Crimson Tide plc (LON:TIDE), the provider of mpro5 – smart mobility as a service, announced its unaudited interim results for the six months ended 30 June 2017.
Highlights
· Revenues 32% up on 1H 2016 (£1,114k vs. £845k)
· Profit Before Tax 16% higher at £142k (1H 2016: £122k);
· Cash generated from operations over 70% higher than 1H 2016 (£365k vs £212k)
· Good progress with planned international expansion
Barrie Whipp, Executive Chairman, commented, “We have invested in sales & marketing resources to ensure that we can take Crimson Tide to the next level. Our performance has been very good and we are very excited about the latest release of mpro5 which is a sea change in terms of performance and usability. The breadth of mpro5’s capabilities is starting to be recognised in new markets with a wide range of new opportunities. We are very excited for the future.”
Chairman’s Statement
In the first half of 2017, the Company concentrated on setting out to expand mpro5’s reach into both existing markets and new economies. This strategy is starting to see early results in a number of new areas.
The mpro5 mobile application has been upgraded to a brand new development platform. Whilst continuing to leverage Microsoft Azure’s capabilities we have changed to a new framework developed in Angular and Ionic. The changes in terms of performance and usability is dramatic, bringing the power of our extremely robust infrastructure to a much more intuitive and fast experience for our users. We are working on new Internet of Things (“IoT”) opportunities for mpro5 and believe that we have just as much to excite clients as organisations that only specialise in this nascent area.
We are seeing opportunities develop in all of the overseas markets that we have invested in. We are pleased that our investments have been tactical. Rather than setting up unnecessary infrastructure we have focused on finding individuals who can exploit our existing uses of mpro5 in overseas markets and using our existing technical staff to assist them in gaining traction.
In the UK & Ireland, we have been working hard to expand our footprint and a number of enterprise level transactions are under way. Our turnover has increased quite significantly and, of course, is now almost entirely comprised of long term and contracted subscriber revenue.
Our new geographic bases in the UAE, Netherlands, US and Australia are being progressed by parties that the Company already knew or that its associates have introduced. We therefore have a level of trust that matters are being progressed in our corporate style and with our core values in mind. There is at least as much potential in these markets as in our existing footprint.
Our profitability increased during the period, however this was not the Board’s primary consideration for 2017. We wanted to continue to be profitable in an investment and expansion stage of our development and I am particularly pleased that we achieved this balance. It is our intention to continue to invest and expand and we are mindful of not properly exploiting the opportunities in front of us. The message to our team is that we are aiming to be a much larger entity in the coming years than our previous base allowed.
This year has presented new challenges, but more importantly significantly greater opportunities. We believe we are well set for continued growth and are continuing to prosecute a bolder strategy. Stakeholders have been extremely supportive of our investment programme and we will continue to explore these opportunities and support our new staff and partners in elevating the Company to the next level.
Barrie Whipp
Executive Chairman
7th September 2017
Operating and Financial Review
I am pleased to provide a review our operating and financial performance over the first half of 2017 and comment on our results for the six months to 30 June 2017.
Operating Review
The Company accelerated plans to expand internationally during the latter part of 2016 and these efforts have continued during the first half of 2017. At the same time, further organic growth in the UK has underpinned the resulting higher operating costs.
Looking in turn at these two strategic routes to higher growth, the Company is currently progressing well with expansion plans in continental Europe. We have already won new business through the efforts of our Netherlands based sales resource and are optimistic that our larger UK customers will use our mpro5 services in their European operations. Further afield in the UAE, our agreement with the British Centres for Business has started to produce enterprise level opportunities and to help progress these we now have a dedicated resource based in Dubai. In the US, we are participating in the CARIN Alliance, a multi-sector collaborative, working to advance the exchange of health information and deliver solid pharmacovigilance and digitalised healthcare and in Australia, from where our Technical Director has recently returned from a very encouraging business trip, our partner, Mobilise IT, is working on opportunities we have identified.
It is worth reminding shareholders that our mpro5 solution is an enterprise class mobility platform that mobilises our customers’ workflows so that staff in the field using for example an Apple, Android or Microsoft smartphone or tablet are empowered to get their work completed more efficiently, eliminating errors and greatly increasing their productivity. All data collected by staff in the field is synchronised to Microsoft Azure Cloud and immediately available via a dedicated mpro5 website allowing office based management teams access to schedule work and report via real time dashboards, instant alerts, and emailed reports. Our solution can utilise photos, GPS positioning, bar code scans and signatures and this financial year, we are investing in Internet of Things (“IoT”) technology to potentially use smart sensors from motion to temperature & humidity, and Bluetooth devices for intelligent and proactive data collection. Customers contract to use these services, simply paying a fixed monthly subscription, for an agreed initial term.
The quality of our mpro5 solution and the level of service and support received by new and existing customers has continued to drive organic growth. Subscription contracts are frequently renewed on or before the end of their initial term by customers to cater for additional users or secure the service for a further term so that their core processes, including mpro5, are safeguarded.
During the period, we have added resources to the technical and support operations so that mpro5 can continue to be rolled out to any new and additional users without delay. In the same vein, we have strengthened our marketing function to ensure our opportunity pipeline, both in the UK and further afield, continues to build. In summary, 2017 to date has seen an operational step change to prepare the business for new levels of activity.
Financial Review
Turnover for the six months to 30 June 2017 increased to £1,114k, up 32% on the same period in 2016 (1H 2016: £845k). With gross profit margins remaining over 90% and operating margins before depreciation, amortisation and interest of 32%, the business continues to show the benefits of its high operational gearing with additional revenues adding significantly to net profits.
After depreciation, amortisation and interest costs, the Group achieved a profit before tax of £142k in the first half 2017 (1H 2016: £122k).
There have been no changes to Crimson Tide’s accounting policies which can be found in the notes to the published 2016 Consolidated Financial Statements available on our website, www.crimsontide.co.uk.
Future Prospects
Our investments to accelerate future growth have largely contributed to the 31% increase in overheads over the same period last year, and while there will be a lag between making these investments and the resulting growth, the Board are convinced that this strategy will be to the medium term benefit of shareholders. We continue to work hard to ensure that we achieve this success.
Stephen Goodwin
Finance Director
7th September 2017
