Intercede Share Discussion Threads

[rivaldo] 20/5/2008 14:44

Happy to hold here. The results were just fine and show much promise for the future, as expected. I'm not sure the share price will be going anywhere much for a while though, as I can't see a specific trigger in the results, particularly for a loss-making company on a £15m m/cap with more shares to be issued, especially in the current climate.

Not that I mind as it's a long-term play anyway with the chance of shorter-term gain on contract or takeover news.

Thanks for the thread WJ.

[wjccghcc] 20/5/2008 12:59

237, given the likelihood of delays, I'd be pleased to see 20% revenue growth so £3.3mm for this year, with most of that coming in H2 as the project rollouts gather pace, followed by a larger % increase in 2009. The £3.3mm would include a similar level of advanced license fees as this year. Their discussion of deriving more value from their partner arrangements makes me suspect that future partner agreements may have less of an upfront fee but a significantly larger revenue per license issued.

Cash is not a problem. After the Credo option exercise they have 1.23mm in the bank vs cashburn last year of 178k. They have 2mm convertibles due in May 09 but with conversion at 20p and 15p by supportive loan note holders, something would have to go seriously wrong for that to become an issue (and even if it did they've already shown they're happy to extend if necessary).

The nice thing about IGP is that their revenues for the next 2 years are underpinned by contracts they've already won. The £2.8mm revenues this year come from contracts they won 2 years ago when they were only working on 2 significant projects at a time. Now they're working on 10 at a time.

[237gmoney] 20/5/2008 12:05

WJ, with todays results do you think the brokers forecasts of, if I remember £3.5m sales for 2008/9 are still vaild? with £2.8m in 2007/8 and £2.6m in 2006/7 a push to £3.5m is little optimistic? I guess many of the larger projects such as HSPD12 and TWIC will be coming to an end in March 2009 and final payments made hopefully before year end but as you say TWIC final completion date now April 2009 but with the renewed RSA contract in September (if there is one) a downpayment should boost revenue substaintally for this year over last.

Looking at the other large contracts with the UK government, US banks, will final payment occur before end h1? or realistically before end h2? The point I'm making is yes its nice to be involved in all these larger projects but with just over £1m cash in the bank, can Intercede continue working at this capacity on current cash burn?

With results coming out earlier than expected, could this suggest something else is going on behind the scenes as Howdy keeps on about as to my mind there was no pressure on the management to release results early?

The showcase for the new product in early June should send shockwaves around the world with the new US patent and the 'only product of its kind IN THE WORLD'. With the potential here its hard not to see why Mr. Parris sounded so excited in his summary of the year so I expect rapid progress once the new product is out in the marketplace.

[wjccghcc] 20/5/2008 11:04

Actually 237, what I find exciting is that they're so upbeat for the year ahead despite the fact I don't think they'll get much in way of revenue from the US federal programs. This shows the geographic and sector diversification underway which can only be a good thing.

The federal contracts are great for marketing and reputation but I would hate to depend only on them for revenues. They have 8 of the biggest agencies for HSPD-12 but given the funding delays and extended deadlines, I doubt they'll issue more than 100-200k licenses this year. Likewise, the TWIC deadline is now April 2009 and the first 1mm licenses go to RSA so IGP may see some revenue at the end of the year once that number is exceeded. Of course, if TWIC is ultimately extended to the non-port transport/hazardous area workers, you're looking at an extra $10-15mm revenue to add to the £15mm they highlight in the results and we're really off to the ball game...

Agree with you re profits for this year - I'd certainly hope for 250-500k.

[237gmoney] 20/5/2008 10:55

Reasonably.......at todays Share price? around 70-80p. hopefully with the partner network/oem agreements a white knight might come in and push it towards £1 a share but I would like to think any new investor can see this is a well run operation and work with it rather than overtake it.

[howdy do da] 20/5/2008 10:02

237, but if they received an offer what would that 1st offer be? Reasonably?

[237gmoney] 20/5/2008 09:30

Also WJ I was always worried about these loan notes due for repayment in May 2009 which is just over £2m but with the share price well above the 20p and 15p levels which the loan notes are convertable it is a near on certainty that the loan note holders will convert as mentioned below.

"....The Group's convertible loan notes mature on 31 May 2009 as outlined in note 5. At this stage, given that the Company's share price has been in excess of the conversion prices throughout the period since the loan notes were last renegotiated and extended on 31 May 2006, and having regard for future prospects, the Directors believe that the loan note holders are likely to elect to convert."

Overall I am a little disappointed the sales increase wasnt higher than 7% but I guess the delays of HSPD12 and TWIC put a strangle hold on the company which I guess has now been sorted and like a coiled spring, the company can steam ahead with their new MyID version 8.0 and the new U.S. patent. 2008/9 should be a very good year with profits hopefully around £250,000-£500,000????

thats if the company dont get bought out before the end of the year....

[wjccghcc] 20/5/2008 09:16

Another interesting part from the results is:

"... a recent Frost & Sullivan report which forecasts that the Smart Card Management System market will grow by 500% to $800m+ pa between 2007 and 2012"

If IGP get even half that growth, you'd be looking at revenues of 10mm, which with 99% margins and (say) a 50% increase in their staff numbers would give profits of 6mm.

[gale dribble] 20/5/2008 08:59

I reitarate my "woof", and back it up with a "baaaaaah"!

[wjccghcc] 20/5/2008 08:58

There are a lot of words but that's more because they want the market to appreciate the immense potential they're facing. They've been sailing under the radar for a few years and now is the time to raise their profile as the growth starts coming through.

As Howdy says, 15mm revenues over 5 years with 99% margins from their top 10 projects alone (and MyID is used on over 50, with maintenance revenues and upgrades occurring in many cases every 3-5 years).

Felix points out the other major change - MyID has moved from a pure smart card management system to being a patent-protected integrated identity and credential management system i.e. a one stop shop for complete ID management within an organisation with a toolset that can now be used by system integrators rather than as previously only by those with MyID specialisation. With MyID's reputation growing, they feel they are in a position of strength vis a vis their business partners. The original RSA partnership agreement was very much in RSA's favour - that is up for renegotiation in September and I'd expect much better terms going forward.

For the year ahead, they're clearly still subject to timing delays on the big projects but we should certainly get lots of new project news as MyID 8 is released onto the security world.

"Having established this firm foundation, Intercede now looks forward to a period of rapid growth in one of the few recession proof markets available to investors."

[felix99] 20/5/2008 08:36

i LIKE the idea they know they have given away their tech too cheaply to the principal contractors of these projects -. They know they have first choice systems now so they should be able to hold out for a bigger share of revenues from these projects going forward. An increase in margins perhaps lol

[howdy do da] 20/5/2008 08:31

Disagree. Solid results. The future is assured. Cash flow positive within the next financial year. Very low p/e by 2010. Strong strategic proposition with an outstanding customer base. Likely takeover target too.

[wjccghcc] 20/5/2008 07:59

APHRODITES, suggest you use the new thread. This one's been trashed. Totally agree with you.

[aphrodites] 20/5/2008 07:53

Summary

The "SUMMARY" says it all. You could not get a more upbeat message than this. It will make it even more vulnerable to a takeover in my opinion.


After another challenging year, it is good to be able to look back and identify the progress made at all levels in the business. One year on, Intercede is better placed in terms of product functionality, project wins, sales prospects and market position.

The momentum is clearly building and the Directors are increasingly confident that this will be reflected in the Group's future financial performance as more and more projects move beyond the initial proof of concept and pilot phases.

[pogglenose] 20/5/2008 07:53

A lot of words to say not much really.

[howdy do da] 20/5/2008 07:43

£15m of revenue coming in over next 5 years from existing projects? at 98% margin? for a £14m mkt cap comany with more revenue growth to come.

That'll do nicely.

[peter1981] 20/5/2008 07:07

Final Results

RNS Number : 8263U
Intercede Group PLC
20 May 2008


INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')

Preliminary Results for the Year Ended 31 March 2008

Intercede, one of the world's leading developers and suppliers of identity management
software, today announces its preliminary results
for the year ended 31 March 2008.

SUMMARY

* Sales increased by 7% from £2.6m to £2.8m.

* Further improvement in gross margin to 99% (2007: 97%).

* Loss for the year reduced from £379k to £87k.

* Cash inflow of £0.5m during the year, which includes £0.7m raised in the May
2007 Placing (2007: £0.5m outflow).

* Cash balances of £1.15m (2007: £0.65m) at the financial year end.

* Launch of MyID Version 8.0 which is the only solution of its kind to deliver
registration, ID verification and card/device
issuance and life cycle management within a single product.

* Continuing progress with business partners and systems integrators to build a global
distribution model.

* Stronger pipeline than ever before; the 10 largest projects alone have the potential
to generate aggregate sales of at least £15m
over the next 5 years.

* Recession proof business drivers give cause for optimism.

Richard Parris, Chairman & Chief Executive of Intercede, said today:

"This year has seen Intercede engaged on 10 major projects that both generally and
individually demonstrate our strong technology
capabilities and market position. This is a considerable advancement from where we were even
two years ago. Intercede has emerged from a
period of 'silent running' with the strongest identity and credential management system in the
world. We have developed an unrivaled network
of global partners and Systems Integrators licensing our patented technology.

"As a result, Intercede is now firmly established as the 'go-to' partner for any
technology provider that needs to add identity and
credential management to their solutions portfolio, which suggests we have created an industry
standard. Having established this firm
foundation, Intercede now looks forward to a period of rapid growth in one of the few
recession proof markets available to investors."

[terrytibbz] 19/5/2008 23:50

"I've never gone to bed with an ugly woman, but I've sure woke up with a few."

[howdy do da] 19/5/2008 23:29

Can't wait. Price action tomorrow for sure.

[wjccghcc] 19/5/2008 23:23

Results tomorrow according to the Independent - a week earlier than last year.

[terrytibbz] 19/5/2008 23:16

they dont have any revenue, so no partners to do any explaining smartiepants

[smartmoney100] 19/5/2008 23:14

Probably their partners can Terry.

:-)

[terrytibbz] 19/5/2008 22:36

can anyone explain the interecede unique selling point, their unique value proposition, their irreplicable software?

[jailbird] 19/5/2008 18:06

WJ,

thanks ok now...i think your link took be to the PBB upgrade page,
but if i seach for the thread ,it works fine....phew, that old thread was awful now.