TIDMIGP
RNS Number : 6392T
Intercede Group PLC
10 June 2009
10 JUNE 2009
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Preliminary Results for the Year Ended 31 March 2009
Intercede, a leading international developer and supplier of software for
identity and credential management software, today announces its preliminary
results for the year ended 31 March 2009.
SUMMARY
* Sales revenues have more than doubled from GBP2.8m to GBP5.7m.
* Full year profitability reported at all levels:
*
* Operating profit of GBP1.5m (2008: loss of GBP0.1m)
* Profit before tax of GBP1.4m (2008: loss of GBP0.2m
* Profit for the year of GBP1.7m (2008: loss of GBP0.1m)
* Cash inflow of GBP2.6m (2008: GBP0.5m) during the year which includes GBP0.1m
from the issue of shares (2008: GBP0.7m).
* Cash balances of GBP3.7m (2008: GBP1.15m) and convertible loan notes of GBP1.9m
(2008: GBP1.8m) at the financial year end.
* All external borrowings subsequently eliminated following the decision of the
convertible loan note holders to convert their loan notes into equity.
* Repositioning of MyID from being a smart card management system to a fully
featured Identity and Credential Management System.
* Contracts signed in support of two national ID card programmes, several public
sector projects and a large defence contractor.
Richard Parris, Chairman & Chief Executive of Intercede, said today:
"This was the year when Intercede bridged the chasm between market opportunity
and commercial success, resulting in a rapid increase in profitability. We have
spent a number of years laying the foundations for future exploitation of the
identity security market, which we always believed would present a major
commercial opportunity."
"These results demonstrate that our product is now being adopted as the security
management system of choice by governments and large corporations all around the
world. Demand continues to be strong and, with cash in the bank and a healthy
pipeline of business, we are extremely optimistic about our future prospects."
ENQUIRIES
+-----------------------------------------+-------------------------------------+
| Intercede Group plc | Tel. +44 (0)1455 558111 |
+-----------------------------------------+-------------------------------------+
| Richard Parris, Chairman & Chief | |
| Executive | |
+-----------------------------------------+-------------------------------------+
| Andrew Walker, Finance Director | |
+-----------------------------------------+-------------------------------------+
| | |
+-----------------------------------------+-------------------------------------+
| FinnCap | Tel. +44 (0)20 7600 1658 |
+-----------------------------------------+-------------------------------------+
| Charles Cunningham | |
+-----------------------------------------+-------------------------------------+
| | |
+-----------------------------------------+-------------------------------------+
| Pelham Public Relations | |
+-----------------------------------------+-------------------------------------+
| Archie Berens | Tel. +44 (0)20 7337 1509 |
+-----------------------------------------+-------------------------------------+
About Intercede
Intercede is the producer of the MyID Identity and Credential Management System
(IDCMS). Intercede's MyID is the only IDCMS software product that enables
organizations to easily and securely manage the identities of people and their
associated identity credentials within a single, integrated, workflow driven
platform. This includes enabling and managing: secure registration, biometric
capture, application vetting and approval through to smart card personalization,
issuance and management.
Intercede's MyID is being used around the world by large corporations,
governments and banks to manage millions of identities for employees, citizens
and customers. Notable deployments in the US include 10 Federal Agencies, a
programme with Lockheed Martin and two major US financial institutions. In
Europe and the Middle East, Intercede's MyID is being deployed in support of
government identity, health and corporate employee ID security projects.
Intercede and MyID are registered trademarks or trademarks in the UK, US and/or
other countries. For more information visit http://www.intercede.com.
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Preliminary Results for the Year Ended 31 March 2009
Chairman's Statement
Intercede is a leading international developer and supplier of software for
identity and credential management. This software is branded as the Intercede
MyID Identity and Credential Management System. MyID is a
commercial-off-the-shelf product that incorporates more than 200 man years of
continuous development and improvement. Intercede has licensed the use of MyID
to governments, public authorities and companies around the world to improve the
level of identity assurance of their citizens and employees.
Operational Highlights
During the year, Intercede's business model has been further proven and
significant progress has been made across many areas including:
1. Sales revenues have more than doubled from GBP2.8m to GBP5.7m.
2. Full year profitability reported at all levels for the first time since IPO
in 2001:
* Operating profit of GBP1.5m (2008: loss of GBP0.1m)
* Profit before tax of GBP1.4m (2008: loss of GBP0.2m)
* Profit for the year of GBP1.7m (2008: loss of GBP0.1m)
3. GBP2.6m of cash generated during the period (2008: GBP0.5m).
4. More than GBP1m of revenue secured in the period from major government
customers via Intercede's partnership with Thales.
5. A contract with a regional integrator to supply a system to support the
national ID card programme of a Middle Eastern country.
6. A contract to supply the management system to support the internal identity
badge of the world's largest defence contractor, Lockheed Martin.
7. The transfer of the contract for the support of the US Transportation Worker
Identity Credential (TWIC) from an Intercede distribution partner to Intercede.
As a result of this change, Intercede now holds a direct multi-year contract
with Lockheed Martin, the prime US government contractor for the TWIC project.
To date, in excess of 1 million TWIC cards have been issued to dock workers at
more than 100 ports across the US and overseas.
8. Intercede's VeriSign and SafeNet partners continue to sell MyID licences to
US Federal agencies, US state governments and US military bases.
9. The UK National Health Service programme has been transitioned from being a
contract between BT and an Intercede partner to Intercede having a direct
contract with BT, the NHS prime contractor.
10. The sale of MyID and associated services to support additional public
sector customers in the UK, Greece, Slovakia, Australia, the Netherlands and
Switzerland.
Results
+------------------+------------------+------------------+------------------+
| | Year ended 31 March |
+------------------+--------------------------------------------------------+
| GBP'000 | 2009 | 2008 | 2007 |
+------------------+------------------+------------------+------------------+
| Revenue | 5,701 | 2,805 | 2,620 |
+------------------+------------------+------------------+------------------+
| Gross profit | 5,660 | 2,775 | 2,546 |
+------------------+------------------+------------------+------------------+
| Operating | 1,487 | (102) | (349) |
| profit/(loss) | | | |
+------------------+------------------+------------------+------------------+
In the year ended 31 March 2009, sales revenues more than doubled from
GBP2,805,000 to GBP5,701,000 at a gross margin of 99%. During the period the
largest single project represented less than 25% of total revenue.
Geographically, Intercede's home market in the UK remains important and
contributes 44% of the Group's revenues. However, other markets are growing: the
US generated 37% of sales revenues with the remaining 19% being generated across
a wide range of European and Australasian customers. This diversity of customers
and territories provides resilience against macro-economic risk and currency
fluctuations.
Another major transition to occur this year has been the signing of a number of
direct contracts with large systems integrators and end-customers who had
previously been serviced by Intercede's OEM partners. This has already had the
benefit of increasing Intercede revenues. It also gives Intercede more control
of its most important accounts and strengthens the visibility of the Intercede
MyID brand.
Whilst costs have continued to be tightly controlled throughout the period, good
progress has been made organically growing the expertise within the Group to
handle the additional workload generated by the growth in sales revenues.
An operating profit of GBP1,487,000 has been achieved, reversing the prior year
operating loss of GBP102,000. The cash inflow from operating activities for the
year was GBP2,450,000 compared to a GBP207,000 outflow in the previous period.
As at 31 March 2009, the Group had cash balances of GBP3,711,000 (2008:
GBP1,153,000). Our cash position remains strong given that, as announced on 1
June 2009, all of the holders of the convertible notes elected to convert their
loan notes into equity instead of being repaid.
The Group has moved to a position of profitability over the last 5 years. The
trend line shows how Intercede has now 'crossed the chasm' resulting in a rapid
increase in profitability. This can be seen by clicking onto a pdf document of
the Preliminary Results announcement on the Group's website
(http://www.intercede.com/news/archives/2009/Intercede---Preliminary-Results-fo
-the-Year-Ended.aspx). The chart is on page 4 of the document.
Product Development
Last year I reported that a major thrust of Intercede's product development
strategy was the repositioning of MyID from being a smart card management system
to a fully featured Identity and Credential Management System. I am pleased to
say this strategy has been vindicated with more than 30% of revenues in this
year being attributable to the new identity management functions within the MyID
v8 platform.
Intercede is continuing to design the MyID platform to take full advantage of
the latest industry standards. This maximises interoperability and future-proofs
the solutions we deliver to our customers. As evidence of this commitment,
Intercede became a full member of the smart card industry's GlobalPlatform
organisation in October 2008.
Intercede's participation in several large scale national identity programmes
during the year has given rise to a significant increase in the functionality
within the MyID platform, especially in the area of multi-application smart card
support. These project specific developments will be incorporated in the
standard MyID product for the benefit of all our partners and customers during
the next 12 months.
Finally, Intercede continues to invest in its integrators' toolkit. This is a
tool that accelerates Intercede's own project specific customisation activities
and provides integrators with a platform for rapid application development.
Strategy
In our statement last year, we highlighted that in the 2008/09 year the Group
would be focusing on executing its strategy to achieve profitability by:
* Adding to our current list of major projects wins;
* Refocusing our channel strategy to improve Intercede's margins on existing
business;
* Adding additional sales channels to attack new markets in different sectors and
regions;
* Becoming recognised as a major player in the Identity Registration and Enrolment
market space; and
* Expanding our professional service capabilities to better support our largest
customers and to provide enhanced feedback to our product management team.
After 12 months of further progress, and notwithstanding the impact of the
global financial recession, the Group's success in executing this strategy can
be summarised as follows:
* Contracts signed in support of two national ID card programmes, several public
sector projects and a large defence contractor;
* Lockheed Martin, BT and the US Environmental Protection Agency have all been
successfully transitioned from being customers of Intercede OEM partners to
being direct Intercede customers;
* New channel partners have been added in the Middle East and the US;
* Over 30% of revenues in the current year have been generated from Intercede's
expansion into the Identity Registration and Enrolment market; and
* Three additional technical consultants have been retained in the US along with a
further two UK based professional service and project management staff to better
support the growing revenue stream.
The success of this strategy is based upon product and service delivery
excellence. In both of these respects, Intercede has an impressive track record.
Furthermore, a programme of continuous product development and new innovation
continues to ensure that Intercede remains a leader amongst its global
competitors.
The Group's business plan in the coming year is to build on this year's success
by executing the following strategy:
* Continue to successfully deliver existing large projects that cross the
financial year end;
* Secure new large scale public sector projects from governments worldwide;
* Further expand our market penetration in the US;
* Capitalise on our new business in the Middle East and Australia to win
additional contracts in these regions; and
* Refocus Intercede's supply chain development efforts onto those partners who are
prepared to invest in product training and marketing. It is also critical that
they have the technical expertise to excel in project delivery and customer
care.
Outlook
After several years of early stage development, the identity and credential
management market has entered a more rapid growth phase. This has been the year
when Intercede has 'crossed the chasm', as the niche market in which the Group
operates transitions from being driven by innovators and early adopters to being
pulled along by the early majority of mainstream customers. As a result,
Intercede's revenues have more than doubled year on year and the sales pipeline
has continued to strengthen.
In spite of the global recession, the outlook within the identity industry is
exciting as an increasing number of large scale Government Public Sector
projects are being launched in the US, Europe and other regions. There is also
good growth potential in a number of industrial sectors, such as defence and
energy. Intercede is well positioned, through its market leading MyID products
and channel partner network, to exploit these emerging opportunities.
Against the background of billions of identity cards to be issued globally over
the next ten years, Intercede and its MyID platform is in an excellent position
to benefit from this burgeoning market.
At a time of macro-economic turmoil and global recession, Intercede has seen a
major upswing in its revenues and profitability. At the same time, the credit
squeeze means that any potential new market entrants are less likely to be able
to obtain development funding and more likely to buy external solutions than
invest in building their own. The Board therefore believes Intercede is very
well positioned to continue its growth notwithstanding these challenging times.
We look forward with confidence to reporting on our progress during the current
year and beyond.
9 June 2009
Richard Parris
Chairman & Chief Executive
Business and Finance Review
Introduction
Intercede has delivered a substantially improved financial performance in the
current financial year. This acceleration in growth reflects the continued
momentum from the Group's involvement in an increasing number of projects around
the world with a consequential increase in revenues from software licence sales,
associated support & maintenance and the delivery of ongoing professional
services assistance.
Business Development
It is the nature of new technology in an early stage market that the investment
is front end loaded. This is the case, both in respect of the extent to which
products have to be proven at proof of concept and pilot phases prior to
roll-out or, at the other end of the spectrum, the level of functionality
required to start to make repeat volume sales of the same product.
In both respects, Intercede continues to make major progress.
In last year's Business and Finance Review, I stated that the momentum is
clearly building and the Directors are increasingly confident that this will be
reflected in the Group's future financial performance as more and more projects
move beyond the initial proof of concept and pilot phases. That has proven to be
the case over the past 12 months when, as outlined in the Chairman's Statement,
existing projects have continued to plan and new projects have continued to be
won.
It is also important to note that the nature of these projects, which are
infrastructure related, means that they can realistically be expected to deliver
revenues over many years. Intercede's MyID software manages the secure
registration, issuance and lifecycle of digital identities for a wide range of
uses. This requires the integration of multiple technologies and products from
many different vendors, including smart cards, biometrics, digital certificates,
Open Platform applets and physical access control systems. Requests for
professional services assistance are an ongoing feature of major projects in
addition to revenues from further licence sales and support & maintenance
renewals.
The past 12 months have also resulted in a further substantial strengthening and
broadening of the Group's historical card management offering. Following the
launch of MyID 8, contracts have been won to supply the Intercede MyID Identity
and Credential Management System in support of two national identity card
programmes. The work to date on these projects has resulted in a significant
increase in functionality which will be incorporated in the standard MyID
product, further strengthening our offering.
The combined effect of project wins and product strengthening continues to be
reflected in a growing level of interest in MyID from existing and potential new
industry partners. The nature and extent of project wins over the past 2-3 years
has established MyID as a market leader in its own right and an increasing
proportion of Intercede's industry partners are marketing and selling the
Group's technology under the MyID name. The consequential benefit from Intercede
receiving a greater share of the contract value has also contributed to the
Group's improved financial performance.
The Group enters 2009/10 with a stronger pipeline than ever before, both in
terms of the nature and scale of individual opportunities and in terms of the
probability of success. The current pipeline contains a high level of forecast
revenue from projects we have already won (ie additional revenues from existing
projects) quite apart from other projects that we are still bidding for.
Whilst experience tells us that project delays can and will happen for a variety
of reasons, we remain focused on the action we can take to ensure that we are
best placed to deal with any changes.
Financial Results
The financial results outlined below reflect the continued momentum from the
Group's involvement in an increasing number of projects around the world.
+---------------------+---------------------+---------------------+---------------------+
| | Year ended | Year ended | Change |
| | 31 March 2009 | 31 March 2008 | % |
| | GBP000 | GBP000 | |
+---------------------+---------------------+---------------------+---------------------+
| Revenue | 5,701 | 2,805 | 103.3 |
+---------------------+---------------------+---------------------+---------------------+
| Gross profit (%) | 5,660 (99%) | 2,775 (99%) | 104.0 |
+---------------------+---------------------+---------------------+---------------------+
| Operating costs | (4,173) | (2,877) | (45.0) |
+---------------------+---------------------+---------------------+---------------------+
| Operating | 1,487 | (102) | 1,557.8 |
| profit/(loss) | | | |
+---------------------+---------------------+---------------------+---------------------+
| Earnings/(loss) per | 4.7p | (0.2)p | N/A |
| share | | | |
+---------------------+---------------------+---------------------+---------------------+
Whilst sales revenues and gross profit have more than doubled year on year (with
gross profit margins remaining constant at 99%), the increase in costs has been
restricted to 45%. As a result, the larger part of revenues and gross profits
has dropped through to the bottom line thereby enabling the Group to deliver its
first full year profit since admission to AIM.
Staff costs continue to represent the main area of expense representing 76% of
the total operating costs (2008: 81%). The average number of employees increased
from 40 to 47 year on year.
The net finance cost for the year was GBP79,000 (2008: GBP75,000) and GBP61,000
was received from HM Revenue and Customs in respect of R&D tax credits (2008:
GBP90,000). GBP3,506,000 of prior year tax losses remain available for
utilisation against future year's profits (2008: GBP4,862,000). A further tax
credit totaling GBP280,000 reflects the recognition of a deferred tax asset in
respect of these prior year losses (2008: GBPnil).
A profit for the year of GBP1,749,000 resulted in a basic earnings per share of
4.7p (2008: 0.2p loss). Having regard for the convertible loan stock and share
options outstanding as at 31 March 2009, the fully diluted earnings per share is
3.6p (2008: 0.2p loss).
Funding
As at 31 March 2009, the Group had cash balances totaling GBP3,711,000 (2008:
GBP1,153,000) and convertible loan notes totaling GBP1,936,000 (2008:
GBP1,833,000). The increase in cash balances reflects a GBP2,478,000 inflow from
operating and investing activities (2008: GBP178,000 outflow) and GBP80,000
received from the issue of shares during the period (2008: GBP678,000).
As outlined in note 6, all of the convertible loan note holders have
subsequently elected to convert their loan notes into ordinary shares. The
conversion significantly strengthens the Company's Balance Sheet and leaves the
Group with a substantial cash balance to meet its future needs.
Summary
After another challenging year, it is pleasing to be able to repeat what I said
last year. One year on, Intercede is better placed in terms of product
functionality, project wins, sales prospects and market position.
Furthermore, the Group is also considerably better placed in financial terms, as
evidenced by both the level of full year profitability and cash generation, and
the post year end elimination of all external debt following the convertible
loan note holders' decision to convert their loans into equity.
Andrew Walker
Finance Director
INTERCEDE GROUP plc
Consolidated Income Statement for the year ended 31 March 2009
+------------------------------------------------+-----------+-------------+------------+
| | Notes | 2009 | 2008 |
+------------------------------------------------+-----------+-------------+------------+
| | | GBP'000 | GBP'000 |
+------------------------------------------------+-----------+-------------+------------+
| Continuing operations | | | |
+------------------------------------------------+-----------+-------------+------------+
| Revenue | 2 | 5,701 | 2,805 |
+------------------------------------------------+-----------+-------------+------------+
| Cost of sales | | (41) | (30) |
+------------------------------------------------+-----------+-------------+------------+
| | | __________ | __________ |
+------------------------------------------------+-----------+-------------+------------+
| Gross profit | | 5,660 | 2,775 |
+------------------------------------------------+-----------+-------------+------------+
| Administrative expenses | | (4,173) | (2,877) |
+------------------------------------------------+-----------+-------------+------------+
| | | __________ | __________ |
+------------------------------------------------+-----------+-------------+------------+
| Operating profit/(loss) | | 1,487 | (102) |
+------------------------------------------------+-----------+-------------+------------+
| Finance income | | 68 | 61 |
+------------------------------------------------+-----------+-------------+------------+
| Finance costs | | (147) | (136) |
+------------------------------------------------+-----------+-------------+------------+
| | | __________ | __________ |
+------------------------------------------------+-----------+-------------+------------+
| Profit/(loss) before tax | | 1,408 | (177) |
+------------------------------------------------+-----------+-------------+------------+
| Taxation | 3 | 341 | 90 |
+------------------------------------------------+-----------+-------------+------------+
| | | __________ | __________ |
+------------------------------------------------+-----------+-------------+------------+
| Profit/(loss) for the year attributable to | | 1,749 | (87) |
| equity shareholders | | | |
+------------------------------------------------+-----------+-------------+------------+
| | | __________ | __________ |
+------------------------------------------------+-----------+-------------+------------+
| | | | |
+------------------------------------------------+-----------+-------------+------------+
| Earnings/(loss) per share (pence) | 4 | | |
+------------------------------------------------+-----------+-------------+------------+
| - basic | | 4.7p | (0.2)p |
+------------------------------------------------+-----------+-------------+------------+
| - diluted | | 3.6p | (0.2)p |
+------------------------------------------------+-----------+-------------+------------+
| | | __________ | __________ |
+------------------------------------------------+-----------+-------------+------------+
| | | | |
+------------------------------------------------+-----------+-------------+------------+
There are no recognised gains or losses in either year other than the profit or
loss for the year.
INTERCEDE GROUP plc
Consolidated Balance Sheet at 31 March 2009
+---------------------------------------------------+----------+------------+-------------+
| | Notes | 2009 | 2008 |
+---------------------------------------------------+----------+------------+-------------+
| | | GBP'000 | GBP'000 |
+---------------------------------------------------+----------+------------+-------------+
| Non-current assets | | | |
+---------------------------------------------------+----------+------------+-------------+
| Property, plant and equipment | | 67 | 52 |
+---------------------------------------------------+----------+------------+-------------+
| Deferred tax | | 280 | - |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | 347 | 52 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Current assets | | | |
+---------------------------------------------------+----------+------------+-------------+
| Trade and other receivables | | 902 | 419 |
+---------------------------------------------------+----------+------------+-------------+
| Cash and cash equivalents | 7 | 3,711 | 1,153 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | 4,613 | 1,572 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Total assets | | 4,960 | 1,624 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Equity | | | |
+---------------------------------------------------+----------+------------+-------------+
| Called up share capital | 6 | 4,305 | 4,292 |
+---------------------------------------------------+----------+------------+-------------+
| Share premium account | | 2,875 | 2,764 |
+---------------------------------------------------+----------+------------+-------------+
| Other reserves | | 1,508 | 1,508 |
+---------------------------------------------------+----------+------------+-------------+
| Equity reserve | | 109 | 109 |
+---------------------------------------------------+----------+------------+-------------+
| Retained earnings | | (8,102) | (9,851) |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| Total equity | | 695 | (1,178) |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Current liabilities | | | |
+---------------------------------------------------+----------+------------+-------------+
| Trade and other payables | | 1,156 | 350 |
+---------------------------------------------------+----------+------------+-------------+
| Deferred revenue | | 1,173 | 619 |
+---------------------------------------------------+----------+------------+-------------+
| Convertible loan notes | 7 | 1,936 | - |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | 4,265 | 969 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Non-current liabilities | | | |
+---------------------------------------------------+----------+------------+-------------+
| Convertible loan notes | 7 | - | 1,833 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Total equity and liabilities | | 4,960 | 1,624 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
Attention is drawn to a significant event which took place subsequent to 31
March 2009. On 29 May 2009, as outlined in note 6, the convertible loan notes
included above within current liabilities were all converted into equity.
INTERCEDE GROUP plc
Consolidated Statement of Changes in Equity for the year ended 31 March 2009
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | Share | Share | Other | Equity | Retained | Total |
| | | | | | | |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | capital | premium | reserves | reserve | earnings | |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | | account | | | | |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | | | | | | |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| At 31 March 2007 | 4,271 | 2,107 | 1,508 | 109 | (9,764) | (1,769) |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| Issue of shares, net of costs | 21 | 657 | - | - | - | 678 |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| Loss for the year | - | - | - | - | (87) | (87) |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | ________ | ________ | ________ | _______ | ________ | _______ |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| At 31 March 2008 | 4,292 | 2,764 | 1,508 | 109 | (9,851) | (1,178) |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| Issue of shares, net of costs | 13 | 111 | - | - | - | 124 |
| (see note 6) | | | | | | |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| Profit for the year | - | - | - | - | 1,749 | 1, 749 |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| At 31 March 2009 | 4,305 | 2,875 | 1,508 | 109 | (8,102) | 695 |
+---------------------------------+------------+----------+----------+---------+----------+----------+
| | ________ | ________ | ________ | _______ | ________ | ________ |
+---------------------------------+------------+----------+----------+---------+----------+----------+
INTERCEDE GROUP plc
Consolidated Cash Flow Statement for the year ended 31 March 2009
+---------------------------------------------------+----------+------------+-------------+
| | Notes | 2009 | 2008 |
+---------------------------------------------------+----------+------------+-------------+
| | | GBP'000 | GBP'000 |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Cash flows from operating activities | | | |
+---------------------------------------------------+----------+------------+-------------+
| Operating profit/(loss) | | 1,487 | (102) |
+---------------------------------------------------+----------+------------+-------------+
| Depreciation | | 25 | 18 |
+---------------------------------------------------+----------+------------+-------------+
| (Increase) in trade and other receivables | | (483) | (184) |
+---------------------------------------------------+----------+------------+-------------+
| Increase/(decrease) in trade and other payables | | 1,360 | (29) |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| Cash generated from/(used in) operations | | 2,389 | (297) |
+---------------------------------------------------+----------+------------+-------------+
| Taxation received | | 61 | 90 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| Net cash generated from/(used in) operating | | 2,450 | (207) |
| activities | | | |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Investing activities | | | |
+---------------------------------------------------+----------+------------+-------------+
| Interest received | | 68 | 61 |
+---------------------------------------------------+----------+------------+-------------+
| Purchases of property, plant and equipment | | (40) | (32) |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| Net cash from investing activities | | 28 | 29 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Financing activities | | | |
+---------------------------------------------------+----------+------------+-------------+
| Proceeds on issue of shares | | 80 | 678 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| | | | |
+---------------------------------------------------+----------+------------+-------------+
| Net increase in cash and cash equivalents | 7 | 2,558 | 500 |
+---------------------------------------------------+----------+------------+-------------+
| Cash and cash equivalents at the beginning of the | 7 | 1,153 | 653 |
| year | | | |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
| Cash and cash equivalents at the end of the year | 7 | 3,711 | 1,153 |
+---------------------------------------------------+----------+------------+-------------+
| | | __________ | __________ |
+---------------------------------------------------+----------+------------+-------------+
INTERCEDE GROUP plc
Preliminary Results for the Year Ended 31 March 2009
NOTES
1.The financial information set out in this announcement does not constitute the
Group's Statutory Accounts for the years ended 31 March 2008 or 2009, but is
derived from those accounts. Statutory Accounts for 2008 have been delivered to
the Registrar of Companies and those for 2009, which have been approved by the
Board of Directors, will be delivered following the Group's Annual General
Meeting. The Company's auditors have reported on those accounts; their reports
were unqualified and did not contain statements under Section 237(2) or (3) of
the Companies Act 1985.
The Annual General Meeting of the Company will be held at 11.00 am on Wednesday
16 September 2009 at Lutterworth Hall. Copies of the full Statutory Accounts
will be despatched to shareholders in due course. Copies will also be available
on the website (www.intercede.com) and from the registered office of the
Company: Lutterworth Hall, St. Mary's Road, Lutterworth, Leicestershire, LE17
4PS.
2.SEGMENTAL REPORTING
All of the Group's revenue, operating profits and net assets originate from
operations in the United Kingdom. The Directors consider that the activity of
the Group constitutes a single business segment.
The split of revenue by geographical destination of the end customer can be
analysed as follows:
+-------------------------------------------------+-------+------------+-------+-------+
| | 2009 | 2008 |
+---------------------------------------------------------+------------+---------------+
| | GBP'000 | GBP'000 |
+---------------------------------------------------------+------------+---------------+
| United Kingdom | 2,488 | 1,378 |
+---------------------------------------------------------+------------+---------------+
| Rest of Europe | 846 | 298 |
+---------------------------------------------------------+------------+---------------+
| USA | 2,104 | 1,085 |
+---------------------------------------------------------+------------+---------------+
| Rest of World | 263 | 44 |
+---------------------------------------------------------+------------+---------------+
| | __________ | _________ |
+---------------------------------------------------------+------------+---------------+
| | 5,701 | 2,805 |
+---------------------------------------------------------+------------+---------------+
| | __________ | _________ |
+---------------------------------------------------------+------------+---------------+
| | |
+-------------------------------------------------+-------+------------+-------+-------+
3. TAX ON LOSS ON ORDINARY ACTIVITIES
The tax credit comprises:
+-------------------------------------------------------+----+-----------+----+------+----+
| | 2009 | 2008 |
+------------------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------------------+-----------+-----------+
| Current year - UK corporation | - | - |
| tax | | |
+------------------------------------------------------------+-----------+-----------+
| Research and development tax | 61 | 90 |
| credits relating to prior | | |
| periods | | |
+------------------------------------------------------------+-----------+-----------+
| Recognition of deferred tax | 280 | - |
| asset arising from prior | | |
| period losses | | |
+------------------------------------------------------------+-----------+-----------+
| | __________ | _________ |
+-------------------------------------------------------+---------------------+-----------+
| | 341 | 90 |
+------------------------------------------------------------+-----------+-----------+
| | __________ | _________ |
+-------------------------------------------------------+---------------------+-----------+
| | | |
+-------------------------------------------------------+----+-----------+----+------+----+
There is no charge in respect of corporation tax in either year due to the
availability of losses. An adjustment has been made in respect of the prior year
for research and development claims which have been agreed by HMRC and received
in cash during the year.
The Group has unrecognised deferred tax assets of GBP702,000 (2008:
GBP1,361,000) and unused tax losses of GBP3,506,000 (2008: GBP4,862,000).
4. BASIC AND DILUTED EARNINGS/(LOSS) PER ORDINARY SHARE
The calculations of earnings/(loss) per ordinary share are based on the profit
or loss for the financial year and the weighted average number of ordinary
shares in issue during each year. Basic and diluted loss per share are the same
for the year ended 31 March 2008 as potential dilution cannot be applied to a
loss making period.
+----------------------------------------------------+-------+----+------------+-------+----+
| | 2009 | 2008 |
+----------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| Profit/(loss) for the | 1,749 | (87) |
| year | | |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+-----------------------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| | Number | Number |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| Weighted average | 37,011,460 | 35,831,101 |
| number of shares - | | |
| basic | | |
+----------------------------------------------------+------------+------------+
| - diluted | 48,735,005 | 48,735,005 |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+-----------------------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| | Pence | Pence |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| Earnings/(loss) per | 4.7 | (0.2) |
| share - basic | | |
+----------------------------------------------------+------------+------------+
| - diluted | 3.6 | (0.2) |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+-----------------------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+-------+----+------------+-------+----+
5.DIVIDEND
The Directors do not recommend the payment of a dividend.
6. CALLED-UP SHARE CAPITAL
+----------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+----------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+------------+------------+
| Authorised | | |
+----------------------------------------------------+------------+------------+
| 481,861,616 (2008: 481,861,616) ordinary shares of | 4,819 | 4,819 |
| 1p each | | |
+----------------------------------------------------+------------+------------+
| 393,138,384 (2008: 393,138,384) deferred shares of | 3,931 | 3,931 |
| 1p each | | |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------------+------------+------------+
| | 8,750 | 8,750 |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------------+------------+------------+
| Issued and fully-paid | | |
+----------------------------------------------------+------------+------------+
| 37,403,756 (2008: 36,093,741) ordinary shares of | 374 | 361 |
| 1p each | | |
+----------------------------------------------------+------------+------------+
| 393,138,384 (2008: 393,138,384) deferred shares of | 3,931 | 3,931 |
| 1p each | | |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------------+------------+------------+
| | 4,305 | 4,292 |
+----------------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------------+------------+------------+
The increase in issued and fully-paid ordinary shares of 1p each reflects
the exercise of warrants and convertible loan stock during the year.
On 13 May 2008, Credo Corporate Finance exercised the warrants which were
granted in connection with the July 2003 placing. This resulted in the issue of
1,017,100 ordinary shares at the July 2003 placing price of 7.8p per ordinary
share.
On 10 March 2009, a further 292,915 ordinary shares were issued at a price of
15p per ordinary share following notification from Champel Inc. that they had
agreed to convert their loan note together with associated interest for the
period to 31 May 2009.
On 29 May 2009, notification was received from the remaining holders of the
convertible loan notes issued by the Company on 31 March 2000 and 6 December
2001 that they had elected to convert their loan notes together with associated
interest for the period to 31 May 2009 into ordinary shares of 1p each in the
Company. This resulted in the issue of 3,877,166 ordinary shares at a price of
15p per share and 6,897,083 ordinary shares at a price of 20p per Ordinary
Share. Following the conversion, the total issued share capital of the Company
is 48,178,005 ordinary shares of 1p each.
The deferred shares which were created as a result of the July 2003 placing have
minimal rights attaching to them and are effectively worthless.
7. ANALYSIS AND RECONCILIATION OF NET DEBT
+---------------------+----------+-------------+------------------+------------+------------+
| | 2008 | Cash flow | Reclassification | Non-cash | 2009 |
| | | | | movement | |
+---------------------+----------+-------------+------------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------+----------+-------------+------------------+------------+------------+
| Cash at bank and in | 1,153 | 2,558 | - | - | 3,711 |
| hand | | | | | |
+---------------------+----------+-------------+------------------+------------+------------+
| Debt due within one | - | - | (1,833) | (103) | (1,936) |
| year | | | | | |
+---------------------+----------+-------------+------------------+------------+------------+
| Debt due after one | (1,833) | - | 1,833 | - | - |
| year | | | | | |
+---------------------+----------+-------------+------------------+------------+------------+
| | ________ | __________ | __________ | __________ | _________ |
+---------------------+----------+-------------+------------------+------------+------------+
| Net debt | (680) | 2,558 | - | (103) | 1,775 |
+---------------------+----------+-------------+------------------+------------+------------+
| | ________ | __________ | __________ | __________ | __________ |
+---------------------+----------+-------------+------------------+------------+------------+
The non-cash movement represents the net effect of interest payable on the
convertible loan notes (GBP147,000) less loan note conversions during the year
(GBP44,000).
On 29 May 2009, as outlined in note 6, the debt due within one year disappeared
since the remaining convertible loan note holders elected to convert their loan
notes into ordinary shares rather than to request repayment.
8. PATENT INFRINGEMENT LAWSUIT
On 1 October 2008, ActivIdentity Corporation ("ActivIdentity") filed a lawsuit
against Intercede Group plc and Intercede Ltd. ("Intercede") in the United
States District Court for the Northern District of California (Case No.
C08-4577) alleging that Intercede's MyID line of products infringes a patent
owned by ActivIdentity.
In response, on 26 March 2009, Intercede filed an answer and counterclaims
against ActivIdentity alleging violations of United States antitrust law, fraud,
and unfair competition. Intercede alleges that, as a member of the Global
Platform standard-setting organization, ActivIdentity had a duty to disclose any
patents relating to Global Platform's smart card specifications, but failed to
do so. In addition to these counterclaims, Intercede's answer and counterclaims
deny that its products infringe ActivIdentity's patent and allege further that
this patent is invalid and unenforceable. Intercede plans to vigorously defend
itself in this matter and fully pursue its counterclaims against ActivIdentity.
No provision has been made as at 31 March 2009 in respect of the original
ActivIdentity lawsuit or contingent asset disclosed in respect of Intercede's
counterclaims.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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