- Interim Results

On 28 November, Crimsonwing plc published its interim results covering the six months ended 30 September 2013 revealing record revenues, earnings before interest, tax, depreciation and amortisation (EBITDA) as well as profitability.

Performance Overview

During the six months ended 30 September, the Crimsonwing Group reported good sales progress with revenues reaching a new all-time high for the fourth consecutive interim period. In fact, turnover grew by 13.7% to €9.86 million reflecting the consistent organic growth across all the business units. The interim report explained that the growth in revenue is due to the Group’s ability to bid for larger projects as well as its growing international dimension. In this respect, the Directors noted that the Group has been recently awarded the second eCommerce global rollout for a global consumer brand which involves eCommerce implementations across more than 50 markets and in over 20 languages. Work on this project will extent to the end of 2014 and beyond. The Directors also explained that the Group is not overly dependent on new client additions as new projects may be generated from its existing and growing client base.

Given the investment required to support the growth in business activity including the recruitment of new employees, direct costs and administrative expenses increase by 11.4% to €8.7 million. Nonetheless, EBITDA still climbed 34.1% higher to €1.16 million with the EBITDA margin similarly improving to 11.7% compared to 9.9% in the previous comparable period.

After accounting for net finance costs of €0.05 million, the Group’s pre-tax profit amounted to €0.77 million representing a 40% increase over the profitability registered in the six months ended 30 September 2012. Similarly, the pre-tax profit margin improved from 6.3% in the comparable period to 7.8% during the period under review.

The Group incurred an income tax expense of €0.31 million which was partially offset by a tax refund of €0.15 million for a total tax charge of €0.16 million leading to a net profit of €0.6 million, up 28.1% from the previous comparable period.

The Statement of financial position shows a 12.7% increase in total assets to €9.44 million compared to the 31 March 2013 figure largely due to the 30% increase in trade receivables to €4.9 million in view of the growing business activity. On the other hand, liabilities also increased by 9.1% during the six months under review to €5.4 million mainly due to the 58.8% increase in bank borrowings to €1.54 million. Total shareholders’ funds improved by 17.9% to just over €4 million reflecting the profit generated during the period under review. This translates into a net asset value per share of €0.138 (March 2013: €0.117).

The Interim report also provides an overview of the performance of each business unit of the Crimsonwing Group during the period under review as detailed below:

Crimsonwing Malta 

The period under review was characterised by a very busy and productive period for the solution centre in Malta including growth in the local business. Revenues grew by 21.6% to €3.9 million but EBITDA eased by 4.3% to €0.29 million as the costs incurred in the run-up to the envisaged growth in business activity offset the increase in revenue. Nonetheless, the Directors expect the benefits to start accruing as from the second half of the current financial year ending 31 March 2014.

Crimsonwing NL (VDA & Promentum)

The turnaround in the VDA business continued during the period under review with revenues rising by 48.5% to €1.1 million reflecting renewed activity from existing clients as well as some new significant projects in eCommerce. This resulted in a significant improvement in EBITDA to €0.23 million compared to an almost break-even position in the previous comparable period.

Revenues at Promentum remained flat at around €3.1 million but EBITDA still improved by 88.4% to €0.37 million on the back of higher margin business.

Crimsonwing UK

The UK unit registered some significant client additions in the period under review in addition to requests from existing clients. Most notably, this unit completed the core global platform for Mothercare whilst winning a second eCommerce global rollout as well as being awarded a contract for a leading UK packaging company. Nonetheless, revenues in the UK only grew by 2.6% to €4.75 million and EBITDA dropped by 20.2% to €0.27 million as the benefits from the new contracts are expected to start flowing into the business in the second half of the year.

Outlook

The Directors stated that they are pleased with the progress achieved so far in the current financial year as well as by the fact that the Crimsonwing brand is becoming more recognised as it delivers substantial international programmes. Additionally, the Directors expect the Group to maintain the strong momentum also during the second half of the year.

Downloads

Crimsonwing plc – Interim Financial Statements for the six months ended 30 September 2013.