Annual Report
and Accounts 2023
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www.crimsontide.co.uk
Contents
Strategic Review
2023 Highlights
Company Overview
Chairman’s Statement
Chief Executive’s Statement
Financial Review
Case Studies
Strategic Report
Corporate Governance
Board of Directors
Directors’ Report
Corporate Governance Statement
Independent Auditor’s Report
Financial Statements
Consolidated Financial Statements
Notes to the Financial Statements
Company Financial Statements
Officers and Professional Advisors
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56
IBC
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2023 Highlights
Financial
REVENUE
£6.2m
15%
2022: £5.4m
ANNUAL RECURRING REVENUE
£5.8m
stable
2022: £5.8m
EBITDA
£0.4m
2022: £0.4m loss
a return to sustained EBITDA
profitability
CASH AT YEAR-END
£3.3m
2022: £3.6m
Operational
Sensor driven IoT contracts in
US and NHS
Expansion into Utilities sector
Significant technology
upgrade completed
Upsells and extensions strong
BARRIE WHIPP, EXECUTIVE CHAIRMAN OF CRIMSON TIDE, COMMENTED:
“The robust nature of our revenue model saw us grow by 15% in a year that had some challenges.
Our pipeline has never been healthier, and with no debt and a healthy cash position we are able to
look forward with optimism, under the stewardship of our new CEO. We have an ambitious team, a
significant upgrade in both our mobile app and backend and look forward to being able to benefit from
our strong base.”
2
Company Overview
Crimson Tide plc is the provider of mpro5,
the process management app. mpro5 is
delivered on smartphones and tablets, and
enables organisations to digitally transform
their business and strengthen their
workforce by smart mobile working. mpro5
is hosted in the cloud on Microsoft Azure.
The Company’s contracts are provided on
a long term, contracted subscription basis
and clients can immediately experience a
return on their investment.
Crimson Tide’s Annual Recurring Revenue
(ARR) contracts are typically on an initial
36-month subscription basis, with many
extending and expanding significantly
beyond the initial contracted date.
FACILITIES MANAGEMENT
WHAT OUR CUSTOMERS SAY
TRANSPORTATION
CATERING SERVICES
RETAIL
HEALTHCARE ESTATES
This new digitised
system for our log
books is great. It’s
easier to use and
harder to get wrong.
John Lamont
Head of Capacity
Tesco
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 3
Chairman’s Statement
The financial year to 31 December 2023
saw our robust long-term contracted revenue
support us in a year that presented some
unexpected financial challenges.
Our mpro5 app has been significantly enhanced
and is ready for further upgrade in the first half
of 2024, whilst we have committed more to
marketing and expanded our pipeline, alongside the
implementation of a partner acquisition strategy.
Dealing first with the unexpected challenges, a large retail customer
went into administration costing us some £360k in ARR. Secondly, a
contract with a rail organisation came to an unexpected conclusion
through a commercial cost-cutting exercise that we could not avoid.
This led to churn being completely outside our norm of less than 5%
and dented our ARR. The impact on full-year revenue was c£0.5m
and there has been some impact on our forecasts. Despite this, the
company increased revenue by some 15%, a creditable performance,
and we returned to operating profitability, as planned. Cash was
strong, ending the year at £3.3m and we have decided to invest
approximately £1.29m in additional marketing and our mpro5 product
within this year, with the goal of growing ARR, revenues and operating
profit alike. We have seen a significant increase in our marketing
“share of voice” already with leads being generated from this
strategy for the first time.
mpro5 now has an upgraded front- and back-end, which should
complete their rollout in Q3, 2024. We believe that our back-end
investment will result in a more efficient use of data and compute time
which should lower hosting costs and improve gross margin.
One significant element of mpro5’s evolution has come with the
contract with Cadent, one of the UK’s largest utilities companies
which, with a significant SAP integration, has taken 6 months to
implement. The benefit of this is twofold; we can now access the
utilities sector with a lighthouse client and our ability to offer full SAP
integration has significant market opportunity.
A contract win in the NHS has yet to be rolled out, however as a
major user of sensor devices and with a complex array of internal
process we believe this could provide a rich seam for us and highly
additive to our existing healthcare proposition.
We were pleased to be able to announce our first client win by our
US office during the year though the US operation remains in its
infancy. Our focus on partner acquisition gives us optimism that our
careful investment in the US will be rewarded. We have relationships
with Meraki and Cisco, who have global footprints, and we are able
to sell into their ecosystem through their partner channel.
To me, 2023 felt like a very frustrating year; however, as per the
Financial Review below, growth in revenue by 15%, preservation of
cash, and turning a £0.4m EBITDA loss into a £0.4m EBITDA profit is a
testament to how robust our revenue is, despite unavoidable churn.
We continue to work hard and 2024 should see software upgrades
that make mpro5 more saleable and efficient. We have enhanced our
Board and intend to appoint COO Phil Meyers to the role of Group
CEO shortly. Having been involved with process management and
IoT at Inmarsat, Phil is committed to driving the business forward in the
coming years.
Barrie Whipp
Founder & Chairman
31 May 2024
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 4
Chief Executive’s
Statement
The performance of
Crimson Tide throughout
2023 has been the
manifestation of the strong
foundations built for
sustainable growth.
Jacqueline Daniell
CEO
31 May 2024
The continued growth in revenue is a result of the
long-term commitment that we made to invest in
the mpro5 product and delight customers.
In parallel, the sales and marketing team has been reorganised and
rejuvenated to execute a more focused strategy based on the sectors
where we have experience. Customer success plans and operations
have been redefined under Phil Meyers’ stewardship and this has
elevated the “stickiness” of mpro5. The improvement in revenue and a
return to operating profit have validated our investment and allowed
us to structure the team more efficiently with more objective-based
outcomes. An increase in net revenue retention from 100% to 101%
exemplifies our commitment to our current customer base and our
strategy of land-and-expand growth.
mpro5 is now a faster, more responsive mobile app with a rationalised
technology stack behind it. The result is an operational cost saving
together with an intuitive, flexible and accessible user experience.
The next phase of capital expenditure enables wider integration,
enhanced usability and the inclusion of limited AI to enable customers
to benefit from additional automated scheduling and notification.
With an enhanced and restructured sales team, including a new
Head of Partner Channel, we have been able to structure a partner
channel including OEMs, MSPs and VARs to be able to firstly introduce
their clients with a view to progressing to a channel-first strategy.
In the future, specific packaged versions of mpro5 with self-serve
onboarding will remove barriers to entry and streamline our route to
market as well as shorten our sales cycle.
With an ever-growing pipeline, well-qualified deals, and products
focused on key capabilities and markets with realigned management
teams, Crimson Tide is now set on a very firm footing to achieve its
growth targets.
Jacqueline Daniell, CEO
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 5
Trade Receivables
Trade receivables at year-end amounted to £0.9m (2022: £1.2m).
The Group has a high-quality customer base with normally low
delinquencies.
Debt and Finance Costs
Finance leases decreased to £0.7m (2022: £0.8m) in respect of the
5-year office lease in Tunbridge Wells. Finance charges of £52k
(2022: £54k) primarily relate to the IFRS 16 recognition requirements
of this lease.
Capitalisation of Intangible Assets
Software development costs of £1.2m (2022: £1.3m) were capitalised
during the year. Software amortisation during 2023 amounted to
£0.6m (2022: £0.8m). The amortisation period of the mpro5 intangible
asset was reduced from 10 to 7 years in 2022. The value of the
capitalised software intangible asset at year-end was £3.3m (2022:
£2.7m).
Earnings per Share
The average number of ordinary shares in issue during the year was
6,574,863 after a 100:1 share consolidation exercise in November
2023. Basic and diluted loss per share was 4.64p (2022: 18.91p).
Tax
There was corporation tax paid in Ireland of £11,350 (2022: £nil) and
no tax paid in the UK or US due to losses brought forward and during
the year. The Company received an R&D tax rebate of £0.4m (2022:
£0.4m).
Financial Review
Financial indicator
Revenue
Gross profit margin
(LBITDA)/EBITDA
Loss before tax
Annual recurring revenue (ARR)
Cash
Year ended
December
2023
£m
Year ended
December
2022
£m
6.16
86.2%
0.42
(0.69)
5.78
3.26
5.35
83.5%
(0.38)
(1.69)
5.75
3.62
EBITDA reconciliation to Loss before tax:
Financial indicator
Year ended
December
2023
£m
Year ended
December
2022
£m
Loss before income tax expense
(0.69)
(1.69)
Finance charges
Depreciation
Amortisation
Share option expense
EBITDA/(LBITDA)
0.05
0.28
0.76
0.02
0.42
0.05
0.26
0.95
0.05
(0.38)
Revenue
The Group’s sustained focus on delivering long-term revenue at a
high margin contributed to revenue growth of 15% (2022: 30%) of
which 91% was recurring contracted revenue. Revenue churn of 16%
(2022: 3.8%) was exceptional, primarily due to McColls falling into
administration. This led to Annual Recurring Revenue (ARR) of £5.8m
remaining flat when compared to the prior year. We expect churn
to normalise in 2024. Gross profit margin of 86.2% (2023: 83.5%)
remained well above the Board’s 80% target rate and correlates with
its focus on cost efficiency.
Cashflow and Liquidity
Cash at year-end amounted to £3.3m (2022: £3.6m). Operational
software efficiencies, a focus on working capital optimisation
and streamlining of people and processes led to operating cash
generation of £0.9m (2022: £0.7m cash outflow). This outlines
management’s commitment to creating a lean and efficient cost base.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 6
Case Study
Cisco Meraki's Journey
Unleashing the
power of ecosystem
partnership
I asked myself ‘How can I put data
together from sensors, or data from
cameras…that our dashboard
doesn’t do?...Leveraging mpro5…to
drive the API and our MQTT brokers
pulls all of our data together.”
Dennis Adams, Meraki Workplace
Technology Lead
Gain visibility of your facilities with sensor-driven
actions
Investing in an Internet of Things (IoT) network can offer your business a
wealth of data. But IoT sensors on their own aren’t enough. Without an
accompanying smart workflow platform your data is just a meaningless
stream of numbers.
When Cisco Meraki approached mpro5 through their partner
ecosystem, they were seeking a solution to streamline operations for
the facilities team in their San Francisco headquarters. By gaining a
deeper understanding of the building's performance, Meraki aimed to
enhance energy efficiency, optimise occupancy levels, and ensure a
healthy and productive environment for all employees.
With a desire to streamline operations and provide complete visibility for
their facilities team, Cisco Meraki turned to us for a transformative solution.
The Problem
The facilities team at Meraki's San Francisco headquarters were
faced with a pressing challenge: they needed to enhance their
visibility into the building. Despite their best efforts, cleaners were
often attending to rooms that didn't need cleaning. This lack of
visibility not only rendered their daily tasks ineffective, but it also left
them lacking purpose in their work.
Adding to the complexity, there was a noticeable absence of data
pertaining to the activities taking place in each room. The staff required
deeper insights into the unique conditions and needs of every space.
The existing Meraki Dashboard only allowed for a view of one sensor
at a time, leaving out valuable information, ultimately leading to
potentially costly mistakes.
Their ultimate objective extended beyond mere visual observation;
they aimed to truly grasp the status of each room through
comprehensive readings. By unlocking this invaluable information, they
knew they could optimize their cleaning efforts and revolutionise their
routine into a more systematic and targeted approach.
At Meraki, the mission was clear: empower the facilities staff with the
tools and knowledge needed to transform their facility management.
With the newfound ability to truly comprehend the core and unique
needs of every space, employees would unlock a new level of
efficiency and effectiveness in their daily tasks, ultimately elevating the
overall cleanliness and functionality of the facility.
The Solution
Integrating Meraki MT sensors with mpro5, staff can now focus on
addressing genuine issues and avoiding unnecessary disruptions.
In the Cisco Meraki headquarters, a cleaning workflow is triggered
after every 10 door openings. This ensures that a cleaner is dispatched
to a room only when it genuinely requires cleaning. By leveraging
the power of the MT sensors, the cleaning process becomes more
streamlined and responsive, maintaining a clean and hygienic
environment without any unnecessary interruptions.
7
mpro5 turns Cisco
products into solutions.
Joe Weiss, Worldwide IoT Sales
Leader, Cisco
INCREASE IN CLEANING EFFICIENCY
40%
50%
113m
TASKS COMPLETED
SAVINGS ON COOLING COSTS
The specially designed mpro5 dashboard for Meraki provides
valuable insights into the environmental readings of each room,
including critical IDF rooms, preventing the temperatures and
humidity levels from rising too high. This allows facility managers
to proactively monitor and control the indoor climate, ensuring a
comfortable and safe environment for occupants. With real-time
updates and customisable alerts, potential issues can be identified
and addressed promptly, preventing any adverse effects on
equipment or personnel.
The integration of Meraki's MT sensors with mpro5 automation and
alert management offers businesses a comprehensive solution for
data-driven decision-making and efficient facility management, with
complete visibility over all operations.
By harnessing the power of these advanced technologies, any
Meraki customer can optimise their operations, reduce costs, and
provide a seamless and comfortable environment for everyone.
The Results
By implementing effective resource management and organising
data efficiently, Cisco Meraki will achieve substantial cost
savings, reduce energy consumption, and minimise
material usage.
Thanks to Meraki's MT sensors, businesses can establish a strong data
foundation within their facilities, empowering them to make informed
and actionable decisions. These cutting-edge sensors provide real-
time insights into various aspects of the facility, including occupancy
levels, temperature, humidity, and more. By effectively collecting
and analysing this data, businesses can optimise their operations and
enhance overall efficiency in their facilities.
With the deployment of mpro5 in combination with a comprehensive
suite of MT devices, we deliver the seamless experience Meraki
desires. Now, they have the ability to not only monitor air quality,
TVOC levels, humidity, occupancy, and much more, all in one
centralised location, but they can respond promptly to the data
collected by setting customised thresholds.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW
8
mpro5 for…
FOOD SAFETY
All the processes clients need to deliver efficient,
optimised, compliant, food safety services.
£
Addressing their biggest pain points
FOOD SAFETY AND COMPLIANCE
• Streamline operations, reducing manual input and
potential for human error
• Quick rollout of updates ensures compliance with
evolving regulations, reducing the risk of penalties
COST MANAGEMENT AND PROFITABILITY
• Save thousands (or millions!) in printing costs
• Make data-driven decisions to deliver efficiencies
and reduce waste
• Seamless integration with existing systems –
no need to update all
CLIENT SATISFACTION AND
CONTRACT RENEWALS
• Prove compliance and efficiencies gains
• Reduced food waste keeps costs lower for clients
• Continual, data-driven improvement increases client
happiness and retention
Compliance is of course a priority for us and part of that is
completing audits. Now we have mpro5 it is so much easier to do
these quickly and, crucially, do them right.
Head of Food and Transformation, Chartwells
9
We help clients deliver exceptional customer
experience with mpro5’s food service
management app that helps them assure food
safety compliance and workflows, implement
preventative maintenance and avoid costly
reactive fixes on equipment.
Who is it for?
Evolved from our food safety work with Tesco, Morrisons,
Booker, Aspens, Chartwells, Illy Coffee and more, mpro5 for
Food Safety has been designed to help anyone who handles,
delivers, stores or prepares food, to help them provide a fast,
efficient, easy and fully compliant operation.
• Restaurants and food service or contract catering providers
• Retail food stores and supermarkets
• Regulatory bodies and food safety consultants
How does it help them?
mpro5’s food service management software makes it possible
to achieve and prove continuous compliance in a matter of
minutes. Here’s how:
• Health + Safety Focus: Implement and indisputably prove
continuous compliance with mpro5’s checks, reports, and risk
assessments.
• Digital Logbooks: Digitise and standardise essential
paperwork.
• Daily Food Quality Audits: Ensure consistently safe meals
and high-quality service through digitised audits.
• Business Intelligence Dashboards: Smart reports and
automated alerts make for data-driven decision making.
• Workforce Management Tools: Automate task scheduling
and task completion with mpro5’s built-in protocol
compliance.
• Brand Standards: Maintain consistent brand standards and
quality through mpro5’s fully integrated platform.
Trusted by
Why choose mpro5?
43%
UK SUPERMARKETS
USING MPRO5
+150 m
SAFE MEALS
SERVED PER YEAR
Tangible benefits
Individual customers have seen benefits such as:
INSTANCES OF UNSAFE FOOD
0
+£1.2m
+£300k
SAVED IN ANNUAL PRINT COSTS
SAVED IN STOCK LOSS ANNUALLY
Standardise. Digitise. Automate.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 10
mpro5 for…
RETAIL OPERATIONS
All the processes clients need to deliver efficient,
optimised, compliant, operations.
Addressing your biggest pain points
CUSTOMER EXPERIENCE AND COMPETITION
• Respond to issues and problems quickly for a better in
store experience
• Utilise IoT to prevent empty shelves and long queues
• Ensure brand adherence quickly and easily
OPERATIONAL EFFICIENCY AND COST
MANAGEMENT
• Save thousands (or millions!) in printing costs
• Respond to maintenance issues quickly and escalate
swiftly and easily
• Reduce wastage by monitoring fridges and freezers
proactively
REGULATORY COMPLIANCE AND
FOOD SAFETY
• Prove legal, H&S, and food compliance quickly
and easily
• Roll out changes to processes in response to legal
changes instantly
• Lower fines, reduce legal issues and limit insurable risk
Trusted by
From streamlining services to ensuring compliance,
mpro5’s operations management app digitises
traditionally tedious processes, driving productivity
and lowering costs for our clients.
Who is it for?
Evolved from our operational work with Tesco, Morrisons, Booker,
Compass and numerous areas of the NHS, mpro5 for Operations has
been designed to help anyone who performs regular or emergency
checks, has responsibility for incident management or requires
compliance audits.
• Retail stores or any area with customer footfall
• Hospitals and surgeries with cold-storage requirements
• Compliance auditors and legal teams with customer facing
premises
How does it help them?
mpro5’s operations management software makes it possible to
achieve and prove operational efficiency in a matter of minutes.
Here’s how:
• Maintain Safety Regulations: With real-time dynamic data,
mpro5 makes it quick and easy to comply with health and safety
requirements.
• Protect Against Litigation: By creating a comprehensive audit trail
backed by data, our retail management software helps retailers to
maintain and ensure.
• Ensure Quality: To increase efficiencies, mpro5 streamlines
processes to reduce the number of checks required without
compromising quality standards.
• Proactive Improvements Rather Than Retroactive Fixes:
With real-time business intelligence dashboards, mpro5’s mobile app
helps to spot trends to proactively improve processes.
• Lower Risk of False Insurance Claims: Protect against fraudulent
claims by evidencing compliance through time-stamped audit trail for
every workflow check completed.
• Consistent High Quality Customer Experiences: With mpro5,
retailers have full visibility of their business and ensure standardized
processes are followed to ensure outstanding service.
11
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mpro5 is the most agile platform in our business: it got us
further down the line in 3 weeks than other systems got to in
years.
Senior Legal Operations & Compliance, Tesco
Why choose mpro5?
43%
UK SUPERMARKETS
USING MPRO5
>10000
UK PREMISES
CHECKED DAILY
USING MPRO5
Tangible benefits
Individual customers have seen benefits such as:
SAVING ON SLIP/TRIP CLAIMS
60%
+£1.2m
+£1.1m
SAVED IN ANNUAL PRINT COSTS
SAVED NOT PAYING BELOW PAR
SUPPLIERS
Standardise. Digitise. Automate.
12
mpro5 for…
FACILITIES MANAGEMENT
All the processes you need to deliver efficient,
optimised, compliant facilities management
Addressing your biggest pain points
COST CONTROL AND BUDGET MANAGEMENT
• Utilise scarce staff only when needed
• Reduce waste of materials and resources
• Do more with less – clean by need, not rota
TECH ADOPTION AND INTEGRATION
• mpro5 API offers seamless integration with your
existing systems
• Camera and sensor integration
• Single Sign-On and user-friendly app interface ease
adoption
COMPLIANCE AND SUSTAINABILITY
• Ensure and prove compliance using mpro5 features
• Reduce waste of staff, materials, and supplies
• Respond to environmental changes instantly
mpro5 covered more ground in six weeks than our old system
did in three years. This was the first step in realising my vision
of the estates department at CWPT.
Senior Compliance Manager, Coventry & Warwickshire Partnership NHS Trust
13
mpro5 offers smart, dynamic cleaning and
preventative maintenance planning with a digital
app that streamlines our clients’ operations for
productivity gains, cost savings and continuous
compliance.
Who is it for?
Evolved from our facilities management work with Tesco,
Chartwells, Mite, Regular Cleaning, Kingdom, the NHS and more,
mpro5 for Facilities Management has been designed to help anyone
who provides or requires cleaning services, equipment monitoring
and maintenance and security checking systems
• Areas of high consumer footfall and food service or contract
cleaning providers
• Retail food stores and supermarkets
• Large-scale facilities and warehousing and empty secured properties
How will it help you?
mpro5’s facilities management app makes it possible to achieve and
prove continuous excellence in a matter of minutes. Here’s how:
• Operational Efficiency: Our smart facilities management
software allows you to increase operational efficiency. One
client saw a +40% increase - and you could too!
• Real-Time IoT Data: Our real-time IoT integration enhances
facilities management by alerting you on the condition of
facilities and assets, as well as the areas that need attention.
• Increased Visibility + Proactivity: Keep eyes on your service
and quality levels so you can make data-driven decisions and
address issues before they become a problem.
• Cost Savings: Save costs with mpro5’s efficient facilities
management software by reducing man hours, administrative time
and printing costs.
• Lower Risk of Aborted Jobs: Reduce the risk of fines
associated with aborted jobs with our facilities management
app. Have quick access to evidence for why work couldn’t be
complete.
• PPM + Asset Maintenance: Efficient PPM reduces costs and
avoids major faults by using data collected on assets, including
their lifespan, energy consumption, and condition.
• Continuous Compliance: Monitor key systems and services to
ensure and easily demonstrate compliance with SLAs and Health
and Safety Requirements using the app and IoT sensors together.
Trusted by
Why choose mpro5?
43%
UK SUPERMARKETS
USING MPRO5
>9000
UK PREMISES
CHECKED DAILY
USING MPRO5
Tangible benefits
Individual customers have seen benefits such as:
INCREASE IN PRODUCTIVITY
40%
97%
63%
REDUCTION IN DAILY CHECKS
REDUCTION IN RESPONSE TIMES
Standardise. Digitise. Automate.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 14
Strategic Report
Strategy and Objectives
The Directors present their strategic report on the Group for the year
ended 31 December 2023.
The Group’s strategy is to continue to develop its mobility solutions
and grow the contracted number of subscribers to its mpro5 service.
In doing so, the targeted objectives are:
Review of the Business
A review of the year and future developments are given in the
Chairman’s Statement, Chief Executive’s Review and Financial Review
on pages 3, 4 and 5 respectively.
At 31 December 2023, the Group had a total of 42 employees and
6 Directors analysed as follows:
•
Increase contracted revenues (“MRR”)
• Strengthen cashflows
• Geographic expansion
•
Improve profitability
Directors
Senior Managers
Other employees
Male
Female
4
4
26
2
1
11
Business Model
The Crimson Tide Group provides its mpro5 software, to subscribers
who typically contract for three or more years. Crimson Tide incurs
the up- front costs of software development and recovers these costs
as quickly as possible over the contract term.
The Group is operationally geared with scalable overheads so
an increasing proportion of turnover growth favourably impacts
profitability and net cashflow.
Key Performance Indicators
Management utilise a number of KPIs, both financial and operational,
to measure the performance of the business and to assess current
trends. These KPIs include Revenue, Gross Profit margin, EBITDA, Profit
before Tax, ARR and Cash.
The Group uses hubspot to capture and monitor pipeline, and to
manage support and services. This data is amalgamated across the
Group and shared in powerful interfaces that management can use to
make informed decisions.
WHAT OUR CUSTOMERS SAY
Developing a new
concept from the
ground up has been
an inspiration. mpro5
has made it possible
for us to exceed the
customer's expectations
of the project.
Elsie Reitzel
Team Manager
Compass Denmark
15
Strategic Report CONTINUED
Principal risks and uncertainties
Our principal risks and uncertainties are outlined below. These are the most significant risks that may adversely affect our business strategy,
financial position or future performance. The risk assessment process evaluates the probability of the risk materialising and the financial or
strategic impact of the risk. Those risks which have a higher probability and significant impact on strategy, reputation or operations, or a material
financial impact are identified as principal risks. The risk assessment and reporting criteria are designed to provide the board with a consistent
perspective of the key risks. The reports to the board, which are submitted twice per year as part of the ISO27001 audit, include an assessment of
the probability and impact of risks materialising, as well as risk mitigation initiatives and their effectiveness. The identification of the principal risks
is informed by discussions with each Head of Department, location and key enabling functions, identifying key risks and assessing the adequacy
of mitigating controls. The Crimson Tide executive members have oversight of risks relevant to each of their areas of responsibility and these are
included in their goals and objectives.
Risk
Data Security
Impact on Company
Mitigation
The risk of loss of data, a security breach and/or
corruption of critical or private data held
People risk
Failure to hire the correct candidates and maintain a
positive working environment to retain key staff
Product obsolescence
Failure to update the core product and ensure best in
class back end and front end
Liquidity risk
Solvency and liquidity issues due to mismanagement of
finances
Foreign exchange risk
The Company has operations in the US and some
customers in Europe and the Middle East. This gives rise
to forex risk
All data is cloud stored within the Microsoft 365/Azure
environment. There is a strict clear desk policy and all
sensitive documentation is scanned and saved within
password protected sharepoint. No data or client
information is stored locally on laptops or hard drives
Fully qualified HR team screens candidates thoroughly.
Extensive on board training, monitoring and coaching.
Ensure regular feedback sessions and appraisal
meetings.
We have hired and cultivate a talented team of
developers who are constantly listening to customers
and improving the mpro5 platform. We attend
tradeshows, events and conferences to ensure we are at
the forefront of the industry. Performance KPIs presented
at Board level
Monthly management accounts and financial forecast
produced and presented to the Board. Constant
monitoring of finance KPIs including performance,
liquidity and solvency ratios. Constant review of margins
and capital projects to ensure a comfortable cash buffer.
Fund raise in 2021 yielded £6m and the Group maintains a
healthy cash balance of £3.3m
We utilise foreign exchange services where appropriate
to hedge our risk and naturally hedge where appropriate
Future developments
The Directors anticipate that the business environment will remain competitive. They believe that the Company is in a good financial position and
that the risks that have been identified are being well managed. The Company continues to focus on growing the fledgling US operation, building
off the success of its first major US customer, and enhancing the core mpro5 product investing substantially in improving both the software and the
useability.
Research and development
The Company is currently undertaking research and development expand market sectors and to improve the performance of its mobile
applications and integrated reporting platform. The Company has been focused on both fortifying and simplifying the coding infrastructure of
our mpro5 product as well as enhancing the user experience.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | STRATEGIC REVIEW 16
Strategic Report CONTINUED
Section 172
Engaging with stakeholders is crucial to the long-term success of the Company. We have implemented an ambitious ESG strategy as evidenced in
our Corporate Responsibility section. The Board and leadership team have reviewed the assessment results, prepared a roadmap and selected
metrics and initiatives to track across FY23. More widely, stakeholder engagement is coordinated consistently in line with our fundamental
principles, values and culture and informs better decision making at every level of the Company. We provide examples of how we build and
maintain relationships with key stakeholder Groups on these pages. Section 172 of the Companies Act 2006 requires a Director of a company to
act in a way that the Directors, in good faith, would most likely promote the success of the company for the benefit of shareholders. In doing so,
consideration is given to a series of important matters, including:
•
•
•
•
•
•
the likely consequences of any decisions in the long-term;
investment in the company’s employees;
the need to foster the company’s business relationships with its stakeholders including suppliers, customers, and others;
the impact of the company’s operations on the community and environment;
the company’s reputation for high standards of business conduct: and
the need to act with integrity and fairness.
Shareholders
Employees
We are committed to engaging with shareholders using consistent and effective communication. Key considerations
include the Company’s financial performance, long-term strategy, corporate governance, and stewardship. The CEO and
Finance Director have regular meetings with investors for formal and informal consultations. Formal meetings coincide
with full-year and half-year results, including the Annual General Meeting. These are viewed not only as opportunities to
present on recent performance and future development but to engage in conversation and answer questions.
We recognise our diverse, skillful and experienced workforce as our most important asset. The pandemic has led to a
renewed focus on how best to engage with our employees. With an emphasis on flexible working, we are reviewing
how to balance the benefits of remote working with the value of in-person collaboration. Regular on-site meetings and
on-site/online Company-wide meetings allow the leadership team to present progress, listen to feedback and answer
questions. We recently engaged in a company-wide employment survey which showed a 100% positive response for
working relationships and line management. We take all feedback very seriously and we shared an action plan to all
employees following the results. We have engaged in Leadership and Management team training to ensure that we
always adhere to best practice and put our employees first.
Customers
Crimson Tide products are efficiency enabling for its customers. The Company digitises manual client log-books and
provides simple work flows using mobile data apps. The products have a real impact on the way its customers plan
and distribute workloads as well as ensuring the most efficient and timely use of resources.
Crimson Tide is well known for its excellent customer service and our customer success team is highly regarded
in the industry. Our whole business model is based around customer with a service. We look to engage
collaboratively with our customers and their end-to-end experience is essential to our success. Crimson Tide
utilizes Churn Zero software to enhance our service delivery to our customers.
Suppliers
Crimson Tide places a high value on its relationships with suppliers, including contractors and service providers.
Trusted, collaborative partnerships facilitate efficient and effective business performance. The Company operates
in a way that guards against unfair business practices and encourages suppliers and contractual partners to adopt
responsible policies. Regular meetings and audits are held with key suppliers to gather feedback and continually
improve relationships.
Community and
Environment
Crimson Tide recognises its responsibility to drive continued efficiencies and improvements in the use of energy,
our carbon footprint, water and waste and the impact our business has in day-to-day operations management as
well as through our entire value chain. We have provided more clarity on specific within the Directors Report.
Signed on behalf of the Directors
Barrie Whipp
Founder & Chairman
31 May 2024
17
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Board of Directors
Directors’ Report
Corporate Governance Statement
Independent Auditor’s Report
18
20
25
29
1818
Board of Directors
The Board of Directors supervises the management of Crimson Tide and looks after the interests
of Shareholders. The re-election of Directors is sought annually at the Annual General Meeting.
Barrie Reginald John Whipp
Jacqueline Daniell
Luke Anthony Jeffrey
(aged 63, Executive Chairman)
(aged 62, Group CEO)
(aged 40, Product Director)
Barrie founded Crimson Tide in 1996 and he
formulated the ideas behind the Group’s mobile
data solutions in 2003, recruiting the current
management team in 2004. After a career
in finance, he founded the financial services
arm of Tiphook plc. He later became Group
Managing Director of IAF Group plc which was
subsequently admitted to the Official List in 1994.
He has served as a non-executive director of
Wills Group plc as well as a number of private
companies. He is responsible for setting the
Group’s vision and strategy as well as setting
goals and targets for the Board.
Shares held:
Annual Remuneration:
338,157
190,560
*Mr Whipp’s wife holds an additional 380,000
Ordinary shares
Jacqueline was appointed as Group CEO in August
2022 after holding the position of non-executive
director of Crimson Tide since January 2021.
She has over 16 years’ experience as founder,
director and CEO of education businesses that use
digital technology to drive positive change for
young learners and the wider education sector.
Jacqueline’s previous background in marketing has
demonstrated how she has developed excellent
relationships with key clients, stakeholders,
government, and corporate institutions. She
also has a track record of an ability to analyse
trends, data, demographics, pricing models, and
other strategies for improvement. Jacqueline’s
early career centred on securing investment in
regeneration and infrastructure projects to support
public sector visions for strong local economies and
good quality of life, winning the award for Global
Action 2000.
Shares held:
Annual Remuneration:
16,722
157,500
Luke joined Crimson Tide from university in July
2005 having achieved a Masters in Advance
Computing Science and has been regularly
promoted since. He has made an invaluable
contribution to the development of our mobility
solutions and has been fully involved in many
other software developments delivered to
customers. Luke joined the Board in July 2012 as
Technical Director, progressing to Deputy CEO
and in 2018 becoming CEO. Luke stepped down
from the role of CEO during August 2022 to focus
on product development as Product Director.
This role is responsible for all app variants
underpinned by the mpro platform.
Shares held:
Annual Remuneration:
23,333
139,559
19
Shaun Robert Mullen
(aged 47, Finance Director)
Shaun Mullen is a Chartered Accountant and
joined the Company in 2022 as Head of Finance.
He assumed the role of Finance Director &
Company Secretary in 2023. Shaun trained
at a top 10 accountancy firm within Audit and
then joined PwC’s Advisory team focusing on
Corporate Finance and Restructuring, both in
the UK and Hong Kong. His career includes
spells as Finance Director for the British Private
Equity and Venture Capital Association (BVCA),
Kesslers International and Coffee Planet. Shaun
has international experience in Europe, Asia and
the Middle East.
Shares held:
–
Annual Remuneration:
75,108
Stephen Brewer
Janet Rosemary Morris
(aged 75, Non-Executive Director)
(aged 58, Non-Executive Director)
Stephen Brewer is an experienced non-
executive and strategic board adviser, as well
as a former CEO and C-level executive with
Eircell, Vodafone, O2 UK, Orange France, Cable
& Wireless and Digicel. Whilst CEO at Eircell,
he oversaw the mobile operator’s growth from
100,000 to 1.6 million customers and played
a key role in the IPO of its parent company
Eircom before leading Eircell’s sale to Vodafone
for $3.5 billion. He has planned and led the
successful delivery of major infrastructure and
complex, transformational projects in Ireland,
the UK, France, and the Caribbean. He acts
as an advisor to Science Foundation Ireland
and Enterprise Ireland and has also advised
Ireland’s Department of the Environment, Climate
and Communications. Stephen was a founding
Director of Apple Computer UK.
Janet Morris is an accomplished global
commercial leader with significant international
experience with Cambridge International
Education (2009-2019), part of Cambridge
University Press & Assessment, the global
education and assessment organisation. She
served as interim CEO (2018) and Director of
International Sales & Marketing (2009-2018),
where she was responsible for the leadership
and development of a global network of 175
people in over 160 countries over a nine-
year period. Janet has also held a variety of
interim leadership and consultancy roles as
part of a portfolio career in a diverse array
of organisations and industry sectors, including
EdTech, publishing, professional services, legal,
construction, property, environment, technology,
travel, aviation, local and national government
bodies.
Shares held:
–
Shares held:
–
Annual Remuneration:
13,365
Annual Remuneration:
13,365
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 20
Directors’ Report
The Directors present their report and the audited financial statements of the Group for the year ended 31 December 2023.
Principal Activities and Review of the Business
The principal activity of the Crimson Tide Group of companies is the development and provision of a mobile software solution with a service
platform. The principal activity of the Company (“Crimson Tide Plc”) is a holding company and AIM listed vehicle providing management and
support to the Group.
Results and Dividends
The trading results for the year and the Group’s financial position at the end of the financial period are shown in the attached financial
statements. The statements have been prepared under UK adopted International Accounting Standards.
Turnover for the year ended 31 December 2023 was £6.16m (2022: £5.35m) and the total loss before tax was £0.69m (2022: loss £1.69m). The
Directors do not recommend payment of a final dividend.
Directors
The following Directors held office during the year and subsequent to the year end:
BRJ Whipp
SK Goodwin (resigned 20 June 2023)
LA Jeffrey
TJT Hawkins (resigned 10 May 2023)
PM Hurter (resigned 20 June 2023)
JK Daniell
TGF England (resigned 20 June 2023)
AG Knowles (resigned 20 June 2023)
SR Mullen (appointed 20 June 2023)
J Morris (appointed 20 June 2023)
S Brewer (appointed 20 June 2023), (resigned 22 May 2024)
PDJ Meyers (appointed 17 May 2024)
J Joyce (appointed 17 May 2024)
Directors’ Interest in Shares
Directors’ interests in the share capital of the Company, including family and pension scheme interests, were as follows:
Director
BRJ Whipp*
SK Goodwin***
LA Jeffrey
JK Daniell***
TJT Hawkins**
PM Hurter***
AG Knowles***
*
BRJ Whipp’s wife holds an additional 380,000 Ordinary shares of 10p each as at 31 December 2023
** TJT Hawkins resigned as Director on 10 May 2023
*** PM Hurter, SK Goodwin and AG Knowles resigned as Directors on 20 June 2023
SK Goodwin also had an interest as a trustee in 9,150 Ordinary shares of 10p each as at 31 December 2023
On 5 October 2023, a resolution was passed to consolidate 1 Ordinary share for every 100 Ordinary shares
Ordinary shares of 10p
2023
338,157
–
23,333
16,722
–
–
–
2022
298,102
258,725
23,333
16,722
4,333
3,333
3,917
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE
Directors’ Report CONTINUED
21
Directors’ interests in the share options, issued under the Group’s Enterprise Management Incentive Scheme, were as follows:
Director
LA Jeffrey
TH Hawkins
TGF England
PM Hurter
SR Mullen
Directors’ Remuneration
The remuneration of the Directors during the period is summarised below:
Number of share options
2023
75,000
–
–
–
4,000
2022
75,000
46,000
8,000
46,000
–
Non-executive
SK Goodwin
AG Knowles
J Morris
S Brewer
Executive
BRJ Whipp
JK Daniell
TJT Hawkins
LA Jeffrey**
PM Hurter
TGF England
SR Mullen**
Total
Fees and
salaries
£
11,763
11,763
13,365
13,365
163,560
152,500
165,954
99,680
47,671
49,998
65,708
Bonus
£
Pension
£
Total 2023
£
Total 2022
£
–
–
–
–
–
5,000
–
–
–
5,000
5,000
–
–
–
–
27,000
–
1,623
38,879
15,000
1,250
4,400
11,763
11,763
13,365
13,365
190,560
157,500
167,577
139,559
62,671
54,585
75,108
22,500
10,417
–
–
197,560
106,667
208,267
122,862
136,850
109,667
–
795,326
15,000
89,152
899,478
914,790
J Morris and S Brewer were appointed as NEDs on 20 June 2023
TGF England resigned as a Director on 20 June 2023
PM Hurter, SK Goodwin and AG Knowles resigned as Directors on 20 June 2023
TJT Hawkins resigned as a Director on 10 May 2023
SR Mullen was appointed as a Director on 20 June 2023
** At year end, LA Jeffrey held 75,000 options and SR Mullen held 4,000 options which incurred a share based payment charge in the year of £525 and
£3,200, respectively.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE
22
Directors’ Report CONTINUED
Significant Shareholdings
As at 7 May 2024 the shareholders’ register showed that the following shareholders had interests in 3% or more of the share capital of the Company:
Shareholder
Canaccord Genuity Group Inc
Helen and Barrie Whipp
Lion Trust Investment Partners LLP
Gresham House Asset Management Limited
William Currie Group*
Herald Investment Management
Octopus Aim VCT Funds
SK Goodwin**
SJM Morris
No.
820,000
718,158
596,066
420,000
347,666
323,333
315,000
258,715
238,472
%
12.47
10.92
9.10
6.39
5.29
4.92
4.79
3.93
3.60
*
The shares are held by Mr William Currie (33,333 ordinary shares) and William Currie Investments Ltd (314,333 ordinary shares)
** Mr Goodwin also had an interest as a trustee in in 91,500 Ordinary shares of 10p each as at 31 December 2023.
Financial Risk Management
The Company’s exposure to financial risk is set out in note 19 to the
accounts. Crimson Tide maintains a strong focus on working capital
management.
Policy on Payments to Suppliers
It is the policy of the Group in respect of all its suppliers, where
reasonably practicable, to settle the terms of payment with those
suppliers when agreeing the terms of each transaction, to ensure that
those suppliers are made aware of the terms of payment, and to abide
by those terms. The number of trade creditor days outstanding at the
period end for the Group was 43 days (2021: 39 days). The Company
is a holding company and has no significant trade creditors.
Employment Policy
The Board places considerable value on the involvement of its
employees and has effective arrangements for communicating the
Group’s results and significant business issues to them. The Directors
recognise that continued and sustained improvement of the Group
depends on its ability to attract, motivate and retain employees of the
highest calibre. Furthermore, the Directors believe that the Group’s
ability to sustain the competitive advantage in the long term depends
on ensuring that all employees contribute to the maximum of their
potential. The Group is committed to improving the performance
of all its employees through appropriate development and training.
Share ownership is at the heart of the Group’s remuneration
philosophy and the Directors believe that the key to the Group’s
future success lies in a motivated workforce holding a stake in
the Group. For this reason the Board implemented an Enterprise
Management Incentive share option scheme in February 2008 which
is available to all Group employees subject to meeting certain
qualifying rules. The Group is an equal opportunity employer. Entry
into and progression within the Group is solely determined on the
basis of work criteria and individual merit. The Group gives full and
fair consideration to applications for employment made by disabled
persons, having regard to their respective aptitudes and abilities.
The policy includes, where practicable, the continued employment
of those who may become disabled during their employment and the
provision of training and career development and promotion, where
appropriate.
Corporate Responsibility
Crimson Tide operates responsibly with regard to its shareholders,
employees, other stakeholders, the environment and the wider
community (refer to the s172 statement). The Group is committed to
the wellbeing of all employees and ensures that their health, safety
and general welfare is paramount at all times. We also maintain open
and fair relationships with all clients and suppliers while ensuring that
all transactions are operated on an arm’s length, commercial basis.
As part of this culture, the Group ensures that all suppliers are paid
in a timely fashion, unless there are sound commercial reasons why
payment should not be made.
The Company is subject to the UK City Code on Takeovers and
Mergers.
Our Products
Crimson Tide plc products are efficiency enabling for our customers.
The Company digitises manual client log books and provide simple
work flows using mobile data apps. The products have a real impact
on the way our customers plan and distribute workloads as well as
ensuring the most efficient and timely use of resources.
This commitment drives all aspect of our culture and business,
including how we develop our products, engage with our customers
and staff as well as how collaborate with stakeholders.
ESG Governance: Our Board of Directors oversee our policies and
operational performance for environmental, health & safety and
social impact, and is led by the Chairman of our Board of Directors
and our Chief Executive Officer. The Board of Directors meet
quarterly to set objectives and review progress and achievements.
The Company has Whistle Blowing and Anti Bribery and Corruption
policies that are fully trained and available to all staff. There is a
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE Directors’ Report CONTINUED
23
clear escalation process to the Board and a monitoring and review
process in place.
Environmental
In compliance with the Companies Act 2006 and in conjunction with
the Guidance on Streamlined Energy and Carbon Reporting (SECR),
Crimson Tide is classed as a ‘Low Energy User’ due to the low energy
intensive nature of our business and operations. We are therefore
not required to make detailed disclosure of energy and carbon
information. Regardless, Crimson Tide recognises its responsibility to
drive continued efficiencies and improvements in the use of energy,
our carbon footprint, water and waste and the impact our business
has in day-to-day operations management as well as through our
entire value chain. Therefore, we drive to reduce environmental
impacts from our building, product development, ways of operating
and in the solutions we provide our customers.
1. Premises and Operations
Crimson Tide plc occupy a building that operates on 100% renewal
energy. In addition, we operate efficiency lighting systems, a
paperless working environment, water reduction management systems
and recycling initiatives. The use of virtual meetings has reduced our
travel requirements significantly. In addition, we have introduced a
hybrid working policy that enables staff to work remotely 2-3 days
per week. The Company has introduced a cycle to work scheme and
encourages staff to participate in the programme. Airline travel is
at a minimum as most of the customers are based in the UK or have
regional head offices in the UK. Travel to the US by a select few
occurs 2-3 times per year.
2. Waste Management
All staff, contractors and visitors have a personal responsibility
to ensure the waste they create is dealt with in accordance with
this policy. Consideration must be given to applying the waste
management hierarchy to all activities across the business.
Reduce: Only order/purchase/use the amount of materials required
Reuse: Retain materials which can be reused onsite or by others
Recycle: Segregate to maximise value of material for recycling
Recover: Energy from waste will be recovered where facilities allow
Dispose: Last resort
Certification of appropriate disposal (in the form of a waste transfer
note, consignment note or certificate of disposal) will be obtained by
FM/Estates staff when waste is removed by a contractor. All contractors
removing waste must be registered with the Environment Agency (EA) to
carry/broker waste, and proposed waste management site will need to
be licenced or have letter of exemption issued by the EA. Waste should
be prevented or minimised wherever possible and must be stored,
carried, processed or disposed of in accordance with the principles of
duty of care.
Social
People - At Crimson tide plc we strongly believe that our employees
are fundamental to our business and we are proud of our outstanding
work culture. Furthermore, we aim to be a valued business partner in
our community.
Culture and Engagement - our environment drives and fosters
innovation and collaboration across all levels of the Company.
Employee development is a key enabler for personal and professional
growth for all employees through performance reviews and learning
& development plans. The Company informs and engages with all
staff through Company meetings. Furthermore, there are recognition
events and awards for staff at regular intervals.
Health and Safety - the health and safety of our employees, and
vendors is of the utmost importance to us. We adhere to leading
health and safety regulations at all times.
Diversity, Equality and Inclusion - we embrace and diversity
in all its forms. Equality is integral to our recruitment and selection
processes, as we aim to attract, retain and develop diverse talent.
We strive to create and maintain a positive workplace, free from
discrimination and harassment. We promote an environment of mutual
respect, fairness and equality. Our total commitment to diversity and
inclusion applies to all levels of the organisation including the Board
of Directors, where we recognize that diversity strengthens board
performance and promotes long-term shareholder value.
Political and Charitable Contributions
No political or significant charitable donations were made during the
period.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable law and
regulations.
UK Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and Parent Company financial
statements in accordance UK adopted International Accounting
Standards. Under Company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and the Company and of
the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and prudent;
•
prepare the financial statement on the going concern basis unless
it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and Company and enable them to
ensure that the financial statements comply with the Companies Act
2006. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 24
Directors’ Report CONTINUED
They are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Website Publication
The Directors are responsible for the maintenance and integrity of
the information included on the Company’s website. Legislation in
the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company’s
website.
Adequacy of Information Supplied to Auditors
In the case of each of the persons who were Directors of the
Company at the date when this report was approved:
•
•
so far as each of the Directors is aware, there is no relevant audit
information (as defined in the Companies Act 2006) of which the
Company’s Auditors are unaware;
each of the Directors has taken all the steps that he/she ought to
have taken as a Director to make himself/herself aware of any
relevant audit information (as defined) and to establish that the
Company’s Auditors are aware of that information; and
Director's Insurance
The Company has provided qualifying third party indemnity for the
benefit of its directors. These were provided during the year and
remain in force on the date of this report.
Signed by order of the Board
Shaun Mullen
Company Secretary
31 May 2024
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE Corporate Governance Statement
25
The Board is committed to sound Corporate Governance and have
adopted the Quoted Companies Alliance (QCA) Corporate
Governance Code in line with the London Stock Exchange’s changes
to the AIM Rules requiring all AIM-listed companies to adopt and
comply with a recognised corporate governance code.
The Company believes the code is essential to foster business
integrity and shareholders’ trust in the Board. High standards of
Corporate Governance are a key priority of the Board and details
of how the Company addresses key governance issues are set out
here by reference to the 10 principles of Corporate Governance
developed by the Quoted Companies Alliance.
The Board of Directors is led by the Chairman who plays a vital role in
ensuring effective Corporate Governance, as follows:
Leadership and Board Management: The Chairman provides
leadership and direction to the board of directors, overseeing
their activities and ensuring they fulfil their duties. He presides over
Board meetings, sets the agenda, and facilitates discussions to make
informed decisions.
Governance Structure and Policies: The chairman works with the
Board to establish and maintain a robust governance framework
for the Group. This involves developing policies, procedures, and
guidelines that promote transparency, accountability, and ethical
conduct within the organisation.
Strategy and Risk Oversight: The Chairman collaborates with the
Board and senior management to formulate the Company’s strategic
objectives and monitor their implementation. He actively participates
in discussions regarding risk assessment and mitigation, ensuring that
appropriate risk management practices are in place.
Stakeholder Engagement: The Chairman represents the Group’s
interests and acts as a liaison between the Board, management,
shareholders, and other stakeholders. He engages with shareholders,
addressing their concerns and providing regular updates on
corporate performance.
Board Composition and Succession Planning: The chairman
leads the process of selecting and appointing Board members,
ensuring an appropriate mix of skills, expertise, and diversity. He
also oversees succession planning for senior management positions,
identifying potential candidates and ensuring a smooth transition
when necessary.
External Relations: The Chairman serves as a public face of the
Company, representing it in external engagements such as industry
conferences, shareholder meetings, and regulatory interactions. He
fosters positive relationships with regulators, government entities, and
other external stakeholders, promoting the Company’s reputation and
interests.
Performance Evaluation: The Chairman leads the evaluation
process for the Board, its committees, and individual directors. He
assesses Board effectiveness, identifies areas for improvement,
and implements measures to enhance overall performance and
governance practices.
1. Establish a Strategy and Business Model
The Board should express a shared view of the Company’s vision and
strategy, including detail of:
• what the Company is working to achieve;
•
the period in which its objectives are to be achieved; and
• what is required to achieve these objectives.
This view should be well communicated, both internally and externally.
Crimson Tide’s vision is to invest in and develop mpro5 to deliver
long term, sustainable growth in revenues, profits and shareholder
value. The Company places particular focus on the quality of mpro5,
its relationships with clients, staff and stakeholders. The Directors
believe that mpro5 can improve operations and efficiency for a broad
range of organisations, particularly in logistics, facilities management
and healthcare.
The Company seeks to grow its revenues consistently, taking
advantage of the high margin it achieves. The Company has a three-
year business plan reflecting expansion including in its home territory
and overseas.
Crimson Tide has sufficient resources to grow the business further. The
retention of existing staff is an area of high focus and recruitment of
further employees will occur as the Company grows.
2. Meeting the Needs and Objectives of our
Shareholders
Directors should develop a good understanding of the needs and
expectations of the Company’s shareholders, as well as the motivations
behind shareholder voting decisions. No board ever wants to find itself
in a position where it is voted down by shareholders. Accordingly, it is
in the interests of the Company to understand the view of shareholders
before a potentially controversial or unusual proposal is put to them.
The Board is aware of the need to protect the interests of all
shareholders. It seeks to balance the interests of small shareholders with
those of more substantial shareholders. The Board comprises Directors
with substantial holdings and small holdings.
The Board consists of the Chairman, three executive Directors and two
non-executive Directors. Board meetings are held monthly.
Crimson Tide plc publishes all relevant material, according to QCA
definitions, on its website www.crimsontide.co.uk. This includes annual
reports and shareholder circulars.
The Group seeks to ensure that all shareholders are kept informed
about the Group and its activities. A comprehensive annual report and
accounts and an interim report are made available to shareholders
on the Group’s website and sent to those shareholders requesting a
paper copy. The Annual General Meeting is a forum for shareholders’
participation with the opportunity to meet and question Board members
including the non-executive members and the Chairmen of the Board
committees. Additionally, the Group operates an investors’ section on
its website to provide further details of the Group’s activities.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 26
Corporate Governance Statement CONTINUED
3. Taking into Account Wider Stakeholder and
Social Responsibilities
The Board should understand the views of the Company’s other key
stakeholders and describe in the annual report how their interest and
the matters set out in section 172 of the companies Act 2006 have
been considered in board discussions and decision-making. Good
governance includes the Board considering the Company’s impact on
society, the community, and the environment. Every company should
consider its corporate social responsibilities (CSR). Any CSR policy
should include narrative on social and environmental issues and
should show how these are integrated into the Company’s strategy.
Integrating CSR into strategy will help create long term value and
reduce risk to shareholders and other stakeholders.
The Company holds bi-annual roadshows with its investor community
presenting the latest financial position and performance and an
update on forecast to the end of the year. The investors have ample
opportunity to ask questions and make suggestions.
The Directors are aware of the impact the business activities have
on the communities in which the Group’s businesses operate. The
Company does not discriminate based upon race, religion, age or
gender.
The Group’s responsibilities to stakeholders including staff, suppliers
and customers and wider society are also recognised. The Company
is a respected employer and member of the community.
The environmental impact of the Group’s activities is carefully
considered, and the maintenance of high environmental standards
applied. The Company operates a low paper strategy, recycles
where possible and aims to be Carbon neutral.
4. Embed Effective Risk Management, Considering
Both Opportunities and Threats
The Board has responsibility for ensuring the Group has effective risk
management processes and that a clear internal control policy exists.
The key risks and associated controls are included within the Strategic
Report. Crimson Tide has a framework of internal financial controls
which is subject to review by the Executive Directors and the Audit
Committee considering the ongoing risks faced by the Group. The
auditor’s Management Points letter is a key point of consideration for
the Audit Committee and is discussed in detail during the meeting.
Crimson Tide’s internal control environment includes:
•
•
•
•
close involvement of the Executive Directors in the day-to-day
running of the Group;
clear lines of authority and reporting;
regular internal audits of all Company departments;
centralised control and decision-making over key areas such as
capital expenditure and financing; and
•
a suite of timely reports focusing on the key performance and
risk areas. Such reports include monthly management accounts
including current performance and the latest forecast updated
monthly, an annual Budget and updating of all KPIs.
The Group undertakes regular updates and reviews of its business
processes, co-ordinated by the Group finance and operations
functions to ensure that it not only addresses basic financial controls
but that non-financial controls are also in place over areas such as
information security, calibration and certification, health and safety,
environmental issues and adherence to law and regulations.
Mitigation can only provide reasonable, but not absolute, assurance
against material misstatement or loss. As such the Group maintains
appropriate insurance cover for the Group’s activities, with the types
of cover and insured values being reviewed on a regular basis by the
Board.
The Group maintains a risk register which not only highlights risks
relevant to its businesses but also details the actions being taken
to mitigate these risks. These registers are reviewed regularly at
Executive leadership team level.
The Board regularly reviews potential risks at Board Meetings and the
Executive Directors regularly monitor KPIs. The Finance Director owns
and updates a Risk Register at least twice a year, for the Group. This is
also a fundamental part of the ISO27001 compliance.
5. Maintain the Board as a Well-Functioning,
Balanced Team Led by the Chair
The Board should not be dominated by one person or a Group
of people. The Board must not be so large as to prevent efficient
operation but must not be too small to be ineffective. The Board
should be balanced between executive and non-executive Directors
and should have at least two independent non-executive Directors.
The Board of Directors meets every quarter and all Board Directors
are required to be in attendance. All physical meetings were held at
the Company’s Head Office in Tunbridge Wells and each meeting has
minutes.
The Board is comprised of the Chairman, three executive Directors
and two non-executive Directors.
Whilst the Company is guided by the provisions of the Combined
Code in respect of the independence of Directors, it gives regard to
the overall effectiveness and independence of the contribution made
by Directors to the Board in considering their independence and does
not consider a Directors’ period of service in isolation to determine
their independence.
Crimson Tide has appointed two non-executive Directors who
provide an independent view of the Company’s activities. Mr Stephen
Brewer and Ms Janet Morris are non-executive Directors with James
Joyce replacing Stephen Brewer on his retirement.
In exceptional cases a non-executive may also be appointed to
represent the interests of a major shareholder where the board is
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE Corporate Governance Statement CONTINUED
27
satisfied that he or she has the requisite experience and is fully aware
of his or her fiduciary duty to act in the wider interests of shareholders
as a whole.
The Board do not consider that the Company currently has a dominant
shareholder where special contractual arrangements would be
necessary to protect the interests of minority shareholders.
Appointments continue to be subject to re-election by shareholders at
the Annual General Meeting. Non-executive Directors must stand for
election at the first Annual General Meeting after appointment and
then every third anniversary, for nine years. After nine years’ service,
each independent director must be re- elected every year.
If not re-elected, the appointment is terminated automatically with
immediate effect. If appointment is terminated for any reason, there is
no entitlement to redundancy or compensation for unfair dismissal.
6. Ensuring that Between them the Directors have
the Necessary Up To Date Experience, Skills and
Capabilities
The Board must have an appropriate balance of functional and sector
skills and experience. The board should be supported by committees
(audit, remuneration, nomination and others) that have the necessary
character, skills and knowledge to discharge their duties and
responsibilities effectively.
Directors who have been appointed to Crimson Tide plc have been
chosen because of the skills and experience they offer.
Full biographical details of the Directors are included within the
website. As noted above, Crimson Tide plc has put in place Audit
and Remuneration committees. Formal terms of reference have been
agreed for all Board Committees and can be found on the Company’s
website. Board members who are members of accredited bodies
are all required to demonstrate appropriate levels of CPD which is
appraised in quarterly meetings as part of their objectives.
7. Evaluate Board Performance Based on Clear
and Relevant Objectives, Seeking Continuous
Improvement
The Board should periodically review its performance, as well as
the performance of its Board committees and the performance
of individual board members. Performance appraisal may include
external review and may also identify development needs.
The Board should ensure that it possesses the skills and experience
to meet present and future business needs. Ineffective Directors
(whether executive or non-executive) must be identified, supported
to become effective and, if that is not possible, replaced. Review,
development and mentoring of Directors and the wider management
team are very important.
It is healthy for membership of the Board to be periodically refreshed,
regardless of performance issues.
Succession planning is a vital task for boards. No member of the
Board should become indispensable. How well succession is managed
(particularly of the Chairman and the Chief Executive) represents a
key measure of the effectiveness of a board.
Crimson Tide plc undertakes regular monitoring of personal and
corporate performance using agreed key performance indicators and
detailed financial reports. Responsibility for assessing and monitoring
the performance of the executive Directors lies with the independent
non-executive Directors.
Key performance indicators (KPIs) include Revenue, Gross Profit
margin, EBITDA, Profit before Tax, ARR and Cash. Agreed personal
objectives and targets including financial and non-financial metrics
are set each year for the executive Directors and performance
measured against these metrics.
New executive and non-executive Directors, taking into account
succession planning, are appointed when deemed appropriate by the
Board.
Crimson Tide has a Chairman and CEO. The CEO was promoted to
the role and took over responsibility for managing and executing
the Board’s plan and is in charge of all day-to-day management
of the business, supported by a management team. The Chairman
retains responsibility for product vision, corporate finance and city
matters in line with his experience. As the CEO has only recently been
appointed and is in his thirties, further succession planning has not
been undertaken at this time.
Each Board Director is subject to bi-annual appraisals and they
are measured against clear objectives that align with Group goals.
An action plan is provided to assist any Director adhering to these
objectives if performance falls short. The Group always strives to
improve its existing skillset or recruit the best candidates from outside.
8. Promote a Corporate Culture that is Based on
Ethical Values and Behaviours
Crimson Tide plc operates responsibly with regard to its
shareholders, employees, other stakeholders, the environment and the
wider community.
The Group is committed to the wellbeing of all employees and ensures
that their health, safety and general welfare is paramount at all times.
The Group also maintains open and fair relationships with all clients
and suppliers while ensuring that all transactions are operated on an
arm’s length, commercial basis.
As part of this culture, the Group ensures that all suppliers are paid
in a timely fashion, unless there are sound commercial reasons why
payment should not be made.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 28
Corporate Governance Statement CONTINUED
10. Communicate how the Company is Governed
and is Performing by Maintaining a Dialogue with
Shareholders and other Relevant Stakeholders
A healthy dialogue should exist between the Board and all of its
shareholders to enable shareholders to come to informed decisions
about the Company.
Appropriate communication and reporting structures should exist
between the Board and all constituent parts of its shareholder body.
This will assist:
•
•
the communication of shareholders’ views to the board; and
shareholders’ understanding of the unique circumstances and
constraints faced by that Company.
The Board attaches great importance to providing shareholders with
clear and transparent information on the Group’s activities, strategy
and financial position. Details of all shareholder communications are
provided on the Company’s website.
The Board holds regular meetings with larger shareholders and
regards the annual general meeting as a good opportunity to
communicate directly with shareholders via an open question and
answer session.
Crimson Tide plc lists contact details on its website and on all
announcements released via RNS, should shareholders wish to
communicate with the Board.
Signed on behalf of the Directors
Barrie Whipp
Founder & Chairman
31 May 2024
9. Maintain Governance Structures and Processes
that are Fit for Purpose and Support Good
Decision-Making by the Board
The long-term success of the Group is the responsibility of the Board.
Four Executive Directors have responsibility for the operational
management of the Group’s activities and development of the Group
strategy. Two Non-Executive Directors are responsible for bringing
independent and objective judgement to Board decisions. The
Company Secretary is responsible for ensuring that Board procedures
are followed, and applicable rules and regulations are complied with.
A corporate calendar is set at the beginning of the financial year and
includes provisional dates for all Board and Committee meetings.
Agendas are finalised and circulated with relevant supporting
information and papers to Board members ahead of the meetings.
The Board has two sub-committees as follows:
The Audit Committee oversees the integrity of the financial results
and risk management strategy of the Company. It engages and works
with the external financial auditor and Group management. It reviews
and reports to the Board on significant issues including estimates
and judgements made in connection with the preparation of the
Group financial statement. The Committee was comprised of Stephen
Brewer (NED) and Janet Morris (NED) as at 31 December 2023, with
James Joyce taking over from Stephen Brewer post resignation. The
Committee met twice during the year on 2 Feb and 25 May. These
meetings were convened primarily to review and approve the interim
and annual accounts and to review the Auditor’s Management Letter
points. Key considerations discussed and agreed as follows:
•
The approval and appointment of PKF Littlejohn as Group
auditors.
There were no other items of note.
The Remuneration Committee ensures that the Group’s Executive
remuneration policy is aligned to the implementation of the Company
strategy and shareholder interests. The Committee seeks to establish
a remuneration policy that is designed to motivate, retain and attract
Executives of the calibre necessary to achieve the Group’s strategic
ambitions. The Committee was comprised of Janet Morris (NED,
Chairman), Stephen Brewer (NED) and Jacqueline Daniell (CEO)
as at 31 December 2023, with James Joyce taking over from Stephen
Brewer post resignation. The Committee met twice during the year on
11 May and 18 July. Revised salary bands were developed in line with
industry benchmarks, a new commission structure for the sales team
was proposed, a new maternity, paternity and adoption policy was
approved, employees were given an extra day off on their birthday,
and annual bonuses were approved.
Given the current size and complexity of the Group, the Board does
not currently consider that a nominations committee is required.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 29
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc
Opinion
We have audited the financial statements of Crimson Tide Plc (the
‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2023 which comprise the Consolidated Statement of
Profit or Loss and Comprehensive Income, the Consolidated and
Parent Company Statements of Financial Position, the Consolidated
and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements of Cash Flows and
notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in
their preparation is applicable law and UK-adopted international
accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of
the group’s and of the parent company’s affairs as at 31 December
2023 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
the parent company financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the
provisions of the Companies Act 2006; and
•
the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of
our report. We are independent of the group and parent company
in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation
of the directors’ assessment of the group’s and parent company’s
ability to continue to adopt the going concern basis of accounting
included:
•
•
•
•
•
•
Reviewing management’s going concern assessment and
discussions with management regarding the future plans and
availability of funding;
Reviewing the cash flow forecast to ensure mathematical
accuracy;
Obtaining corroborative and contradictory evidence for the
key assumptions and estimates used in the cashflow forecast and
challenging the reasonableness of these with management;
Performing sensitivity analysis on the cash flow forecasts
prepared by management, and assessing management’s
assessment of the worst case scenario and cash flows;
Reviewing performance of the group subsequent to the year end
and other events impacting the going concern assumption; and
Reviewing the adequacy and completeness of disclosures in the
financial statements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group's
or parent company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 30
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the
scope of our audit and the nature, timing and extent of our audit procedures. We determined materiality for the financial statements to be:
Entity
Group
Parent company
Materiality
£’000
123 (2022: 106)
52 (2022: 96)
Performance
materiality (70%)
£’000
86 (2022: 64)
Triviality threshold
(5%)
£’000
6.1 (2022: 5)
36 (2022: 58)
2.6 (2022: 4.8)
The benchmark used to calculated materiality for the group financial statements as a whole was 2% of revenue. Revenue was deemed to be the
most appropriate metric for group materiality as revenue growth and expansion is a key performance indicator of the group.
The benchmark selected for the parent company materiality was 1% of gross assets. As the parent company is not revenue generating, the
significant balances in the parent company financial statements are the investments in the trading subsidiaries.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of transactions and disclosures. We have increased the benchmark of the performance
materiality this year from 60% to 70% due to the fact the prior year audit did not identify a significant level of adjusted items which has
accordingly reduced the underlying inherent risk of the group. We therefore have concluded that 70% of materiality is appropriate to set
performance materiality for the group and parent company.
While materiality for the group financial statements as a whole was set at £123,000 (2022:106,000), each significant component of the group was
audited to an overall materiality ranging between £112,000 and £50,000, with performance materiality set at 70%.
We applied the concept of materiality in planning and performing our audit and in evaluating the effects of misstatement. No significant changes
have come to light during the audit which required a revision to our materiality for the financial statements as a whole.
Our approach to the audit
Our audit was risk based and designed to focus our efforts on the areas at greatest risk of material misstatement, aspects subject to significant
management judgement as well as greatest complexity, risk and size.
As part of designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the financial statements. In
particular, we looked at areas involving significant accounting estimates and judgement by the directors and considered future events that are
inherently uncertain. These areas of estimate and judgement included:
•
Revenue recognition in relation to subscription contracts over time;
• Carrying value and impairment assessment of intangible assets, including goodwill, acquired intangibles and internally generated intangibles;
• Share based payment transaction valuation; and
• Carrying value of and recoverability of the investments and intra-group receivables
We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
A full scope audit was completed on the financial information of all of the group’s significant operating subsidiaries by PKF Littlejohn LLP and no
component auditors were engaged.
The key audit matters and how these were addressed are outlined below.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 31
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
Key Audit Matter
Revenue recognition (Note 3)
Under ISA (UK) 240, there is a rebuttable
presumption that revenue recognition is a
significant fraud risk.
The group’s revenue is derived from the provision
of the bespoke software platform & support over
a subscription period, which is recognised both
over time and at a point in time depending on the
underlying agreement.
The group has a high number of subscription
agreements each with different terms and start
dates. There is a risk that revenue is materially
misstated due to incorrect application of IFRS 15.
Due to the significance of the revenues to the
consolidated financial statements, and the fact that
these transactions require management to exercise
judgement, this risk has been identified as a key
audit matter.
Carrying value of internally generated
intangible assets (Note 8)
The group capitalises development costs in relation
to its revenue generating mPro5 software platform
and other internally generated assets. The costs
are capitalised in accordance with IAS 38 and
assessed annually for impairment.
There is a risk that the carrying values exceed their
recoverable values through non-recognition of
impairment losses or incorrect capitalisation of
costs under IAS 38.
The assessment of the valuation and recoverability
of the intangible assets involves significant
judgement and estimation by management and as
a result we have identified this risk as a key audit
matter.
How our scope addressed this matter
Our work in this area included:
•
•
•
•
•
•
Updating our understanding of the internal control environment in operation for
the material revenue streams and undertaking a walk-through to ensure that the key
controls within these systems have been operating in the year;
Performing a review of a sample of contracts to ensure revenue is recognised in line
with IFRS 15 and the contractual performance obligations;
Substantive transactional testing of revenue recognised in the financial statements,
including recalculation of deferred revenue balances recognised at the year end if
any;
Performing substantive analytical review from the contract listing to arrive at an
expected revenue and comparing this to the amount recorded per the financial
statements;
Reviewing post year end credit notes to ensure revenue has not subsequently been
reversed and reviewing post year end receipts to ensure completeness of revenue
recorded in the accounting period; and
Reviewing disclosures within the financial statements to ensure consistency with the
underlying contracts.
Our work in this area included:
•
•
•
•
•
•
•
•
•
•
Substantively testing the additions during the period to ensure in line with the
recognition criteria of the group and IAS 38;
Obtaining the group’s impairment assessment and challenging the reasonableness of
key assumptions to external and internal data, including budgets, cash flow forecasts
and future contracted revenue;
Evaluating the reasonableness of cash flows in the forecasts through comparison to
actual and prior period performance;
Verifying the integrity of the data and mathematical accuracy of supporting
calculations;
Performing sensitivity analysis on key assumptions to ascertain the impact of possible
changes which would eliminate the headroom over carrying value;
Assessing the cash generating unit allocations and ensuring impairment assessment of
separate CGUs in line with the requirements of IAS 36;
Evaluating management’s assessment of expected useful economic lives;
Considering whether any other indicators of impairment are present under IAS 36
having reference to internal and external factors;
Reviewing expense ledgers to ensure consistency of the capitalisation policy and
completeness of the costs capitalised; and
Reviewing appropriateness of the capitalisation policy and the disclosures and
classification of items within the intangible asset categories.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE 32
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
group and parent company financial statements does not cover the
other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the course of the
audit:
•
•
the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the group and the
parent company and their environment obtained in the course of the
audit, we have not identified material misstatements in the strategic
report or the directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent company financial statements are not in agreement
with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law
are not made; or
we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities,
the directors are responsible for the preparation of the group and
parent company financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the group and parent company financial statements,
the directors are responsible for assessing the group and the parent
company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is
detailed below:
•
We obtained an understanding of the group and the parent
company and the sector in which it operates to identify laws
and regulations that could reasonably be expected to have
a direct effect on the financial statements. We obtained
our understanding in this regard through discussions with
management, industry research and sector experience.
•
We determined the principal laws and regulations relevant to the
group in this regard to be those arising from:
– AIM Rules for Companies;
– UK-adopted international accounting standards;
– Companies Act 2006;
– UK Employment Laws and Health and Safety Regulations;
– UK Tax Laws;
– General Data Protection Regulations;
– Anti-Bribery Act; and
– Anti-Money Laundering Regulations.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
33
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have
formed.
Adam Humphreys
Senior Statutory Auditor
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
31 May 2024
•
We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-
compliance by the group with those laws and regulations. These
procedures included, but were not limited to:
–
–
–
Enquiries of management;
Reviewing board minutes and RNS announcements; and
Reviewing the nature of legal and professional fees incurred
in the year for evidence of any non-compliance.
•
•
We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls and revenue recognition,
whether key management judgements could include management
bias. The significant areas of judgement were in relation to the
carrying value of intangible assets and we addressed these as
outlined in the Key Audit Matters section above. The parent
company assessment of the carrying value of the investment in
subsidiary also included management judgements which were in
agreement with those used to assess the intangible assets. Other
estimates, including the share-based payments in the year, were
either immaterial or not considered to be significant in the context
of the financial statements.
As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit
procedures, which included, but were not limited to testing of
journals, reviewing key accounting judgement and estimates for
evidence of bias (refer to the key audit matter section and going
concern section) and evaluating the business rationale of any
significant transactions that are unusual or outside the normal
course of business.
Because of the inherent limitations of an audit, there is a risk that we
will not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law
or regulation is removed from the events and transactions reflected
in the financial statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater regarding
irregularities occurring due to fraud rather than error, as fraud
involves intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | CORPORATE GOVERNANCE
34
F i n a n c i a l
S t a t e m e n t s
Consolidated Statement of Profit or Loss and Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Officers and Professional Advisors
35
36
37
38
39
56
57
58
IBC
Consolidated Statement of Profit or Loss
and Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2023
Revenue
Cost of Sales
Gross Profit
Administrative expenses
Impairment of intangible asset
Finance costs
(Loss)/Profit before income tax expense
Income tax income/(expense)
(Loss)/Profit after income tax
(Loss)/Earnings per share (pence)
Basic
Diluted
Consolidated Statement of Comprehensive Income
(Loss)/Profit for the year
Items that may be classified subsequently to profit and loss
Exchange differences on translating foreign operations
Total comprehensive income/(loss) for the year
Note
3
4
4
4
6
7
7
2023
£000
6,155
(849)
5,306
(5,942)
–
(52)
(688)
383
(305)
(4.64)
(4.64)
(305)
(19)
(324)
35
2022
£000
5,351
(883)
4,468
(5,838)
(264)
(54)
(1,688)
445
(1,243)
(18.91)
(18.91)
(1,243)
(39)
(1,282)
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS
36
Consolidated Statement of Financial Position
AT 31 DECEMBER 2023
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share premium
Other reserves
Reverse acquisition reserve
Retained profits
Total equity
Note
8
9
10
12
13
14
15
15
16
17
17
17
17
2023
£000
4,440
237
571
5,248
1,182
3,255
4,437
9,685
1,514
199
1,713
468
468
2,181
7,504
657
5,590
427
(5,244)
6,074
7,504
2022
£000
3,812
264
703
4,779
1,646
3,618
5,264
10,043
1,460
170
1,630
607
607
2,237
7,806
657
5,590
493
(5,244)
6,310
7,806
The financial statements were approved by the board of Directors on 31 May 2024 and signed on its behalf by:
BRJ Whipp
Director
JK Daniell
Director
Company Registration Number 00113845
37
Consolidated Statement of
Changes in Equity
AT 31 DECEMBER 2023
Consolidated
Balance at 1 January 2022
Loss after income tax expense for the year
Share options expense
Translation movement
Balance at 31 December 2022
Loss after income tax expense for the year
Share options cancelled
Share options expense
Translation movement
Issued
capital
£000
Share
premium
£000
Other
reserves
£000
Reverse
acquisition
reserve
£000
Retained
earnings
£000
657
–
–
–
657
–
–
–
–
5,590
–
–
–
5,590
–
–
–
–
481
–
51
(39)
493
–
(69)
22
(19)
(5,244)
–
–
–
(5,244)
–
–
–
–
7,553
(1,243)
–
–
6,310
(305)
69
–
Total
equity
£000
9,037
(1,243)
51
(39)
7,806
(305)
–
22
(19)
Balance at 31 December 2023
657
5,590
427
(5,244)
6,074
7,504
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 38
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2023
Note
Loss before taxation
Adjustments for:
Amortisation of intangibles
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Unrealised currency translation gains
Interest paid
Share option expense
Operating cash flows before movements in working capital
Decrease / (increase) in trade and other receivables
(Decrease) / increase in trade and other payables
Cash (used in)/generated by operations
Income taxes received
Income taxes paid
Interest paid in cash
Net cash from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of other intangible assets
Development expenditure capitalised
Net cash used in investing activities
Cash flows from financing activities
Repayments of borrowings
Repayments of lease liability
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
13
2023
£000
(688)
758
74
206
(19)
52
22
405
464
54
923
407
(24)
(52)
1,254
(47)
(223)
(1,163)
(1,433)
–
(184)
(184)
(363)
3,618
3,255
2022
£000
(1,688)
954
149
112
(39)
54
51
(407)
(567)
300
(674)
445
–
(54)
(283)
(246)
(218)
(1,266)
(1,730)
(5)
(100)
(105)
(2,118)
5,736
3,618
39
Notes to the Financial Statements
AT 31 DECEMBER 2023
Corporate information
Crimson Tide plc (“the Company”) is a Public Limited Company
incorporated and domiciled in the United Kingdom. The address
of the registered office is Brockbourne House, 77 Mount Ephraim,
Tunbridge Wells, Kent, TN4 8BS. Crimson Tide plc’s shares are
publicly traded on the Alternative Investment Market of the London
Stock Exchange (AIM).
1. Summary of significant accounting policies
The principal accounting policies adopted in the preparation
of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated.
1.1 Basis of preparation
The financial statements have been prepared in accordance with
UK-Adopted International Accounting Standards and in accordance
with the requirements of the Companies Act 2006.
Historical cost convention
The consolidated financial statements have been prepared under the
historical cost convention, except for, where applicable, the revaluation
of financial assets and liabilities at fair value through profit or loss,
financial assets at fair value through other comprehensive income. The
amounts in the financial statements have been rounded to the nearest
thousand pounds sterling, unless otherwise stated.
The preparation of financial statements requires the use of certain
critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to
the consolidated financial statements, are disclosed in note 2.
Standards, amendments and interpretations relevant to the Group’s
operation and adopted by the Group as at 1 January 2023
There were no new standards or interpretations effective for the first
time for periods beginning on or after 1 January 2022, which had a
significant effect on the Group’s financial statements.
There were also no standards, amendments or interpretations relevant
to the Group’s operations that have not yet become effective.
1.2 Going concern
The Strategic report sets out the Group’s business activities and
headline results, together with the financial statements and notes
which detail the results for the year, net current asset position and
cash flows for the year ended 31 December 2023.
The Directors have prepared cash flow forecasts for the Group for a
review period of more than twelve months from the date of approval
of the 2023 financial statements and consider the assumptions used
therein to be reasonable and reflective of its long-term subscription
contracts and contracted recurring revenue. These forecasts reflect
an assessment of current and future market conditions and their impact
on the Group’s future cash flow performance. Alternative scenarios
have also been prepared to consider sensitivities for a reduction
in revenue to the end of the review period. Forecasts indicate the
Group would have sufficient funds to continue as a going concern.
Should sales reduce further than the sensitised case, the Group has a
number of mitigating actions such as reducing discretionary spend and
delaying capital expenditure and research and development costs
to protect the Group’s cash position. The Directors remain confident
in the long-term future prospects for the Group and therefore
the Directors have a reasonable expectation that the Group has
adequate resources to continue for the foreseeable future. As a
result, they continue to adopt the going concern basis in preparing the
financial statements.
1.3 Basis of consolidation
The consolidated financial statements include the financial statements
of the Company as well as its subsidiaries.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which
the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are
deconsolidated from the date when control ceases.
The acquisition method of accounting is used to account for
the acquisition of subsidiaries by the Group. The consideration
transferred for the acquisition of a subsidiary is the fair value of the
assets transferred, the liabilities incurred and the equity interest
issued by the Group. The consideration transferred also includes
the fair value of any asset or liability resulting from a contingent
consideration arrangement. Acquisition-related costs are expensed
as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially
at their fair values at the acquisition date. On an acquisition-by-
acquisition basis, the Group recognizes any non-controlling interest
in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net assets.
Goodwill is measured as the excess of the aggregate of the
consideration transferred and the fair value of non-controlling
interest over the fair value of the identifiable assets acquired and
liabilities and contingent liabilities assumed. If the consideration is
lower than the fair value of the net assets acquired, the difference is
recognized in profit or loss.
Any contingent consideration is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the
contingent consideration is recognised in profit or loss in accordance
with IFRS 9 ‘Financial Instruments’. Contingent consideration that is
classified as equity is not remeasured and its subsequent settlement is
accounted for within equity.
Changes in ownership interests in subsidiaries without loss of control
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions that is,
as transactions with the owners in their capacity as owners. The
difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets is recorded
in equity.
Gains or losses on disposals to non-controlling interests are also
recorded in equity.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 40
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in
the entity is remeasured to its fair value, with the change in carrying
amount recognized in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In
addition, any amounts previously recognized in other comprehensive
income are reclassified to profit or loss.
1.4 Foreign currency
Items included in the financial statements of each of the Group’s
subsidiaries are measured using the currency of the primary economic
environment in which the entity operates (the “functional currency”).
The consolidated financial statements are presented in UK Sterling,
which is the currency in which the majority of the Group’s transactions
are denominated and the Company’s functional currency is also
UK Sterling.
Transactions in foreign currencies are translated into the respective
functional currencies using the exchange rates prevailing at the dates
of the transactions. When the Group pays or receives consideration
in advance, the date of the transaction is the date when the
consideration is realised.
Foreign exchange differences arising from the settlement or from the
translation at the reporting date of monetary assets and liabilities
denominated in foreign currencies are recognized in the profit or loss,
except when deferred in equity as qualifying cash flow hedges or
qualifying net investment hedges.
The financial statements of the Group’s subsidiaries (none of which
has the currency of a hyperinflationary economy) with a different
functional currency than the presentation currency are translated as
follows:
•
•
assets and liabilities are translated using the closing rate at the
date of the reporting date;
income and expenses for each statement presenting profit or loss
and other comprehensive income are translated on a monthly
basis at the average exchange rates of the month (unless the
average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the rate on the dates
of the transactions);
• equity items are translated at the historical rates; and
•
all resulting exchange differences are recognized in other
comprehensive income. When a foreign operation is partially
disposed of or sold, exchange differences that were recorded in
equity are recognized in profit or loss as part of the gain or loss
on sale.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the acquired
entity. They are recognized in the functional currency of the acquired
entity and translated to the presentation currency using the closing
rate.
1.5 Segment Reporting
The Group prepares its financial statements in accordance with IFRS.
The reporting entity operates in multiple business segments and
evaluates its performance and allocates resources based on these
segments. The Group has identified its operating segments based on
the criteria specified in IFRS 8 - Operating Segments. The primary
segments are determined based on the “management approach”
to segment reporting, which aligns with how the company’s Chief
Operating Decision Maker (CODM) makes decisions about allocating
resources and assessing performance.
The Board consider segmental reporting by (i) region, including
turnover, operating profit and non-current assets and (ii) business
activity, by turnover, to be appropriate. Business activity is best split
between (i) the strategic focus of the business, i.e. mobility solutions
and the resulting development services that emanate from that,
and (ii) non-core software solutions, including reselling third party
software and related development and support services.
1.6 Financial instruments
(i) Recognition and Initial measurement
Trade receivables and debt securities issued are initially recognised
when they are originated. All other financial assets and financial
liabilities are initially recognised when the Group becomes a party to
the contractual provisions of the instrument. A financial asset (unless
it is a trade receivable without a significant financing component) or
financial liability is initially measured at fair value plus, for an item
not at FVTPL, transaction costs that are directly attributable to its
acquisition or issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
(ii) Classification and subsequent measurement
The financial assets are classified as either:
•
those to be measured subsequently at fair value (either through
other comprehensive income or through profit of loss); or
•
those to be measured at amortised cost.
The classification is dependent on the business model adopted for
managing the financial assets and the contractual terms of the cash
flows expected to be derived from the assets. Financial assets are not
reclassified subsequent to their initial recognition unless the Group
changes its business model for managing financial assets, in which
case all affected financial assets are reclassified on the first day of
the first reporting period following the change in the business model.
Financial assets at amortised cost are financial assets with fixed
or determinable payments that are not quoted in an active market.
Such assets are recognised initially at fair value plus any directly
attributable transaction costs. On initial recognition of an equity
investment that is not held for trading, the Group may irrevocably
elect to present subsequent changes in the investment’s fair value in
OCI. This election is made on an investment-by-investment basis. All
financial assets not classified as measured at amortised cost or FVOCI
as described above are measured at FVTPL. On initial recognition,
the Group may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at
FVOCI as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
41
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
The Group’s financial assets comprised equity and debt instruments as
described below:
Investment in subsidiaries: Investment in subsidiaries, comprising
equity instruments and capital contributions, are recognised initially
at cost less any provision for impairments.
Loans to subsidiaries: Loans to subsidiaries, other than capital
contribution, are held for the collection of contractual cash flows and
are classified as being measured at amortised costs, net of provision
for impairment.
Trade and other receivables: Trade receivables represent amounts
due from customers arising from the sale of services in the ordinary
course of business. They are generally non-interest bearing and
are recorded at their nominal value less any provision for doubtful
debts. Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Trade
receivables are generally due for settlement within 30 days.
Trade receivables are recognised initially at the transaction price or
at fair value if they contain significant financing components. They are
subsequently measured at amortized cost using the effective interest
method as the Group’s objective and business model are to hold this
asset to collect the contractual cash flows.
Cash and cash equivalents: Cash and cash equivalents include cash
on hand and bank current accounts.
Trade and other payables: Trade and other payables are
recognised when the Company has received goods or services
from suppliers or has an obligation to make a payment for other
transactions. They are initially measured at their fair value, which is
usually the invoiced amount. Other payables include amounts owed to
creditors for non-trade transactions, such as taxes, utilities, rent, and
other operating expenses.
Trade and other payables are classified as current liabilities unless the
Company has an unconditional right to defer settlement for at least
twelve months after the reporting period.
Trade and other payables are settled in accordance with the agreed
terms and conditions. Payments are typically made by bank transfer.
Issued share capital and premium: Company’s ordinary shares.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the
proceeds and included in share premium.
Share options: Options are stated at their fair value, which is
estimated using a Black Scholes model where they are not issued as
part of a cash transaction. Other disclosures are discussed further in
note 18.
(iii) Offsetting
Financial assets and financial liabilities are offset and the net amount
presented in the statement of financial position when, and only when,
the Group currently has a legally enforceable right to set off the
amounts and it intends either to settle them on a net basis or to realise
the asset and settle the liability simultaneously.
(iv) Impairment of financial assets
The Group applies the IFRS 9 simplified approach to measure
expected credit losses which uses the lifetime expected credit loss
allowance for all trade receivables including trade receivables with
significant financing components and contract assets. The Group
exercises judgment in determining the expected credit loss allowance.
In this judgment, the Group identifies the default rate by analysing
historical experience with credit losses, considering it to represent a
reasonable approximation for future expected defaults, and applies
to current receivables. The Group also takes into consideration
forward-looking factors, including changes in the overall economic
environment or changes in regulation, and if material, reflects these in
the expected credit loss allowance.
Other receivables primarily represent prepayments and contract
costs according to IFRS 15. Contract costs expected to be recognized
in profit or loss after more than 12 months, are reported as non-
current assets. All other amounts are reported as current assets.
1.7 Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated as follows to write off the net cost of each
item of property, plant and equipment (excluding land) over their
expected useful lives:
Office and computer equipment
5 years straight line
PDA and smartphone equipment
3 years straight line
Fixtures and fittings
4 years reducing balance
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon
disposal or when there is no future economic benefit to the Company.
Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss. Any revaluation surplus reserve
relating to the item disposed of is transferred directly to retained
profits.
1.8 Intangible assets
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents
the excess of the consideration transferred and the amount of any
non-controlling interest in the acquiree over the fair value of the
identifiable assets acquired and liabilities and contingent liabilities
assumed. Goodwill on acquisitions of subsidiaries is included in
intangible assets.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 42
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
Goodwill is tested annually for impairment, or more frequently if
events or changes in circumstances indicate a potential impairment.
The carrying amount is allocated to the cash-generating unit
(CGU) that is expected to benefit from the synergies of the business
combination. The CGU to which the goodwill is allocated to
represents the lowest level at which the goodwill is monitored for
internal management purposes. The carrying value of the CGU is then
compared to the higher of its fair value less costs of disposal and its
value in use. Any impairment attributed to goodwill is recognized
immediately as an expense and is not subsequently reversed.
Internally-generated software development
The Group follows a strategy of investing a substantial part of its
revenue in research and development which is directed towards the
enhancement of its product platforms.
The costs associated with the development of new or substantially
improved products or modules are capitalized when the following
criteria are met:
•
•
•
•
technical feasibility to complete the development;
management intent and ability to complete the product and use or
sell it;
the likelihood of success is probable;
availability of technical and financial resources to complete the
development phase;
•
costs can be reliably measured; and
• probable future economic benefits can be demonstrated.
Directly attributable development costs that are capitalized include
employee costs and an appropriate portion of relevant overheads.
Directly attributable development costs previously recognized as
an expense are not recognized as an asset in a subsequent period.
Development expenditures that are not directly attributable are
recognized as an expense when incurred.
The Company assesses impairment of non-financial assets other than
goodwill and other indefinite life intangible assets at each reporting
date by evaluating conditions specific to the Company and to the
particular asset that may lead to impairment. If an impairment trigger
exists, the recoverable amount of the asset is determined. This
involves fair value less costs of disposal or value-in-use calculations,
which incorporate a number of key estimates and assumptions.
Incremental contracts costs
Sales commission that is directly attributable to the acquisition of a
customer contract is recognised as an intangible asset and amortised
over the life of the contract, as per IFRS15 guidance. To be eligible for
capitalization, the commission must be directly related to a contract,
is measurable and the Company expects to recover the costs. If there
is an indication that the carrying amount of the capitalised sales
commission may not be recoverable, an impairment test is performed.
If the carrying amount exceeds the recoverable amount, then an
impairment loss is recognised in the income statement.
Amortisation policy
Amortisation is calculated on a straight-line basis to write off the net
cost of each item of intangible asset over its expected useful life as
follows:
Enterprise Development Expenditure
Consumer Focused Development Expenditure
7 years straight line
5 years straight line
Website Development costs
Incremental contract costs
3 years straight line
3 years straight line
1.9 Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognized for the amount by
which the asset’s carrying amount exceeds its recoverable amount,
which is the higher of an asset’s fair value less costs to sell and value
in use. For the purpose of assessing impairment, assets are grouped
at the lowest level for which there are separately identifiable cash
flows. Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at
each reporting date.
1.10 Taxation
The tax expense for the period comprises current and deferred tax.
Current income tax and deferred income tax is recognized under IAS 12
‘Income Tax’ and IFRIC 23 ‘Uncertainty over income tax treatments’.
Tax is recognized in the profit or loss, except to the extent that it relates
to items recognized in Other comprehensive income or directly in
equity. In this case, the tax is also recognized in Other comprehensive
income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the reporting date in the countries
where the Group’s subsidiaries and associates operate and generate
taxable income. Management periodically evaluates positions taken or
expected to be taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation or uncertainty. It
establishes provisions for uncertain tax positions where appropriate on
the basis of amounts expected to be paid to the tax authorities, taking
into account any discussions with these authorities.
Deferred tax is recognised using the liability method on temporary
differences arising between the tax bases of assets and liabilities
and their carrying amounts in the Group’s financial statements.
However, the deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or
substantively enacted by the reporting date and are expected to apply
when the related deferred income tax asset is realized or the deferred
income tax liability is settled.
43
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
Deferred income tax assets are recognised to the extent that it is
probable that future taxable profit will be available against which
the temporary differences can be utilised. As future profitability is
uncertain, no deferred tax asset has been recognised in relation to
historic losses as at the year end.
Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except where the timing of
the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income taxes assets and liabilities
relate to income taxes levied by the same taxation authority on either
the taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
1.11 Leases
Identification of a lease
The Group assesses whether a contract is or contains a lease based on
the definition of a lease under IFRS 16. Under IFRS 16, a contract is, or
contains, a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration.
To apply this definition the Group assesses whether the contract
meets these evaluations:
•
•
•
the contract contains an identified asset that is either explicitly
specified or implicitly specified at the time that the asset is made
available for use by the Group;
the Group has the right to obtain substantially all of the economic
benefits from use of the identified asset throughout the period of
use; and
the Group has the right to direct the use of the identified asset
throughout the period of use or the Group has the right to
operate the asset throughout the period of use, without the
supplier having the right to change those operating instructions.
The Group has elected not to separate the non-lease components of
the finance lease.
Recognition and measurement of a lease including right of use
assets and lease liabilities
At the lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the balance sheet. Assets and liabilities
arising from a lease are initially measured on a present value basis.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount
rate determined by reference to the rate inherent in the lease unless
this is not readily determinable, in which case the Group uses the
incremental borrowing rate which consists of the risk-free rate of
currency of the lease plus the premium arising from the Group’s credit
risk. Lease payments included in the measurement comprise of fixed
payments, variable lease payments that depend on an index or a rate
and amounts to be paid under a residual value guarantee (if any).
The right-of-use asset is initially measured at cost, which is made
up of the initial measurement of the lease liability, any initial direct
costs incurred by the Group, an estimate of any costs to restore the
asset to the condition required at the end of the lease and any lease
payments made in advance of the lease commencement date (net of
any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis
over the lease term. The lease term determined at the commencement
of lease represents the non-cancellable period of a lease and
includes the period covered by an option to extend or option to
terminate, where exercising such option is reasonably certain.
1.12 Employee share-based payments
The Group operates an equity-settled option plan that provides
eligible employees with the opportunity to acquire shares of the
Company’s common stock. The plan aims to incentivise and retain key
employees, align their interests with those of shareholders, and foster
long-term commitment and performance.
The fair value of the options granted was determined using the Black-
Scholes model, taking into consideration the exercise price, expected
volatility of the Company’s stock, expected term, risk-free interest
rate, and expected dividends.
The expense associated with the equity-settled options is recognized
over the vesting period, with a corresponding increase in equity.
The tax implications of the equity-settled options are accounted for
in accordance with applicable tax laws and regulations. The Group
recognizes any tax benefits or obligations arising from the exercise
or lapse of options in the income tax expense or deferred tax assets/
liabilities in the financial statements.
The fair value of the equity-settled options granted is disclosed in the
notes to the financial statements, providing transparency regarding
the valuation methodology and assumptions used in the determination.
The Group will continue to monitor and evaluate the impact of
the equity-settled option plan and its financial implications. Any
significant changes or developments in the plan will be disclosed in
subsequent financial statements.
1.13 Employee benefits
The Group operates a defined contribution plan.
Defined contribution plan is a scheme under which the Group pays
fixed contributions into a separate entity. The Group has no legal or
constructive obligations to pay further contributions if the fund does
not hold sufficient assets to pay the benefits relating to the employee’s
service in the current and prior periods. The relevant contributions
are recognized as personnel costs when they are due. On realization
of the liability, the Group has no further payment obligations. Prepaid
contributions are recognized as an asset to the extent that a cash
refund or a reduction in the future payments is available.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 44
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
1.14 Revenue recognition
The Group derives revenue from the following key sources:
Recurring subscription revenue related to software licenses
Software license revenue includes software sold on a subscription
basis (“SaaS”) and some one-off development work.
Subscription revenue represents all fees earned from granting
customers a right-to-use license of the Group’s software billed on a
subscription basis over the contract term.
Revenue is recognised when the performance obligation has
been rendered which is when a customer purchases a right-to-use
mpro5 software license. The service provide also includes ongoing
maintenance for the use of software at a fixed term which may vary
depending on the facts and circumstances. The revenue is recognised
over time and is usually invoiced on a monthly basis. The associated
consideration payable to Crimson Tide (consisting of the license fee
and maintenance combined), are usually settled on a monthly basis. In
instances of software license renewals with existing customers where
the licensed software is consistent with that initially purchased and
delivered to the customer, license revenue is recognized over time
when the renewal is signed, and an enforceable contract deemed to
exist.
One-off revenue
This relates to one off development work to enhance or modify the
customer’s mpro5 core product. It is billed in advance on a per day
basis however it is recognised at a point in time, when the work is
delivered, as typically the projects are of a short-term nature.
Incremental costs of obtaining customer contracts
Incremental costs to obtain a contract are made up of sales commissions
earned by the Group’s sales teams which can be directly linked to an
individual sale, relating to SaaS contracts. The asset is included within
“Intangible Assets” in the statement of financial position.
The asset is amortized over the life of the contract committed for by
the customer on a straight-line basis. The asset is also periodically
reviewed for impairment.
Deferred revenue
Deferred revenue (referred to as “contract liabilities” as per IFRS 15)
represents prepayments from customers for wholly-unsatisfied or
partially-satisfied performance obligations mainly in relation to
annual in advanced billing on SaaS contracts.
1.15 Earnings per share
Basic earnings per share is calculated by dividing the profit or loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share is determined by dividing the profit or loss
attributable to equity holders of the Company, adjusted for the effect
that would result from the conversion of dilutive ordinary shares, by
the weighted average number of ordinary shares plus the weighted
average of number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares.
1.16 Current and non-current classification
Assets and liabilities are presented in the statement of financial
position based on current and non-current classification.
An asset is classified as current when: it is either expected to be
realised or intended to be sold or consumed in the Company’s normal
operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period;
or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be
settled in the Company’s normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within 12 months after
the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-
current.
2. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and based on
historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The resulting accounting estimates may differ from actual results. The
estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
Impairment of goodwill
The Group tests annually whether goodwill has suffered any
impairment in accordance with Group accounting policy. The
recoverable amounts of cash-generating units have been determined
based on value-in-use calculations. These calculations require the use
of estimates (see note 8).
If future sales and size of market opportunities are significantly lower
than management’s estimates, the carrying value of goodwill may
need to be reduced accordingly. However, unless any downturn is
particularly severe and pervasive, it is unlikely to have a material
impact on the carrying value of goodwill.
Internally-generated software impairment
The Group is required to make an assessment for each ongoing
project in order to determine the stage a project meets the criteria
outlined in the Group’s accounting policies. Such an assessment may,
in certain circumstances, require significant judgment. In making this
judgment, the Group evaluates, amongst other factors, the stage at
which technical feasibility has been achieved, management’s intention
to complete and use or sell the product, likelihood of success,
availability of technical and financial resources to complete the
development phase and management’s ability to reliably measure the
expenditure attributable to the project.
See note 8 for further details regarding the key assumptions made.
45
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
3. Revenue
The Group has three regional centres of operation; in the UK, Ireland and the US but the Group’s resources, including capital, human and
non-current assets are utilised across the Group irrespective of where they are based or originate from. The Board via the management team,
allocate these resources based on revenue generation, which due to its high margin nature and the Group’s reasonably fixed overheads, in turn
drives profitability and cashflow generation. The Board consider it most meaningful to monitor financial results and KPIs for the consolidated
Group, and decisions are made by the Board accordingly.
The analysis of each as follows:
Revenue by business activity
Recurring mobility solutions and related development
Software development & support
Revenue can be further analysed by geographic region as follows:
2023
£000
5,612
543
6,155
Geographical regions
UK
Ireland
US
Total
Turnover
(Loss)/Profit after tax
Non-current assets
2023
£000
5,636
424
95
6,155
2022
£000
4,891
442
18
5,351
2023
£000
(203)
255
(357)
(305)
2022
£000
(1,089)
73
(227)
(1,243)
2023
£000
5,238
–
10
5,248
The group generated 37% of its revenue from its top 3 customers (2022: 35%).
4. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Plant and equipment
Buildings right-of-use assets
Total depreciation
Amortisation
Development software
Development software - impairment
Incremental contract costs
Total amortisation
Research & Development
Development software
Finance costs
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Auditors remuneration for:
Audit services
Auditing of accounts of associates of the Company
Other services supplied pursuant to such legislation
2023
£000
74
206
280
558
–
200
758
62
52
52
50
–
–
2022
£000
4,854
497
5,351
2022
£000
4,776
–
4
4,780
2022
£000
149
112
261
505
264
185
954
62
54
54
45
–
–
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 46
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
5. Employees
Staff costs (including executive Directors) were as follows:
Wages and salaries
Non-executive Directors’ fees
Compulsory social security contributions
Pension costs
Directors emoluments included in the above:
Wages and salaries
Non-executive Directors’ fees
Compulsory social security contributions
Pension costs
A detailed breakdown of the remuneration of the Directors is shown in the Directors Report.
Average monthly staff numbers in the period were as follows:
Sales and marketing
Technical and operations
Management, finance, and administration
2023
£000
3,381
50
422
204
4,057
2023
£000
771
50
106
89
1,016
2023
No.
4
29
9
42
2022
£000
3,099
33
374
244
3,750
2022
£000
775
33
89
107
1,004
2022
No.
10
23
8
41
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
6. Income tax expense
Analysis of tax credit/(charge) for the year
Total current taxation
Total deferred taxation
Tax credit/(charge)
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25%/20%
Effects of:
Expenses not deductible for taxation purposes
Effect of deferred tax assets not recognised
R&D tax rebate
Corporation tax Ireland
Income tax rebate
2023
£000
383
–
383
2023
£000
(688)
(172)
14
145
407
(11)
383
47
2022
£000
445
–
445
2022
£000
(1,688)
(338)
201
137
445
–
445
The Group has an unrecognised deferred tax asset relating to carried forward taxable losses of approximately £410,000 (2022: £287,000).
A deferred tax asset has not been recognised in relation to these losses as the Group is expecting to be profitable although the timing is uncertain.
7. (Loss)/Earnings per share
The calculation of basic (loss)/earnings 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 diluted (loss)/earnings per share is based on profit 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.
Reconciliation of the weighted average number of shares used in the calculations are set out below:
Basic earnings per share
Reported (loss)/profit (£000)
Reported basic earnings per share (pence)
Reported diluted earnings per share (pence)
Weighted average number of ordinary shares
Opening balance
Weighted average number of ordinary shares for basic EPS
Effect of options outstanding
Weighted average number of ordinary shares for diluted EPS
2023
£
(305)
(4.64)
(4.64)
2023
No.
6,574,863
6,574,863
–
6,574,863
2022
£
(1,243)
(18.91)
(18.91)
2022
No.
6,574,863
6,574,863
–
6,574,863
On 31 October 2023 the Company completed a 100:1 share consolidation exercise. Basic and diluted EPS were retrospectively adjusted in
accordance with the requirements of IAS 33 to achieve comparability.
At 31 December 2023 there were 131,000 (2022: 243,000) share options outstanding. These share options were not included in the calculation of
diluted earnings per share because they are antidilutive in terms of IAS 33.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 48
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
8. Intangible assets
Group
Cost
At 1 January 2022
Additions
At 31 December 2022
At 1 January 2023
Additions
At 31 December 2023
Amortisation and Impairment
At 1 January 2022
Charge for year
Impairment loss
At 31 December 2022
At 1 January 2023
Charge for year
Impairment loss
At 31 December 2023
Carrying amount at 31 December 2022
Carrying amount at 31 December 2023
Cost
Less impairment
Carrying amount
Enterprise
Development
Expenditure
£000
Consumer
Focused
Development
Expenditure
£000
Website
Development
Costs
£000
Incremental
Contract Costs
£000
Goodwill
Restated*
£000
2,937
721
3,658
3,658
1,163
4,821
(1,197)
(432)
(264)
(1,893)
(1,893)
(411)
–
(2,304)
1,765
2,516
479
545
1,024
1,024
-
1,024
–
(47)
–
(47)
(47)
(146)
–
(193)
977
831
18
73
91
91
12
103
–
(26)
–
(26)
(26)
(31)
–
(57)
65
46
742
145
887
887
211
1,098
(496)
(185)
–
(681)
(681)
(169)
–
(847)
206
248
989
–
989
989
–
989
(190)
–
–
(190)
(190)
–
–
(190)
799
799
Crimson Tide (IE) Ltd
(Healthcare)
£000
Crimson Tide mpro Ltd
(Mobile sols.)
£000
400
–
400
280
–
280
Callog Ltd
(Telecoms)
£000
309
(190)
119
Total
£000
5,165
1,484
6,649
6,649
1,386
8,035
(1,883)
(690)
(264)
(2,837)
(2,837)
(758)
–
(3,595)
3,812
4,440
Total
£000
989
(190)
799
Included within the intangible assets additions figure of £1.39m is £0.72m of internally generated intangibles (2022: £0.64m).
The recoverable amount of the CGU is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections
based on the most recent financial budget and plan approved by the management covering a three-year period and then inflated over a
perpetual period using the estimated growth rate assigned to the countries where the cash-generating unit operates.
As Crimson Tide is entirely equity funded, we have used the CAPM model to determine a suitable Cost of Equity of 9.52%, a growth rate of 1.2%,
which is equal to the five year average of the 10 year Govt bond yield, and terminal value for outer years. Budgeted cash flow projections are
determined based on the expectation of future client signings of the Group’s current pipeline. Budgeted gross margin is in line with our history
and takes into consideration market developments and efficiency leverage. The Group is well positioned for growth in future years. Management
believes that any reasonable change in any of the key assumptions described above on which the recoverable amount is based would not cause
the reported carrying amount to exceed the recoverable amount of the cash-generating unit. The discount rate represents the Group’s Weighted
Average Cost of Capital adjusted for tax effect to determine the pre-tax rate as required by IFRS the Group has significant recurring cashflows with
subscription-based income representing nearly 90% of the total, an average customer length of three years and low churn. The cost base relates
primarily to employee costs and the Group has the ability to flex appropriately to manage cash flows. Management operates an impairment model
and runs various sensitivities around revenue and cost of capital to determine impairment risk. Based off a prudent forecast CAGR revenue would
need to reduce from 17% to 6%, maintaining the same cost base, for impairment. The cost of capital would need to increase by more than 100%
for impairment.
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
9. Property, plant, and equipment
Group Fixed Assets
Cost
At 1 January 2022
Additions
Disposals/Scrapped
At 31 December 2022
Depreciation
At 1 January 2022
Depreciation charge
Elimination on disposal
At 31 December 2022
Carrying amount at 31 December 2022
Cost
At 1 January 2023
Additions
Disposals/Scrapped
At 31 December 2023
Depreciation
At 1 January 2023
Depreciation charge
Elimination on disposal
At 31 December 2023
Carrying amount at 31 December 2023
10. Right-of-use assets
Group
At 1 January 2023
Land and buildings - right-of-use addition
Less: depreciation
At 31 December 2023
Office and computer
equipment
£000
PDA and smartphone
equipment
£000
Fixtures
and fittings
£000
178
86
–
264
(103)
(32)
–
(135)
129
264
38
–
302
(135)
(38)
–
(173)
129
610
–
–
610
(525)
(85)
–
(610)
–
610
–
–
610
(610)
–
–
(610)
–
68
160
–
228
(61)
(32)
–
(93)
135
228
9
–
237
(93)
(36)
–
(129)
108
2023
£000
703
74
(206)
571
49
Total
£000
856
246
–
1,102
(689)
(149)
–
(838)
264
1,102
47
–
1,149
(838)
(74)
–
(912)
237
2022
£000
36
835
(168)
703
The Group leases land and buildings for its offices, the current agreement for which began on 18th February 2022 and will cease on 24th December
2031. It is likely that the break clause in December 2026 will be exercised, therefore the asset value has been calculated on this basis. As permitted
under IFRS16, the Group has chosen to combine the service charge and lease rental components. The asset attracts a depreciation charge of £0.51m
per quarter. See note 15 regarding the corresponding lease liability.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 50
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
11. Deferred tax
Group
Movements:
Opening balance
Credited to profit or loss
Closing balance
12. Trade and other receivables
Group
Trade receivables
Prepayments and accrued income
2023
£000
–
–
–
2023
£000
849
333
1,182
2022
£000
–
–
–
2022
£000
1,209
437
1,646
The average credit period to customers is typically 30 days. No interest is charged on outstanding trade receivables. The Company does not
hold any collateral. The carrying amount of trade and other receivables approximates the fair value.
As there is no significant increase in credit losses in the year, the loss allowance is remeasured to the 12 month expected credit loss as at the
year-end date.
As at 31 December 2023, trade receivables of £108,315 (2022: £222,881) were impaired and fully provided for. The ageing of trade receivables
not impaired are as follows:
Age analysis of trade receivables
Age from invoice date
< 30 days
30 – 60 days
60 – 90 days
> 90 days
Movement of the Group provision for impairment of trade receivables are as follows:
Opening balance
Receivables collected in year previously provided for
Receivables written off during the year as uncollectable
Provision for receivables impairment for the year
Company
Amounts recoverable from Group undertakings
Other receivables
Prepayments and accrued income
2023
£000
785
3
82
87
957
2023
£000
223
(98)
(129)
112
108
2023
£000
4,110
–
1
4,111
2022
£000
842
90
31
469
1,432
2022
£000
81
–
(51)
193
223
2022
£000
3,734
–
4
3,738
51
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
13. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits held by Group companies. The carrying amount of these assets
approximate their fair value.
14. Trade and other payables
Group
Trade payables
PAYE and social security
VAT
Accruals and deferred income
Company
Trade payables
Accruals
15. Lease liabilities
Group
At 1 January 2022
New leases entered into during the year
Increase in service charge
Disposals
Payments made during the year
At 1 January 2023
New leases entered into during the year
Increase in service charge
Disposals
Payments made during the year
At 31 December 2023
Group
Maturity analysis:
Year 1
Years 2 – 5
After five years
Lease liability
2023
£000
526
101
149
738
1,514
2023
£000
7
52
59
2023
£000
199
468
–
667
2022
£000
542
97
121
700
1,460
2022
£000
1
27
28
Property
£000
98
779
–
–
(100)
777
–
74
–
(184)
667
2022
£000
170
607
–
777
The above relates materially to the land and buildings lease. The Company utilises an interest rate of 6.5%, defined in the lease as 3% over the
prevailing Barclays Bank base rate. Interest is calculated on a quarterly basis, with the annual charge for 2023 amounting to £51,716. Total cash
outflow for the lease to date £284k, being the quarterly rent and service charge payments. See note 10 regarding the corresponding right of use
asset. During the year, expenses totaling £54,335 were recognised in relation to short term/ low value leases not accounted for under IFRS 16
as permitted.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS
52
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
16. Share capital
Authorised
Ordinary shares of 0.1p each
Ordinary shares of 10p each
Issued, called up
Ordinary shares - fully paid
2023
Shares
–
7,119,508
2023
Shares
6,574,863
2022
Shares
711,950,842
–
2022
Shares
657,486,234
2023
£’000
–
712
2023
£’000
657
2022
£’000
712
–
2022
£’000
657
On 31 October 2023 the members passed a resolution to consolidate the Company’s ordinary shares at a conversion ratio of 100:1.
Share options
The Company has granted equity-settled options to some of the Directors and employees under the Company’s Enterprise Management Incentive
Scheme (EMI Scheme). The share options may not be exercised for three years from date of issue and thereafter, only if the target share price is
achieved.
At 31 December 2023 the following options were outstanding in respect of ordinary shares.
75,000
56,000
2022
£’000
51
Date of grant
Issued under EMI scheme
22 December 2020
2 July 2022
Expiry
date
Number
issued
Expired/
cancelled Consolidation*
Outstanding at
31 December
2023
22 December 2030
16,700,000
(9,200,000)
(7,425,000)
2 July 2032
7,600,000
(2,000,000)
(5,544,000)
*On 31 October 2023 the members passed a resolution to consolidate the Company’s ordinary shares at a conversion ratio of 100:1.
Expense charged to the income statement
The total expense recognised for the year arising from equity compensation plans was as follows:
Equity-settled expense
2023
£’000
22
Fair value of options and awards granted
The weighted average fair values of options granted, estimated by using the Black Scholes Option pricing model, were £0.008 (2020 issue: £0.007).
Share options
The fair value of the options was estimated on the date of grant being issued in 2020 and in 2022. Assumptions are based on the following
assumptions:
Share price
Exercise price
Expected volatility
Expected life
Risk-free interest rate
2022
£2.30
£2.21
30%
3 and 5 years
0.296%
2020
£3.40
£3.35
30%
3 years
0.296%
The expected volatility is measured as the standard deviation of continuously compounded share returns based on statistical analysis. The risk-
free interest rate was based on the yields available on UK government bonds as at the date of grant. The bonds chosen were those with a similar
remaining term to the expected life of the options. The comparative assumptions have been updated to reflect the 100:1 share consolidation
exercise during the year.
53
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
17. Reserves
Group
Balance as at 1 January 2022
Loss after income tax expense for the year
Share options expense
Translation movement
Balance as at 31 December 2022
Loss after income tax expense for the year
Share options cancelled
Share options expense
Translation movement
Balance as at 31 December 2023
Share premium
£000
5,590
–
–
–
5,590
–
–
–
–
5,590
Other reserves
£000
481
–
51
(39)
493
–
(69)
22
(19)
427
Reverse acquisition
reserve
£000
(5,244)
–
–
–
(5,244)
–
–
–
–
(5,244)
Retained earnings
£000
7,553
(1,243)
–
–
6,310
(305)
69
–
–
6,074
Share Premium – represents the amount received by the Company in excess of the nominal value of its shares. It arises when shares are
issued at a price higher than their nominal or face value. The share premium reserve is a component of the Company’s shareholders’ equity and
represents the additional value contributed by shareholders mostly due to the April 2021 equity fund raise.
Other reserves – relates to foreign currency translation reserves representing the cumulative gains or losses arising from the translation of
financial statements of foreign subsidiaries or branches into the presentation currency of the reporting entity. These reserves reflect the impact
of changes in exchange rates on the financial statements and are recognized in other comprehensive income (OCI).
Reverse acquisition reserve – represents transaction relating to the reversal into an AIM listed vehicle in 2006.
Retained earnings – represent the accumulated profits or losses of the Company that have not been distributed as dividends to shareholders.
They reflect the net earnings generated by the Company since its inception, adjusted for dividends paid and any transfers to other reserves.
Company
Balance as at 1 January 2022
Loss after income tax expense for the year
Share option expense
Balance as at 31 December 2022
Loss after income tax expense for the year
Share options cancelled
Share option expense
Balance as at 31 December 2023
Share premium
£000
Other reserves
£000
Retained earnings
£000
5,590
–
–
5,590
–
–
–
5,590
348
–
51
399
–
(69)
22
352
3,170
(268)
–
2,902
(296)
69
–
2,675
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 54
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
18. Investments
The Company is the holding company of the Group. The following table shows details of the Company’s subsidiary undertakings at 31 December
2023. Each of these companies is wholly owned by Crimson Tide plc, the issued share capital of each is fully paid and each is included in the
consolidated accounts of the Group:
Name of Company
Owned directly by Crimson Tide plc
Crimson Tide mpro Limited
Crimson Tide Services Limited
A. Cohen & Co. (GB) Limited
Crimson Tide (IE) Limited
Owned by Crimson Tide (IE) Limited
mpro5 Inc
Owned by Crimson Tide mpro Limited
Moneymotive Limited (100%)
Owned by Moneymotive Limited
Callog Limited (100%)
Company
Shares in subsidiary undertakings - at cost
Less: Impairment
Activity
Mobile data solutions
Mobile data solutions
Non-trading
Country of incorporation or
registration and operations
England and Wales (*)
England and Wales (*)
England and Wales (*)
Mobile data solutions
Ireland (**)
Mobile data solutions
Delaware, USA(***)
Non-trading
England and Wales (*)
Telecoms Software
England and Wales (*)
2023
£000
5,297
(1,929)
3,368
2022
£000
5,297
(1,929)
3,368
(*)
Located at Brockbourne House, 77 Mount Ephraim, Tunbridge Wells TN4 8BS, UK
(**) Located at 3013 Lake Drive Citywest Campus Dublin 24
(***) Located at 16 W. Martin Street, Suite 1003, Raleigh, NC 27601
19. Financial instruments
Financial risk management objectives
The Group uses a limited number of financial instruments, comprising cash, short-term deposits, finance leases, loans and bank overdrafts to fund
the Group’s operations. The Group has other financial instruments such as trade receivables and payables, that arise directly from operations.
The Group does not trade in financial instruments.
Trade and other short-term debtors/creditors have been excluded from the following disclosures:
Group
Financial assets
Cash at bank and in hand
Financial liabilities
Secured loans
Finance leases
2023
£000
3,255
–
667
2022
£000
3,618
–
777
Exposure to currency, credit, liquidity and interest rate risk arise in the normal course of the Group’s business. The Directors review and agree
policies for managing each of these risks to minimise potential adverse effects on the Group’s financial performance. Sensitivity analysis indicates
none are likely to have a material impact on the profitability or net assets of the Group.
Foreign currency risk
The Company undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange
rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a
currency that is not the entity’s functional currency.
55
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2023
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company
has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The Company
obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial
assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements. The Company does not hold any collateral.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to
engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year.
The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses the lifetime expected credit loss allowance for
all trade receivables including trade receivables with significant financing components and contract assets. The Group exercises judgment in
determining the expected credit loss allowance. In this judgment, the Group identifies the default rate by analysing historical experience with credit
losses, considering it to represent a reasonable approximation for future expected defaults, and applies to current receivables. The Group also
takes into consideration forward-looking factors, including changes in the overall economic environment or changes in regulation, and if material,
reflects these in the expected credit loss allowance. The provision for doubtful debts is £0.18m (2022: £0.22m).
Liquidity risk
Vigilant liquidity risk management requires the Company to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The Company manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual
and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
The Group had £3.26m of cash at year end (2022: £3.62m)
Interest rate risk
The Group’s policy is to minimise interest rate risk by regularly reviewing and agreeing actions to limit the Group’s exposure to adverse
movements in interest rates and fixing interest rates where possible.
Fair value risk factors
The net fair value of intangible assets approximate to their carrying value as disclosed in Note 8 is regularly assessed. The aggregate net fair
values and carrying amounts of all other assets and liabilities, including financial assets and financial liabilities, are disclosed in the Statement of
Financial Position and the Notes.
Operational risk factors
The Board considers the key operating risk to be insufficient working capital to fund the planned growth in subscriber numbers. Funding is
regularly assessed against forecasts and expected growth rates and managed accordingly to minimise this risk.
20. Related party transactions
The interests of the Directors in shares and share options and remuneration are shown in the Directors Report.
Other than the above, no transactions with related parties were undertaken such as are required to be disclosed under International Accounting
Standard 24.
21. Subsequent Events
On 17 April 2024, PDJ Meyers joined the Board as Chief Executive Officer, JR Joyce joined as a Non-Executive Director and J Daniell assumed a
new role on the Board as Non-Executive Deputy Chair.
On 22 May 2024, S Brewer retired from the Board as Non-Executive Director.
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 56
Company Statement of Financial Position
AT 31 DECEMBER 2023
Assets
Non-current assets
Investments
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share premium
Other reserves
Retained profits
Total equity
Note
18
12
13
14
16
17
17
17
2023
£000
3,368
3,368
4,111
1,854
5,965
9,333
59
59
59
9,274
657
5,590
352
2,675
9,274
2022
£000
3,368
3,368
3,738
2,470
6,208
9,576
28
28
28
9,548
657
5,590
399
2,902
9,548
As permitted by Section 408 of the Companies Act, the profit and loss account of the Parent Company is not presented as part of these accounts. The Parent Company’s
loss for the financial year amounted to £296,718 (2022 loss: £268,255).
The financial statements were approved by the board of Directors on 31 May 2024 and signed on its behalf by:
BRJ Whipp
Director
JK Daniell
Director
Company Registration Number 00113845
Company Statement of Changes in Equity
AT 31 DECEMBER 2023
Issued
capital
£000
Share
premium
£000
Reserves
£000
Retained
earnings
£000
Company
Balance at 1 January 2022
Share option expense
Loss after income tax expense for the year
Balance at 31 December 2022
Loss after income tax expense for the year
Share options cancelled
Share options expense
657
–
–
657
–
–
–
5,590
–
–
5,590
–
–
–
Balance at 31 December 2023
657
5,590
348
51
–
399
–
(69)
22
352
3,170
–
(268)
2,902
(296)
69
–
2,675
9,274
57
Total
equity
£000
9,765
51
(268)
9,548
(296)
–
22
CRIMSON TIDE PLC | ANNUAL REPORT & ACCOUNTS 2023 | FINANCIAL STATEMENTS 58
Company Statement of Cash Flows
AT 31 DECEMBER 2023
Note
Loss before taxation
Adjustments for:
Share option expense
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash from operating activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
13
2023
£000
(296)
22
(373)
31
(616)
(616)
2,470
1,854
2022
£000
(268)
51
(1,933)
(13)
(2,163)
(2,163)
4,633
2,470
Officers and Professional Advisors
Board of Directors
BRJ Whipp (Chairman)
JK Daniell
SR Mullen
JR Morris
S Brewer
LA Jeffrey
Secretary
SR Mullen
Registered office
Brockbourne House
77 Mount Ephraim
Tunbridge Wells
Kent TN4 8BS
Registered number
00113845
Bankers
Auditors
Nominated Adviser
and Broker
Solicitors
NatWest Bank
19 Mount Ephraim
Tunbridge Wells
Kent TN1 1EN
PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
United Kingdom
Cavendish Capital Markets
1 Bartholomew Cl
London
EC1A 7BL
DMH Stallard LLP
135 High Street
Crawley
RH10 1DQ
Website
www.crimsontide.co.uk
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www.crimsontide.co.uk