TIDMIGP
RNS Number : 7446R
Intercede Group PLC
22 November 2012
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2012
Intercede (AIM: IGP.L) is a leading producer of Identity and
Credential Management software, called MyID, which manages the
secure registration, issuance and life cycle of digital identities
for a wide range of uses.
SUMMARY
-- Sales of GBP3,508,000 (H1 2011: GBP3,528,000);
-- Loss before tax of GBP185,000 (H1 2011: Profit before tax of GBP653,000);
-- Basic and fully diluted loss per share of 0.2p (H1 2011: Earnings per share of 1.4p);
-- Continued programme of investment to expand market presence and sales infrastructure, develop
products and create additional revenue streams;
-- Cash balances of GBP7,183,000 at 30 September 2012 (30 September 2011: GBP6,563,000) demonstrating
financial strength of business;
-- Launch of management solution for Microsoft Windows 8 Virtual Smart Cards.
Richard Parris, Chairman & Chief Executive of Intercede,
said today:
"We have continued to make good commercial progress in
challenging markets while resolutely laying the ground for our
future strategic development.
As governments and corporations become increasingly aware that
identity assurance is a critical cornerstone of cyber security, the
need for Intercede's MyID software platform is becoming more widely
recognised. To exploit this opportunity we have made excellent
progress in developing a number of new solutions and partnerships
that we expect to announce in the coming months.
We are confident and committed to our investment plan in support
of Intercede's 2020 vision for high growth in the medium to long
term. In the short term shareholders should be comforted that, in
spite of a period of increased investment, our cash position is
stronger than ever."
ENQUIRIES
Intercede Group plc Tel. +44 (0)1455 558 111
Richard Parris, Chairman & Chief
Executive
Andrew Walker, Finance Director
FinnCap Tel. +44 (0)20 7220 0500
Stuart Andrews, Corporate Finance
Rose Herbert, Corporate Finance
Joanna Weaving, Corporate Broking
Pelham Bell Pottinger Tel. +44 (0)20 7861 3112
Archie Berens
About Intercede
Intercede(R) is a security software provider whose MyID(R)
identity management platform enables global organisations and
governments to create trusted digital identities for employees and
citizens on secure devices such as smartcards, smartphones and
tablets. MyID enables the protection of IP, assets, and digital
content, delivering trusted digital identities as the cornerstone
of cyber security strategies for government, defence, financial
services and other industries.
The Company operates in global markets (including the US, Europe
and Middle East) and works with large international partners
including BT, Gemalto, HP, Microsoft, Oberthur, SafeNet, Symantec
and Thales to deliver flexible digital identity solutions that are
interoperable with other existing technologies and which are
tailored to customer needs.
Corporations such as Boeing, Booz Allen Hamilton and Lockheed
Martin, and governments including the USA, UK and Kuwait, trust
Intercede's deep expertise to deliver effective solutions. The
company's technology achievements reflect an investment of 300 plus
man years of development, exemplary speed of deployment and
adherence to international standards including FIPS 201, where MyID
was the first electronic personalization product to obtain GSA
approval. This trust is reflected in Intercede's rate of repeat
business with its customers, which typically runs at 70-80% of
annual revenues.
Intercede has been developing ID management systems since 1992
and MyID is currently deployed by end customers located in 24
countries. The company is headquartered in the UK, listed on the
London Stock Exchange AIM: IGP and ISO 9001 and TickIT
certified.
For more information visit http://www.intercede.com
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2012
Chairman's Statement
Introduction
I am pleased to announce Intercede's interim results for the six
month period ended 30 September 2012. We have continued to make
good commercial progress, whilst also laying the ground for our
longer term strategic development. We remain convinced that as
governments and corporations become increasingly concerned about
cyber security issues, our proprietary MyID technology will be
recognised as a vital asset in this area.
Financial Results
Revenues in the period totaled GBP3,508,000 compared to
GBP3,528,000 in the previous year. This is a creditable performance
in markets which continue to be challenging. An GBP84,000 loss for
the period compares to a GBP700,000 profit in the prior year which
reflects the strategic investment programme we have put in place to
accelerate the growth of the business.
The Company continues to be cash generative. Through careful
cash management, the cash balance at the end of September was
GBP7,183,000 compared to GBP6,968,000 at the end of March 2012 and
GBP6,563,000 at the end of September 2011, representing a year on
year increase of GBP620,000. Shareholders should be comforted that,
in spite of a period of increased investment, our financial
position is stronger than ever.
Review of Operations
As previously reported, the goals for the current financial
period are to increase sales and marketing efforts in promoting
MyID and to extend product development in areas such as mobile
devices and integration with the newly released Microsoft Windows
8. I am pleased to report that we are making good progress on both
fronts.
The average number of employees and contractors increased from
67 to 74 year on year in support of these goals. Staff costs
continue to represent the main area of expense totalling 72% of the
total operating costs during the period (2011: 79%).
Much of this expansion has been in the US, our largest market.
Our product has been known at the highest levels of government for
a number of years and that brand recognition has extended into the
commercial sector. We were delighted that nearly 100 US government
and business leaders attended our reception in Washington DC last
month, "The Future of Identity Assurance." Attendees included
senior executives from the US federal and state governments,
federal contractors as well as Intercede customers and technology
partners.
We have also launched our MyID management solution for Microsoft
Windows 8 Virtual Smart Cards (VSCs), including desktop, laptop and
tablet devices. Delivering a smart card level of security without
the smart card, the solution ensures only known people on known
devices can access company information.
There have also been a number of commercial successes and
industry milestones achieved in the period, including the
following:
-- MyID installations in support of managed service providers;
-- Delivery of services to support major MyID system upgrades; and
-- Ground breaking R&D to support the use of mobile devices as identity
devices.
As we reported in our trading update in October, we have secured
a number of new customers in the European and US markets, who are
expected to contribute to revenues in the second half of the year.
We are also making good progress on a number of large bid
opportunities with major corporates and governments, several of
which are expected to yield revenues before the end of the
financial period.
We continue to invest in developing additional routes to market.
These include supporting managed service providers who will offer
MyID as a Cloud service in support of their entry into the newly
emerging Identity Provider market place. This will provide a new
source of annuity revenue with greater visibility, which we expect
to commence towards the end of the current financial year, and to
increase thereafter.
The mobile market is clearly an area of significant opportunity
for us, as consumers and workers spend increasing amounts of time
using smart phones and other devices. Protecting identities, and
thus the data contained in the devices, is more important than
ever. We are working with industry majors with a view to our market
leading technology being used in mobile applications. We expect
these initiatives to start producing revenues in the next financial
year.
Outlook
As noted above, we have made good commercial and operational
progress in the first half of the year. First half trading was in
line with expectations and we anticipate several new contracts will
begin generating revenue in the second half of the year.
Our planned investment in expanding our technology leadership
into the managed service, Cloud and mobile device sectors is
starting to bear fruit with increasing partnership engagements with
a number of major industry players. This underpins our focus on
building a business and technology platform to deliver our
previously declared high growth 2020 vision. We remain confident
that this strategy will maximise long term shareholder value.
Richard Parris
Chairman & Chief Executive
22 November 2012
Consolidated Statement of Comprehensive Income
For the period ended 30 September 2012
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2012 2011 2012
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3,508 3,528 6,964
Cost of sales (20) (94) (112)
------------ ------------ ----------
Gross profit 3,488 3,434 6,852
Administrative expenses (3,717) (2,817) (6,023)
------------ ------------ ----------
Operating (loss)/profit (229) 617 829
Finance income 44 36 81
------------ ------------ ----------
(Loss)/profit before tax (185) 653 910
Taxation 101 47 (233)
------------ ------------ ----------
(Loss)/profit for the period (84) 700 677
------------ ------------ ----------
Total comprehensive income attributable
to owners of the company (84) 700 677
Earnings per share (pence)
- basic (0.2)p 1.4p 1.4p
- diluted (0.2)p 1.4p 1.4p
------------ ------------ ----------
Consolidated Balance Sheet
As at 30 September 2012
As at As at As at
30 September 30 September 31 March
2012 2011 2012
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 624 162 183
Deferred tax - 280 -
624 442 183
------------ ------------ --------
Current assets
Trade and other receivables 1,104 1,460 1,311
Cash and cash equivalents 7,183 6,563 6,968
8,287 8,023 8,279
------------ ------------ --------
Total assets 8,911 8,465 8,462
------------ ------------ --------
Equity
Share capital 487 484 484
Share premium account 232 86 110
Other reserves 1,508 1,508 1,508
Retained earnings 3,946 3,833 3,930
__________
------------ ------------ --------
Total equity 6,173 5,911 6,032
Current liabilities
Trade and other payables 890 772 910
Deferred revenue 1,848 1,782 1,520
2,738 2,554 2,430
------------ ------------ --------
Total equity and liabilities 8,911 8,465 8,462
------------ ------------ --------
Consolidated Statement of Changes in Equity
As at 30 September 2012
Share Share Other Retained Total
capital premium reserves earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2012 484 110 1,508 3,930 6,032
Issue of shares, net of costs 3 122 - - 125
Employee share option scheme
charge - - - 100 100
Total comprehensive income - - - (84) (84)
At 30 September 2012 487 232 1,508 3,946 6,173
------- ------- -------- -------- -------
At 31 March 2011 484 86 1,508 3,113 5,191
Employee share option scheme
charge - - - 20 20
Total comprehensive income - - - 700 700
At 30 September 2011 484 86 1,508 3,833 5,911
--- ----- ----- -----
At 31 March 2011 484 86 1,508 3,113 5,191
Issue of shares, net of costs - 24 - - 24
Employee share option scheme
charge - - - 140 140
Total comprehensive income - - - 677 677
At 31 March 2012 484 110 1,508 3,930 6,032
Consolidated Cash Flow Statement
For the period ended 30 September 2012
6 months
ended 6 months ended Year ended
30 September 30 September 31 March
2012 2011 2012
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating (loss)/profit (229) 617 829
Depreciation 45 33 67
Employee share option scheme charge 100 20 140
Decrease/(increase) in trade and other
receivables 306 (615) (461)
Increase in trade and other payables 308 410 287
------------ -------------- ----------
Cash generated from operations 530 465 862
Taxation 4 47 47
------------ -------------- ----------
Net cash generated from operating activities 534 512 909
------------ -------------- ----------
Investing activities
Interest received 42 33 73
Purchases of property, plant and equipment (486) (28) (84)
------------ -------------- ----------
Net cash (used by)/generated from investing
activities (444) 5 (11)
------------ -------------- ----------
Financing activities
Proceeds on issue of shares 125 - 24
------------ -------------- ----------
Net cash from financing activities 125 - 24
------------ -------------- ----------
Net increase in cash and cash equivalents 215 517 922
Cash and cash equivalents at the beginning
of the period 6,968 6,046 6,046
------------ -------------- ----------
Cash and cash equivalents at the end
of the period 7,183 6,563 6,968
1 Preparation of the interim financial statements
These interim financial statements have been prepared under IFRS
as adopted by the European Union and on the basis of the accounting
policies set out in the Group's Annual Report for the year ended 31
March 2012.
The Group is not required to apply IAS 34 Interim Financial
Reporting at this time.
These interim financial statements have not been audited and do
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31 March
2012 have been delivered to the Registrar of Companies. The
Auditors' Report on those accounts was unqualified and did not
contain any statement under Section 498 (2) or (3) of the Companies
Act 2006.
The Interim Report will be mailed to shareholders prior to the
end of December 2012 and copies will be available on the website
(www.intercede.com) and at the registered office: Intercede Group
plc, Lutterworth Hall, St Mary's Road, Lutterworth, Leicestershire,
LE17 4PS.
2 Revenue
All of the Group's revenue, operating profits and net assets
originate from operations in the UK. 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:
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2012 2011 2012
GBP'000 GBP'000 GBP'000
UK 331 399 779
Rest of Europe 403 377 814
North America 2,555 2,368 4,450
Rest of World 219 384 921
-------------- -------------- ----------
3,508 3,528 6,964
-------------- -------------- ----------
3 Taxation
Taxation represents the net effect of amounts receivable from
HMRC in respect of research and development claims and US
corporation tax payable. There is no charge for UK corporation tax
due to the availability of losses brought forward from prior
years.
4 (Loss)/Earnings per share
The calculations of the (loss)/earnings per ordinary share are
based on the (loss)/profit for the period and the weighted average
number of ordinary shares in issue during each period. The basic
and diluted loss per share are the same as potential dilution
cannot be applied to a loss making period.
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2012 2011 2012
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (84) 700 677
Number Number Number
Weighted average number
of shares - basic 48,613,486 48,365,005 48,367,939
- diluted 50,228,664 49,120,843 49,662,277
Pence Pence Pence
(Loss)/Earnings per share - basic (0.2)p 1.4p 1.4p
- diluted (0.2)p 1.4p 1.4p
-------------- -------------- ----------
The increase in the weighted average number of shares used for
the calculation of diluted earnings per share reflects the grant of
share options to directors and senior managers during July, August
and December 2011.
5 Dividend
The Directors do not recommend the payment of a dividend.
6 Changes in equity
Between 14 March and 14 June 2012, certain employees and a
Director of the Company exercised options over a total of 370,000
ordinary shares at an exercise price of 40.5p per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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