Intercede Share Discussion Threads

[pyman] 07/4/2011 11:50

Looking at cash of £6m. IGP set up offfice in USA and increaed admin costs by £650k in the last half year.Average number of employees up by 2 to 56. There is a lot of money there to expand support and sales functions if microsoft deal increases the workload without the need for borrowing . I reckon they are in a very strong position to push ahead.
I see dividends coming soon!

[dick grasso] 07/4/2011 08:25

As far as I can see forecast adjusted EPS for 2011 is 4.1 the same as 2010, is this right? thanks! (thats with sharelockholmes!)

[glasshalfull] 07/4/2011 08:15

Lovely forward looking statement.
Well done the Intercede team.

Regards
GHF

[yump] 07/4/2011 08:09

So effectively half year to half year was 10% growth, if you exclude the the NHS licences ?

If they expect acclerating growth that p/e should drop nicely, or rather the share price should rise to keep the p/e in a similar area, or better still the p/e should rise a bit to reflect the growth AND the share price should rise.

Quite happy for just one option to happen for the time being though !

[wjccghcc] 07/4/2011 07:16

Full Year revenues +10% with PBT in line gives H2 of 3.3mm vs H1 of 3.5mm. As expected given the H1 boost from the final NHS licences which would have been worth at least 500k. Nice to see cash of over 6mm - it really is turning into a cash machine.

They flag accelerating revenue growth over the next 12-24 months from MyID9, PIV-I and the Microsoft partnership. Be interesting to see Finncap's new forecasts for the current year.

[fft] 06/4/2011 09:31

Until now, IGP have been dealing with the large boys, so can, presumably, build individual support teams within each company the products have been sold to. Or have a central support for only a few customers who are well known.

If they are now selling to MS customers (smaller, less value - SME's), who will provide the support ? Will they have to spend more on support infrastructure as MS sales ramp up ?

I wonder if this could be a bit indigovisionish, where past a certain point the business needed to have quite a bit invested in it to get it to the next level and that knocked profits.

[aphrodites] 06/4/2011 09:16

WJC

I agree with your analysis of the situation.

The problem we have here is that with only two institutions of any note with holdings in the company the CE does not need to be as transparent with the rest of the shareholders as he would be in a larger company.

Easy to meet with the two institutions and update them with progress and answer their questions as to where they are taking the business. With cash building up in the company I would like to see a lot more open discussion as to where they believe the future lies for them.

Let's hope the next AGM and results will allow a discussion along these lines.

[wjccghcc] 05/4/2011 22:37

Not so sure Archa - I wouldn't be surprised if they only meet or beat slightly rather than by that much. H1 was boosted by the 400k NHS license sale which won't be repeated and H2 has the costs of the US office and increased staff recruitment.

All the recent good news of MyID9, PIV-I, Microsoft and the Defence Association will benefit next year rather than the one just ended, as will the implosion of the competition.

IMHO They're making all the right moves to triple turnover over the next 5 years and if investing for the future means having the odd pause in profit growth, I can live with it.

[archa] 05/4/2011 22:09

I am looking forward to an anticipated trading report, possibly this week or early next. Whilst FinnCap are sticking with pre-tax profits of £2.0m and EPS of 4.10p. I can see good reason for being more optimistic than this, going for £2.485m and 5.0p. respectively. If the preliminary results come in at much less than this, I can see the current price weaken a bit on a disappointing outturn. I am well aware that we are only likely to get figures for turnover and current cash within the next few days, but the first of these should make prediction of the overall outcome relatively easy.

[pyman] 05/4/2011 15:29

hmm. So is th smart phone a threat or an opportunity? presumably the software is still needed - just put on a mobile rather than a smart card. Another serious reason not to loose your phone!!- or let the battery die at a crucial moment.

[igoe104] 05/4/2011 09:17

WORTH A READ.

[looby loo] 03/4/2011 21:33

Shares listed on NASDAQ do tend to be rated on higher PEs than AIM but I don't think that needs to be a reason for Intercede to be listed there – because the share price, at some stage, is going to explode – wherever its listed. ;o)

Intercede is starting to generate more of its business via its office in Dulles Technology Corridor. With it being in partnership with the likes of Microsoft, Lockheed Martin, Symantec, etc, I think a NASDAQ listing would be more appropriate than AIM. But it would be expensive. I don't think Intercede would want to incur that expense just now if it can manage without it. 'Though it would be nice to think it was on the agenda.

[billbyrne] 03/4/2011 17:36

With 58% of turnover in the US and that figure likely to rise, I think its
time to think about a dual listing. If the main listing was in the US I
think we would be looking at a higher share price than we have now.

A different business altogether I know, but look at the impact on Signets
share price since they moved their main listing to the US.

[pyman] 31/3/2011 18:18

good to hear!

[igoe104] 31/3/2011 17:54

Good write up in the leicester mercury.

Mr Parris said the partnership with Microsoft gave it access to the US firm's many thousands of medium-sized business customers – a potentially lucrative move.

"At the moment our customers are some of the biggest in the world," he said. "But this allows us to get our product to medium-sized enterprises, which opens up a whole new area.

"This company is capable of turning over a significantly larger amount of money. We are just at the beginning of the growth of this market."

[pyman] 30/3/2011 17:07

us unemployment data boosts dollar : stronger dollar = stronger earnings for IGP

[rambutan2] 30/3/2011 03:15

Great news re Microsoft. I wonder by how much it immediately expands IGP's sales opps for a negligible cost?

IGP is the only partner to offer plug n play...


Vast resource on FIM here...

[wjccghcc] 29/3/2011 14:45

Agree re the takeover price but I'm sure it would be an industry player rather than an MBO. Management remember too well what it was like to operate with stretched finances and I very much doubt they'd be comfortable taking on MBO leverage.

[aphrodites] 29/3/2011 14:33

WJC

I think the big question here is whether IGP would be able to grow faster under the arm of a major business like Microsoft than as a stand-alone quoted company on the AIM market.

As I posted several months ago,the aim of every company is to produce shareholder value and to date that is exactly what IGP has done. But where does it go from here? Does it make an acquisition or just continue to grow organically?

Personally, I think it would be better for them to be taken over now and I would not mind betting that any would be predator would have to pay £1.50+.

It is either that or a management buy out which I would find strange having seen the CEO sell part of his holding to Herald Investments.

Considering that sale was around the 40p level, even though the value has doubled, after all the good news, and the lack of market liquidity, to my mind an 80p price today does not reflect the true value of IGP. Of course it would help the price if some of the recent silly selling antics had not undermined the share price. On an announcement like today and recent past news we should be nearer £1 than only 80p.

This is all most frustrating but it is one of the problems with shares on the AIM market.

[wjccghcc] 29/3/2011 13:10

I think it depends on whether IGP can leverage their US success into a global business.

It's clear IGP have taken market leadership in the US high-end market, and with 58% of turnover in the USA, it's very much becoming a US business. UK revenues are likely to decline both in relative and absolute terms now that the NHS spine is nearly complete and with the abolition of the ID card scheme. If that's the way it stays, then I think management will be happy to sell once they reach double digit revenues (giving EPS of 8p and a takeout price of 150-200p).

The rest of Europe/World revenues are about 20% of the business and still very lumpy (as was the UK/US a few years ago when the business was at an earlier growth stage). If IGP can dominate the high-end market here, then it's a whole different ballgame and you're looking at 20mm+ revenues in 5 years time and a valuation which is a multiple of today's.

The downside of staying listed is that this lumpiness will mean they'll occasionally have a weaker half's trading and the stock market may well punish them accordingly.

Personally, it wouldn't surprise me to see H2 being weaker than H1 for this year - a lot of good contracts fell into H1 that won't be repeated (NHS), and all the recent great news (launch of MyId9, PIV-I approval, Microsoft) won't have had a financial impact yet. Luckily, Management have managed expectations accordingly so that 4p EPs should be achievable. Next year however, could see them moving to the next level...

[pyman] 29/3/2011 12:29

Yeah. Good news for us they did nt take em over yet. Great news.

[igoe104] 29/3/2011 12:15

I dont know why microsoft just take intercede over, it would just about put them in control of the whole id market.

[wjccghcc] 29/3/2011 09:27

Long term, this is a very significant move and really opens up the enterprise space for IGP. Currently, the most demanding security environments are the government / defence contractors where they have no choice but to implement PIV and PIV-I systems where IGP is the market leader. However, further down the security spectrum there are a large number of enterprises who base their IT infrastructure on Microsoft and therefore will use Forefront as the starting point for their security needs. By integrating MyID seamlessly with Forefront, these enterprises can now adopt the highest federal standards for their security without an awful lot of work/expense of integrating two systems.

Another nail in the coffin of Actividentity IMHO.