- Interim Directors’ Statement

On 16 February, Crimsonwing plc published its Interim Directors’ Statement explaining the developments that took place during the current financial year ending 31 March 2012 and the short-term outlook. The Directors expect Crimsonwing’s net overall position for the current financial year to be in line with that of the previous year when the Group registered a loss of €109,135 mainly due to the losses incurred at the Crimsonwing NL (VDA) business unit following the extensive one-off restructuring costs incurred. Crimsonwing reported that this business unit has now met all its commitments with respect to the restructuring and is therefore expected to operate much more efficiently from March 2012 onwards.

Moreover, during the year under review, Crimsonwing incurred higher costs of sales in order to participate in a number of large bids. Such participation was only possible due to the Group’s international experience and solution capabilities which in turn is enabling Crimsonwing to expose itself to proposals with a global reach. Although a high cost was incurred to participate in these bids, the Directors noted that the potential benefit from such projects is great.

The announcement also revealed that the Crimsonwing Group has been selected as a strategic partner by an international multi-channel retailer for a global eCommerce roll-out across over 50 countries by 2013. Assuming a successful solution build phase, this will result in Crimsonwing implementing over 100 eCommerce sites from mid-2012 onwards and subsequently supporting these businesses. This business was achieved after the Group made substantial investments in its capability which initially impacted operational profitability. However, this will form the backbone of growth and annuity revenues in the future. Crimsonwing is also involved in similar large bids for international clients relating to the ERP (Dynamics) service offering.

In conclusion the Directors explained that despite the tough trading conditions in the Eurozone, Crimsonwing has continued to make steady sales progress. In fact, like-for-like sales to the end of January 2012 have increased by 6% to €12.57 million. Furthermore, the Directors believe that they are building a solid foundation to push on in the next twelve months and take advantage of the tremendous opportunities that lie ahead.

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