Shares in Crimson Tide (AIM:TIDE) fell 20% to 70p after the group said a significant customer plans to exit its contract early, knocking a sizeable hole in near-term revenues.
The AIM-listed software group, which provides the mpro5 process management app, said it had received formal notice from a major retailer that it intends to exercise a break clause in its existing contract. The termination will take effect on 31 March next year and is separate from a contract renewal announced in November.
The contract, which began in December 2024, accounted for about 12% of Crimson Tide’s annual recurring revenue in the years to April 2025 and April 2026. The company said the deal operated at below-average margins, as the customer required extensive bespoke development work.
While the loss of revenue has clearly unsettled investors, Crimson Tide sought to strike a more upbeat tone. The board said ending the contract would free up resources that had been heavily committed to servicing the retailer’s customised requirements.
Those resources will now be redirected towards higher-margin opportunities and the development of core product features, supporting its ambition to build a more scalable software-as-a-service platform.
The company acknowledged there would be an immediate impact on revenue but argued the change should be beneficial over the longer term.
In a separate update, Crimson Tide said it had secured renewals with two previously lost customers, together worth about £14,700 a month in recurring revenue over the next year.
Both had earlier been classed as churned but were re-signed following a renewed focus on customer retention by the current management team.