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Intercede Group PLC IGP Interim Results

  Intercede Group PLC (IGP) - Interim Results

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  globalorganisations  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.



TheCompany 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 tailoredto customer needs.



Corporations such  as Boeing,  Booz Allen  Hamilton and  Lockheed Martin,  and 
governments including the USA, UK and Kuwait, trust Intercede'sdeep 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

END


IR LLFSTLTLLFIF -0- Nov/22/2012 07:00 GMT