(TIDE) Crimson Tide

11 October 2011

Crimson Tide PLC

("Crimson Tide" or "the Company")

CRIMSON TIDE ADDS RACK CLEANING APPLICATION FOR ASSOCIATED NEWSPAPERS' METRO

Mobile business application supplier Crimson Tide has added to its contract with Associated Newspapers to provide a rack cleanliness recording system for Metro, the world's largest free newspaper and Britain's third most widely read national newspaper.  The Company's mpro system will allow Metro to ensure the auditing of cleanliness of Metro racks around London and south-east England. The contract is to add new software to the 115 Motorola MC55 smartphones already under contract for the Metro delivery system and runs for three years with a three year extension option.

The mpro system allows a smartphone user  to record the cleanliness of Metro racks and  report back on the condition of a rack based on questions and answers supplied by London Underground and Train Operating Companies. Each Metro rack is barcode tagged and the information synchronised to Crimson Tide's mpro database hosted in the cloud. Each rack can have a photo taken to demonstrate the current state of the rack.

The current system has been fully live since February, and the new system will go live during October, along with an upgrade to the existing delivery system

Says Crimson Tide's Chairman Barrie Whipp: 'This contract displays the flexibility of our mpro gemini system, allowing Associated Newspapers to run multiple applications on the same device. It also validates the collaborative approach we have with Associated Newspapers, one of the most prestigious names in media"

John Leitch, Executive Director, Metro, said:

"We're delighted that this enhancement to the software has been launched. It's another example of how Metro is using technology to manage our operations and enhance our service to readers and clients.

"We look forward to working with Crimson Tide further to continue to advance the effectiveness of our delivery and distribution."

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Crimson Tide plc

("Crimson Tide" or "the Company")

Interim Results for the six months ended 30 June 2011

Crimson Tide, a leading service provider of mobile data solutions for business, (AIM: TIDE.L) is pleased to announce its unaudited interim results for the six months ended 30 June 2011.

Highlights

·      Revenue improved to £752k (H1 2010: £733k)

·      Profitable first half performance and well placed for H2

·      Cash balance of over £400k and minimal debt

·      Subscriber numbers in core business up 32%

·      mpro Gemini now available on Apple's iOS platform

·     Strong pipeline of significant new business leads

Barrie Whipp, Executive Chairman, commented;

"Against a backdrop where overall economic conditions have remained challenging we are pleased to have continued to be profitable in the first half of the year on increased revenue.  New deals have taken longer to negotiate and ultimately finalise but this is reflective of larger size transactions with larger organisations, which are by their nature more complex."

"Importantly, the long-term contracted subscriber base in our core mobile applications business has grown by 32% as we continue our focus away from software and consultancy. With our recent investments in products and marketing, healthy cash balances and a strong pipeline of significant new business opportunities, the Board remains confident of continued growth."                     

Enquiries:

Chairman's Statement

I am pleased to report the Company's interim results for the period to 30 June 2011, which show Turnover of £752k and a Profit Before Tax of £6k, in line with expectations.

The financial results do not completely reflect the progress made in the period, as we continue to expand our book of long-term contracted subscribers, at the expense of the traditional software and consultancy business. As we progress, contracted monthly subscription revenues are providing a larger percentage of total revenues and cash, and we are confident of further growth in the short and medium term.

Subscriber numbers grew by 32% in the period, with the significant rollouts to Associated Newspapers and two City Councils amongst others. We are working hard to close more significant deals in the second half of the year, a number of which have taken longer to negotiate than previously. As the margin on subscriber business continues to grow , the associated cash return means that we are well placed to finance additional subscriber business from our own resources with no reliance on debt funding. The additional capital raised in January enabled us to plan for subscriber growth with confidence and allowed us to invest in product development and marketing. We ended the period with over £400k in cash, having repaid the loan against our contracted receivables, with only a small debt remaining on the loan for the purchase of the business in Ireland in 2006.

Whilst the economy in the UK & Ireland continues to be challenging, we have seen no drop in potential demand for our mobile applications. The Directors are optimistic that the number of deals in the company's qualified pipeline will fuel further subscriber growth in the second half and beyond. Overheads are tightly controlled, contracted revenues continue to grow and we believe we are well placed to take advantage of deals in our traditional SME sector and some with organisations of a much larger nature.

Our actions to reduce costs in Ireland have paid dividends and the business there is operating at a breakeven level despite the difficulties in the economy. Applications in the medical field are led by our experiences in Ireland and we see substantial opportunities for mpro Gemini's healthcare applications, which include some groundbreaking work in nursing and patient care.

Our focus on subscriber business has been enhanced significantly by the investment made in our mpro gemini system. The software now allows faster rollout, is a substantial enhancement to our previous mobile solutions and is much more "out of the box" than previous versions. We have recently completed a version of mpro gemini on Apple's iOS platform and can now sell on iPhone and iPad, devices that are providing new opportunities in the increasingly device sensitive marketplace. Our roadmap plans versions for Android and Windows Phone 7 devices early next year.

Our staff, professional advisors and major shareholders have continued to support our efforts in a transitional period for the company. We thank them for their support.

Barrie Whipp

Executive Chairman

29 September 2011

Operating and Financial Review

I am pleased to report on our interim results for the six months to 30^th June 2011 and our achievements over this period. 

OPERATING REVIEW

As previously announced, the two tranches of additional finance raised in October 2010 and January 2011 secured much needed capital and ensured we could fund the demand from new subscribers previously held up.  The Chairman in his statement highlights an increase in new subscribers of 32% in the six months which, along with subscription renewals, has significantly increased the value of future contracted revenues from subscribers. 

Following the release of the subscriber "log-jam", we have been able to accelerate our drive for more subscribers.  We have invested in various marketing initiatives, including developing opportunities with our new channel partners.  In doing so we recognise that, to an extent, this has impacted profitability, but we are convinced this strategy will lead to more opportunities in the second half and beyond. 

We have also invested in developing and enhancing our mpro applications.  Improvements to mpro gemini fulfil the vast majority of functionality required by our subscriber users without the need for additional software development, allowing us to roll out our solutions to new and existing subscribers faster than previously.  We continue to expense a significant proportion of internal resources utilised in this regard with capitalised development time, that is the value of our applications on our balance sheet, still only £0.2m as at 30^th June 2011, ensuring that future earnings are not materially reduced by amortisation costs.

With the funding risk mostly eliminated in all but the most aggressive of growth scenarios, the most immediate issue we have to deal with is a better, more regular, rate of deal flow.  Over the latter part of the first half and into the summer, a number of deals that had either closed or were expected to close, could not be rolled out due to delays requested by these customers.  Whether these experiences were due to the current economic turmoil or for other reasons has yet to be identified.  We do know that our customers benefit from significant productivity and efficiency savings once they commence using our services.  We have been encouraged that over that period none of these deals were lost and more recently have started to move forward at a more acceptable pace.  Management will continue to adopt a watchful approach, balancing investing now for future growth and ultimately a more valuable company, with the more immediate requirement to deliver improving results.

FINANCIAL REVIEW

Turnover in the six months to 30^th June 2011 totalled £752,000, up from £733,000 in the same period in 2010 but this once again hides the improvement in core revenues as we continued the move away from lower margin activities and focused on subscriptions and related activities.  Subscription income increased by 64% to £311,000 in the first half of 2011 over the same period last year.  Comparing the same periods, income from mobile connections decreased by £100,000 leading management to conclude the recent sale of the connection book announced on 12^th September 2011.  The Company will continue this strategy of margin improvement from higher quality sales as it allows our people and working capital resources to focus on core activities and results in margin improvements as demonstrated by gross margin increasing to over 70% on average, up from 64% reported in 2010. 

Overheads remain under tight control but have increased in the first half 2011 as indicated above with £20,000 higher spend on marketing.  After amortisation, depreciation and interest, the Company is reporting a profit before tax of £6,000 for the six months to 30^th June 2011.

At 30^th June 2011 the Group had a cash balance of £422,000 after making loan repayments of £287,000 in the six month period and investing £183,000 in devices for subscribers contracting, in almost all cases, for a minimum of three years.

There have been no changes to Crimson Tide's accounting policies which can be found in the notes to the published 2010 Consolidated Financial Statements. 

Stephen Goodwin

Chief Executive

29 September 2011

Crimson Tide Plc

Unaudited Consolidated Income Statement for the 6 months to 30 June 2011

Unaudited Consolidated Statement of Comprehensive Income

for the 6 months to 30 June 2011

Unaudited Consolidated Statement Of Financial Position at 30 June 2011

Unaudited Consolidated Statement Of Changes In Equity at 30 June 2011

Unaudited Consolidated Statement Of Cashflows for the 6 months to 30 June 2011

Crimson Tide Plc

Notes to the Unaudited Interim Results for the 6 months ended 30 June 2010

1.  Basis of preparation of interim report

The information for the period ended 30 June 2011 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 2010.  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 profit 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 profit 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:

3.  Availability of this announcement

Copies of the interim report will be despatched shortly to shareholders who have requested a printed copy. Copies of this announcement are available from the Company's office, Heathervale House, Vale Avenue, Royal Tunbridge Wells, Kent TN1 1DJ, and from the Company's website, www.crimsontide.co.uk.