King Canute won't stop the Tide!

I do love a micro-cap company with a great growth story to tell, particularly where there is relatively little risk to your capital in the long term.

Here's a company that fits the criteria called Crimson Tide (Tide) and below you'll find a link to it's website:-

http://crimsontide.co.uk//company-description/

I'm a fan of this company and my investment is currently showing a 37% gain. It's another long term hold for me since it's best days are yet to come.

As you'd expect if you read my blog on a regular basis, TIDE is a profitable, cash generative company with an excellent balance sheet. It's market cap. stands at slightly below £13m.

It has a healthy £782,000 in cash on the balance sheet with zero debt. It's gross margins are a mouth watering 86%.

Crimson Tide released their interim results at the end of September showing revenue growth of 8%, but profit down to around £4000. At first glance it doesn't look impressive, but delve further into the company's history and you'll see a terrific growth story unfolding. The temporary dip in profits is purely down to a planned investment in sales and marketing, and a measured and sensible approach  to global expansion.

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TIDE/13807975.html

Barrie Whipp, Executive Chairman said the following:-

"Our pipeline has grown significantly and have seen additional demand from Europe and the Middle East as well as in the UK & Ireland. The Board estimates that, considering increased investment in Sales & Marketing, like for like profit would have increased by approximately 50%. We are working on a much wider range of exciting opportunities and have developed mpro5's IOT capabilities. mpro5 is now publicly downloadable from app stores for demonstration purposes and for smaller businesses. We are extremely well placed to take advantage of the opportunities generated from our marketing activities and the Board is excited to accelerate our growth to the next level. " 

If you want a company to grow strongly and succeed then they need to invest and TIDE's management have seen the opportunity and are to determined to capitalise on it. This is a very telling sentence from the interim report:-

"We currently have over 100 identified opportunities with potential clients, five times more than typical levels before these investments were made."

Whilst not obviously cheap at the moment, once growth kicks in from investments then with such juicy gross margins and a strong balance sheet I expect the share price of TIDE to make excellent progress in the years to come.

Finally, keep your eyes peeled for those large contract announcements with enterprise clients.

As ever, this is not a recommendation to buy or sell.

twitter: @michae1mouse.