REG - Intercede Group PLC - Half-year Report
22/11/2022 07:00
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RNS Number : 1257H Intercede Group PLC 22 November 2022
22 November 2022
INTERCEDE GROUP plc
('Intercede', the 'Company' or the 'Group')
Interim Results for the Six Months Ended 30 September 2022
Intercede, a cybersecurity software company specialising in digital
identities, today announces its interim results for the six months ended 30
September 2022.
Financial Highlights
H1 FY22 H1 FY21 % Change
£ million £ million
Revenue 6.1 4.9 24%
Gross profit 5.6 4.8 17%
Profit before Tax 0.62 0.12 417%
Net Profit 1.21 0.54 124%
EPS - basic 2.1p 0.9p
EPS - diluted 2.0p 0.9p
Gross Margin 93% 98% (5)%
Net Margin 20% 11% 82%
Cash and cash equivalents 10.0 8.5 18%
Deferred revenue 4.4 3.7 19%
Total Assets 14.0 11.3 24%
Total Equity 6.9 5.2 33%
Revenue highlights for the period include:
· Revenues for the six months ended 30 September 2022 (H1) totalling
£6.1 million are approximately 23% higher than last year on a constant
currency basis and 24% higher on a reported basis (2021: £4.9 million)
· Multiple MyID PIV licence orders from the US Department of State
(DoS) for its Identity Management System (IDMS) solution totalling $1.6
million. The same agency also placed Services orders with a value totalling
$0.3 million. Linked to this sale is a third party embedded product which
marginally impacted gross profit in the period
· Several major customers have chosen to upgrade their existing MyID
deployments including, but not limited to, a major global aerospace and
defence manufacturer, a UK Government department, a US central bank and a
major US government agency
· A $0.1 million follow-on order of professional services for a
prestigious independent US Federal Agency that was won at the end of the last
financial year. The deployment will leverage Intercede's technology
partnership with Microsoft, by delivering PKI credentials into Microsoft
Intune managed smartphones enabling sensitive data protection and secure
access to agency systems
· A follow-on MyID Enterprise order from a US Federal agency tasked
with intelligence and security services. Orders have been received to date for
75,000 device licences
· Various cross and upsell of licences into existing client base
totalling £0.2 million in the period.
Operating Highlights
· Post-period end acquisition of Authlogics Ltd a UK based company with
annual recurring revenues (ARR) of £0.5 million. It brings Multi Factor
Authentication (MFA) and Password Security Management (PSM) capabilities to
the Intercede Group
· Phase 2 of the Intercede turnaround plan is on track to push
scalability and accelerate revenue growth
· The M&A programme continues, focussed on targets that add
recurring revenues and have a strong industry logic.
Board Changes
During the period Andrew Walker retired from the Board with the appointment of
Nitil Patel as his successor and new Chief Financial Officer of Intercede.
Royston Hoggarth, Non-Executive Director of the Company succeeded Chuck Pol as
the Group's Chairman. Tina Whitley was appointed as an Independent
Non-Executive Director, bringing over 30 years' experience across the
information technology sector.
Royston Hoggarth, Chairman, said:
"I would like to take this opportunity to thank our colleagues for their hard
work during what has undoubtedly been a busy six months, driving strong
double-digit revenue growth and working towards the completion of Intercede's
first M&A deal. The acquisition of Authlogics enables Intercede to deliver
on its strategic vision of addressing the entire authentication pyramid from
Passwords to PKI.
The Board is pleased to see such a focussed start to Phase 2 of the turnaround
plan to push scalability and accelerate revenue growth. While the Board is
cognisant of volatility in the current global macroeconomic environment, we
remain confident in the Group's execution of the '6C strategy' and that the
outlook for the second half of FY23 remains in line with management's
expectations."
ENQUIRIES
Intercede Group plc
Tel. +44 (0)1455 558 111
Klaas van der Leest, CEO
Nitil Patel, CFO
finnCap
Ltd.
Tel. +44 (0)20 7220 0500
Simon Hicks/Fergus Sullivan, Corporate Finance
Tim Redfern/Charlotte Sutcliffe, ECM
About Intercede
Intercede is a cybersecurity software company specialising in digital
identities, and its innovative solutions enable organisations to protect
themselves against the number one cause of data breach: compromised user
credentials.
The Intercede suite of products allows customers to choose the level of
security that best fits their needs, from Secure Registration and ID
Verification to Password Security Management, One-Time Passwords, FIDO and
PKI. Uniquely, Intercede provides the entire set of authentication options
from Passwords to PKI, supporting customers on their journey to passwordless
and stronger authentication environments. In addition to developing and
supporting Intercede software, the Group offers professional services and
custom development capabilities as well as managing the world's largest
password breach database.
For over 20 years, global customers in government, aerospace and defence,
financial services, healthcare, telecommunications, cloud services and
information technology have trusted Intercede solutions and expertise in
protecting their mission critical data and systems at the highest level of
assurance.
For more information visit: www.intercede.com (http://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.
Introduction
Intercede's FY22 Annual Report noted that the Group continued to drive organic
growth despite global volatility, starting with Covid-19 restrictions and
ending with war in Europe. It would appear that FY23 is going to be just as
volatile and it is therefore testament to the resilience of the Group in
delivering accelerated revenue growth in the first six months of this new
financial year. Almost as important is the completion of its first acquisition
as it embarks on Phase 2 of its turnaround to achieve scalability and
consistent revenue growth.
Market Opportunity and Growth Strategy
Intercede's MyID platform is a leading credential management system (CMS) and
ID&V solution that integrates and manages a broad range of PKI (Public Key
Infrastructure) and FIDO (Faster Identity Online) technologies. These are very
attractive, but niche, market segments which meet the needs of Aerospace &
Defence contractors and governments who are prepared to pay for military grade
security and can cope with the complex infrastructure. For Intercede this is
both a blessing, due to the potential for large initial one-off licence orders
and steady recurring Support & Maintenance, but it can also present a
challenge as the timing of contract awards which is invariably outside of
Intercede's control.
The FY22 Annual Report noted that while the lack of a significant licence deal
was felt acutely in the comparison of FY22 revenue to FY21, the substantial
increase in new deployment wins was clear evidence of underlying momentum.
This is now evident by the double-digit revenue growth for the six months
ended 30 September 2022. However, for this level of growth to be sustainable
Intercede needs to expand faster and broaden MyID's functionality as it moves
down the authentication pyramid and increase its addressable market. This lies
at the heart of Phase 2 of the turnaround plan.
After considering options such as partnering and further internal development,
the Board decided that a buy approach would accelerate time to market as well
as leveraging new IP for existing clients and partners and extending the
target account market. On 10 October Intercede was pleased to announce the
acquisition of Authlogics, a Multi Factor Authentication ('MFA') and Password
Security Management ('PSM') software vendor which enables the Group to offer
its customers and prospects solutions that span the entire authentication
pyramid as outlined below.
What Authlogics Brings to the Intercede Group
The acquisition of Authlogics brings MFA and PSM capabilities to the Intercede
Group enabling it to deliver on the strategic vision of addressing the entire
authentication pyramid and offer software solutions from Passwords to PKI
Strong strategic logic for combination
· Acquisition of IP and reference customers that accelerates our entry
into these markets, which would have taken at least 3 years organically even
if the resource could be made available
· Will enable the Group to quickly meet some of the new requirements of
FIPS 201-3 for our US defence and Federal customer base
· Allows Intercede to address migration to a 'No Password' environment:
− This acquisition expands our addressable market more than 10-fold
− Whereas PKI is complex and involves long sales & integration
cycles, the MFA and PSM markets are characterised by much simpler sales and
less complicated integration cycles
Strategy
Intercede continues to focus on its '6C strategy', centred around Colleagues,
Customers, Channels, Code, Cash and more recently, Corporate Development. In
the Phase 2 of its turnaround, the Group will actively explore buy-side
M&A, taking time to ensure the right strategic fit(s) to ensure
scalability and accelerated revenue growth.
1. Colleagues
The employment market, particularly in the cybersecurity sector, has certainly
been volatility largely due to the hangover from the Covid-19 pandemic, which
brings opportunities and threats to Intercede's most valuable asset: its
staff. As stated in previous reports, Intercede's innovation roadmap is able
to leverage many years of internal development expertise and the Group
therefore places a high degree of focus on its colleague strategy as it
strives for market-leading staff retention.
Over the six months to 30 September 2022, staff numbers stayed broadly flat at
81 (2021: 82), while the average number of employees and contractors during
the period was 85 (2021: 84). The attrition rate (average number of leavers
over the year as a ratio of average headcount over the year) rose to 11%
compared to 7% in the prior period. The increase in attrition was not
unexpected and was factored into the Group's hiring strategy and pay and bonus
policy. Intercede and its Board understands the issues everyone is facing with
the cost of living crisis, has listened to the Employee Working Group (EWG)
and taken onboard feedback from its more recent Employee Satisfaction Survey.
2. Customers
In the FY22 Annual Report Intercede was pleased to announce sixteen new
deployments were signed up during the year, which was double the number signed
up during FY21. Due to a combination of timing, and understandable general
customer caution around global uncertainty, these wins did not quite convert
into a significant licence deal in FY22.
However, the wins generated momentum towards the end of FY22 that has carried
into FY23 and resulted in revenue for the six months ended 30 September 2022
that is 24% higher than the prior period on a reported basis. In particular,
follow-on licence orders from existing customers (more details in the
'Financial Results' review section below) has driven the growth. Although only
one new customer was signed up during the period (compared to eight in the
prior period) the level of attrition remains very low with renewal rates of
99% compared to 98% in the prior period.
3. Channels
Intercede continues to invest in its Connect Partner Programme which deals
with resellers as well as technology partners. Over the period relationships
were further strengthened which resulted in new pipeline opportunities,
partner campaigns and most importantly driving the strong H1 revenue growth.
As reported in the Customers section above, licence sales have driven the
overall revenue growth compared to the prior period. Partner relationships
play an increasing role in these license sales and generated 89% of all
licence sales in the six months ended 30 September 2022 (2021: 71%).
Our technology partners have confidence that as security standards change, and
new technologies become available, MyID is designed to cope with these changes
both in order to support newer devices and systems, but also to aid the
transition between them ensuring the ongoing security of system access as
technology changes are implemented.
Whilst the resellers are focused on delivering complete end to end solutions
to their clients, it is paramount that MyID has a rich eco system of proven
technology partners and integrations which enables an out-of-the-box approach
to many complex use cases.
The addition of Authlogics's partner and channel footprint, with no overlap
with Intercede, further enhances the Group's geographic reach as well as
providing new cross and upsell opportunities.
4. Code
Intercede has continued to invest in the MyID platform and in September
released v12.4.1, which continues to address the Group's core development
principles:
· Create and maintain a modern platform based upon market leading
technology - v12.4.1 contains enhancements for the MyID Operator Client, which
is now the primary user interface for operation and administration of MyID.
New REST APIs have been added to enable customisation of the Operator Client
to allow helpdesk and monitoring applications;
· Broaden the addressable market with new functionality - MyID has been
updated to help customers adapt to the revised US Government PIV standard,
FIPS-201-3, and contains integration updates for the latest external third
party PKI components; and
· Meet constantly evolving Customer and Partner needs - MyID
Installation Assistant is a new utility that is designed to help customers
and partners prepare their MyID server environment and guide them through each
step of the installation process.
From a strategic perspective, the second principle above has received a lot of
focus as Intercede commences Phase 2 of its turnaround and the acquisition of
Authlogics represents a leap forward in this regard.
It is Intercede's intention to sell the acquired products standalone and
create a product portfolio offering customers high, medium and low
authentication depending on their needs and circumstances. During H2, the
development teams will decide on the best way to integrate the products so
that a customer can manage any form of authentication they need used under a
'single pane of glass' or migrate users from one form of authentication to
another.
5. Cash
Treasury and cash management is a significant pillar and crucial asset for the
Group. It operates a tight working capital model and aims to maintain
sufficient head room to ensure operations can continue in potentially
difficult global macroeconomic environments.
The Group's DSO has improved from 68 days (H1 2021) to 47 days (H1 2022) which
has resulted in a positive cash inflow during the period.
The Group had gross cash balances of £10.0 million as at 30 September 2022
compared to £7.8 million held at 31 March 2022. Following the acquisition
of Authlogics on the 7 October 2022 for an initial consideration of £2.0
million, after adjusting for net debt and working capital movements ), the
Group had gross cash balances of £7.9million ,000 and no long-term debt or
external financing.
6. Corporate Development
Corporate Development is a key strategic component to drive incremental
revenue growth, IP acceleration as well as market access. Following an
intensive market assessment over the last 12 months as well as the strategic
intent of "moving down the authentication pyramid", the Group was pleased to
report its first acquisition, Authlogics as announced on 10 October 2022.
In the section '4. Code' above the acquisition of Authlogics was described as
enabling the Group to address the entire authentication pyramid by giving
customer access to a portfolio of products depending on whether their users
need high, medium or low authentication. Depending on a client's specific use
case, Intercede can now offer an end to end solution, from Passwords to PKI.
Whilst the immediate operational activities are now focused on a seamless
integration of Authlogics, the corporate development activity has firmly
maintained its pace and further targets are being assessed. The Group will
maintain business as usual and diligent in its approach whilst the M&A
pipeline remains firmly on the agenda.
Financial Review - Income Statement
Revenue and operating results
The Group's revenue from continuing operations increased by 24% to £6.1
million (2021: £4.9 million) and gross profit increased by 17%% to £5.6
million (2021: £4.8 million). Gross margin decreased from 98% to 93% as a
third party product were part of a licence sale in the period.
The Group's operating profit was £0.6 million (2021: £0.2 million), after
non-cash depreciation charge for property, plant and equipment in the period
of £0.03 million (2021: £0.03 million) and a right-of-use depreciation
charge of £0.1 million (2021: £0.1 million). Acquisition costs for the
period were £0.25 million (2021: £nil). Operating expenses increased by 10%
to £5.1m (2021: £4.6m). When one-off acquisition costs are excluded the
growth in the remaining operating expenses is 4%.
Underlying costs are very consistent and reflect continued tight control over
all areas of expenditure, while the Group continues to recognise the
achievements of its staff with pay rises and performance-related rewards.
Staff costs continue to represent the main area of expense representing 86% of
total operating costs (2021: 85%). Intercede had 81 employees and contractors
as at 30 September 2022 (2021: 82). The average number of employees and
contractors during the period was 85 (2021: 84).
The statutory profit before tax for the period was £0.6 million (2021:
£0.1million) and profit for the period was £1.2 million (2021: £0.5
million).
Taxation
The Group has a tax credit of £0.6 million for the period due to amounts
receivable from HMRC in respect of R&D claims and US corporation tax
payable. (2021: tax credit of £0.4 million). The Group brought forward unused
tax losses of £6.4 million (2021: £6.4 million). The Group assessed the
deferred tax impact in the period and did not recognise any assets or
liabilities.
Earnings per share
Earnings per share from continuing operations in the period was 2.1 pence for
basic and 2.0 pence for diluted (2021: 0.9 pence for both basic and diluted)
and were based on the profit for the period of £1.2 million (2021: £0.5
million) with a basic weighted average number of shares in issue during the
period of 57,648,980 (2021: 57,107,449 shares). For diluted the weighted
average number was 58,943,357 (2021: 59,760, 815).
Adjusted earnings per share, both basic and diluted, from continuing
operations in the period were 1.93 pence (2021: loss of 2.74 pence) and were
based on the profit after tax for the period of £0.4 million (2021: loss of
£0.6 million).
Dividend
The Board is not proposing a dividend (2021: £nil).
Financial Position
Assets
Non-current assets of £0.4 million comprise property, plant and equipment of
£0.1 million (2021: £0.1 million) and IFRS 16 right of use assets of £0.3
million (2021: £0.6 million).
Trade and other receivables increased by £1.4 million to £3.6 million (2021:
£2.2 million) reflecting increased revenue in the period.
Liabilities
Current liabilities increased by £1.4 million to £6.8 million (2021: £5.3
million) reflecting higher cost of sales and increased deferred revenue at the
period end.
Non-Current liabilities fell by £0.4 million to £0.4 million (2021: £0.8
million). Key change in the period was a reduction in lease liabilities of
£0.3 million.
Capital and Reserves
Total equity increased by £1.6 million to £6.9 million (2021: £5.3
million), reflecting the profit for the period, shares issuance in September
2022.
Liquidity and capital resources
The Group remains in a good financial position, with gross cash balances of
£9,999,000 as at 30 September 2022 compared to £7,787,000 held at 31 March
2022. Following the acquisition of Authlogics on the 7 October 2022 for an
initial consideration of £2.5 million (adjusted to approximately £2.0
million after net debt and working capital adjustments), the Group had gross
cash balances of £7,865,000 and no long-term debt or external financing
During the period there has been a net cash inflow from operating activities
of £2.1 million (2021: £0.8 million) which reflects cash received from
significant licence orders received both during the period and prior to the
end of FY22.
Outlook
Intercede has recorded strong double-digit revenue growth in the first half of
FY23 which was underpinned by increased recurring Support & Maintenance
revenue, encouraging licence growth as well as solid Professional Services
revenues. At the same time, the Group made its first acquisition on 7(th)
October 2022.
The post-period acquisition and integration of Authlogics brings MFA and PSM
to the Intercede software suite enabling the Group to deliver on the strategic
vision of addressing the entire authentication pyramid from Passwords to PKI.
This is an encouraging start to Phase 2 of Intercede's turnaround of achieving
scalability and sustainable revenue growth.
The Board therefore remains positive about the medium and long-term prospects
for Intercede. As such, whilst there is caution of the effects of the current
global macroeconomic environment, the Board can confirm that the outlook for
the second half of FY23 continues to remain in line with management's
expectations.
By order of the Board
Klaas van der
Leest
Nitil Patel
Chief Executive
Officer
Chief Financial Officer
21 November 2022
Consolidated Statement of Comprehensive Income- unaudited
6 months ended 6 months ended Year ended
30 September 2022 30 September 2021 31 March
2022
£'000 £'000 £'000
Continuing operations
Revenue 6,065 4,855 9,925
Cost of sales (417) (95) (198)
__________ __________ __________
Gross profit 5,648 4,760 9,727
Operating expenses (5,051) (4,589) (9,337)
__________ __________ __________
Operating profit 597 171 390
Finance income 41 5 16
Finance costs (21) (53) (83)
__________ __________ __________
Profit before tax 617 123 323
Taxation 590 416 400
__________ __________ __________
Profit for the period 1,207 539 723
__________ __________ __________
Total comprehensive income attributable to owners of the parent company 1,207 539 723
__________ __________ __________
Earnings per share (pence)
- basic 2.1p 0.9p 1.3p
- diluted 2.0p 0.9p 1.2p
__________ __________ __________
Consolidated Financial Position - unaudited
As at As at As at
30 September 2022 30 September 2021 31 March
2022
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 98 134 117
Right of use assets 309 553 431
___________ ___________ __________
407 687 548
___________ ___________ __________
Current assets
Trade and other receivables 3,609 2,187 4,598
Cash and cash equivalents 9,999 8,491 7,787
___________ ___________ __________
13,608 10,678 12,385
___________ ___________ __________
Total assets 14,015 11,365 12,933
___________ ___________ __________
Equity
Share capital 584 572 577
Share premium 5,430 5,138 5,268
Merger reserve 1,508 1,508 1,508
Accumulated deficit (640) (1,989) (1,842)
___________ ___________ __________
Total equity 6,882 5,229 5,511
___________ ___________ __________
Non-current liabilities
Lease liabilities 278 566 388
Deferred revenue 121 240 233
___________ ___________ __________
399 806 621
___________ ___________ __________
Current liabilities
Lease liabilities 336 352 368
Trade and other payables 2,166 1,444 1,464
Deferred revenue 4,232 3,534 4,969
___________ ___________ __________
6,734 5,330 6,801
___________ ___________ __________
Total liabilities 7,133 6,136 7,422
___________ ___________ __________
Total equity and liabilities 14,015 11,365 12,933
___________ ___________ __________
Consolidated Statement of Changes in Equity- unaudited
Share capital Share premium Merger reserve Accumulated deficit Total equity
£'000 £'000 £'000 £'000 £'000
At 1 April 2022 577 5,268 1,508 (1,842) 5,511
Purchase of own shares (27) (27)
Issue of new shares 7 162 - - 169
Employee share incentive plan charge - - - 22 22
Profit for the period and total comprehensive income - - - 1,207 1,207
________ ________ ________ ______________ _______ _______
At 30 September 2022 584 5,430 1,508 (640) 6,882
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 2021 571 5,138 1,508 (2,471) 4,746
Purchase of own shares - - - (187) (187)
Issue of new shares 6 130 - - 136
Employee share option plan charge - - - 67 67
Employee share incentive plan charge - - - 26 26
Profit for the period and total comprehensive income - - - 723 723
________ ________ ________ __________ _______
At 31 March 2022 577 5,268 1,508 (1,842) 5,511
________ ________ ________ __________ _______
Consolidated Cash Flow Statement- unaudited
6 months ended 30 September 2022 6 months ended 30 September 2021 Year ended
31 March 2022
£'000 £'000 £'000
Cash flows from operating activities
Profit for the period 1,207 539 723
Taxation (590) (416) (400)
Finance income (41) (5) (16)
Finance costs 21 53 83
Depreciation of property, plant & equipment 31 35 70
Depreciation of right of use assets 122 115 237
Exchange losses on foreign currency lease liabilities 59 10 22
Employee share option plan charge - 58 67
Employee share incentive plan charge 22 13 26
Employee unit incentive plan charge (60) 24 9
Decrease / (increase) in trade and other receivables 1,439 2,313 (550)
Increase / (decrease) in trade and other payables 762 (500) (465)
Decrease in deferred revenue (849) (1,454) (26)
____________ ____________ __________
Cash generated from operations 2,123 785 (220)
Finance income 30 8 13
Finance costs on leases (21) (32) (83)
Tax (paid) / received (14) (17) 400
____________ ____________ __________
Net cash generated from operating activities 2,118 744 110
____________ ____________ __________
Investing activities
Purchases of property, plant and equipment (12) (15) (33)
____________ ____________ __________
Cash used in from investing activities (12) (15) (33)
____________ ____________ __________
Financing activities
Purchase of own shares (27) (128) (187)
Proceeds from issue of ordinary share capital 169 - 136
Principal elements of lease payments (201) (168) (321)
____________ ____________ __________
Cash used in financing activities (59) (296) (372)
____________ ____________ __________
Net increase / (decrease) in cash and cash equivalents 2,047 433 (295)
Cash and cash equivalents at the beginning of the period 7,787 8,029 8,029
Exchange gain / (loss) on cash and cash equivalents 165 29 53
____________ ____________ __________
Cash and cash equivalents at the end of the period 9,999 8,491 7,787
____________ ____________ __________
Notes to the Consolidated Accounts
For the period ended 30 September 2022
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 2022, 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 2022 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 2022
30 September 2022 30 September 2021
£'000 £'000 £'000
UK 95 69 119
Rest of Europe 414 503 992
Americas 5,221 3,872 7,801
Rest of World 335 411 1,013
___________ ___________ __________
6,065 4,855 9,925
___________ ____________ __________
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 2022
30 September 2022 30 September 2021
£'000 £'000 £'000
Profit for the period 1,207 539 723
___________ ___________ __________
Number Number Number
Weighted average number of shares 57,648,980 57,107,449 57,265,739
- basic
- diluted 58,943,357 59,760,815 59,413,261
___________ ___________ __________
Pence Pence Pence
Earnings per share 2.1p 0.9p 1.3p
- basic
- diluted 2.0p 0.9p 1.2p
___________ ___________ __________
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 2022
30 September 2022 30 September 2020
Number Number Number
Issued ordinary shares at start of period 57,743,357 57,143,357 57,143,357
Effect of treasury shares (131,645) (93,285) (112,412)
Effect of issue of ordinary share capital 37,268 57,377 234,794
___________ ___________ __________
Weighted average number of shares 57,648,980 57,107,449 57,265,739
- basic
___________ ___________ __________
131,645 93,285 112,412
Add back effect of treasury shares
Effect of share options in issue 1,162,732 2,560,081 2,035,110
___________ ___________ __________
Weighted average number of shares 58,943,357 59,760,815 59,413,261
- diluted
___________ ___________ __________
5 Dividend
The Directors do not recommend the payment of a dividend.
6 Post-balance sheet events
On 7 October 2022 Intercede acquired the entire share capital of Authlogics
Ltd. Authlogics is a UK headquartered business based in Bracknell and was
founded in June 2015. A Multi Factor Authentication ('MFA') and Password
Security Management ('PSM') software vendor, Authlogics is the only business
to cover all three key authentication segments (password security management,
password breach database and multi factor authentication) with a seamless
integrated solution.
The initial consideration of £2.5 million (adjusted to approximately £2.0
million after net debt and working capital adjustments) was settled in cash
from existing reserves post-period end. The combined consideration includes a
further deferred conditional and staged earnout payment of up to £3 million
and comprises of intangible assets and goodwill as the balance sheet of
Authlogics Ltd is in a net liability position.
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