Crimsonwing plc issued its Interim Directors’ Statement on 21 February. The Directors noted that the Company recorded strong sales performance during the second half of the financial year, and is set to achieve its revenue projections as detailed in the Prospectus issued at the time of the Initial Public Offering. Crimsonwing had projected a 36% growth in turnover to €9.65 million for the year ended 31 March 2008.
The Directors confirmed that there continues to be strong demand across all three business areas (ebusiness, Dynamics and custom solutions) and announced new clients in the UK and the Netherlands. Overall, all Crimsonwing subsidiaries (Crimsonwing UK, Crimsonwing BV, and Crimsonwing Promentum BV) are expected to meet their March 2008 year-end revenue targets.
Crimsonwing also announced that in January 2008 it initiated operations in North America. Crimsonwing LLC, a 100% owned subsidiary of Crimsonwing Promentum BV, was incorporated in the State of Washington, USA in close proximity to Microsoft’s Head Office. Moreover Crimsonwing LLC won its first end user clients for Dynamics services and were also invited by Microsoft to internal technical product briefings for releases due in mid-2009. Crimsonwing LLC expects to break-even in the first six months of operation and thereafter to begin normal contributions.
However the Directors announced that Crimsonwing’s overall profitability may be negatively impacted by the erosion of the exchange rate of UK Sterling against the euro, which declined by 8% since November. Currently approximately 75% of Crimsonwing’s revenues, but only 25% of costs, are in UK Sterling. The Company’s reference currency for accounting purposes is euro. The strategy is to continue to increase revenue in euro and the Directors expect euro turnover to rise from 25% of overall revenue to more than 40% within the next 12 to 18 months.