie Whipp, Executive Chairman, commented;
"Our customer base and subscription revenues have grown in 2008 and we continue to make good progress".
Chairman's Statement
I am pleased to report on your Company's progress in the first half of the year to 30 June 2008. We have continued to make progress with our business model. Turnover for the period increased to £902,000, an increase of 27% over the comparative period last year.
All areas of the business contributed to the growth and at the EBITDA level the loss for the half year was £126,000, a substantial reduction on the comparative period last year of £222,000. The management continue to work hard on reducing the loss on a monthly basis and are focused on achieving break-even at the earliest opportunity.
The book of contracted revenues from our subscription based business continued to grow. The most pleasing aspect is the further business secured from our existing customers, both in number of users and term of contract. We recently secured our first five year subscription contract and, during the period, we extended the first three year contract we entered into by a further two years.
Our business in Ireland underwent a structural change during the period as we worked on switching the focus from immediate revenue opportunities to subscription based business. In addition, technical staff from Dublin have assisted with UK deliverables. The contribution from Ireland in profit terms was therefore below the previous period but management believes that we are creating a better long term business model for this part of our business.
Our voice and data mobile telecommunications connections and ancillary income have increased and we are increasing our ability to deliver a full range of solutions in this field.
The second half of the year will be exciting as we attempt to secure business from our extensive sales pipeline. The volume of opportunities is very high, some of which are large in numbers of subscribers and, by nature, take longer to negotiate. Furthermore, we are implementing a range of new Microsoft technologies that will improve margins in the medium and long term. The business opportunities remain very encouraging and the management is highly focused on delivering profitability.
Barrie WhippExecutive Chairman24 September 2008
Operational Review
In first six months of 2008, the Group has consolidated its position, adding more long-term subscribers and increasing the book of contracted revenues, continuing the progress made last year. Our strategic shift from one-off sales of software solutions to contracted, subscription based, business is proving successful we expect to maintain this trend.
The market for our mobile data solutions continues to grow as technology improvements and business awareness of the potential productivity gains, both help add to demand. The Crimson Tide subscription model makes these solutions even more attractive because customers are able to quickly implement proven applications without incurring the capital cost usually associated with information technology solutions. In the current economic climate, it is more important than ever that we are able to clearly demonstrate an immediate return on investment for our customers without them incurring any capital expenditure. We continue to focus our marketing on these benefits and have found trade shows in particular, a good way to generate new leads and grow our opportunity pipeline.
As our customer base has increased, so too has our portfolio of mobility solutions focused on specific vertical markets. Facilities management, cleaning, and health and safety are particular areas where our targeted solutions have been well received. We are starting now to see the uptake of these in the Irish market, where the business has increasingly moved away from outright sales to subscription business. The short-term downside of this move is that revenues and profits in Ireland have fallen in the first six months of 2008 but as we are increasingly demonstrating in the U.K., the medium and long term benefits of secure subscription business, stretching out a number of years, is ultimately the best option for shareholders.
Our new sales resources have plenty of opportunities to progress and recent new staff additions have freed up both sales and technical staff to more quickly implement our solutions. Overheads remain under close scrutiny and are well managed. Crimson Tide's employees as a whole, continue to perform exceptionally well and we intend to reward some through our Enterprise Management Incentive (EMI) share option scheme which will also help to keep operating costs down. As before, the options will be aligned to shareholders' aims, only being exercisable if the Group's share price increases. I would again like to take this opportunity to thank the whole Crimson Tide team for their continuing dedication and hard work.
We are pleased with our progress, especially as we were frustrated by limited cash resources in the first half of the year. The placing completed at the end of April which realised £272,500 net of expenses and the new loan facility of up to £300,000 announced in August, now leave us well positioned to accelerate our growth over the second half of 2008 and beyond.
Stephen Goodwin
Chief Executive24 September 2008
Enquiries:
| Crimson Tide plc Barrie Whipp, Executive Chairman | 01892 542444 |
| W.H. Ireland Limited Tim Cofman-Nicoresti / Katy Birkin | 0121 265 6330 |
Crimson Tide Plc
Unaudited consolidated income statement for the 6 months to 30 June 2008
| Unaudited 6 Months ended 30 June 2008 | Unaudited 6 Months ended 30 June 2007 | Audited 12 Months ended 31 December 2007 | |||
| £000 | £000 | £000 | |||
| Revenue | 902 | 715 | 1,674 | ||
| Cost of sales | (416) | (307) | (745) | ||
| 486 | 408 | 929 | |||
| Total operating expenses | (638) | (648) | (1,328) | ||
| Loss from operations | (152) | (240) | (399) | ||
| Interest income | - | 7 | 10 | ||
| Interest payable and similar charges | (7) | (8) | (19) | ||
| Loss before taxation | |||||
| (159) | (241) | (408) | |||
| Tax on loss on ordinary activities | - | - | - | ||
| Loss for period attributable to equity holders of the parent | |||||
| (159) | (241) | (408) | |||
| Loss per share | |||||
| Basic and diluted loss per ordinary share | (0.05)p | (0.09)p | (0.14)p | ||
Unaudited consolidated balance sheet as at 30 June 2008
| Unaudited As at 30 June 2008 | Unaudited As at 30 June 2007 | Audited As at 31 December 2007 | |||
| £000 | £000 | £000 | |||
| Fixed Assets | |||||
| Intangible assets | 869 | 850 | 889 | ||
| Equipment, fixtures & fittings | 23 | 27 | 29 | ||
| 892 | 877 | 918 | |||
| Current Assets | |||||
| Inventories | 27 | 23 | 25 | ||
| Trade and other receivables | 499 | 290 | 383 | ||
| Cash and cash equivalents | 71 | 267 | 175 | ||
| Total current assets | 597 | 580 | 583 | ||
| Total assets | 1,489 | 1,457 | 1,501 | ||
| Equity and liabilities | |||||
| Equity | |||||
| Share capital | 6,038 | 5,789 | 5,790 | ||
| Capital redemption reserve | 49 | 49 | 49 | ||
| Share premium | 1,041 | 1,010 | 1,006 | ||
| Other reserves | 499 | 457 | 507 | ||
| Reverse acquisition reserve | (5,244) | (5,244) | (5,244) | ||
| Retained earnings | (1,730) | (1,404) | (1,571) | ||
| Total Equity | 653 | 657 | 537 | ||
| Creditors | |||||
| Amounts falling due within one year | 751 | 681 | 862 | ||
| Creditors | |||||
| Amounts falling due after more than one year | 85 | 119 | 102 | ||
| Total liabilities | 836 | 800 | 964 | ||
| Total equity and liabilities | 1,489 | 1,457 | 1,501 | ||
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Unaudited consolidated statement of changes in equity as at 30 June 2008
| 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 as at 31 December 2006 | 5,679 | 49 | 915 | 457 | (5,244) | (1,163) | 693 |
| Loss for the period | - | - | - | - | - | (241) | (241) |
| Proceeds from new shares issued during 6 months | 110 | - | 95 | - | - | - | 205 |
| Balance as at 30 June 2007 | 5,789 | 49 | 1,010 | 457 | (5,244) | (1,404) | 657 |
| Balance as at 31 December 2007 | 5,790 | 49 | 1,006 | 507 | (5,244) | (1,571) | 537 |
| Loss for the period | - | - | - | - | - | (159) | (159) |
| Proceeds from new shares issued during 6 months | 248 | - | 35 | - | - | - | 283 |
| Translation movement | - | - | - | (8) | - | - | (8) |
| Balance as at 30 June 2008 | 6,038 | 49 | 1,041 | 499 | (5,244) | (1,730) | 653 |
Unaudited consolidated statement of cashflows for the 6 months to 30 June 2008
| Unaudited 6 Months ended 30 June 2008 | Unaudited 6 Months ended 30 June 2007 | Audited 12 Months ended 31 December 2007 | |||
| £000 | £000 | £000 | |||
| Cash flows from operating activities | |||||
| Loss from operations | (152) | (240) | (399) | ||
| Adjustments for: | |||||
| Amortisation of Intangible Assets | 20 | 16 | 41 | ||
| Depreciation of equipment, fixtures and fittings | 5 | 2 | 10 | ||
| Operating cash flows before movement in working capital and provisions | (127) | (222) | (348) | ||
| (Increase)/Decrease in inventories | (2) | 5 | 3 | ||
| (Increase)/Decrease in trade and other receivables | (117) | 123 | 31 | ||
| (Decrease)/Increase in trade and other payables | (102) | (207) | 30 | ||
| Cash used in operations | (348) | (301) | (284) | ||
| Income taxes paid | - | - | - | ||
| Net cash used in operating activities | (348) | (301) | (284) | ||
| Cash flows from/(used in) investing activities | |||||
| Purchase of fixed assets | - | (4) | - | ||
| Acquisition of subsidiaries | - | - | (60) | ||
| Interest received | - | 7 | 10 | ||
| Net cash from/(used in) investing activities | - | 3 | (50) | ||
| Cash flows from financing activities | |||||
| Net proceeds on issues of shares | 283 | 205 | 206 | ||
| Interest paid | (7) | (8) | (19) | ||
| Net decrease in borrowings | (32) | (22) | (49) | ||
| Net cash from financing activities | 244 | 175 | 138 | ||
| Net decrease in cash and cash equivalents | (104) | (123) | (196) | ||
| Net cash and cash equivalents at beginning of period | 175 | 371 | 371 | ||
| Net cash and cash equivalents at end of period December | 71 | 248 | 175 | ||
Crimson Tide Plc
Notes to the Unaudited Interim Results for the 6 months ended 30 June 2008
1. Basis of preparation of interim report
The information for the period ended 30 June 2008 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. 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 2007. 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 237(2) or (3) of the Companies Act 1985.
2. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
| Unaudited 6 Months ended 30 June 2008 | Unaudited 6 Months ended 30 June 2007 | Audited 12 Months ended 31 December 2007 | |
| Earnings | |||
| Reported loss (£000) | (159) | (241) | (408) |
| Reported loss per share (pence) | (0.05) | (0.09) | (0.14) |
| Unaudited 6 Months ended 30 June 2008 | Unaudited 6 Months ended 30 June 2007 | Audited 12 Months ended 31 December 2007 | |
| No. 000 | No. 000 | No. 000 | |
| Weighted average number of ordinary shares: | |||
| Shares in issue at start of period | 290,940 | 279,899 | 279,899 |
| Effect of shares issued during the period | 4,682 | 1,537 | 6,314 |
| Weighted average number of ordinary shares for the purpose of basic earnings per share | 295,622 | 281,436 | 286,213 |
Due to the Group's loss for the period, the diluted loss per share is the same as the basic loss per share.