LONDON (Alliance News) - Cybersecurity software and services company Intercede Group PLC said Wednesday it has raised extra funds, after its interim loss widened severely as revenue dropped by almost half.
Intercede booked a pretax loss of GBP3.7 million for the six months to September 30, the first half of its financial year, widened from GBP432,000 in the same period in 2015.
Revenue dived by 49% to GBP2.8 million for the six month period from GBP5.5 million in the same period the prior financial year. Intercede said it was hit by the deferment of a "small number of particularly large orders", leading to a delay in over GBP2.0 million in sales.
Intercede added this was partly due to a delay in investment decisions from the US government, a major customer for its MyID identity and credential management product. The company said it expects its revenue run-rate to recover now that the US presidential election is out of the way.
The company's loss also was widened by a 14% increase in operating expenses to GBP6.4 million from GBP5.7 million, which Intercede said was due to planned investment in marketing.
The company's cash position at September 30 was down to GBP1.4 million from GBP5.3 million as at March 31. Intercede said that as at November 30 its cash balances recovered to GBP2.6 million.
Intercede also noted post-period it has conditionally secured approximately GBP5.0 million in cash via a convertible loan note and share subscription, in order to support investment.
Intercede said it has conditionally raised GBP4.5 million through the issue of loan notes convertible into equity at 68.8 pence a share, along with a subscription for up to 877,192 shares in the company at a price of 57.0p each, raising GBP500,000.
Shares in Intercede were down 1.6% at 56.10 pence Wednesday.
"The reduction in revenues in the first half of the financial year should not mask the scale of the market opportunity which we are positioned to exploit. We are very pleased at the support we have received from both new and existing investors who also understand this opportunity and are endorsing our strategy by subscribing for convertible loan notes and equity," said Richard Parris, chairman and chief executive of Intercede.
"We remain confident that the deferred orders which have affected the first half of the year will soon come to fruition and the outlook for the full year is in line with expectations," added Parris.
By Adam Clark; adamclark@alliancenews.com
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