One of the biggest security challenges faced by organisations
today is verifying the identity of people and devices that attempt
to access their networks, data and premises. Many firms rely on
usernames and passwords, but these are an inherently insecure form
of authentication, while proving especially awkward to use on
mobile devices. To address this, we have increased our
collaboration with Microsoft so that organisations can now give
their employees secure access to corporate networks and resources
straight from their Windows device, whether it is a PC, tablet or
phone. Intercede announced in June 2014 that it was the first
company to provide virtual smart card (VSC) management - a form of
authentication that uses a device's inbuilt secure element (known
as a TPM) - for Windows Phone 8.1.
The advantage of Windows VSC solutions is the low cost and ease
of deployment, making it an ideal way to provide higher levels of
cyber security and identity assurance to mid-market customers.
A significant amount of man time has been invested during the
period in supporting Microsoft on a number of internal and external
facing proofs of concept and pilots that involve key security
components and the Azure Cloud services.
As a further sign of our strengthening relationship, Intercede
was a bronze sponsor at Microsoft's World Partner Conference in
July 2014.
3. FIPS 201-2 Derived Credentials - mobile solutions for
governments and security sensitive large scale organisations
Intercede's US Federal market for secure identities is about to
go through a revolution as government agencies seek to improve
productivity and reduce costs through the mobile enablement of
their workforce. Intercede has invested to ensure it can ride this
wave of opportunity. In September 2014 we announced that a
high-profile US Federal government agency had placed an initial
order for MyID v10.1 credential management software to provide its
employees with secure identity on mobile devices to meet the new
FIPS 201-2 standard.
Launched September 2014, MyID v10.1 is the US's first derived
credential solution that can securely issue and manage trusted
personal identity verification (PIV) credentials for mobile.
Meeting the technical and business process standards for FIPS 201-2
compliance, MyID combines technology independence with an easy
"mobile first" self-service interface to enable fast
enterprise-wide deployment of derived credentials.
The use of derived credentials enables Federal employees to
securely access mobile resources that they could previously only
get to with their PIV smart card, leading to higher productivity
while simultaneously strengthening security.
Intercede previewed MyID v10.2 at the Smart Card Alliance on
29-30 October 2014. This is Intercede's inaugural "Cloud-first,
Mobile-first" product. Designed to be run by end-user organisations
or service providers in a cloud environment, MyID v10.2 enables any
Federal agency to manage their derived credentials using MyID
irrespective of their existing PIV provider. This opens up a large
premium government market to Intercede.
Strategy and Outlook
Intercede's strategy is to continue to grow its identity and
credential management business in its historically strong markets
and to reinvest in the significantly higher growth opportunity that
is anticipated in the mobile and Internet of Things (IoT) markets.
Our diverse product portfolio and long term 'sticky' customers
enable the Company to ride the inherent risks associated with
selling products based on new technology and to focus on maximising
market penetration ahead of nascent competition.
We believe the upside of success is huge. For example, Trustonic
TEE technology alone already protects more than 250 million smart
devices, empowering service providers to protect their applications
in hardware to simplify access and enhance the services provided.
The technology enables usernames and passwords to be replaced with
strong identity and authentication credentials that increase
convenience, privacy and security for consumer and business
applications. This population is expected to grow significantly in
the next 12-24 months and by 2020 the Internet of Things market is
estimated to be in excess of 50 billion devices. Each of those
digital identities needs to be managed and this therefore
represents a massive potential market for Intercede.
The commercial upside of the Microsoft VSC and Derived
Credential markets, while smaller in terms of number of licenses
than the TEE opportunity, carry higher unit prices and have the
scope for generating significant returns in the medium term.
In the markets in which we operate orders can be delayed and the
adoption of new products and services can be slower than planned.
However, we see encouraging signs based on the level of customer
engagement in the current financial year to date. Our expectations
are thus for year on year growth and further upside potential based
on a strong pipeline of opportunities, more and more of which is
developing in new markets. In the longer term it has become clear
that Intercede is very well placed to capitalise on a market in
which it has been recognised that passwords are not enough.
Richard Parris
Chairman & Chief Executive
6 November 2014
Consolidated Statement of Comprehensive Income
For the period ended 30 September 2014
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 4,045 4,614 9,783
Cost of sales (296) (18) (99)
------------ ------------ ----------
Gross profit 3,749 4,596 9,684
Operating expenses (4,868) (4,376) (9,366)
------------ ------------ ----------
Operating (loss)/profit (1,119) 220 318
Finance income 31 36 77
------------ ------------ ----------
(Loss)/profit before tax (1,088) 256 395
Taxation 383 396 385
------------ ------------ ----------
(Loss)/profit for the period (705) 780
------------ ------------ ----------
Total comprehensive (expense)/income
attributable to owners of the parent
company (705) 652 780
------------ ------------ ----------
(Loss)/earnings per share (pence)
- basic (1.4)p 1.3p 1.6p
- diluted (1.4)p 1.3p 1.6p
------------ ------------ ----------
Consolidated Balance Sheet
As at 30 September 2014
As at As at As at
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 786 658 757
------------ ------------ --------
Current assets
Trade and other receivables 1,744 1,575 1,785
Cash and cash equivalents 6,301 7,429 7,247
------------ ------------ --------
8,045 9,004 9,032
------------ ------------ --------
Total assets 8,831 9,662 9,789
------------ ------------ --------
Equity
Share capital 487 487 487
Share premium account 232 232 232
Other reserves 1,508 1,508 1,508
Retained earnings 3,010 4,250 3,972
------------ ------------ --------
Total equity attributable to owners
of the parent company 5,237 6,477 6,199
------------ ------------ --------
Current liabilities
Trade and other payables 1,396 1,225 1,719
Deferred revenue 2,198 1,960 1,871
------------ ------------ --------
3,594 3,185 3,590
------------ ------------ --------
Total equity and liabilities 8,831 9,662 9,789
------------ ------------ --------
Consolidated Statement of Changes in Equity
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