Crimson Tide (TIDE) , the provider of the mpro5 process management app, released a trading update for the year ended December 31, 2023 (FY23) ahead of its FY23 final results in April 2024.
Crimson Time expects FY23 EBITDA to be no less than £0.4m, exceeding management expectations at the time of its interim results in September 2023. Turnover for FY23 is expected to be £6.2m, a 15% improvement over FY22, with a healthy gross margin of 85%, up from 83.5% in FY22. Cash balance remained a comfortable £3.3m, from £3.6m in FY22.
Operationally, Crimson continued to grow its sales team, focusing on partner acquisition in the UK and US. Its operational and management staff remained set. The company reported an increase in investment and marketing spend in FY24, without affecting anticipated profitability. TIDE also recently established an Employee Benefit Trust, intending to incentivise employees through shareholdings in the company.
Final FY23 results are expected in April 2024.
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A positive trading update from Crimson Tide, with EBITDA to exceed board expectations set in September, plus a notable improvement in turnover and margin. Combined with a strong cash balance of £3.3m, the company is well-positioned for growth in FY24. The results build on an impressive first half where revenues jumped 30.9% and TIDE swung to an EBITDA profit from a £0.3m loss the previous year.
The positive changes in FY23 were driven by TIDE's recently detailed focus on bolstering operational efficiency through product enhancements and hosting, with a view of increasing near-term profitability. The increase in investment and marketing spend this year should not affect profitability and enable the company to scale further domestically and internationally. Investors reacted positively, sending TIDE shares 4.35% higher in early trade.
Crimson has been accelerating adoption of mpro5 outside the US, securing two contracts with NHS facilities last year. In April 2023, the company announced the initial contract win with the NHS Trust in the South East of England for c. 250k, whereby the implementation of mpro5 would drive efficiencies and savings across the Trust's estates. Shortly after, Crimson won an additional 3-year contract with the NHS in May to add Internet of Things (IoT) sensors, taking the full contract value to over £0.5m.
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