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AIM-listed process management app supplier Crimson Tide's H2 2024 results, reveal a company looking to stabilise after significant corporate upheaval, with management focused on cost control amid revenue headwinds. The £1m pre-tax loss was largely driven by £495k in exceptional costs from the aborted M&A activity, masking underlying operational performance.
Revenue declined -3% YoY to £5.97m, primarily due to COVID-era contract churn and extended sales cycles during the disruption period. However, the company's high-margin model remains intact with gross margins at 87%, supported by £5.24m in annual recurring revenue providing a stable foundation.
Management's strategic reset appears to be moving in the right direction, with ‘right-sizing’ initiatives delivering £1m in annualised savings. The generational software upgrades (Saturn mobile client and Odyssey web platform) should help position the company competitively, with better automation capabilities targeting further margin expansion towards 90%.
A five-year Elizabeth Line contract demonstrates mpro5's (the firm’s app) enterprise appeal, while the shift to April year-end provides better visibility into seasonality patterns. With £2.1m cash and a streamlined cost base, Crimson Tide appears better positioned for a return to profitability, though delivery of the sales pipeline will be key.
Post year end management changes should also help provide stability for the next phase, with the company's SaaS fundamentals offering opportunities for growth if and when revenue momentum resumes.
Posted by: Marc Hardwick at 08:46
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