Crimson Tide shares plummeted on Monday as the firm reported increased revenue and inched closer to profitability in its latest half year, but alongside operational setbacks.

The stock was down 17% at 1.82 pence on Monday morning in London.

Crimson Tide, a Kent-based software developer, said revenue for the first half of 2023 increased 31% to £3.0 million from £2.3 million in 2022. Pretax loss narrowed to £471,000 from £860,000.

The firm said its loss was in line with expectations and due to amortisation, which rose 23% to £371,000 from increased investment in its software platform.

Cost of sales meanwhile increased 33% to £477,000 and operating expenses increased 6.0% to £2.5 million.

It reported earnings before interest, tax, depreciation and amortisation of £106,000, returning to Ebitda profitability after a £344,000 loss the year before. Cash at June 30 was £2.9 million, down from £3.7 million at the same time one year prior.

Crimson Tide said its mpro5 business to business software’s ‘Saturn release’ is ready for delivery to its largest clients, with further rollouts expected in the current half year.

However, Chair Barrie Whipp said that due to ‘the focus on mpro5 and its strong growth,’ Crimson Tide has de-prioritised development and marketing of its Beepro business to consumer app.

‘We will target a new B2C focused app, incorporating our other individual user apps at a later date, however we have prudently removed Beepro figures from our forecasts for the time being,’ he said.

Chief Executive Officer Jacqueline Daniell added that ‘there has been some natural churn of smaller historic contracts where businesses have been unable to grow.’

However, she added: ‘The successful development of the partner ecosystem, initiated in the US and now being implemented throughout the organisation will mean revenue can continue to grow.’

Overall, Whipp said the period ‘has demonstrated very good progress,’ and that Crimson Tide expects around 20% revenue growth in the second half, with the decreased rate caused by an enterprise customer going into administration.

He continued: ‘Our pipeline is strong...and with a strengthened management team, we look forward to the future with confidence.’

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