Crimson Tide Regulatory News (TIDE)

25 Sep 2008 07:00



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

 Further growth in long-term contracted revenues

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 Whipp

Executive Chairman

24 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 Executive

24 September 2008

Enquiries: 

  Crimson Tide Plc

Unaudited consolidated income statement for the 6 months to 30 June 2008 

  Unaudited consolidated balance sheet as at 30 June 2008 

Unaudited consolidated statement of changes in equity as at 30 June 2008

   Unaudited consolidated statement of cashflows for the 6 months to 30 June 2008

Crimson Tide Plc

Notes to the Unaudited Interim Results for the 6 months ended 30 June 2008 

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: 

Due to the Group's loss for the period, the diluted loss per share is the same as the basic loss per share.