Intercede Share Discussion Threads

[pyman] 27/3/2007 14:53

true- dont want one.

[jailbird] 27/3/2007 14:05

i thibk we should stop this takeover talk...2morrow in the papers some idiot will be writing Intercede Group - talk/gossip of takeovers.

the papers get these sort of comments from BBs!

[pyman] 27/3/2007 14:01

directors directly and indirectly control a large chunk of stock- parris 19% ex his options.Credo venture cap money - they have an option to convert the loan stock representing 25% i believe. I m hoping a bid would have to be very much agreed and at a very good exit price if there is one.

[aphrodites] 27/3/2007 12:51

Taurus

As you know I have been one who has been expecting a bid.

The answer as to why Oracle did not bid when they were 30p is simple.

In most examples like this the predator waits until all the hard work has been done. When the evidence is there that the company has an ongoing and successful business and all the early dangers associated with a young compnay are removed that is the time to pounce. Better to pay £2 when it is a racing certainty than 60p when it has no track record. But as we all know even the 6/4-on favourites sometimes lose.

I would put money on someone presently passing the slide-rule over IGP.

And as long as they can keep the lid on the price the more attractive £2 will appear to shareholders.

When this was at 75p I would have loved to see it move on and break £1. While it stays down here it is extrememly vulnerable and I hate to think of someone getting the company at a snip.

[wjccghcc] 27/3/2007 12:50

Taurus, any bid would need management approval and I hardly think they'd accept the original flotation price. Nor, given the potential, would most of the shareholders, whatever the market price at the time.

Plus, Oracle's move into the Identity space has only been quite recent.

Microsoft are going their own way aiming more at the lower-tech SME space while given IGP's broad range of partners, an acquisition by Verisign, RSA or Gemalto wouldn't work.

Spooky summed it up quite well a while back - might be worth looking at some of his posts.

[jailbird] 27/3/2007 12:36

thanks WJ,

Tb, i'm sure there is a reason, but the longer any bidders wait, then more the company will be worth .

[taurusthebear] 27/3/2007 12:25

But if that was the case, why didn't Oracle bid 60-70p for IGP when they were 30p and under? The fact is that even the industry players have trouble figuring out what the future is sometimes! :0)

[wjccghcc] 27/3/2007 12:21

jailbird, I'm being conservative in forecasting the number of cards issued but ID card projects are of such importance and have so many different interested parties with different priorities that it's safe to assume they'll almost always be subject to delay. I think HSPD-12 issuance will ramp up towards the end of this year but if you assume the bulk of issuance takes place in 2008 then you won't be dissappointed. We should get more info on timing at the finals in May.

I agree with rambutan - a takeover is most likely before a traditional PE valuation becomes relevant since it's the industry partners who know how big the potential is for MyID unlike the stock market which struggles to look more than 12 months ahead.

[rambutan2] 27/3/2007 11:44

i'm more and more convinced that the oracle scenerio is the likely one - and easier to pick a £2 plus initial bid than try to predict furture rev/profits. imho.

[jailbird] 27/3/2007 11:38

WJ,

what sort of share price are will looking at with these figures in mind.
i was hoping for then $8M dollars next year! which is £4M sterling
they are current on 5 times revenues.

[wjccghcc] 27/3/2007 11:31

Agreed barnsey. Their TWIC contract revenues should be more than this year's total revenues for the company!

I suspect it's a combination of tax year-end profit-taking plus some investors who originally bought at the flotation price finally relieved to get out at breakeven that's holding this back. Bit shortsighted if you ask me - the odds of IGP being snapped up by the likes of Oracle within the next 12-18 months are shortening with each US contract win.

[wjccghcc] 27/3/2007 11:19

Agreed Aphrodites - I wasn't particularly worried about the cashflow given their history of running a tight ship. Also they have a very suppportive group of shareholders if need be.

I think forecasts will only ever be very approximate for IGP given that while they are winning an increasing number of large contracts, their involvement is mainly with their partners rather than with the client and so they have little knowledge of implementation timing (for projects outside the UK).

What we do know are the end-deadlines for the government projects - Oct 2008 for HSPD-12 and Dec 2008 for TWIC. Clearly these may slip although I think HSPD-12 is likely to meet their's. For HSPD-12 you're looking at 1.5mm federal employees and 4-5mm contactors while TWIC is 750k port workers likely to be expanded as igoe says above.

In total for these programmes, I would hope to see 500k MyID cards issued this financial year, perhaps increasing to 2mm next financial year. Assuming $4 per card (out of total card price of $120-140), that would be a $2mm revenue hike this year rising to $8mm next year all of which drops to the bottom line. Ongoing, they should receive 20% of those amounts for annual maintenance as well.

Add to that the large deployments ahead in the aerospace, defence, health and banking markets and I suspect this will be the last year of losses unless they really have to ramp up the cost base because they're winning other big projects e.g. the UK ID card.

[barnsey] 27/3/2007 10:49

The market will wake up when the big money starts rolling in.
Major news just in and 1p on shareprice is disappointing to say the least.

[wjccghcc] 27/3/2007 10:48

AFAIK Daon were originally doing the IDMS (Identity Management System) when the TWIC project was a lot more basic (it's been in development since 2001). Recently, Homeland Security has decided to bring it into line with HSPD-12 and for that they need a far more sophisticated CMS (card management system) of which MyID is (now clearly) the market leader.

What this shows is that HSPD-12 compatability is really the benchmark for almost all US ID card projects going forward.

[aphrodites] 27/3/2007 10:44

WJCCGHCC

When I spoke to the FD several weeks ago he confirmed there were no cash problems and I think I indicated then that issuing more shares was never being contemplated.

The cashflow positive statement endorses this message which is good news for the shares.

Slow contract implementation is an excuse which many companies use and which major shareholders do not like to hear. It can cover a multitude of sins. However, providing the company and its advisors cover this matter suscintly in the results it will remove a lot of concerns.

The involvement in the two new major further systems integrators with aerospace and defense sectors indicates just how well the technology is thought of.

The company did not need to make such a detailed update but the fact that it did must mean that it is highly staisfied with progress.

I think we will see an even more positive statement on progress at the time of the release of the results.

[rambutan2] 27/3/2007 10:40

cash n twics - lovely.

[pyman] 27/3/2007 10:32

found it- lockheed - they lsit their partners as daon- irish bunch and datatrac,deloittes maximus lexisnexus. Daon do managment software - wher does IGP fit into the frame?- i m digging further at the mo.

[igoe104] 27/3/2007 10:28

lockheed won the contract pyman.

close to 900k, jailbird. i can,t see them not being involved in the real id project.
I don,t think the market understands how big myid is going to be, especially in the usa.
also its worth a mention, that two other contracts have been won.

[pyman] 27/3/2007 10:22

good news indeed- cant find which partner/s awarded twic.

[jailbird] 27/3/2007 10:17

igoe,

that mean u will 750k quids in!!!

[igoe104] 27/3/2007 10:11

YEP that 750,000 figure for the twic project, is the starting figure. i,ve heard it will eventually involve 15 million people.

with such a strong involvement in the amercian market, i expect them to be involved in the real id project as well, which will involve 280 million people.
im sure im £6 target price, is going to be reached, in the medium term.

[jailbird] 27/3/2007 09:17

WJ,
well good news is that as there has been cash generation they cash balances will have gone up..so our previous cash concern is gone...Also if more contracts come in before yr that loss may still be less than the 500k u are estimating...all in all a very positive update.

[wjccghcc] 27/3/2007 08:12

Well revenues will be a bit less than I was expecting and implies a loss of around 500k, but the fact that they've been cashflow positive since september indicates it's more a case of when they recognise the revenues i.e. slow contract implementation over which they have no control.

However, the big, huge news is their involvement in TWIC. Along with HSPD-12, this is the other current major US smart ID card programme. The 750,000 workers they mention is conservative IMHO. igoe has provided more info on the TWIC programme.

The current year is when we'll begin to see major revenues from the US so the numbers will look a lot better although given the contract timing, I'd say it will be next year when the real kicker comes.

With 99% of the US federal ID issuance (outside the military), it puts them in a very strong position for expansion into the individual states and corporate america.

[garth] 27/3/2007 07:25

Last year's numbers:

Preliminary Results for the Year Ended 31 March 2006


Intercede, a leading developer of identity management software, today announces
its preliminary results for the year ended 31 March 2006.


SUMMARY

- Sales increased by 18.6% from #1.8m to #2.1m, with sales of core MyID licenses
up 21%.

- Further improvement in gross margin to 95% (2005: 94%).

- Operating loss reduced to #0.3m (2005: #0.4m), notwithstanding increased
investment in sales and after-sales staff.

- Full year cash inflow of #0.4m (2005: cash outflow of #0.4m). Cash balances of
#1.1m (2005: #0.7m) at financial year end.