Intercede Group PLC Trading Update (4066Y)
03 März 2017 - 8:00AM
UK Regulatory
TIDMIGP
RNS Number : 4066Y
Intercede Group PLC
03 March 2017
3 March 2017
INTERCEDE GROUP plc
('Intercede', the 'Company' or the 'Group')
Trading Update
Following the Company's announcement on 5 January 2017 of the
receipt of a record $3.0m order, the order book as of 2 March 2017
indicates that, unless further orders are received that can be
recognised as revenue in the current period, the revenue outturn
for the financial year ending 31 March 2017 will be approximately
GBP8.0m. A further GBP2.0m of new orders remain in the current
period pipeline which includes US government and defence contractor
customers.
The Company is working diligently to close these orders.
However, the US Presidential Budget Proposal issued on 27 February
2017 made a commitment to radically increase military and
infrastructure expenditure during the term of the new
administration. This commitment has raised considerable and
unexpected uncertainty for the short term budget allocations across
the Company's target customer base in the US.
There remains a risk that a proportion of the outstanding orders
forecast for closure in the current period will be delayed into the
next financial year. The consequent impact on revenue is likely to
result in losses for the year to 31 March 2017 being higher than
management expectations. In this case, gross cash balances
(excluding GBP4.5m convertible loan notes) are forecast to be
approximately GBP6.0m as at 31 March 2017.
Intercede believes that the impact of the Presidential Budget
will be short term in nature. Cybersecurity remains a vital
component of US IT strategy and a Presidential Executive Order on
Cybersecurity is expected shortly. Contemporaneously, New York
State Cybersecurity Regulations for Financial Services Companies 23
NYCRR 500 became effective on 1 March 2017. In the medium to long
term, the regulatory trend towards higher levels of cybersecurity
will significantly increase budgets. As a result, it is highly
probable that this could produce a step change in the Company's
revenue potential within the US government and US regulated
financial services markets.
Richard Parris, Chairman & CEO of Intercede, commented
"Following the Presidential Budget Proposal, the Board has taken
a conservative view of its immediate pipeline. While we remain
confident that these orders will flow to revenue, there can be no
certainty that this will occur within the current financial year.
This timing issue does not in any way detract from the Board's
confidence in the Company's prospects. Intercede is developing
products and services which directly address the emerging need for
higher levels of cybersecurity. In the next 12 months, European and
US regulation will require a range of agencies and organisations to
put this in place. Intercede is already well advanced in its plans
to benefit from this trend, utilising the GBP4.5m (net) funds
raised in January 2017 to invest in new applications for our
leading software and to expand into new markets. Intercede is
reducing its dependence on single geographies and sectors which
will position the Company well for what promises to be a period of
potential growth."
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
Simon Hicks, Corporate Finance
Capital Access Group Tel. +44 (0)203 7633405
Scott Fulton
About Intercede
Intercede is a software and service company specializing in
identity, credential management and secure mobility. Its solutions
create a foundation of trust between connected people, devices and
apps and combine expertise with innovation to provide world-class
cybersecurity. Intercede has been delivering solutions to high
profile customers, from the US and UK governments to some of the
world's largest corporations, telecommunications providers and
information technology firms, for over 20 years. Intercede's
product portfolio includes MyID, an identity and credential
management system that assigns trusted digital identities to
employees citizens and machines. In 2015, Intercede launched MyTAM,
enabling trusted applications to be loaded into a mobile device's
Trusted Execution Environment (TEE), providing hardware-level
security for Android apps. In 2016, Intercede launched RapID, a
secure, easy to implement authentication service for mobile apps
and cloud services to completely eliminate the need for
passwords.
For more information visit: www.intercede.com
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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