TIDMIGP
RNS Number : 5275T
Intercede Group PLC
21 November 2013
21 November 2013
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2013
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 increased by 32% to GBP4,614,000 (H1 2012:
GBP3,508,000): the highest six month sales period to date.
-- Return to profitability: profit before tax of GBP256,000 (H1
2012: loss before tax of GBP185,000).
-- Basic and fully diluted earnings per share of 1.3p (H1 2012: loss per share of 0.2p).
-- Cash balances of GBP7,429,000 as at 30 September 2013 (30
September 2012: GBP7,183,000) demonstrating financial strength of
business.
-- Six new contracts signed in the period with major
international organisations in the telecoms, aerospace &
defence and law enforcement sectors; one further contract signed
since period end - all expected to contribute to revenues in
current financial year.
-- Increased investment in technology and sales & marketing
validated by the securing of launch customers and partners for our
MyID credentialing services, MyID Mail app and MyID
machine-certificate solutions.
Richard Parris, Chairman and Chief Executive of Intercede,
commented:
"We have experienced one of our strongest ever six month trading
periods and remain optimistic that this pattern will continue
through the second half. No fewer than six new revenue generating
contracts were signed in the half year, with a seventh earlier this
month. In addition, we have advanced our technological proposition,
enabling MyID to be applied in a growing range of devices and other
environments. We have also continued to invest in our own sales
capacity and expanded our indirect channels to market.
"The commercial outlook for the remainder of the year ending 31
March 2014 remains in line with expectations. Beyond that, I
believe 2014 will be an inflexion year for the adoption of
Intercede's technology by mainstream channel partners and large
customers. 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."
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
Joanna Weaving, Corporate Broking
Bell Pottinger Tel. +44 (0)7802 442486
Archie Berens
About Intercede
Intercede(TM) 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(R) 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 to
deliver flexible digital identity solutions that are interoperable
with other existing technologies and which are tailored to customer
needs.
The world's largest governments, major corporations and mobile
network operators trust Intercede's deep expertise to deliver
effective solutions. The Company's technology achievements reflect
a significant investment in the development of intellectual
property, exemplary speed of deployment and adherence to
international standards including FIPS 201, where MyID(R) was the
first electronic personalisation 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(R) 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 is 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 2013
Chairman's Statement
Introduction
I am pleased to announce Intercede's interim results for the six
month period ended 30 September 2013. We have experienced one of
our strongest ever six month trading periods and remain optimistic
that this pattern will continue through the second half.
Financial Results
Revenues in the period totaled GBP4,614,000 compared to
GBP3,508,000 in the previous year, an increase of 32%. A net profit
of GBP652,000 for the period compares to a GBP84,000 net loss in
the prior year.
The Company has no debt and continues to be cash generative. The
cash balance at the end of September was GBP7,429,000 compared to
GBP6,770,000 at the end of March 2013 and GBP7,183,000 at the end
of September 2012.
Operational Highlights
This has been a very busy period in terms of contract wins and
customer deliveries. The following contract wins were added to the
order book during the period, all of which will contribute to
revenues in the current financial year:
-- 9 April 2013: CertiPath announced its CIV-in-a-Box product,
based on MyID, at ISC West in Las Vegas. CertiPath has subsequently
secured its first customer for this solution.
-- 25 April 2013: Large scale US transportation security
programme - MyID licenses and development to support more than 2.5
million biometric identity smart cards. The contract value to
Intercede is likely to exceed GBP1.5 million in the current
financial year and GBP10 million over a five-year period.
-- 29 July 2013: Canadiantelecommunications company - more than
25,000 MyID licences in support of digital identities on mobile
devices for employees and to be expanded to external customers.
-- 29 July 2013: German telecommunications company - more than
100,000 MyID licenses in support of digital identities on smart
cards and mobile devices, initially for employees but with an
intention to later expand to external customers.
-- 25 September 2013: Major European aerospace & defence
contractor - initial order for 50,000 MyID licenses to manage
digital identities on employee smart badges. The total population
after full deployment is anticipated to be more than 100,000
users.
-- 25 September 2013: UK law enforcement organisation - order
received to replace an incumbent competitor's product with MyID.
The total population after full deployment is anticipated to be
more than 30,000 users.
In addition, on 5 November 2013, we signed a contract with a
major US aerospace & defence contractor, to replace an existing
credential management system with MyID. The total population after
full deployment is anticipated to be more than 60,000 users.
Business Development
During the period, Intercede advanced the use of MyID to manage
digital credentials on Windows 7, Windows 8 and 8.1 mobile devices
to enable customers to deploy virtual smartcards onto tablets,
laptops and phones equipped with TPM technology. These solutions
were demonstrated at an invitation-only CESG security event on 14
October 2013. Working with the Microsoft sales channel, a number of
opportunities are in the late stages of contract negotiation.
On 6 September 2013, Intercede entered into a technology and
marketing partnership with Trustonic to further develop our mobile
device credential management capability. Trustonic is a joint
venture between ARM, Gemalto and Giesecke & Devrient.
Extending from our work with both Microsoft and Trustonic,
Intercede is developing a MyID solution for managing the secure
identity of machines connected to trusted networks. Initial
contracts are currently being negotiated for the deployment of at
least 100,000 machine certificates managed by MyID licenses in
2014.
To demonstrate the use of digital identities on mobile devices,
Intercede has developed MyID Mail, a secure email app that is
available for purchase on iTunes. This works on any iPhone or iPad
equipped with a smart card reader. A major oil and gas company is
currently piloting the use of this solution for its senior
executives, reinforcing the potential demand for such
capability.
At government level, additional PIV and PIV-I licenses have been
sold to US Federal government agencies and HP have purchased the
first licenses under our previously announced reseller agreement to
support a large UK government agency. This endorses MyID as a
high-security trusted product.
In the US, at state and local level, Intercede MyID is powering
two managed service providers who have been contracted during the
period to roll out citizen-facing identity card solutions within
the Commonwealth of Virginia and the State of West Virginia. These
programs have the potential to provide healthy revenues in future
periods. Furthermore, another Intercede partner is poised to roll
out PIV-I credentials to more than 300,000 contractors accessing US
military bases.
We have previously highlighted our engagement with TSCP, an
aerospace and governmental organisation focused on secure
transglobal collaboration. On 18 September 2013, TSCP announced it
had been awarded a pilot grant by the Department of Commerce's
National Institute of Standards and Technology (NIST) to support
the National Strategy for Trusted Identities in Cyberspace (NSTIC).
The TSCP team brings together governments, leading system
integrators, technology solution providers, small and medium-sized
businesses and financial services sector participants to
collaborate in achieving NSTIC's goals. Intercede is a member of
this team. The TSCP pilots will use trusted credentials to conduct
secure business-to-business, government-to-business and retail
transactions for small and medium-sized businesses and financial
services companies. One outcome of the TSCP pilots will be the
development of an open source, technology-neutral Trust Framework
Development Guidance document. This is a highly significant
development, since it will create a standard for consistent and
convenient online transactions to enable secure and
privacy-enhancing online access for businesses and consumers.
Intercede is also a member of a pan-European consortium that has
been awarded an EU-funded grant to research and propose solutions
to support the concept of a situational awareness security
operations centre investigating converged physical, logical and
cyber security. The project, which has a value to Intercede in
excess of EUR300k over three years, includes protecting critical
national infrastructure, power utilities and major sports stadiums.
Intercede is contracted to a multinational prime contractor and
will be the identity management solutions provider to the
consortium.
Strategy and Outlook
This wide range of new business opportunities is driving
Intercede's growth trajectory in terms of revenue and headcount.
Our ability to win new customers and to displace competitors from
key accounts demonstrates our current leadership and the
competitive strength of the MyID software platform.
The sales potential behind each of the opportunities described
above is far greater than the revenue booked in the current period,
meaning the business is well structured for further growth. We
continue to invest in people and facilities to ensure we take
advantage of the opportunities we have created.
The securing of launch customers and partners for our MyID
mobile credentialing services, MyID Mail app and MyID
machine-certificate solutions also validates our investment
strategy and provides vital customer feedback.
Intercede's strapline for 2014 is 'ID Anywhere'. On smart cards,
in phones, on tablets, in servers, for employees, citizens,
consumers, in the office, on the move, Intercede delivers secure
and trusted identities - Anywhere. This Internet of Things promises
to be a very large market for Intercede to exploit in both the
medium and long term.
The commercial outlook for the remainder of the year ending 31
March 2014 remains in line with expectations. Beyond that, I
believe 2014 will be an inflexion year for the adoption of
Intercede's technology by mainstream channel partners and large
customers. 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
21 November 2013
Consolidated Statement of Comprehensive Income
For the period ended 30 September 2013
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 4,614 3,508 6,727
Cost of sales (18) (20) (24)
__________ __________ __________
Gross profit 4,596 3,488 6,703
Administrative expenses (4,376) (3,717) (7,467)
__________ __________ __________
Operating profit/(loss) 220 (229) (764)
Finance income 36 44 91
__________ __________ __________
Profit/(loss) before tax 256 (185) (673)
Taxation 396 101 101
__________ __________ __________
Profit/(loss) for the period 652 (84) (572)
__________ __________ __________
Total comprehensive income/(expense)
attributable to owners of the parent
company 652 (84) (572)
__________ __________ __________
Earnings/(loss) per share (pence)
- basic 1.3p (0.2)p (1.2p)
- diluted 1.3p (0.2)p (1.2p)
__________ __________ __________
Consolidated Balance Sheet
As at 30 September 2013
As at As at As at
30 September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 658 624 644
__________ __________ __________
Current assets
Trade and other receivables 1,575 1,104 991
Cash and cash equivalents 7,429 7,183 6,770
__________ __________ __________
9,004 8,287 7,761
__________ __________ __________
Total assets 9,662 8,911 8,405
__________ __________ __________
Equity
Share capital 487 487 487
Share premium account 232 232 232
Other reserves 1,508 1,508 1,508
Retained earnings 4,250 3,946 3,530
__________ __________ __________
Total equity 6,477 6,173 5,757
__________ __________ __________
Current liabilities
Trade and other payables 1,225 890 998
Deferred revenue 1,960 1,848 1,650
__________ __________ __________
3,185 2,738 2,648
__________ __________ __________
Total equity and liabilities 9,662 8,911 8,405
__________ __________ __________
Consolidated Statement of Changes in Equity
As at 30 September 2013
Share Share Other Retained
capital premium reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2013 487 232 1,508 3,530 5,757
Employee share option scheme
charge - - - 68 68
Total comprehensive income - - - 652 652
________ ________ ________ ________ _______
At 30 September 2013 487 232 1,508 4,250 6,477
________ ________ ________ _________________ ________
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 expense - - - (84) (84)
________ ________ ________ ________ _______
At 30 September 2012 487 232 1,508 3,946 6,173
________ ________ ________ ___________ ________
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 - - - 172 172
Total comprehensive expense - - - (572) (572)
________ ________ ________ ________ _______
At 31 March 2013 487 232 1,508 3,530 5,757
________ ________ ________ ___________ ________
Consolidated Cash Flow Statement
For the period ended 30 September 2013
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating profit/(loss) 220 (229) (764)
Depreciation 55 45 92
Employee share option scheme charge 68 100 172
(Increase)/decrease in trade and other
receivables (584) 306 317
Increase in deferred income and trade
and other payables 537 308 218
__________ __________ __________
Cash generated from operations 296 530 35
Taxation 396 4 101
__________ __________ __________
Net cash generated from operating activities 692 534 136
__________ __________ __________
Investing activities
Interest received 36 42 94
Purchases of property, plant and equipment (69) (486) (553)
__________ __________ __________
Net cash used in investing activities (33) (444) (459)
__________ __________ __________
Financing activities
Proceeds on issue of shares - 125 125
__________ __________ __________
Net cash generated from financing activities - 125 125
__________ __________ __________
Net increase/(decrease) in cash and cash
equivalents 659 215 (198)
Cash and cash equivalents at the beginning
of the period 6,770 6,968 6,968
__________ __________ __________
Cash and cash equivalents at the end
of the period 7,429 7,183 6,770
__________ __________ __________
Notes to the Consolidated Accounts
For the period ended 30 September 2013
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 2013.
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
2013 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 2013 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
6 months ended ended Year ended
30 September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
UK 353 331 806
Rest of Europe 1,319 403 651
North America 2,812 2,555 4,823
Rest of World 130 219 447
__________ __________ __________
4,614 3,508 6,727
__________ __________ __________
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 Earnings/(loss) per share
The calculations of the earnings/(loss) per ordinary share are
based on the profit/(loss) 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
2013 2012 2013
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period 652 (84) (572)
__________ __________ __________
Number Number Number
Weighted average number of shares
- basic 48,735,005 48,613,486 48,613,172
- diluted 50,228,664 50,228,664 50,228,664
__________ __________ __________
Pence Pence Pence
Earnings/(loss) per share -
basic 1.3p (0.2)p (1.2p)
- diluted 1.3p (0.2)p (1.2p)
__________ __________ __________
5 Dividend
The Directors do not recommend the payment of a dividend.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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