TIDMIGP
RNS Number : 3659N
Intercede Group PLC
10 June 2010
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Preliminary Results for the Year Ended 31 March 2010
Intercede, one of the world's leading developers and suppliers of identity
management software, today announces its preliminary results for the year ended
31 March 2010.
SUMMARY
- Sales revenues increased from GBP5.7m to GBP6.2m.
- Full year profitability reported for the second consecutive period:
* Operating profit before exceptional item of GBP2.0m (2009: GBP1.9m)
* Profit before tax of GBP0.5m (2009: GBP1.4m)
* Profit for the year of GBP0.5m (2009: GBP1.7m)
- Full and final settlement of US and UK patent litigation; GBP1.5m
exceptional item for legal costs.
- Cash balances of GBP4.7m at 31 March 2010 (2009: GBP3.7m).
- All external borrowings eliminated following the decision of the
convertible loan note holders to convert their loan notes into ordinary shares.
- Increased investment in international sales and technical capabilities to
support growing demand for and use of Intercede's proprietary MyID Identity and
Credential Management System.
- National ID schemes powered by MyID go live in two countries.
- Continued expansion of Intercede's customer base in the US.
- Winning new contracts to supply MyID to government ministries, banks and
business corporations around the world.
- Intercede overtakes competitors to be No1 in class as measured by the
number of contract wins announced during the period.
Richard Parris, Chairman & Chief Executive of Intercede, said today:
"Intercede continues to prove that it is a world leader in identity and
credential management. This is a market that is growing each year and we are
right at its heart. In an increasingly virtual and highly mobile world,
security of identity affects many areas of peoples' lives in a very real way:
accessing facilities in the workplace, buying goods and services, proving
entitlement, defeating terrorism and preventing cyber warfare."
"Our performance this year demonstrates how we have capitalised on this
opportunity. We are becoming involved in increasingly long term projects across
the world, we are financially strong and the millstone of patent litigation has
been removed. We therefore remain optimistic about our future prospects."
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
organisations 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
personalisation,
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
program 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.
For more information visit http://www.intercede.com
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 |
+-----------------------------------+-------------------------------+
| Clive Carver | |
+-----------------------------------+-------------------------------+
| Sarah Wharry | |
+-----------------------------------+-------------------------------+
| | |
+-----------------------------------+-------------------------------+
| Pelham Bell Pottinger | Tel. +44 (0)20 7861 3112 |
+-----------------------------------+-------------------------------+
| Archie Berens | |
+-----------------------------------+-------------------------------+
| Francesca Tuckett | |
+-----------------------------------+-------------------------------+
INTERCEDE GROUP plc
Preliminary Results for the Year Ended 31 March 2010
Chairman's Statement
Intercede is one of the world's leading developers and suppliers of software for
identity and credential management. This software is branded as the Intercede
MyID Identity and Credential Management System. MyID is used by governments,
public authorities and companies around the world to improve the level of
identity assurance of their citizens and employees.
Financial and Operational Highlights
During the year significant progress has been made both financially and
operationally across many areas. Highlights include:
1. Sales revenues increased from GBP5.7m to GBP6.2m.
2. Full year profitability reported for the second consecutive period:
o Operating profit before exceptional item of GBP2.0m (2009: GBP1.9m)
o Profit before tax of GBP0.5m (2009: GBP1.4m)
o Profit for the year of GBP0.5m (2009: GBP1.7m)
3. Full and final settlement of US and UK patent litigation; GBP1.5m
exceptional item for legal costs.
4. GBP1.0m of cash generated during the period (2009: GBP2.6m), after payment
of legal costs relating to patent litigation.
5. National ID schemes powered by MyID go live in two countries.
6. Lockheed Martin purchased additional MyID licenses for provisioning all
permanent staff with PIV-Interoperable smart cards.
7. US Transportation Worker Identity Credential (TWIC) programme has issued
more than 1.5 million smart cards to date to US port workers and mariners using
MyID.
8. US Federal Aviation Authority significantly increased its investment in
MyID infrastructure at airports across the US.
9. The US Social Security Administration has used MyID to issue smartcards to
more than 80,000 staff.
10. A new multi year contract has been won with a US partner to supply MyID to
a large US based, global management consultancy group for internal security and
regulatory compliance.
11. The NHS has purchased a further 200,000 MyID licenses to deliver smart
cards to medical professionals in the UK bringing the total purchased to date up
to 800,000.
Results
+--------------------------+--------------+-------------+-------------+
| | Year ended 31 March |
+--------------------------+------------------------------------------+
| GBP'000 | 2010 | 2009 | 2008 |
+--------------------------+--------------+-------------+-------------+
| Revenue | 6,194 | 5,701 | 2,805 |
+--------------------------+--------------+-------------+-------------+
| Gross profit | 6,128 | 5,660 | 2,775 |
+--------------------------+--------------+-------------+-------------+
| Pre-exceptional | 2,026 | 1,858 | (102) |
| operating profit/(loss) | | | |
+--------------------------+--------------+-------------+-------------+
| Exceptional item | (1,517) | (371) | - |
+--------------------------+--------------+-------------+-------------+
| Profit/(loss) before tax | 510 | 1,408 | (177) |
+--------------------------+--------------+-------------+-------------+
In the year ended 31 March 2010, revenue increased by 9% from GBP5,701,000 to
GBP6,194,000 at a gross margin of 99%. While the level of growth is lower than
that achieved in the previous period, it belies an underlying strengthening of
the business, with no single project representing more than 15% of total revenue
(2009: 25%). As a result of the growth delivered from multiple projects, we have
a stronger and more diverse customer base from which to generate recurring
revenues.
Good progress has been made growing our international sales and technical
capabilities through a targeted programme of investment, which has been
accelerated to take advantage of the growing market opportunity. This includes
the incorporation of Intercede MyID Inc. in the United States and recruiting two
additional business development and sales resources in the region. Furthermore,
we have also recruited a senior business head in France to spearhead our further
growth in continental Europe. In parallel with this investment, though, we have
continued to maintain tight control of our cost base.
The pre-exceptional operating profit for the period was GBP2,026,000 which
compares to GBP1,858,000 in the previous year, the margin on sales remaining at
33% year on year. As a consequence at 31 March 2010, the Group had cash balances
of GBP4,664,000, an increase of GBP953,000 from 2009. This includes the payment
during the year of GBP1,085,000 of legal costs associated with the conduct and
eventual settlement of the patent litigation, described below. With a balance of
GBP747,000 of legal costs remaining to be paid as at 31 March 2010, the Group
has effectively entered the new financial year with a net cash balance of
GBP3,917,000.
The US and UK patent litigations involving ActivIdentity were settled on 23
March 2010. The exceptional charge to the current financial year for all of the
legal fees and associated costs relating to this case is GBP1,517,000. There are
no other additional costs associated with this suit in the reported period and
no further legal costs or exposures are expected to arise in the foreseeable
future. Furthermore, the patent licence agreement included within the settlement
will have no material impact on Intercede's future earnings. We believe that
this was an appropriate use of funds, which removed a major uncertainty from the
business and was necessary for the successful protection of long term
shareholder value. We also believe it sends a clear message to others in the
industry that Intercede is prepared to invest with the world's strongest law
firms in order to robustly defend itself in any legal action.
After these exceptional charges are taken into account, Intercede delivered a
profit before tax of GBP510,000. This is the second consecutive full year of
profitability and is a tremendous achievement under the circumstances.
Key Revenue Statistics
* 83% of revenue generated by recurring customers.
* 15% of revenue generated by the largest single customer.
* 45% of revenue generated in the US.
* 62% of revenue generated by government customers.
* 33% of revenue generated by software licence sales.
* 43% of revenue generated by professional services and custom MyID software
development.
* 24% of revenue generated by support and maintenance.
Product Development
This year has been marked by the continuing adaptation of MyID to service a
growing number of major commercial organisations, governments and managed
service providers. These funded adaptations significantly enhance the MyID
platform and will be made available to all customers in the next major product
release, MyID 9 scheduled in Q4 2010.
MyID 9 will enable customers to maximise their return on investment in
credential management by:
* Providing a comprehensive infrastructure that reduces the number of 'moving
parts' in a credential management system. This reduces both initial deployment
and subsequent ongoing operating costs;
* Delivering enhanced levels of business process improvement through Intercede's
generic objects technology;
* Allowing Systems Integrators to add value faster by utilising MyID's rich
productivity toolkit; and
* Leveraging MyID's vendor independence to protect customers from technology
obsolescence.In the US, the PIV-Interoperable market is proving to be of
particular interest. Customers include those organisations that wish to
interoperate or emulate the best practice of the US Government's HSPD-12/PIV
initiative. Intercede has already delivered a number of customer deployments
outside of Federal Government, thereby achieving significant first mover
advantage. These include a large aerospace company,a leading strategy and
technology consulting firm, the Transportation Workers Identity Credential
programme and a US state.
A major European telecommunications provider has also adopted MyID to support a
new managed service for the issuance of secure credentials in support of online
data services. This is complemented by MyID's service management capability
which has been developed over the last year for a UK government customer. This
extends the scope of usage of MyID from credential issuance to the larger
credential usage market. It enables MyID to be used to provision subscriber
access to on-card data services and to support 'Security in the Cloud' managed
service deployments.
MyID's identity management capabilities continue to be extended to increase our
product reach, both through MyID's own capabilities and through enhanced
integration with 3rd party identity provisioning systems. For example, we have
enhanced our integration with SUN Identity Manager for our Lockheed Martin and
BT customers. We have also enabled integration with Novell Identity Manager for
our Middle East Oil Company customer and, in the case of a large government
contract, we have integrated with the Thales TAMIS biometric system.
Finally, Intercede continues to invest in its integrators' toolkit; a tool that
accelerates Intercede's own project specific customisation activities and
provides integrators with a platform for rapid application development.
Strategy
In last year's Chairman's statement, I highlighted that the Group's 2009/10
business plan was to:
* 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 by incorporating a US subsidiary
company and appointing a local general manager;
* 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.
After 12 months of further progress, Intercede's success in executing this
strategy can be summarised as follows:
* 80% of Intercede's revenues were derived from 16 major projects that span across
financial years;
* A new subcontract with Thales UK for a major UK government contract was
announced on 1 March 2010. This is in addition to ongoing large and small public
sector contracts in Australia, Greece, Hungary, Ireland, Israel, Kuwait,
Netherlands, Portugal, Romania, Slovakia and the US;
* Intercede MyID Inc, was incorporated in September 2009 in the State of Delaware
and a senior industry professional has been appointed to grow the business;
* Intercede's footprint in the Middle East and Australia has been expanded by the
addition of a middle eastern oil company and an Australian bank as new
customers; and
* A new sales structure has been put in place lead by Jurek Sikorski, a
Non-Executive Director of Intercede. Jurek is a member of the London Business
School and is a highly experienced sales professional. Under Jurek's expert
leadership, Intercede is investing in supporting and leveraging a selected group
of sales partners who are judged to be most likely to maximise our commercial
performance in the short to medium term.
The Group's business plan in the coming year is to build on this year's success
by executing the following strategy:
* Launch MyID 9 as a major product release, designed to deliver new levels of
business productivity and cost improvements to customers;
* Expand the number of large customers who generate long term recurring revenues;
* Further develop an ecosystem of global partners and integrators to deliver
complete solutions to customers around the world;
* Increase the service revenues from Intercede expert professional services team
at a time when one of the major barriers to market growth is a lack of skilled
implementers;
* Drive product innovation in the support of managed service partners including
the delivery of 'security in the cloud' and the use of mobile devices as a
secure credential; and
* Accelerate growth and compensate for any loss of revenue that may result from
cuts in UK public sector spending by investing to drive new sales in
international markets, particularly in the US.
Outlook
Intercede's activities are highly relevant to world events; but its products are
also helping to build a safer world, as illustrated by a selection of media
headlines from earlier this year:
March 3, New York - FAA puts two air traffic control employees on admin leave
after teen directs aircraft over JFK.
March 25, Leeds - NHS Choose and Book programme [a national electronic referral
service] announces that it has reached a key milestone of 20 million patient
referrals having been booked using the system.
April 13, Washington - In full accord on a global threat, world leaders endorse
President Barack Obama's call for securing all nuclear materials around the
globe within four years to keep them out of the grasp of terrorists.
April 15, Washington - 1,421,756 TWIC cards issued to port workers at 159 TWIC
Enrollment Centers across the US, American Samoa and Guam.
Behind each of these headlines is a story about how Intercede's people and
technology are enabling these and similar programmes to enhance security and
deliver trust. For example, the FAA is using MyID to provision strong identity
cards to air traffic controllers across the US to enable better access security
to sensitive facilities and the NHS has issued nearly 800,000 smart cards using
MyID to medical professionals across the UK to enable secure access to the NHS
Choose and Book system. In the US, MyID is being used in a programme to control
the movement of radioactive materials and all of the TWIC cards for US port
workers are produced using MyID. These are just a few topical examples of the
ongoing growth of identity projects and there is clear evidence of an
acceleration in the number of similar opportunities that are emerging around the
world.
We believe the importance of being able to establish trust between individuals
and organisations in an increasingly virtual and highly mobile world will be
critical to many areas of day to day business and personal life, such as
accessing facilities in the workplace, buying goods and services, proving
entitlement, defeating terrorism and preventing cyber warfare. This need is a
subset of the wider Identity and Access Management market which is forecast to
grow globally from $3.15bn in 2007 to $5.3bn in 2012. 75% of this total market
is driven by compliance and regulatory demand, notably in the US which accounts
for around 40% of the whole (Source:IDC).
Intercede's MyID technology and our expert team of engineers are ideally placed
to deliver world-class solutions to these difficult and complex requirements.
For a company with modest current revenues, the potential upside from our
continuing success is very high and we remain optimistic about our future
prospects.
We look forward with confidence to reporting on our progress during the current
year and beyond.
Richard Parris
Chairman & Chief Executive
Business and Finance Review
Introduction
Intercede has delivered an improved trading performance in the current financial
year despite difficult economic conditions. This further 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
In last year's Business and Finance Review, I stated that the momentum is
clearly building, which has been further demonstrated by these results.
Existing projects have gone to plan and new projects have continued to be won.
Moreover, 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.
It is also worthy of note that the nature of these projects, which are
infrastructure related, means that they can realistically be expected to deliver
revenues over many years offering increasing levels of visibility. Intercede's
MyID software manages the secure enrolment, verification, 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.
Following the successful launch of MyID 8 in June 2008, which repositioned MyID
from being a smart card management system to a fully featured Identity and
Credential Management System, MyID 8 SR1 was released on 26 October 2009. This
updated version includes support for a wide range of third party systems and
devices and enables partners and systems integrators to add value faster using
Intercede's revolutionary Project Designer suite of Application Programming
Interfaces (APIs) and customisation tools.
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 2010/11 with a larger pipeline than ever before, both in terms
of the number and value of individual opportunities. The current pipeline
contains a high level of forecast revenue from projects we have already won
(i.e. 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 to project timings.
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 | |
| | 31 March 2010 | 31 March 2009 | Change |
| | GBP000 | GBP000 | % |
+--------------------------+-----------------+----------------+----------+
| Revenue | 6,194 | 5,701 | 8.6 |
+--------------------------+-----------------+----------------+----------+
| Gross profit (%) | 6,128 (99%) | 5,660 (99%) | 8.3 |
+--------------------------+-----------------+----------------+----------+
| Pre-exceptional | (4,102) | (3,802) | (7.9) |
| operating costs | | | |
+--------------------------+-----------------+----------------+----------+
| Pre-exceptional | 2,026 (33%) | 1,858 (33%) | 9.0 |
| operating profit (%) | | | |
+--------------------------+-----------------+----------------+----------+
| Exceptional item | (1,517) | (371) | |
+--------------------------+-----------------+----------------+----------+
| Profit before tax | 510 | 1,408 | (63.8) |
+--------------------------+-----------------+----------------+----------+
| Basic earnings per share | 1.1p | 4.7p | (76.6) |
+--------------------------+-----------------+----------------+----------+
| Adjusted earnings per | 4.2p | 3.7p | 13.5 |
| share | | | |
+--------------------------+-----------------+----------------+----------+
Sales revenues have grown by a further 9% following last year's doubling, with
no one project representing more than 15% of total revenue (2009: 25%). With
gross profit margins remaining constant at 99%, and the increase in costs being
restricted to 8%, the Group has delivered a 33% pre-exceptional operating margin
for the second year in succession.
Staff costs continue to represent the main area of expense representing 84% of
the total pre-exceptional operating costs (2009: 84%). The average number of
employees increased from 47 to 54 year on year.
The exceptional item represents the costs associated with defending a patent
infringement lawsuit which was filed by ActivIdentity in the United States
District Court for the Northern District of California on 1 October 2008. No
further legal costs are expected to arise following the settlement of this claim
on 23 March 2010.
The net finance income for the year was GBP1,000 (2009: GBP79,000 net finance
cost) which reflects the benefit of the May 2009 convertible loan note
conversion. Having regard for the enhanced tax relief available in respect of
research and development expenditure, GBP3,574,000 of prior year tax losses
remain available for utilisation against future year's profits (2009:
GBP3,506,000). Given the increase in tax losses carried forward, no change has
been made to the deferred tax asset recognised in respect of prior year losses
(2009: GBP280,000 credit).
A profit for the year of GBP496,000 (2009: GBP1,749,000) resulted in a basic
earnings per share of 1.1p (2009: 4.7p) and a fully diluted earnings per share
of 1.0p (2009: 3.6p). The adjusted fully diluted earnings per share, based upon
profit prior to tax and exceptional item of GBP2,027,000 (2009: GBP1,779,000),
is 4.2p (2009: 3.7p).
Funding
As at 31 March 2010, the Group had cash balances totaling GBP4,664,000 (2009:
GBP3,711,000). The increase in cash balances principally reflects a GBP2,085,000
inflow from pre-exceptional operating activities (2009: GBP2,445,000 inflow) and
GBP1,085,000 of exceptional payments relating to the ActivIdentity patent
litigation (2009: GBP56,000). Following the settlement of this litigation on 23
March 2010, all outstanding legal costs have now been paid. This resulted in a
further GBP747,000 being paid out during April and May 2010 to the Group's legal
advisers, as a result of which the Group has effectively entered the new
financial year with a net cash balance of GBP3,917,000.
The Group has no debt (2009: GBP1,936,000). As outlined in note 7, all of the
convertible loan note holders elected to convert their loan notes into ordinary
shares during the period. The conversion significantly strengthens the Company's
Balance Sheet and leaves the Group with a substantial cash balance to meet its
future needs.
The Board proposes to reduce the Company's share capital by cancelling the Share
Premium Account and cancelling and extinguishing the Deferred Shares. A circular
will be sent to shareholders seeking approval for the Proposals at a General
Meeting of the Company which is scheduled to follow this year's AGM on 24
September 2010. The effect of the Capital Reduction would be to eliminate the
deficit showing as profit and loss account reserves, thereby facilitating the
payment of a dividend as and when the Board considers this to be appropriate.
Summary
The Group has delivered another strong trading and financial performance. It is
pleasing to enter the new financial year with a much stronger Balance Sheet and
having resolved the patent litigation.
Andrew Walker
Finance Director
INTERCEDE GROUP plc
Consolidated Income Statement for the year ended 31 March 2010
+---------------------------------------------+--------+------------+------------+
| | Notes | 2010 | 2009 |
+---------------------------------------------+--------+------------+------------+
| | | GBP000 | GBP000 |
+---------------------------------------------+--------+------------+------------+
| Continuing operations | | | |
+---------------------------------------------+--------+------------+------------+
| Revenue | 2 | 6,194 | 5,701 |
+---------------------------------------------+--------+------------+------------+
| Cost of sales | | (66) | (41) |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Gross profit | | 6,128 | 5,660 |
+---------------------------------------------+--------+------------+------------+
| Administrative expenses | | (5,619) | (4,173) |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Operating profit | | 509 | 1,487 |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
| Operating profit before exceptional item | | 2,026 | 1,858 |
+---------------------------------------------+--------+------------+------------+
| Exceptional item | 3 | (1,517) | (371) |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Operating profit | | 509 | 1,487 |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
| Finance income | | 27 | 68 |
+---------------------------------------------+--------+------------+------------+
| Finance costs | | (26) | (147) |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Profit before tax | | 510 | 1,408 |
+---------------------------------------------+--------+------------+------------+
| Taxation | 4 | (14) | 341 |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Profit for the year | | 496 | 1,749 |
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| | | | |
| | | | |
+---------------------------------------------+--------+------------+------------+
| Total comprehensive income attributable to | | 496 | 1,749 |
| owners of the company | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| | | | |
| | | | |
+---------------------------------------------+--------+------------+------------+
| Earnings per share (pence) | 5 | | |
+---------------------------------------------+--------+------------+------------+
| - basic | | 1.1p | 4.7p |
+---------------------------------------------+--------+------------+------------+
| - diluted | | 1.0p | 3.6p |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
There are no recognised gains or losses in either year other than the profit for
the year.
The accompanying notes are an integral part of these financial statements.
INTERCEDE GROUP plc
Consolidated Balance Sheet at 31 March 2010
+--------------------------------------------+--------+------------+------------+
| | Notes | 2010 | 2009 |
+--------------------------------------------+--------+------------+------------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------+--------+------------+------------+
| Non-current assets | | | |
+--------------------------------------------+--------+------------+------------+
| Property, plant and equipment | | 84 | 67 |
+--------------------------------------------+--------+------------+------------+
| Deferred tax | | 280 | 280 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | 364 | 347 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | | |
+--------------------------------------------+--------+------------+------------+
| Current assets | | | |
+--------------------------------------------+--------+------------+------------+
| Trade and other receivables | | 954 | 902 |
+--------------------------------------------+--------+------------+------------+
| Cash and cash equivalents | 8 | 4,664 | 3,711 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | 5,618 | 4,613 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | | |
+--------------------------------------------+--------+------------+------------+
| Total assets | | 5,982 | 4,960 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | | |
+--------------------------------------------+--------+------------+------------+
| Equity | | | |
+--------------------------------------------+--------+------------+------------+
| Called up share capital | 7 | 4,413 | 4,305 |
+--------------------------------------------+--------+------------+------------+
| Share premium account | | 4,718 | 2,875 |
+--------------------------------------------+--------+------------+------------+
| Other reserves | | 1,508 | 1,508 |
+--------------------------------------------+--------+------------+------------+
| Equity reserve | | - | 109 |
+--------------------------------------------+--------+------------+------------+
| Retained earnings | | (7,497) | (8,102) |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| Total equity | | 3,142 | 695 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | | |
+--------------------------------------------+--------+------------+------------+
| Current liabilities | | | |
+--------------------------------------------+--------+------------+------------+
| Trade and other payables | | 1,385 | 1,156 |
+--------------------------------------------+--------+------------+------------+
| Deferred revenue | | 1,455 | 1,173 |
+--------------------------------------------+--------+------------+------------+
| Convertible loan notes | 8 | - | 1,936 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | 2,840 | 4,265 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
| | | | |
+--------------------------------------------+--------+------------+------------+
| Total equity and liabilities | | 5,982 | 4,960 |
+--------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+--------+------------+------------+
The accompanying notes are an integral part of these financial statements.
INTERCEDE GROUP plc
Consolidated Statement of Changes in Equity for the year ended 31 March 2010
+----------------------------+----------+----------+----------+----------+----------+----------+
| | 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 2008 | 4,292 | 2,764 | 1,508 | 109 | (9,851) | (1,178) |
+----------------------------+----------+----------+----------+----------+----------+----------+
| Issue of shares, net of | 13 | 111 | - | - | - | 124 |
| costs | | | | | | |
+----------------------------+----------+----------+----------+----------+----------+----------+
| Total comprehensive income | - | - | - | - | 1,749 | 1, 749 |
+----------------------------+----------+----------+----------+----------+----------+----------+
| | ________ | ________ | ________ | _______ | ________ | _______ |
+----------------------------+----------+----------+----------+----------+----------+----------+
| At 31 March 2009 | 4,305 | 2,875 | 1,508 | 109 | (8,102) | 695 |
+----------------------------+----------+----------+----------+----------+----------+----------+
| Issue of shares, net of | 108 | 1,843 | - | (109) | 109 | 1,951 |
| costs (see note 7) | | | | | | |
+----------------------------+----------+----------+----------+----------+----------+----------+
| Total comprehensive income | - | - | - | - | 496 | 496 |
+----------------------------+----------+----------+----------+----------+----------+----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+----------------------------+----------+----------+----------+----------+----------+----------+
| At 31 March 2010 | 4,413 | 4,718 | 1,508 | - | (7,497) | 3,142 |
+----------------------------+----------+----------+----------+----------+----------+----------+
| | _ | ________ | ________ | _______ | ________ | ________ |
| | ______ | | | | | |
+----------------------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
| | | | | | | |
+----------------------------+----------+----------+----------+----------+----------+----------+
The accompanying notes are an integral part of these financial statements.
INTERCEDE GROUP plc
Consolidated Cash Flow Statement for the year ended 31 March 2010
+---------------------------------------------+--------+------------+------------+
| | Notes | 2010 | 2009 |
+---------------------------------------------+--------+------------+------------+
| | | GBP'000 | GBP'000 |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
| Cash flows from operating activities | | | |
+---------------------------------------------+--------+------------+------------+
| Operating profit | | 509 | 1,487 |
+---------------------------------------------+--------+------------+------------+
| Exceptional item | | 1,517 | 371 |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Operating profit before exceptional item | | 2,026 | 1,858 |
+---------------------------------------------+--------+------------+------------+
| Depreciation | | 31 | 25 |
+---------------------------------------------+--------+------------+------------+
| Increase in trade and other receivables | | (60) | (473) |
+---------------------------------------------+--------+------------+------------+
| Increase in trade and other payables | | 88 | 1,035 |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Cash generated from operations before | | 2,085 | 2,445 |
| exceptional item | | | |
+---------------------------------------------+--------+------------+------------+
| Exceptional item | | (1,085) | (56) |
+---------------------------------------------+--------+------------+------------+
| Taxation (paid)/received | | (14) | 61 |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Net cash generated from operating | | 986 | 2,450 |
| activities | | | |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
| Investing activities | | | |
+---------------------------------------------+--------+------------+------------+
| Interest received | | 25 | 68 |
+---------------------------------------------+--------+------------+------------+
| Purchases of property, plant and equipment | | (48) | (40) |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Net cash from investing activities | | (23) | 28 |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
| Financing activities | | | |
+---------------------------------------------+--------+------------+------------+
| (Costs)/proceeds on issue of shares | | (10) | 80 |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| | | | |
+---------------------------------------------+--------+------------+------------+
| Net increase in cash and cash equivalents | 8 | 953 | 2,558 |
+---------------------------------------------+--------+------------+------------+
| Cash and cash equivalents at the beginning | 8 | 3,711 | 1,153 |
| of the year | | | |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
| Cash and cash equivalents at the end of the | 8 | 4,664 | 3,711 |
| year | | | |
+---------------------------------------------+--------+------------+------------+
| | | __________ | __________ |
+---------------------------------------------+--------+------------+------------+
The accompanying notes are an integral part of these financial statements.
INTERCEDE GROUP plc
Preliminary Results for the Year Ended 31 March 2010
NOTES
1. The financial information set out in this announcement does not
constitute the Group's Statutory Accounts for the years ended 31 March 2009 or
2010, but is derived from those accounts. Statutory Accounts for 2009 have been
delivered to the Registrar of Companies and those for 2010, 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 498
of the Companies Act 2006.
The Annual General Meeting of the Company will be held at 11.00 am on Friday 24
September 2010 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 activities of
the Group constitute a single business segment.
The split of revenue by geographical destination of the end customer can be
analysed as follows:
+-------------------------------------------+------+------------+----------+----------+
| | 2010 | 2009 |
+--------------------------------------------------+------------+---------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+------------+---------------------+
| United Kingdom | 1,601 | 2,488 |
+--------------------------------------------------+------------+---------------------+
| Rest of Europe | 1,389 | 846 |
+--------------------------------------------------+------------+---------------------+
| USA | 2,795 | 2,104 |
+--------------------------------------------------+------------+---------------------+
| Rest of World | 409 | 263 |
+--------------------------------------------------+------------+---------------------+
| | __________ | _________ |
+--------------------------------------------------+------------+---------------------+
| | 6,194 | 5,701 |
+--------------------------------------------------+------------+---------------------+
| | __________ | _________ |
+--------------------------------------------------+------------+---------------------+
| | | |
+-------------------------------------------+------------------------------+----------+
| | | | | |
+-------------------------------------------+------+------------+----------+----------+
3. EXCEPTIONAL ITEM
The exceptional item represents the costs associated with defending a patent
infringement lawsuit which was filed by ActivIdentity in the United States
District Court for the Northern District of California on 1 October 2008. No
further legal costs are expected to arise following the settlement of this claim
on 23 March 2010.
4. TAXATION
The tax (charge)/credit comprises:
+------------------------------------------------+----------+----------+-----------+
| | 2010 | 2009 |
+-----------------------------------------------------------+----------+-----------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------+----------+-----------+
| | | |
+-----------------------------------------------------------+----------+-----------+
| Current year - UK corporation tax | - | - |
+-----------------------------------------------------------+----------+-----------+
| Prior year - UK corporation tax | (14) | - |
+-----------------------------------------------------------+----------+-----------+
| Research and development tax credits relating to prior | - | 61 |
| periods | | |
+-----------------------------------------------------------+----------+-----------+
| Recognition of deferred tax asset arising from prior | - | 280 |
| period losses | | |
+-----------------------------------------------------------+----------+-----------+
| | __________ | _________ |
+------------------------------------------------+---------------------+-----------+
| | (14) | 341 |
+-----------------------------------------------------------+----------+-----------+
| | __________ | _________ |
+------------------------------------------------+---------------------+-----------+
| | | | |
+------------------------------------------------+----------+----------+-----------+
The Group has unrecognised deferred tax assets of GBP721,000 (2009: GBP702,000)
and unused tax losses of GBP3,574,000 (2009: GBP3,506,000).
5. EARNINGS PER ORDINARY SHARE
The calculations of earnings per ordinary share are based on the profit for the
financial year and the weighted average number of ordinary shares in issue
during each year.
+----------+----------------------------------------------+----------+------------+------------+----------+
| | | 2010 | 2009 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | GBP'000 | GBP'000 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | Profit for the year | 496 | 1,749 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | Adjusted profit before tax and exceptional | 2,027 | 1,779 | |
| | item | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | __________ | __________ |
+--------------------------------------------------------------------+------------+-----------------------+
| | | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | Number | Number | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | Weighted average number of shares - basic | 46,304,420 | 37,011,460 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | 48,735,005 | 48,735,009 | |
| | - diluted | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | __________ | __________ |
+--------------------------------------------------------------------+------------+-----------------------+
| | | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | Pence | Pence | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | Earnings per share - basic | 1.1 | 4.7 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | - diluted | 1.0 | 3.6 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | - adjusted* | 4.2 | 3.7 | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | __________ | __________ |
+--------------------------------------------------------------------+------------+-----------------------+
| | * Adjusted fully diluted earnings per share | | | |
| | based on profit before tax and exceptional | | | |
| | item | | | |
+----------+----------------------------------------------+-----------------------+------------+----------+
| | | | | | |
+----------+----------------------------------------------+----------+------------+------------+----------+
6.DIVIDEND
The Directors do not recommend the payment of a dividend.
7. CALLED UP SHARE CAPITAL
+----------------------------------------------+------------+------------+
| | 2010 | 2009 |
+----------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------+------------+------------+
| Authorised | | |
+----------------------------------------------+------------+------------+
| 481,861,616 (2009: 481,861,616) ordinary | 4,819 | 4,819 |
| shares of 1p each | | |
+----------------------------------------------+------------+------------+
| 393,138,384 (2009: 393,138,384) deferred | 3,931 | 3,931 |
| shares of 1p each | | |
+----------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------+------------+------------+
| | 8,750 | 8,750 |
+----------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------+------------+------------+
| Issued and fully paid | | |
+----------------------------------------------+------------+------------+
| 48,178,005 (2009: 37,403,756) ordinary | 482 | 374 |
| shares of 1p each | | |
+----------------------------------------------+------------+------------+
| 393,138,384 (2009: 393,138,384) deferred | 3,931 | 3,931 |
| shares of 1p each | | |
+----------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------+------------+------------+
| | 4,413 | 4,305 |
+----------------------------------------------+------------+------------+
| | __________ | __________ |
+----------------------------------------------+------------+------------+
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, 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 share.
The deferred shares which were created as a result of the July 2003 placing have
minimal rights attaching to them and are effectively worthless.
8. ANALYSIS OF NET CASH
+------------------+--------------------+------------+------------+-----------+
| | 2009 | Cash flow | Non-cash | 2010 |
| | | | movement | |
+------------------+--------------------+------------+------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+--------------------+------------+------------+-----------+
| Cash at bank and | 3,711 | 953 | - | 4,664 |
| in hand | | | | |
+------------------+--------------------+------------+------------+-----------+
| Debt due within | (1,936) | - | 1,936 | - |
| one year | | | | |
+------------------+--------------------+------------+------------+-----------+
| | ________ | __________ | __________ | _________ |
+------------------+--------------------+------------+------------+-----------+
| Net cash | 1,775 | 953 | 1,936 | 4,664 |
+------------------+--------------------+------------+------------+-----------+
| | ________ | __________ | __________ | _________ |
+------------------+--------------------+------------+------------+-----------+
On 29 May 2009, as outlined in note 7, 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KKCDPOBKDBAK
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