IN BRIEF: Crimson Tide loses contract representing 12% annual revenue

Crimson Tide PLC - Kent, England-based software developer - Says a ‘significant customer’, which Crimson Tide doesn’t name but describes as a ‘major retailer’, exercises a break clause in its contract. The cancellation will be effective from March 31 next year. Crimson Tide says it is in ‘constructive dialogue’ with the customer over transition arrangements. The contract, which began a year ago, represents 12% of Crimson Tide’s annual recurring revenue. However, the company says the contract required significant bespoke development, which resulted in below-average margins and took up product development capacity.

‘The conclusion of this contract will enable the company to redeploy resources towards higher-margin opportunities, accelerate delivery of core product enhancements and support the company’s strategy to build a more scalable SaaS platform,’ Crimson Tide says. ‘Whilst there will be an immediate impact on revenue, the board believes that this transition will benefit the company over the longer term.’

Current stock price: 74.90 pence, down 14% in London on Wednesday

12-month change: down 29%

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