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INTERCEDE | Interim Results | RNS

RNS Regulatory News
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 £3,508,000 (H1 2011: £3,528,000);

  •        Loss before tax of £185,000 (H1 2011: Profit before tax of £653,000);

  •        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 £7,183,000 at 30 September 2012 (30 September 2011: £6,563,000) 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® is a security software provider whose MyID® 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 £3,508,000 compared to £3,528,000 in the previous year. This is a creditable performance in markets which continue to be challenging. An £84,000 loss for the period compares to a £700,000 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 £7,183,000 compared to £6,968,000 at the end of March 2012 and £6,563,000 at the end of September 2011, representing a year on year increase of £620,000. 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 ended

6 months ended

Year ended


30 September

30 September

31 March


2012

2011

2012


£'000

£'000

£'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


£'000

£'000

£'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



£'000

£'000

£'000

£'000

£'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


£'000

£'000

£'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


£'000

£'000

£'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


£'000

£'000

£'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
 
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