Intercede Share Discussion Threads

[maywillow] 17/6/2005 21:48

Updated: June 6th, 2005 01:44 PM EDT
Smart Card Manufacturers Report a Good Year
Sales for big chip card vendors jumped 18 percent last year


All of the four big international smart card vendors have now reported their 2004 results, and it was clearly a good year. It appears 2005 is also off to a good start.

All told, the Big Four of the smart card industry reported total 2004 sales of 2.59 billion euros (US$3.26 billion), up 18% from $2.20 billion euros in 2003. Gemplus retained its top spot in terms of revenue, with sales of 865 million euros, and a 33.4% share of the four companies' combined revenue in 2004, down just slightly from 34.0% the prior year.

Axalto retained the second spot, with 707 million euros in 2004 revenue. (Axalto reports its financials in dollars, and does not release a conversion to euros). Axalto gained the most market share, growing from 25.6% of the revenue for the four largest players to 27.3% in 2004. Oberthur, which says it has adopted a strategy of steering clear of deals for low-margin, lower cost subscriber identity module cards for mobile phones, saw its share of revenue drop to 17.4% in 2004, versus 19.5% in 2003. Gemplus, Axalto and Oberthur are all based in France.

G&D's Results
Germany-based Giesecke & Devrient was the last to disclose its 2004 sales. The company, the only one of the four that is privately held, reported last month a 24% rise in card-related revenue in 2004, compared with the previous year, and predicted another good year in 2005. G&D, which also prints bank notes and securities, reported total 2004 sales of 1.16 billion euros (US$1.47 billion), up 10.5%. Earnings were 69.7 million euros, and net profit was 38.4 million euros, a 36% increase over 2003. Net profit is earnings after subtracting such items as interest and taxes.

Company executives said the card segment generated 568 million euros in revenue, driven by strong sales in telecom and banking. The company said it increased its market share in banking by 6% last year and had strong sales to UK banks, which are in the process of converting their 140 million credit and debit cards to chip cards.

For this year, the card group expects growth in the United States from government ID cards and anticipated rollouts of contactless MasterCard PayPass contactless payment cards, as well as from sales of inexpensive, limited-use contactless chip cards to transit agencies, a spokesperson says.

The company also expects to generate 50 million euros from the rollout of 8 million smart cards in Austria, where Giesecke & Devrient has won a contract to supply a new electronic social insurance card.

Axalto's Fast Start
Earlier, Axalto had reported sales for the first quarter of 2005 that were up 17% to $237.3 million. The gain came mainly from higher shipments of subscriber identity module cards for mobile phones, which represents nearly 60% of the vendor's revenue.

The vendor says SIM sales grew by 28% to $135.1 million. Unit shipments soared by 50% to more than 73 million, and growth was especially strong in Eastern Europe, the Americas and Africa.

Sales were sluggish in Asia, which accounts for a third of the vendor's SIM card sales. They grew by just 1%. Overall SIM prices dropped by 13% compared with 2004. At the same time, Axalto says it doubled the share of high-end cards it shipped, to 34%.

Meanwhile, Axalto reported sales of banking smart cards dropped by 10% during the first quarter, reflecting a slowdown in orders of credit and debit cards that comply with the international EMV standard. The vendor blamed the fall on abnormally high sales of EMV cards during the first quarter of 2004, which marked the peak of the rollout of EMV cards by banks in the United Kingdom.

Axalto says it had sales of $44.5 million in its financial cards unit on shipments of 15.4 million chip cards during the first quarter of 2005. The unit shipment figure was down 17% from the same period in 2004.

Taking out sales from Axalto's unit that produces point-of-sale terminals, Axalto's revenue for the quarter rose by 13% to $216.5 million.

[kmacgre] 17/6/2005 10:12

Simon, thanks for that. Is the Bell ID therefore more costly?

[simon gordon] 17/6/2005 09:44

Bell ID provide software for complex solutions whereas Intercede is for more straightforward solutions.

For instance Gemplus sell both solutions.

[kmacgre] 17/6/2005 09:31

I found this article, although a few months old, extremely interesting.
It highlights the financial benefits for an organization in employing smart ID cards over non smart low tech options.
What comes across is that the Intercede type of ID management system is a real money saver over its low tech rival and enables one smart card to be used for many tasks with huge savings in card administration.

[topvest] 14/6/2005 21:46

I see ANS on OFEX are getting into identity software as well. This seems to be getting an exciting sector.

[kmacgre] 14/6/2005 14:09

SG: Thank you. I don't know much about Bell ID but thought it was a direct competitor of IGP. This (ID management) business is going to be very large and there is room for good competition.

[simon gordon] 14/6/2005 11:44

Pat Curran was the main man at Bell Group. I think he still works at Bell but bought Bell ID from Securitas.

[rambutan2] 14/6/2005 11:40

yes, certainly don't want any mergers/buyouts at current levels!

[kmacgre] 14/6/2005 08:53

As a small outfit, IGP have chosen to go through the Gemplus' & Axaltos of this world, thus, in theory anyway, getting sales leads in a timely manner.
SG: Did this guy Pat Curren head up Bell Group prior to the Securitas day and a half of ownership?

[topvest] 13/6/2005 17:20

IMO the current valuation of IGP is too low for a merger to be in our best interests. Best thing is for the share price to rise, before any significant number of new shares are issued.

[simon gordon] 13/6/2005 17:13

R2 - I owned shares in Bell Group and thus followed the smartcard industry.

Topvest - overall growth would improve with this combination, as would costs - one salesman selling the full spectrum of smartcard software.

[topvest] 13/6/2005 17:07

I don't think they need a merger. They are doing fine on their own!

[rambutan2] 13/6/2005 16:42

interesting thought simon.

are you in the industry?

[simon gordon] 13/6/2005 16:36

I note Pat Curran has bought Bell ID from Securitas. It would make sense to merge Intercede with Bell ID as the synergies would be excellent and allow the bigger Bell ID to come to market through a reverse takeover.

Thus creating a leading smartcard software company able to bid globally for contracts.

[garth] 13/6/2005 09:34

Techinvest wasn't issued this weekend was it?

[topvest] 13/6/2005 08:36

Starting to get interesting here. I guess it's the continued buying.

[wjccghcc] 13/6/2005 08:22

That was me topping up. Unfortunately, been away for 2 months so missed the dip!!

[jailbird] 13/6/2005 08:15

who has finally lit this..some buying going today then.

[rambutan2] 10/6/2005 15:31

that's better.
some turkish buying? !!!

[kmacgre] 10/6/2005 09:37

There is an interesting bit of news re Oberthur and the Turkish military ID card order they have just been awarded. Oberthur are an IGP OEM and from the press release it seems as if Oberthur are supplying a complete ID solution including management software for all turkish military incl families. However, it may not be IGP's MYID, but if it is .....

[topvest] 09/6/2005 22:09

They need to appoint a decent broker to initiate coverage. Daniel Stewart would be good. Then again, I've been looking at another technolgy stock (and bought recently) - RDS - they seem to be in the same position of being totally overlooked and they are very good on the broker coverage. Share price is on an all time low!! Stock markets are very unpredicatable...when you think the share price should be going up, it doesn't seem to happen!! Maybe these would go through the roof with a downbeat statement...lol!

[rambutan2] 09/6/2005 13:47

the first 5k buy was from me yesterday - my last top up i think.

i emailed citywire yesterday evening as they did a few write ups on igp up until 2003. told them that were about to take off.

[topvest] 09/6/2005 08:47

jailbird - I agree it is a big IF, but something is holding back the price. Anyway a better day today. Up another 0.5p. Given the very good news coming out of the company, I'm amazed that I'm still in a marginal loss position on this one to be frank and I have bought at c20p. You could quite easily attach a valuation of double or triple the current share price based on current prospects. Oh well, lets hope we get some more positive news soon. They could do with getting broker coverage or something to raise their profile.

[jailbird] 09/6/2005 07:55

topvest,

did not someone say earlier that if any dilution happens to repay convert loan, and that is a big IF,it is likely to be hardly upto 2M shares.
This to me is very small and this will frankly no negative impact on the share price as there is plenty of good news to come

[topvest] 08/6/2005 22:12

rambutan - it is at their head-office building I think. Nothing wrong with a cheap AGM! There is a resolution to issue up to 25% of the share capital on a pre-emptive basis included, although no intention to do so at the moment. I guess that this is sensible as they may or may not need to issue shares to redeem the convertible debt in 18m time or so. I think that two things are holding the price back at the moment: 1. Lack of awareness by the investment community on what a cracking little company this is and 2. Concerns over some dilution over repayment of the convertibles as the strike price is way above the current market cap. If they have a good year in 2005 then they may be able to redeem at par, but it will be a close call.