Crimson Tide

Crimson Tide (TIDE) has won a major £290,000 contract with Associated Newspapers to provide circulation tracking for the Metro newspaper. Using its in-house software product mpro the media giant can accurately monitor deliveries of the Metro to distribution centres and paper racks throughout London.

The contract was secured after a lengthy test period and includes 6,000 newsrack barcode tags and 115 Motorala smartphone devices. Launched in 1999 with 85,000 copies the Metro now prints 1m copies and is the world's largest free newspaper as well as the third most popular paper in the UK.

Crimson joined AIM in 2006 and provides investors with an attractive investment proposition. The sales model has already attracted 115 users with contracts that typically span three years bringing in useful recurring revenues. Crimson pays out for the kit needed to deliver its service but thereafter is locked into a strong and profitable income stream.

Canny investor David Newton of Helium Special Situations recently invested £500,000 at 1p a share to take a 11.4% stake. The funds will allow marketing spend to be stepped up as Crimson works to widen its customer base. Its end markets span areas such as warehousing, surveying, nursing and facilities management. One example of the product in use is by haemophilia patients recording time and medicine useage.

Named after a football team in Alabama the business is now starting to gain real traction and with a near break-even position expected for 2010 brokers expect a good swing to profits in the current year. Crimson has developed a technology with wide appeal so there is plenty of scope for new contract wins and further out it could be a useful target for a major. Speculative buy.