Intercede Share Discussion Threads

[wjccghcc] 08/4/2010 19:50

iiCB, I suspect that's why they settled. There have been a lot of small US software companies who are bankrupted by legal fees in patent disputes before it even gets to court.

[rivaldo] 08/4/2010 19:21

A disappointing statement from a very good company. It seems IGP's share price will remain range-bound until confidence is restored in the markets after (1) the legal case and (2) failing to meet expectations.

Will a contract win RNS be enough, or will it take the next set of interims to cause a re-rating I wonder?

Happy to hold anyway until the re-rating happens, which it will at some point imo.

[iicb] 08/4/2010 19:02

Personally, I believe they lost the court case now - £1.5m in charges, and a license agreement, doesn't sound like a winnner does it?

iiCB

[cambium] 08/4/2010 14:48

delayed from yesterday IMO

[accumulat0r] 08/4/2010 14:47

IMHO, the MMs are just trying to shake out the short term punters who bought straight after the court case announcement. And making a pretty good job of it too!

Whilst those in for the long term know IGP is a good buy at this level. I see someone bought 50,000 @ 44p on PLUS, whilst the price on LSE has remained at 38/41.

[yump] 08/4/2010 12:57

@ Archa

You can't have been around ADVFN for long then, that's a minor indiscretion.

There are hundreds of 'directors ate my parrot with a nice glass of Chianti' comments all over the place.

[archa] 08/4/2010 11:32

Igoe, your post 2011 was not quite removed in time. It is on the record! As a fellow member of Mr Walker's professional institute I find your public behaviour quite staggering.

[igoe104] 08/4/2010 10:54

POINT taken yump.

[yump] 08/4/2010 10:46

@ igoe104
Up to you of course, but I wouldn't leave that last post up, its pretty specific.

Be very surprised if anyone 'in the know' sold just on the basis of the figures - that would imply very short term investment horizons and I can't imagine anyone close to the company having that attitude. They'd have sold long ago for a host of reasons.

[boadicea] 08/4/2010 10:09

Agree the legal charges will be a charge against profit and therefore tax deductible - i.e. add to the potential tax asset. I am not sure whether they will count as R&D expenditure (I think patent filing costs would count as R&D, being a necessary adjunct, so why not ip protection as well?) and get more favourable treatment as such.

The bottom line profit this year could be a pleasant surprise imho, although both legal expenses and tax asset recognition should be viewed as exceptionals.

An accountant would need to check my view, but it looks to me as if (assuming this year's profit is virtually wiped out by legal costs) a potential tax asset of approaching £2M might eventually be available from accumulated losses.

[boadicea] 08/4/2010 09:51

Double entry - see next.

[wjccghcc] 08/4/2010 09:39

boadicea, I agree but it was the only way I could get from the operating profit of 1.9mm to PBT being below expectations. Perhaps Mr Parris was working off a higher forecast than the December Finncap one of 1.6mm?

Also, I'd have thought the legal costs would be tax deductible as well.

[boadicea] 08/4/2010 09:34

WJCCGHCC - "assuming full tax charge" -

While I agree that it is always wise to evaluate potential profitability on the basis of a full tax charge, in the current case I would expect the tax charge in the P&L account to be negative (i.e. a credit) as forward profitability expectations (on a "more likely than not" basis) allow further deferred tax assets to be recognised against former losses.
In this respect, the annuity revenue stream is particularly important as it increases forward visibility thereby allowing a longer view of forward profitability to be taken.
Last year the credit amounted to £341k in a combination of R&D tax credit and deferred tax assets.
I would expect the current year's figure to be at least as large.
Very little tax should be payable for the next few years, imho, as these credits are utilised.
The recognition of the credit does not, of course, amount to cash inflow. However, it adds to the equity in the balance sheet as a recognition of built-in value in the company.

[wjccghcc] 08/4/2010 09:06

Agreed. Might be a good lesson to underpromise and overdeliver in the future.

[daz] 08/4/2010 09:04

WG agree with those revenue splits.

Given that they said they were confident of meeting 'expectations' (whatever they were) in the interim's in December, I would have thought the trading statement could have given at least a cursory explanation for the 2nd half weakness. If it is just timing of contracts as warned, then it's not going to be held against them. By not saying anything, it leaves open the possibility of other causes, which could be viewed less favourably.

[wjccghcc] 08/4/2010 08:46

Daz, revenues have always been lumpy due to the large contract sizes and the fact they have little control over implementation timetables. Over time, this effect will reduce as the annuity income from existing contracts builds up (it's usually about 20% of the contract size). I also think H2 last year was boosted considerably by TWIC.

IGP are also pretty conservative regarding revenue recognition - the fact that cash has increased by 1mm over the year despite PBT being zero after the 1.5mm legal costs shows this.

For the record, revenues are

H1 08/9 2.0mm
H2 08/9 3.7mm
H1 09/10 2.8mm
H2 09/10 3.5mm

[outsider] 08/4/2010 08:39

bought 5k online had to pay full offer tho

[daz] 08/4/2010 08:37

2nd half revenues have been weak and are down about 7% from 2009 H2, so am not surprised by the markdown.

The interim's said '...the full year outcome will be dependent upon the timing of receipt of orders' but then went on to say '...Nevertheless, the level and pace of customer and partner activity is greater than in previous periods and the sales pipeline is stronger than ever'.

You have to wonder what happened to this sales pipeline and one reason could be that IGP were affected by the legal case to a greater extent than they let on.

[arty] 08/4/2010 08:37

FELIX99 - Yes online trading limits tell the same story, I tried earlier and you could buy only 1000, where as you could sell 10000. NOT what you'd expect in the circumstances (o;

[felix99] 08/4/2010 08:29

MM's seem to be taking stock quite happily is all I can say 25k sold on plus and 5k on LSE that I can see so far. I reckon Herald will be mopping up . Parris must have breifed em well before selling 1m and I reckon they will be buying anything else they can get hold of

[interceptor2] 08/4/2010 08:20

Stop/lossed out this morning after holding for over a year, shame because I had high hopes here. I still think they will have a bright future, might look again after results are out.

Good luck.........

[carly2] 08/4/2010 07:58

How interesting that the price starts falling just a few days before this announcement...someone knew something!!
Anyway, lets hope for better things to come with the lawsuit out of the way.
All the best

[wjccghcc] 08/4/2010 07:56

With 1.9mm op profit, no interest charges, then assuming a full tax rate, it looks like PBT will be just under 1.5mm so they've missed the forecast by 100k. Given the distraction of the litigation on management and on the client base, that's pretty good going IMHO. Puts them on a historic PE of 12-13 with everything to play for.