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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Intercede Group Plc | LSE:IGP | London | Ordinary Share | GB0003287249 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 109.50 | 107.00 | 112.00 | 109.50 | 108.50 | 109.50 | 22,874 | 14:58:59 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Systems Service | 12.11M | 1.31M | 0.0225 | 48.67 | 63.76M |
From Apr 2019 to Apr 2024
TIDMIGP
RNS Number : 5077X
Intercede Group PLC
27 November 2017
27 November 2017
INTERCEDE GROUP plc
('Intercede', the 'Company' or the 'Group')
Interim Results for the Six Months Ended 30 September 2017
Intercede, the software and service company specializing in identity, credential management and secure mobility, today announces its interim results for the six months ended 30 September 2017.
Highlights
-- Revenues increased by 29% to GBP3.7m (2016: GBP2.8m), primarily due to new contract wins; the most notable including MyID license sales to (i) a major US Aerospace & Defence contractor; (ii) the UK Defence Industry, (iii) the largest US military shipbuilding company; and (iv) one of the world's largest diversified natural resource companies.
-- Operating expenses marginally increased to GBP6.7m (2016: GBP6.4m), reflecting increased investment in sales and marketing.
-- Operating loss reduced by 16% to GBP3.1m (2016: GBP3.7m).
-- Loss for the period fell by 23% to GBP2.1m (2016: GBP2.8m) resulting in a basic loss per share of 4.3p (2016: 5.7p).
-- Cash balances of GBP4.8m at 30 September 2017 (30 September 2016: GBP1.4m). -- Further GBP0.5m secured from the Convertible Loan Note programme.
-- Launch of a cloud-based version of MyID including variants designed to secure employee authentication and consumer facing applications and websites.
-- New Sales team in place by the period end following the appointment of Helen Adams as Chief Sales Officer (formerly ARM VP Sales, Europe & Asia Pacific).
Richard Parris, Chairman & Chief Executive of Intercede, said:
"I am pleased with the progress that Intercede has made in the first half of the current year. The Group has secured important contract extensions and new client wins within its core market. It has successfully brought important evolutions of the core product to address previously unexploited, high volume markets and, critically, the Group has recruited exceptional staff who are expected to generate significant future revenues from these developments.
"As announced on 6 November 2017, Intercede is now forecasting revenue growth for the full financial year in the range of 10%-20%. This is based on the timing of receipt of a small number of large orders and Intercede's subsequent ability to deliver and recognise revenues in accordance with the Group's accounting policy.
"We look forward to updating the market in due course."
ENQUIRIES
Intercede Group plc Tel. +44 (0)1455 558 111
Richard Parris, Chairman & Chief Executive
Andrew Walker, Finance Director
finnCap Tel. +44 (0)20 7220 0500
Stuart Andrews, Corporate Finance
Simon Hicks, Corporate Finance
Capital Access Group Tel. +44 (0)20 3763 3400
Scott Fulton, Media
Ed Welsby, Investors
About Intercede
Intercede is a cybersecurity company specializing in digital identities, derived credentials and access control, enabling digital trust in a mobile world.
Headquartered in the UK, with offices in the US, we believe in a connected world in which people and technology are free to exchange information securely, and complex insecure passwords become a thing of the past.
Our vision is to make the highest levels of cybersecurity available to organizations and consumers alike, solving complexity and scalability issues by managing high volumes of digital credentials.
We have been delivering trusted solutions to high profile customers for over 20 years. Our team of experts has deployed millions of identities to governments, most of the largest aerospace and defence corporations, and major financial services and healthcare organizations, as well as leading telecommunications, cloud services and information technology firms, providing industry-leading employee and customer credential management systems.
For more information visit: www.intercede.com
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2017
Chairman's Statement
Introduction
Intercede has made a good start to the year, achieving MyID contract wins from significant new customers, generating a pipeline for newly released products and substantially enhancing its sales and marketing capability. The Group's ability to convert its recent product development into meaningful revenue generation is likely to play an important role in Intercede's short to medium term growth prospects.
The on-premise version of MyID continues to appeal to governments, defence contractors and large enterprises as evidenced by contract wins in the first six months of this year. These include:
- The award of a MyID contract from a major US Aerospace & Defence contractor to manage digital identities for 130,000 devices. MyID is now used by five of the seven largest Aerospace & Defence companies.
- A new MyID license sale to a large UK defence organisation. This customer is expected to generate further significant professional services revenue over the next 12 months.
- An initial MyID license sale to the largest US military shipbuilding company. A successful implementation is expected to result in a follow-on order for over 20,000 licenses.
- An initial MyID license sale to one of the world's largest diversified natural resource companies, with the potential rollout to a workforce of more than 100,000 based in 50+ countries.
The Group has developed a range of related applications from its core MyID platform. These have been designed to take advantage of the growing awareness of, and requirement for, cyber security. In the last 12 months, Intercede has launched a cloud-based version of MyID, including variants designed to secure employee authentication and consumer facing applications and websites. These additions to the wide-ranging product suite provide the Group with a subscription based service suitable for enterprises and service providers around the world. Aligned to Intercede's enhanced and expanded sales and marketing function, the Group believes that it has positioned itself well to benefit from significant emerging opportunities.
The potential for growth in all of the Group's markets reflects the backdrop of a growing number of high profile cyber-attacks. In turn, this has led to an expectation that the global market for cyber security products and services will grow strongly over the medium term with Verizon reporting in their annual Data Breach Investigation Report that 81% of hacking-related breaches in 2016 involved stolen and/or weak passwords, up from 63% in 2015. That situation cannot continue and Intercede believes the world is at a "user authentication tipping point".
At the core of Intercede's technology is cryptographic key management, which has been proven to prevent such breaches by only allowing access to verified devices that have been unlocked by verified users. This contrasts with alternatives such as biometric security or SMS one-time passwords, which although having a place, are also open to compromise. Intercede is therefore well placed to benefit from the global investment in cyber security that is expected to grow to $100 billion by 2019.
Financial Results
Revenues in the period totalled GBP3,651,000, a 29% increase compared to the corresponding period last year. This growth was driven by further contract wins within the Group's core market; on-premise deployment of its MyID product. Intercede is now providing MyID to large enterprises in a wide range of industries. From its core Government Agency customer base, the Group is now working with a considerable proportion of the world's leading Aerospace & Defence contractors and an increasing number of customers from other sectors including Finance, Healthcare and Natural Resources. Intercede remains convinced that Government Agencies and large enterprises represent a significant market place for the Group's products.
Compared to the first half of the prior year, operating expenses rose by 4.0% to GBP6,704,000 (2016: GBP6,448,000). Costs continue to be tightly managed, but the Group has acted to expand and refresh its sales and marketing activities in recognition of the need to convert product development into meaningful revenue generation.
Staff costs continue to represent the main area of expense, representing 75% of total operating costs (2016: 77%). Intercede had 124 employees and contractors as at 30 September 2017 (30 September 2016: 127). The average number of employees and contractors during the period was 123 (2016: 128).
A GBP1,141,000 taxation credit for the period (2016: GBP898,000 taxation credit) primarily reflects the 2017 Research & Development ("R&D") claim which results from the Group's strategic investment activities. While the 2016 claim was received during October 2016, the 2017 R&D claim was received prior to 30 September 2017. The Group is a beneficiary of the UK Government's efforts to encourage innovation by allowing 130% of qualifying R&D expenditure to be offset against taxable profits and allowing 14.5% of the lower of R&D losses or taxable losses to be paid as tax credits.
A loss for the period of GBP2,146,000 (2016: loss of GBP2,773,000) resulted in a basic and a fully diluted loss per share of 4.3p (2016: basic and fully diluted loss per share of 5.7p).
Cash balances as at 30 September 2017 totalled GBP4,818,000 compared to GBP6,891,000 as at 31 March 2017 and GBP1,377,000 as at 30 September 2016. Intercede raised GBP4,623,000 (net of expenses from the issue of Convertible Loan Notes ("CLN") and new equity in January 2017 and a further GBP485,000 (net of expenses) from the same CLN instruments in August 2017.
Product Development and Partnerships
Intercede's software and services enable Trusted Digital Identities to be created, deployed and managed securely and at scale.
To widen the market into which Intercede can sell its products, MyID can be deployed in various formats to meet the demands of a comprehensive range of authentication use cases:
-- On-premise - typically adopted within the most security conscious environments such as the aerospace, defence and government sectors that demand all infrastructure and software is directly under their control. Highly configurable and feature rich.
-- Cloud-based - similar functionality and features as the on-premise solution but designed for widespread deployment in enterprise markets that are increasingly adopting infrastructure, platform and software as a service working models.
-- Mobile and Web - a frictionless, easy to deploy and highly secure two-factor authentication solution for web and mobile applications. Targeted at service providers and application developers that require a highly secure, user friendly and economic means to reliably authenticate their customers and eliminate passwords.
Intercede continues to engage under NDA with industry IT majors. While it is premature to predict when and if significant revenue streams will flow from these partnerships, a commercial breakthrough with any one of these partners could create an inflexion point in Intercede sales revenues. The engagements are a recognition of Intercede's world lead in cryptographic key management, authentication expertise and security technologies. Intercede's solutions remain contemporary, relevant and cannot be readily duplicated by industry majors themselves.
Intercede is also engaging in Internet of Things (IoT) based proofs-of-concept activity when it makes commercial sense to do so. For example, a MyID solution for smart security cameras was demonstrated at a conference in Washington DC in June in collaboration with a significant industrial partner. This project is expected to generate first revenues in the current financial year as it goes through a pilot stage across a number of secure US Government sites.
The Group's ground breaking IoT research capability was highlighted when Imagination Technology and Intercede showcased a solution for enhanced IoT security at BT's bi-annual Innovation 2017 event in June. The demonstration of the 'Trust Continuum' shows how systems-on-chips (SoCs) for home gateway routers can be architected to address the growing security and management challenges presented by the proliferation of IoT devices, services and technologies entering the home. This is the type of innovative exercise into which Intercede reinvests some of its R&D tax credit.
Sales and Marketing
To better represent the Intercede portfolio to a wider audience, the Group has relaunched its sales and marketing proposition to be more 'customer solutions' oriented. In support of this the Intercede website, www.intercede.com, has been redesigned and refreshed. In addition, the product suite will be unified under one brand name; MyID. MyID is positioned as an enterprise-grade authentication and credentials management solution that enables organizations to replace passwords with trusted digital identities.
Intercede's ability to address the widening cyber security market is dependent on a sales team that is focused clearly on its vision, mission and goals. A new team is now in place including the appointments of Helen Adams as Chief Sales Officer and Chuck Pol as Non-Executive Director.
Helen Adams joined the Group on 5 June 2017 from ARM Holdings plc, the world's leading semiconductor intellectual property supplier, where she was Vice President of Regional Sales for both Europe and Asia/Pacific.
Chuck Pol was appointed with effect from 1 June 2017 as a Non-Executive Director. He recently served as Chairperson of Vodafone Americas, a role in which he led the development of applications for the Internet of Things.
In addition, there have been several new hires in the US and RoW sales teams. Due to the long sales cycle for enterprise solutions, it is expected that this refreshed sales team will mainly deliver a sales revenue uplift in the next financial period and beyond.
Strategy and Outlook
At the core of Intercede's strategy is the MyID platform which has become a benchmark for Digital Trust within government circles and amongst some of the world's largest security sensitive organizations. Over time the Group's products have evolved from providing Digital Trust between connected people to include connectivity between devices, applications and the mass produced electrical goods that will make up the IoT market.
Cyber-threats, whether driven by individuals, organisations or nation states are increasing in frequency and sophistication and the economic cost is growing exponentially. Additionally, the threat landscape is expanding with the growth of the IoT and developments such as connected cars. In that environment, the Group is experiencing continuing demand in its traditional markets but, perhaps most importantly, Intercede is seeing opportunities to deliver the power of the MyID platform as a cloud-based service.
MyID as a service has the potential to open new and potentially large markets that were not previously accessible. One such example is enabling enterprises to issue digital credentials to mobile devices used by employees to replace usernames and passwords. Another is providing consumers with the ability to authenticate, sign and encrypt digital banking transactions. Pilot implementations with several network operators, banks and application platform providers will continue in the current financial year. Successful implementations will enable commercial activities to start in earnest for target markets for this product, including those that are impacted by new regulations in the financial services and consumer sectors such as Payment Services Directive 2 (PSD2) and the General Data Protection Regulations (GDPR).
MyID's evolution into the IoT securely provisions apps to a device and 'binds' them to the secure element of the device's chip so that the app cannot be compromised by cyber attacks. The growth potential of in this market is significant and, by 2020, is estimated to be more than 50 billion devices with each 'thing' needing to validate the trustworthiness of its peers across a network. Each point of trust is an opportunity for Intercede to provide an enabling service.
Some opportunities will take time to mature, but the Group's management team continues to be optimistic.
Richard Parris
Chairman & Chief Executive
27 November 2017
Hot Features
Premium
Consolidated Statement of
Comprehensive Income
For the period ended 30 September
2017
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3,651 2,828 8,286
Cost of sales (22) (58) (116)
__________ __________ __________
Gross profit 3,629 2,770 8,170
Operating expenses (6,704) (6,448) (12,891)
__________ __________ __________
Operating loss (3,075) (3,678) (4,721)
Finance income 5 7 13
Finance costs (217) - (70)
__________ __________ __________
Loss before tax (3,287) (3,671) (4,778)
Taxation 1,141 898 888
__________ __________ __________
Loss for the period (2,146) (2,773) (3,890)
__________ __________ __________
Total comprehensive expense
attributable to owners of
the parent company (2,146) (2,773) (3,890)
__________ __________ __________
Loss per share (pence)
- basic (4.3)p (5.7)p (8.0)p
- diluted (4.3)p (5.7)p (8.0)p
__________ __________ __________
Consolidated Balance Sheet
As at 30 September 2017
As at As at As at
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 636 822 695
__________ __________ __________
Current assets
Trade and other receivables 1,910 2,718 1,280
Cash and cash equivalents 4,818 1,377 6,891
__________ __________ __________
6,728 4,095 8,171
__________ __________ __________
Total assets 7,364 4,917 8,866
__________ __________ __________
Equity
Share capital 505 491 499
Share premium 673 232 673
Equity reserve 60 - 60
Merger reserve 1,508 1,508 1,508
(Losses)/retained earnings (4,285) (1,441) (2,354)
__________ __________ __________
Total equity (1,539) 790 386
__________ __________ __________
Non-current liabilities
Convertible loan notes 4,641 - 4,124
Deferred revenue 185 77 141
__________ __________ __________
4,826 77 4,265
__________ __________ __________
Current liabilities
Trade and other payables 1,517 1,745 1,390
Deferred revenue 2,560 2,305 2,825
__________ __________ __________
4,077 4,050 4,215
__________ __________ __________
Total liabilities 8,903 4,127 8,480
__________ __________ __________
Total equity and liabilities 7,364 4,917 8,866
__________ __________ __________
Consolidated Statement
of Changes in Equity
For the period ended
30 September 2017
(Losses)/
Share Share Equity Merger retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2017 499 673 60 1,508 (2,354) 386
Purchase of own shares - - - - (93) (93)
Re-issuance of treasury
shares - - - - 138 138
Employee share option
plan charge - - - - 8 8
Employee share incentive
plan charge - - - - 162 162
Issue of ordinary
shares 6 - - - - 6
Loss for the period
and total comprehensive
expense - - - - (2,146) (2,146)
________ ________ ________ ________ ________ _______
At 30 September 2017 505 673 60 1,508 (4,285) (1,539)
________ ________ ________ ________ _______
At 1 April 2016 487 232 - 1,508 1,131 3,358
Purchase of own shares - - - - (68) (68)
Employee share option
plan charge - - - - 47 47
Employee share incentive
plan charge - - - - 222 222
Issue of ordinary
shares 4 - - - - 4
Loss for the period
and total comprehensive
expense - - - - (2,773) (2,773)
________ ________ ________ ________ ________ _______
At 30 September 2016 491 232 - 1,508 (1,441) 790
________ ________ ________ ________ _______
At 1 April 2016 487 232 - 1,508 1,131 3,358
Purchase of own shares - - - - (143) (143)
Employee share option
plan charge - - - - 60 60
Employee share incentive
plan charge - - - - 488 488
Issue of ordinary
shares 12 441 - - - 453
Equity component of
convertible loan notes - - 60 - - 60
Loss for the year
and total comprehensive
expense - - - - (3,890) (3,890)
________ ________ ________ ________ ________ _______
At 31 March 2017 499 673 60 1,508 (2,354) 386
________ ________ ________ ________ ________ _______
Consolidated Cash Flow Statement
For the period ended 30 September
2017
6 months 6 months
ended 30 ended 30 Year ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Operating loss (3,075) (3,678) (4,721)
Depreciation 82 103 194
Loss on disposal of property,
plant and equipment - - 48
Employee share option plan
charge 8 47 60
Employee share incentive
plan charge 162 222 488
Employee unit incentive plan
charge/(credit) 7 (4) (20)
Employee unit incentive plan
payment - - (28)
Increase in trade and other
receivables (573) (821) (364)
Increase/(decrease) in trade
and other payables 85 (46) (417)
(Decrease)/increase in deferred
revenue (221) 236 820
__________ __________ __________
Cash used in operations (3,525) (3,941) (3,940)
Finance income 4 9 14
Finance costs on convertible
loan notes (150) - -
Taxation 1,141 (24) 888
__________ __________ __________
Net cash used in operating
activities (2,530) (3,956) (3,038)
__________ __________ __________
Investing activities
Purchases of property, plant
and equipment (23) (61) (73)
__________ __________ __________
Cash used in investing activities (23) (61) (73)
__________ __________ __________
Financing activities
Purchase of own shares (93) (64) (143)
Proceeds from re-issuance
of treasury shares 138 - -
Proceeds from issue of ordinary
share capital 6 - 453
Proceeds from issue of convertible
loan notes 510 - 4,495
Convertible loan note issue
costs (25) - (321)
__________ __________ __________
Cash generated from/(used
in) financing activities 536 (64) 4,484
__________ __________ __________
Net (decrease)/increase in
cash and cash equivalents (2,017) (4,081) 1,373
Cash and cash equivalents
at the beginning of the period 6,891 5,289 5,289
Exchange (losses)/gains on
cash and cash equivalents (56) 169 229
__________ __________ __________
Cash and cash equivalents
at the end of the period 4,818 1,377 6,891
__________ __________ __________
Notes to the Consolidated Accounts
For the period ended 30 September 2017
1 Preparation of the interim financial statements
These interim financial statements have been prepared under IFRS as adopted by the European Union and on the basis of the accounting policies set out in the Group's Annual Report for the year ended 31 March 2017.
The Group is not required to apply IAS 34 Interim Financial Reporting at this time.
These interim financial statements have not been audited and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2017 have been delivered to the Registrar of Companies. The Auditors' Report on those accounts was unqualified and did not contain any statement under Section 498 (2) or (3) of the Companies Act 2006.
The Interim Report will be mailed to shareholders within the next few weeks and copies will be available on the website (www.intercede.com) and at the registered office: Intercede Group plc, Lutterworth Hall, St Mary's Road, Lutterworth, Leicestershire, LE17 4PS.
2 Revenue
All of the Group's revenue, operating losses and net assets originate from operations in the UK. The Directors consider that the activities of the Group constitute a single business segment.
The split of revenue by geographical destination of the end customer can be analysed as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
UK 187 139 403
Rest of Europe 451 461 960
North America 2,774 1,987 6,367
Rest of World 239 241 556
__________ __________ __________
3,651 2,828 8,286
__________ __________ __________
3 Taxation
Taxation represents the net effect of amounts receivable from HMRC in respect of R&D claims and US corporation tax payable.
4 Loss per share
The calculations of the loss per ordinary share are based on the loss for the period and the weighted average number of ordinary shares in issue during each period. The basic and diluted loss per share are the same as potential dilution cannot be applied to a loss making period.
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Loss for the period (2,146) (2,773) (3,890)
__________ __________ __________
Number Number Number
Weighted average number
of shares
- basic 49,944,619 48,507,555 48,835,080
- diluted 49,944,619 48,507,555 48,835,080
__________ __________ __________
Pence Pence Pence
Loss per share
- basic (4.3)p (5.7)p (8.0)p
- diluted (4.3)p (5.7)p (8.0)p
__________ __________ __________
The weighted average number of shares used in the calculation of basic and diluted loss per share for each period were calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2017 2016 2017
Number Number Number
Issued ordinary shares
at start of period 49,903,143 48,735,005 48,735,005
Effect of treasury shares (189,197) (294,000) (294,000)
Effect of issue of ordinary
shares 230,673 66,550 394,075
__________ __________ __________
Weighted average number
of shares
- basic 49,944,619 48,507,555 48,835,080
__________ __________ __________
Add back effect of treasury
shares N/A N/A N/A
Effect of share options
in issue N/A N/A N/A
Effect of convertible
loan notes in issue N/A N/A N/A
__________ __________ __________
Weighted average number
of shares
- diluted 49,944,619 48,507,555 48,835,080
__________ __________ __________
5 Dividend
The Directors do not recommend the payment of a dividend.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EZLFLDFFZFBD
(END) Dow Jones Newswires
November 27, 2017 02:00 ET (07:00 GMT)
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