Crimson Tide describes year of 'good progress'
Crimson Tide described a year of “good progress” in a trading update on Wednesday, with annualised recurring revenue now at record levels.
The AIM-traded firm said revenue for 2022 exceeded £5.3m, making for an increase of more than 30% over the prior year.
It said its gross margin remained consistent at around 84%.
“It is pleasing that the increased performance at the top line will result in a smaller-than-expected loss at the EBITDA level, despite the deployment of investment capital in marketing and growth,” the board said in its statement.
The company said its loss before tax would be smaller than expected - an improved performance - due to the enhanced sales figures and its decision to be “cautious” in marketing spend in the second half.
Year-end cash stood at more than £3.5m, and the firm entered 2023 with record annual recurring revenue of £5.8m, up from £3.8m a year earlier.
“Our revenues were boosted by contracts with new and existing clients,” the directors added.
“Significant wins in the catering and facilities management sectors were finalised, and we have secured an exciting new client in the utility sector.
“We were particularly pleased with the renewal of a contract with one of the UK's largest retailers, which will contribute to further growth in 2023 and beyond.”
Crimson Tide said churn remained below 5%, with no significant contract losses.
“We made strides in a market where the demand for technical human resources is high.
“Our new ‘One Platform’ strategy web client for ‘mpro5’ is in the rollout phase, and a new mobile client upgrade is expected in the first half of 2023.
“We also implemented our Internet of Things back-end infrastructure, with front-end architecture a priority for 2023.”
That, the board said, would enable a more straightforward implementation of the opportunities generated in the “exciting” sector, particularly with its hardware partners.
“With the demand for enterprise-level mpro5 increasing, we have recently decided to focus on standardising our product offering.
“Our first deployment of the ‘beepro’ mobile client for micro and nano businesses was released in the last quarter of the year.
“Its user interface, modern mobile technology and ease of use have opened up possibilities for its use in a single mpro5 catalogue.”
Crimson Tide said it would now aim more towards the five-to-10 user companies than individual trades, and as a result had reduced its marketing spend on the micro and nano sector.
It said stakeholders and clients would see a new, more standardised range of products and prices in 2023.
“Our investment in the American market is making headway and the team has developed an active pipeline of over 20 opportunities.
“We remain hopeful of the first contract signature, and 2023 will see us increase focus on a partner-led strategy across North America.
“We are optimistic that our relationship with Cisco Meraki will lead to further opportunities in North America and beyond.”
Jacqueline Daniell, appointed as chief executive officer in August, was focussed on leading the executive team in standardising the firm’s product and processes, the board added.
“We are already seeing the benefits in operational focus and efficiency and have added heads of finance and human resources to allow our technical and sales teams to focus on their specialist subjects.
“We were delighted that Tony Knowles joined the board as a non-executive director and are currently seeking a further independent non-executive director through a recruitment process.”
Crimson Tide’s current headcount was around 50, and it said it did not see that increasing significantly, save for where it saw growth opportunities.
“The company is well structured and well funded for future growth and opportunities.
“The board is excited about the future prospects for the company.”
Crimson Tide said it expected to publish full-year results for 2022 in early April.
At 1418 GMT, shares in Crimson Tide were down 4.2% at 2.44p.
Reporting by Josh White for Sharecast.com.