Search Share Prices
Crimson Tide investing in growth after decent year
Crimson Tide, the provider of 'mpro5 smart mobility-as-a-service', updated the market on its trading for the year ended 31 December on Tuesday.
The AIM-traded firm said it had a very positive year in 2017, with revenue expected to total £2.3m - an increase of approximately 23% on the previous year.
It said its strategy was one of continued investment in the growth of the business, and in particular the sales and marketing resources to ensure the company remained positioned to take full advantage of the opportunities that it saw emerging.
Company headcount doubled over 18 months, which the board said was to address growth in demand for its products.
Notwithstanding the increased cost associated with that, profit before tax for 2017 was still expected to be similar to 2016, which was reportedly achieved as a result of both revenue growth and increased gross margin.
Cash generation from organic business remained strong, Crimson Tide claimed, with balances maintained notwithstanding a reduction of some £0.25m in debt on finance leases and funding investments in the Middle East, Northern Europe and the US.
The company said it had no core debt and approximately £0.75m in cash.
"From a strategic standpoint, the company is launching its mpro5 internet of things (IoT) service during the current quarter," the board said of its strategy.
"The directors believe there is a clear opportunity to supply this new, sensor-based mpro5 module to existing, long-term, contracted clients.
"The market for cloud, mobility and IoT is undoubted and mpro5 provides clients with a fully inclusive service on a long-term, contracted, subscription basis."
In healthcare, the company said it was making its first inroads into the NHS, where it saw "enormous scope" for mpro5 to assist in areas from facilities management to patient care.
The company was recruiting a government-sector sales executive to pursue this opportunity as well as securing additional sales resources in the North of the UK and in Ireland.
Crimson Tide's board said it believed that demand for mpro5 was stronger than at any previous time, which was being demonstrated by the number of opportunities in its pipeline, and that to maximise the benefits of such a positive position, the company should continue to invest in sales and marketing in 2018.
It said it anticipated that the percentage growth in topline revenue would be similar in 2018, then rise in the following two years.
The firm's strategy was to continue to expand in 2018 in order to facilitate the growth in the business and re-invest the increased cash generation into a larger operation whilst maintaining profit before tax at current levels in 2018.
"The directors are very encouraged by our growth and believe that we should continue to pursue aggressively the opportunities we have developed," said executive chairman Barrie Whipp.
"The board has targeted growth at the top-line level while continuing to plough a proportion of profits back into the business."
Whipp said the company's IoT module, combined with its geographic expansion, offered "tremendous" upside.
"We are also seeing traction in Northern Europe and the Middle East and I am confident that these opportunities will increase this year with both existing and new clients.
"The directors are very optimistic for the future."