REG - Intercede Group PLC - Half-year Report
23/11/2021 07:00
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RNS Number : 1898T Intercede Group PLC 23 November 2021
23 November 2021
INTERCEDE GROUP plc
('Intercede', the 'Company' or the 'Group')
Interim Results for the Six Months Ended 30 September 2021
Intercede, the leading specialist in digital identity, credential management
and secure mobility, today announces its interim results for the six months
ended 30 September 2021.
Financial Highlights
· Revenues for the six months ended 30 September 2021 (H1) totalling
£4.9m are approximately 9% higher than last year on a constant currency basis
and 2% higher on a reported basis (2020: £4.8m). This represents a fifth
successive year of H1 growth with compound average growth of 11% over the five
corresponding H1 periods to 30 September 2021.
· Operating expenses increased by 3% to £4.6m (2020: £4.4m).
· Increased revenues and a reduction in finance costs, following the
early retirement of convertible loan notes totalling £5.0m in February 2021,
have resulted in an increased profit for the period of £0.5m (2020: £0.4m).
Basic and fully diluted earnings per share is 0.9p (2020: basic earnings per
share of 0.9p and a fully diluted earnings per share of 0.8p).
· Cash balances of £8.5m at 30 September 2021 compared to £8.0m held
at 31 March 2021. It is worth noting that the 2021 R&D tax claim totalling
£0.4m had not been received by the period end and does not form part of the
cash balances as at 30 September 2021 (2019: R&D claim totalling £0.4m
was received by the period end and formed part of the cash balances as at 30
September 2020).
· Intercede's Connect Partner Programme has helped to form new
partnerships in Europe, the US, ASEAN, Latin America and Africa. This has
resulted in a record number of eight new customers being signed up during H1.
Operating Highlights
· MyID v12 released to plan, introducing a FIDO2 certified
authentication server, an improved operator client and a new MyID
authorisation service, which enables remote transaction approval from a mobile
app using secure multi-factor authentication including fingerprint, PIN, or
facial matching.
· Phase 2 of the Intercede turnaround plan is underway to push
scalability and accelerate revenue growth. The Company is building an M&A
pipeline to expand its footprint across the authentication pyramid and to
address adjacent market segments.
Chuck Pol, Chairman, said:
"Intercede continues to be cash generative and deliver revenue growth during a
continued period of worldwide social and economic turbulence. Sales through
our Connect Partner Programme are particularly encouraging, delivering a
record number of new customers in the first half, that are expected to
generate incremental revenues over time
The recent cyber-attack on Colonial Pipeline and the after-effects of the
SolarWinds breach are a strong reminder that nations and enterprises need to
heighten their cyber security defences in order to maintain the confidence of
the public. In our view, the Intercede product suite is a best in class
solution for those parties looking to gain the highest levels of protection
from malicious and devastating cyber strikes. The MyID platform provides
Intercede's customers with government-grade multi-factor authentication,
whether it is PKI credential management or FIDO for the Enterprise, allowing
them to mix and match technologies and manage them from a single software
solution. Being the only provider to offer a PKI and FIDO hybrid solution
means that we are well placed to take market share as it becomes increasingly
accepted that password protection alone is not sufficient to prevent unwanted
attacks.
The Board continues to believe that Intercede is well placed to benefit from
the heightened and global focus on Cyber Security and will look to strengthen
this position going forward."
ENQUIRIES
Intercede Group plc
Tel. +44 (0)1455 558 111
Klaas van der Leest, Chief Executive
Andrew Walker, Finance Director
finnCap
Tel. +44 (0)20 7220 0500
Stuart Andrews/Simon Hicks, Corporate Finance
Tim Redfern/Charlotte Sutcliffe, ECM
About Intercede
Intercede is a cybersecurity company specialising in digital identities,
derived credentials and access control, enabling digital trust in a mobile
world.
Headquartered in the UK, with offices in the US, we believe in a connected
world in which people and technology are free to exchange information
securely, and complex insecure passwords become a thing of the past.
Our vision is to make the highest levels of cybersecurity available to
organizations and consumers alike, solving complexity and scalability issues
by managing high volumes of digital credentials.
We have been delivering trusted solutions to high profile customers for over
20 years. Our team of experts has deployed millions of identities to
governments, most of the largest aerospace and defence corporations, and major
financial services and healthcare organizations, as well as leading
telecommunications, cloud services and information technology firms, providing
industry-leading employee and customer credential management systems.
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) 596/2014 as
it forms part of UK domestic law by virtue of the European Union (Withdrawal)
Act 2018 ("MAR"), and is disclosed in accordance with the company's
obligations under Article 17 of MAR.
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2021
Interim Management Review
Introduction
Despite the COVID-19 pandemic, the previous financial year demonstrated that
Intercede has significant reasons to be optimistic for the future. The Group
completed Phase 1 of its turnaround after recording its third consecutive year
of profit and cash generation, with 14% growth in revenues in its dominant US
market. The continuing positive trend and momentum gave the Board the
confidence to issue a call notice in respect of the outstanding convertible
loan notes (CLNs) totalling £5,005,000. The removal of this debt from the
balance sheet, and the elimination of the associated interest cost, means
Intercede is well placed to pursue its growth strategy into 2021 and beyond.
Throughout this year, we have seen yet more evidence of the economic and
reputational threat posed to governments and enterprises by cyber attacks. The
first half of this financial year has given rise to a number of catastrophic
cybersecurity breaches including the recent attack on Colonial Pipeline,
whilst many organisations are also still dealing with the aftereffects of the
SolarWinds breach. The increased instances of such malicious and targeted
strikes led to President Biden's administration issuing an Executive Order on
cybersecurity in May 2021. The Executive Order is wide ranging, covering
enhanced information sharing, replicable 'playbook' style responses to
cybersecurity incidents and increased vendor transparency. One item that
stands out is that username/password combination alone is not a permitted form
of authentication to access government systems and data and instead secure
Multi-factor Authentication (MFA) is mandated.
"Hackers don't break in, they log in"
Vasu Jakkal, Security vice-president Microsoft
Fundamentally, it is time to move on from passwords. Last year,
username/password breaches increased by +450% in the US, according to
ForgeRock's Identity Breach Report 2021. A key learning from the Colonial
attack is that MFA is not enough and the recent Executive Order requires that
authentication is secured with encryption of data at rest and in transit. MFA
is used to ensure that digital users are who they say they are by requiring
that they provide at least two pieces of evidence to prove their identity.
Each piece of evidence must come from a different category: something they
know, something they have or something they are. Commonly, day-to-day MFA
utilises SMS-based one-time passwords (OTP's) but these are at risk of
phishing via open source and readily available phishing tools or methods such
as SIM swapping that rely on social engineering. This is not the case with
secure MFA, such as Public Key Infrastructure (PKI) and FIDO (Faster Identity
Online), which provide highly secure crypto-based security that meets the
requirements of the Executive Order and mitigate against the threat of
phishing, social engineering, brute force and password spraying attacks.
In July 2021, Intercede was excited to announce that MyID had been formally
FIDO2 certified. The certification has been awarded after MyID passed FIDO
Alliance interoperability trials demonstrating its ability to use open
authentication standards backed by technology leaders including Microsoft,
Apple, Google, Intel, Facebook and Amazon. This certification opens up
Intercede's addressable market by both territorial reach and product breath.
The MyID platform manages deployment and lifecycle events for both PKI, FIDO
and combined PKI/FIDO devices, giving consistency over policy, reporting and
user experience. Intercede is proud to offer the MyID platform as the first
global solution to offer a truly unified approach to credential management.
Strategy
Intercede continues to focus on its 5C strategy, centred around Colleagues,
Customers, Channels, Code and Cash. In this second phase of our turnaround, we
are adding a new C: Corporate Development. The Group is actively exploring
buy-side M&A following the appointment of a new full time Head of
Corporate Development. The Board sees the value in taking time to ensure the
right strategic fit(s) to ensure scalability and accelerated revenue growth,
whilst also pursuing a disciplined approach to deal pricing.
1. Colleagues
Intercede's product innovation roadmap leverages over 1,000 person-years of
internal development expertise that would require a competitor to spend
significant time and effort to replicate. Put very simply, the Group respects
its staff and recognises they are one of its most valuable assets. Two-way
communication is promoted to encourage colleagues to share their views and
preferences, be they positive or negative, so they can be addressed to deliver
a workplace that is enjoyable and productive. In September 2021, all
colleagues were invited to take part in the annual employee survey which saw a
high response of 96% (compared to an industry average in the mid-60%s).
Engagement has increased from 63% in 2017 to 85% in 2021 (above industry norm)
and has held steady compared to 2020, which is reassuring and a positive
indication of colleagues' health and wellbeing during the pandemic and the
switch to remote working.
2. Customers
A record eight new customers were signed up during the period and the level of
attrition remains very low with renewal rates above 98%.
Intercede works closely with customers to understand what is important to them
and reflect this in the MyID product roadmap. New features such as enhanced
REST APIs for simpler integration, the improved user experience of the
operator interface and support for a wider range of authentication mechanisms
including FIDO and mobile ID, help to keep MyID relevant to our customers and
ensure that MyID is the system of choice where both security and flexibility
are essential in ensuring data is protected now and into the future.
Customer upgrades to the latest release indicate the support for the new
features released as evidenced by the Group's recent announcement that
multiple major customers have chosen to upgrade their existing MyID
deployments including:
§ A major global aerospace and defence manufacturer upgrading to benefit from
enhanced system configuration capabilities and integration APIs, enabling them
to remove customisations and to achieve greater in-house control of the
solution. In addition, support for the latest device types, such as YubiKey
5s, will allow the customer to deploy modern authentication devices better
suited to their working environment.
§ A major transportation program wishing to modernise their supported
infrastructure platforms and also benefit from the more intuitive and faster
browser-independent operator interface.
§ A major US government agency choosing to extend their deployment to
overseas workers, benefiting from enhanced self-service via kiosk interfaces,
reducing operational costs while maintaining compliance with government
security standards.
One important communication channel we have with our customers is the annual
Customer Advisory Board (CAB). Virtual CABs were held during October and
November for Customers and partners in the RoW and US respectively. They have
followed a different format this year, starting with a Product Roadmap and
Customer Success initiative session, then followed by non-concurrent workshops
that allowed customers to attend all sessions including: FIDO for the
Enterprise, Mobile Authentication & Transaction Signing and Upgrading
MyID.
There are encouraging signs that our efforts to increase and improve customer
interaction are paying off as evidenced by the increase in participation of
the Customer Satisfaction Survey, the low churn rate and an increased NPS.
3. Channels
The deep focus on strengthening relationships with reseller and technical
alliance partners underlies Intercede's go-to-market strategy, namely:
Additional Partners = increased addressable market = more customer deployments
A key element of the Group's growth strategy is therefore focused on
increasing the number of partner relationships via Intercede's Connect Partner
Programme. There is a vast and ever-growing number of Public Key
Infrastructure (PKI) technologies in global circulation and the business is
continually assessing them to identify those hardware and software vendors
which meet Intercede's criteria for providing a successful partnership.
We are pleased to report that excellent progress has been made on this front
with new partnerships formed in Europe, the US, ASEAN, Latin America and
Africa. The strength of these new relationships has resulted in a record
number of eight new customers being signed up during H1, with orders received
totalling in excess of £700,000, most of which will be recognised in the
current fiscal year.
Intercede continues to focus on technical alliances so that customers benefit
from their digital infrastructure being seamlessly joined by the secure
credential issued by the MyID platform. In Europe we continue to work with the
likes of Cryptas and ESYSCO to embed MyID in their solution offerings. This
enables enterprises to benefit from a single and secure source of identity to
access centralised systems, such as HR and Finance, and provide strong
authentication to eIDAS (electronic identification and trust services) signing
services.
There has been interest from app developers in Latin America who wish to issue
a secure credential with MyID to act as a vaccine passport, which would
utilise relevant experience that Intercede has from working on the Kuwait
National ID scheme. In our core US market, we were pleased to announce that
MyID v12.1 supports the Entrust CA gateway using REST APIs and continue to be
part of their Entrust technology Alliance Program.
We are also looking forwarding to sponsoring and speaking at Sailpoint's
annual ID.gov event later this month and demonstrating MyID working with
SailPoint to help organisations automate the process of onboarding employees
and issuing digital credentials.
4. Code
During this financial year, Intercede has continued to invest in the MyID
platform in accordance with its core development principles:
§ Create and maintain a modern platform based upon market leading technology;
§ Broaden the addressable market with new functionality; and
§ Meet constantly evolving Customer and Partner needs.
April 2021 saw the announcement of the release of MyID v12 which introduced
the following significant new features:
§ FIDO - MyID can now operate as a FIDO server, supporting a wide range of
FIDO2 authenticators and delivering the ability to manage issuance policy and
lifecycle management, providing organisations with the control they need to
ensure that only the right people can access protected systems and resources.
§ Authentication Server - an easy to operate method of authentication that
enables a customer to use mobile devices within their existing PKI to secure
access to the applications, such as Office 365, that they need as part of
their role using fingerprint, PIN, or facial matching.
§ Operator Client - additional features have now been migrated to the new
operator client to improve performance and user experience. The operator
client is now supported on Google Chrome, Microsoft Edge (Chromium) and
Mozilla Firefox browsers.
The imminent release of MyID v12.2 will remove any dependency on Internet
Explorer whilst adding more options to authenticate users for self-service
features and further operations to the new Operator Client including the
ability to embed it within an existing end user portal. As mentioned in the
'Customer' section above, some of our largest customers are choosing to
upgrade MyID to benefit from these new features and capabilities.
5. Cash
The Group remains in a healthy financial position, with gross cash balances of
£8,491,000 as at 30 September 2021 compared to £8,029,000 held at 31 March
2021. Following the early retirement of all convertible loan notes in February
2021, the Group has no long-term debt or external financing.
Financial Results
Revenues for the six months ended 30 September 2021 totalling £4,855,000 are
approximately 9% higher than last year on a constant currency basis and 2%
higher on a reported basis (2020: £4,762,000 on a reported basis). It is also
pleasing to note the longer-term trend of Intercede's revenue as this
represents a fifth successive year of H1 growth with compound average growth
of 11% over the five corresponding H1 periods to 30 September 2021.
Revenue highlights for the period include:
− A new MyID Enterprise deployment sale to the US Air Force to
support an overseas forward deployment.
− As previously mentioned, multiple major customers have chosen to
upgrade their existing MyID deployments including, but not limited to, a major
global aerospace and defence manufacturer, a major transportation program and
a major US government agency.
− A new MyID Enterprise deployment sale to a photonics technology
business based in the UK to help them automate the issue of virtual smart
cards (VSCs) at scale.
− A new MyID Enterprise deployment sale and order for professional
services to assist a new partner based in South America to set up a pilot ID
Provider for the service network of a multinational financial service
corporation.
− A new MyID Enterprise deployment sale to a shared service provider
for a major US government defence agency.
− Two new MyID PIV deployment sales to an existing US Air Force base
customer. This customer now operates six similarly sized MyID PIV deployments.
All of these wins are expected to generate incremental revenue over the next
12 months from a combination of support & maintenance plus professional
services, development and/or follow-on license sales.
Compared to the corresponding period last year, operating expenses have
increased by 3% to £4,589,000 (2020: £4,446,000). Underlying costs are very
consistent and reflect continued tight control over all areas of expenditure.
Travel expenses continue to be very low and comparable to the almost complete
cessation of travel during the COVID-19 pandemic in the first half of 2020.
Staff costs continue to represent the main area of expense representing 85% of
total operating costs (2020: 87%). The Group continues to recognise the
achievements of its staff with pay rises and performance-related rewards.
Intercede had 82 employees and contractors as at 30 September 2021 (30
September 2020: 83). The average number of employees and contractors during
the period was 84 (2020: 83).
A £416,000 taxation credit for the period (2020: £438,000 taxation credit)
primarily reflects the 2021 Research & Development ("R&D") claim which
results from the Group's strategic investment activities. The Group is a
beneficiary of the UK Government's efforts to encourage innovation by allowing
130% of qualifying R&D expenditure to be offset against taxable profits
and 14.5% of the lower of R&D losses or taxable losses to be paid as tax
credits.
The increase in operating expenses exceeds the increase in revenue, resulting
in a small reduction in operating profit to £171,000 (2020: £295,000).
However, the fall in finance costs following the elimination of the
convertible loan notes produces an increased profit for the period of
£539,000 (2020: £441,000) and has resulted in a basic and fully diluted
earnings per share of 0.9p (2020: basic earnings per share of 0.9p and a fully
diluted profit per share of 0.8p).
Cash balances as at 30 September 2021 totalled £8,491,000 which compares with
£8,029,000 as at 31 March 2021. It is worth noting that the 2021 R&D tax
claim totalling £433,000 had not been received by the period end and does not
form part of the cash balances as at 30 September 2021 (2019: R&D claim
totalling £447,000 was received by the period end and formed part of the cash
balances as at 30 September 2020).
Retirement of Finance Director
Intercede also announces that after 21 years with the Company, Andrew Walker,
Finance Director, has informed the Board of his intention to retire and step
down from the Board. He will continue in the role during his notice period of
up to 12 months or until an orderly handover can take place. As a result, the
Board has begun a recruitment process to identify his successor.
Andrew has been instrumental in the growth of Intercede throughout his 21
years at the Company and his contributions during the last three years have
been critical to the success of the Phase 1 turnaround plan. We wish Andrew
the very best for his retirement.
Outlook
Whilst the nature of Intercede's business and customer profile is such that
the precise timing of orders is difficult to predict, the first half of this
year gives us several reasons to be cautiously optimistic. We have continued
to demonstrate the strength of our product suite in our core market (PKI),
which offers our Blue Chip client base the highest levels of authentication
technology available. We are encouraged by the long-term nature of these
customer relationships, which remain sticky and grow incrementally over time
and provide us with a solid sales pipeline to support management's revenue
target.
At the same time, Intercede has ambitions to generate further top line growth
and we have identified various avenues to achieve this in the medium-term. We
have expanded our TAM (Total Addressable Market) by moving into the FIDO
space, which requires a rigorous but lower level of authentication technology
and makes our products more relevant to a wider customer base. Initial
indications from the proof of concept phase are promising and we look forward
to rolling this new solution out to both existing and new customers. With a
renewed focus on growth, we have also implemented an M&A strategy which
will concentrate on gaining exposure to adjacent and attractive markets.
With various positive structural growth drivers in play and expansion into new
markets, the Board remains positive about the medium and long-term prospects
for Intercede. As a such, whilst we remain cautious of the effects of
COVID-19, the Board can confirm that the outlook for the second half of FY22
continues to remain in line with management's expectations.
By order of the Board
Klaas van der
Leest
Andrew Walker
Chief Executive
Officer
Finance Director
23 November
2021
23 November 2021
Consolidated Statement of Comprehensive Income
6 months ended 6 months ended Year ended
30 September 2021 30 September 2020 31 March
2021
£'000 £'000 £'000
Continuing operations
Revenue 4,855 4,762 10,961
Cost of sales (95) (21) (235)
__________ __________ __________
Gross profit 4,760 4,741 10,726
Operating expenses (4,589) (4,446) (9,137)
__________ __________ __________
Operating profit 171 295 1,589
Finance income 5 3 9
Finance costs (53) (295) (494)
__________ __________ __________
Profit before tax 123 3 1,104
Taxation 416 438 425
__________ __________ __________
Profit for the period 539 441 1,529
__________ __________ __________
Total comprehensive income attributable to owners of the parent company 539 441 1,529
__________ __________ __________
Profit per share (pence)
- basic 0.9p 0.9p 3.0p
- diluted 0.9p 0.8p 2.8p
__________ __________ __________
Consolidated Balance Sheet
As at As at As at
30 September 2021 30 September 2020 31 March
2021
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 134 109 154
Right of use assets 553 851 725
___________ ___________ __________
687 960 879
___________ ___________ __________
Current assets
Trade and other receivables 2,187 1,315 4,098
Cash and cash equivalents 8,491 8,067 8,029
___________ ___________ __________
10,678 9,382 12,127
___________ ___________ __________
Total assets 11,365 10,342 13,006
___________ ___________ __________
Equity
Share capital 572 505 571
Share premium 5,138 673 5,138
Equity reserve - 66 -
Merger reserve 1,508 1,508 1,508
Accumulated deficit (1,989) (3,597) (2,471)
___________ ___________ __________
Total equity 5,229 (845) 4,746
___________ ___________ __________
Non-current liabilities
Convertible loan notes - 4,879 -
Lease liabilities 566 1,001 762
Deferred revenue 240 370 420
___________ ___________ __________
806 6,250 1,182
___________ ___________ __________
Current liabilities
Lease liabilities 352 328 350
Trade and other payables 1,444 1,663 1,920
Deferred revenue 3,534 2,946 4,808
___________ ___________ __________
5,330 4,937 7,078
___________ ___________ __________
Total liabilities 6,136 11,187 8,260
___________ ___________ __________
Total equity and liabilities 11,365 10,342 13,006
___________ ___________ __________
Consolidated Statement of Changes in Equity
Share capital Share premium Equity reserve Merger reserve Accumulated deficit Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2021 571 5,138 - 1,508 (2,471) 4,746
Purchase of own shares - - - - (128) (128)
Issue of new shares 1 - - - - 1
Employee share option plan charge - - - - 58 58
Employee share incentive plan charge - - - - 13 13
Profit for the period and total comprehensive income - - - - 539 539
________ ________ ________ ________ __________ _______
At 30 September 2021 572 5,138 - 1,508 (1,989) 5,229
At 1 April 2020 505 673 66 1,508 (4,133) (1,381)
Purchase of own shares - - - - (14) (14)
Proceeds from recycling of own shares - - - - 26 26
Employee share option plan charge - - - - 45 45
Employee share incentive plan charge - - - - 38 38
Profit for the period and total comprehensive income - - - - 441 441
________ ________ ________ ________ _________ _______
At 30 September 2020 505 673 66 1,508 (3,597) (845)
At 1 April 2020 505 673 66 1,508 (4,133) (1,381)
Purchase of own shares - - - - (29) (29)
Issue of new shares on conversion of convertible loan notes 66 4,465 (60) - - 4,471
Reversal of equity component following redemption of convertible loan notes - - (6) - - (6)
Proceeds from recycling of own shares - - - - 26 26
Employee share option plan charge - - - - 88 88
Employee share incentive plan charge - - - - 48 48
Profit for the period and total comprehensive income - - - - 1,529 1,529
________ ________ ________ ________ __________ _______
At 31 March 2021 571 5,138 - 1,508 (2,471) 4,746
Consolidated Cash Flow Statement
6 months ended 30 September 2021 6 months ended 30 September 2020 Year ended
31 March 2021
£'000 £'000 £'000
Cash flows from operating activities
Profit for the period 539 441 1,529
Taxation (416) (438) (425)
Finance income (5) (3) (9)
Finance costs 53 295 494
Depreciation of property, plant & equipment 35 31 60
Depreciation of right of use assets 115 129 255
Exchange losses / (gains) on foreign currency lease liabilities 10 (31) (74)
Employee share option plan charge 58 45 88
Employee share incentive plan charge 13 38 48
Employee unit incentive plan charge 24 25 30
Decrease in trade and other receivables 2,313 3,810 1,078
(Decrease) / increase in trade and other payables (500) 5 357
(Decrease) / increase in deferred revenue (1,454) (1,035) 877
____________ ____________ __________
Cash generated from operations 785 3,312 4,308
Finance income 8 6 12
Finance costs on convertible loan notes - (199) (445)
Finance costs on leases (32) (48) (65)
Tax (paid) / received (17) 438 425
____________ ____________ __________
Net cash generated from operating activities 744 3,509 4,235
____________ ____________ __________
Investing activities
Purchases of property, plant and equipment (15) (21) (95)
____________ ____________ __________
Cash used in from investing activities (15) (21) (95)
____________ ____________ __________
Financing activities
Purchase of own shares (128) (14) (29)
Proceeds from recycling of own shares - 26 26
Principal elements of lease payments (168) (163) (338)
Repayment of convertible loan notes - - (450)
____________ ____________ __________
Cash used in financing activities (296) (151) (791)
____________ ____________ __________
Net increase in cash and cash equivalents 433 3,337 3,349
Cash and cash equivalents at the beginning of the period 8,029 4,758 4,758
Exchange gain / (loss) on cash and cash equivalents 29 (28) (78)
____________ ____________ __________
Cash and cash equivalents at the end of the period 8,491 8,067 8,029
____________ ____________ __________
Notes to the Consolidated Accounts
For the period ended 30 September 2021
1 Preparation of the interim financial statements
These interim financial statements have been prepared in accordance with
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 and with those parts of the Companies Act 2006 applicable
to companies reporting under International Financial Reporting Standards
(IFRS).
The basis of preparation and accounting policies used in preparation of these
interim financial statements have been prepared in accordance with the same
accounting policies set out in the Group's Annual Report for the year ended 31
March 2021, which provides full details of significant judgements and
estimates used in the application of the Group's accounting policies. There
have been no significant changes to these judgements and estimates during the
period which included an assessment that the going concern basis continues to
be appropriate in preparing the interim financial statements.
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 2021 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 within the next few weeks
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 31 March 2021
30 September 2021 30 September 2020
£'000 £'000 £'000
UK 69 66 115
Rest of Europe 503 509 1,061
Americas 3,872 3,867 9,095
Rest of World 411 320 690
___________ ___________ __________
4,855 4,762 10,961
___________ ____________ __________
3 Taxation
Taxation represents the net effect of amounts receivable from HMRC in respect
of R&D claims and US corporation tax payable.
4 Earnings per share
The calculations of earnings per ordinary share are based on the profit for
the period and the weighted average number of ordinary shares in issue during
each period.
6 months ended 6 months ended Year ended 31 March 2021
30 September 2021 30 September 2020
£'000 £'000 £'000
Profit for the period 539 441 1,529
___________ ___________ __________
Number Number Number
Weighted average number of shares 57,107,449 50,482,281 51,359,410
- basic
- diluted 59,760,815 53,183,844 54,049,938
___________ ___________ __________
Pence Pence Pence
Earnings per share 0.9p 0.9p 3.0p
- basic
- diluted 0.9p 0.8p 2.8p
___________ ___________ __________
The weighted average number of shares used in the calculation of basic and
diluted earnings per share for each period were calculated as follows:
6 months ended 6 months ended Year ended 31 March 2021
30 September 2021 30 September 2020
Number Number Number
Issued ordinary shares at start of period 57,143,357 50,523,926 50,523,926
Effect of treasury shares (93,285) (41,645) (41,645)
Effect of issue of ordinary share capital 57,377 - 877,129
___________ ___________ __________
Weighted average number of shares 57,107,449 50,482,281 51,359,410
- basic
___________ ___________ __________
93,285 41,645 41,645
Add back effect of treasury shares
Effect of share options in issue 2,560,081 2,659,918 2,648,883
Effect of convertible loan notes in issue - - -
___________ ___________ __________
Weighted average number of shares 59,760,815 53,183,844 54,049,938
- diluted
___________ ___________ __________
The effect of issue of ordinary share capital reflects the issue of 100,000
shares to facilitate the exercise of options by senior managers in June 2021
and the issue of 6,619,431 shares during the period 5 January to 19 February
2021 to facilitate the conversion of convertible loan notes into ordinary
shares.
The convertible loan notes were anti-dilutive and therefore excluded from the
calculation of diluted profit per share. Had the convertible loan notes been
dilutive in nature, this would have increased the comparative 2021 and 2020
weighted average number of shares by 6,295,925 and 7,273,387 respectively.
5 Dividend
The Directors do not recommend the payment of a dividend.
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