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