Intercede Regulatory News (IGP)

15 Dec 2005 07:00

Intercede Group PLC15 December 2005 INTERCEDE GROUP plc Interim Results for the Six months Ended 30 September 2005 Chairman's Statement Business and Product DevelopmentI am pleased to report that the Group has achieved a very strong six monthperiod in terms of year on year revenue growth and partnership development. TheGroup has now been profitable and cash generating for two consecutive half yearperiods. From a business development perspective this has been a transformational period,as our technology and business model have proven themselves around the world.Intercede has succeeded in signing new OEM licence contracts with both RSASecurity and Verisign, arguably the largest and most influential securitysoftware and service vendors in the world. These industry majors, along with ourexisting partners, are rapidly establishing Intercede's MyID smart cardmanagement system as the global de facto standard for interoperable smart cardmanagement across the smart card and IT security industries. Major sales successes during the period include: UK 1. Gemplus have now delivered 300,000 MyID licences to a major European customer. 2. Siemens have sold 200,000 MyID licences to a leading UK retailer. 3. Oberthur Card Systems have collaborated with Intercede to build a UK National ID demonstrator in their Tewkesbury facility. Intercede and Oberthur will jointly market the demonstrator to UK Government and major integrators. USA 1. RSA Security - Intercede has concluded an OEM licence agreement valued at a minimum of $2m over the next three years. The first $500,000 has already been received and a further $500,000 is due to be received prior to the end of the financial year. Under this agreement, RSA have launched the RSA Card Management solution based on Intercede's MyID technology. 2. Verisign - Following a competitive RFP process, Intercede has entered into a global OEM licensing agreement with Verisign. Under this agreement, Verisign will pay Intercede to produce a custom version of MyID to closely integrate with the Verisign Managed PKI environment and reimburse Intercede a percentage of all its associated service fees. 3. Major US Aerospace Contractor - Following a competitive procurement process, Intercede and a US partner secured a contract to install a pilot deployment of MyID within a major US aerospace contractor. This pilot has been successfully completed during the period and production roll-out is anticipated within the next 12-18 months. 4. Major US Bank - An order has been received for the first stage of a MyID deployment within a major US bank in partnership with a major US computer manufacturer. 5. SafeNet - Intercede has activated a further 20,000 MyID licences for a major SafeNet banking customer. Europe1. Thales e-Security have secured their first contract in the Middle East for their OEM version of MyID.2. Siemens are supplying a major European telecoms company with MyID to issue smart cards loaded with qualified certificates. ResultsSales during the period totalled £1,241,000 which, at a gross margin of 96%,resulted in an operating profit of £2,000. This compares to prior yearcomparative period sales of £535,000 at a gross margin of 87% and an operatingloss of £538k. The increase in gross margin reflects an increase in theproportion of own technology sales from 76% to 92%. The main sales during the period related to the completion of prior yearcommitments i.e. DoT Ireland, European Notaries and RSA European aerospacecontractor along with the impact of the new licensing deal with RSA Security, afurther significant order from Gemplus for a major UK customer and orders fromthe Met Police and Siemens. As at 30 September 2005, the Group had net cash balances totalling £1,030,000.During the six months ended 30 September 2005, the cash inflow before financingwas £358,000 which compares with a cash outflow of £451,000 during thecomparative period. OutlookThe Company expects to see continued strong growth in our market sector and inour share of this market over the coming months. We anticipate that our new andexisting distribution partners will start to generate recurring revenues as theyrespond to increasing demand for identity cards for corporate and governmentalapplications around the World. Richard Parris Chairman & Chief Executive 15 December 2005 Enquiries:Intercede Group plcTel. +44 (0) 1455 558111Richard Parris - Chairman & Chief ExecutiveAndrew Walker - Finance Director Consolidated Profit and Loss 6 months ended 6 months ended Year endedAccount 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Turnover 1,241 535 1,806 Cost of sales (50) (71) (113) ----------- ---------- ---------- Gross profit 1,191 464 1,693 Other operating expenses (1,189) (1,002) (2,079) ----------- ---------- ---------- Operating profit/(loss) 2 (538) (386) Interest receivable and similarincome 12 16 32 Interest payable and similarcharges (62) (36) (72) ----------- ---------- ---------- Loss on ordinary activitiesbefore taxation (48) (558) (426) Tax on loss on ordinaryactivities 76 182 182 ----------- ---------- ---------- Profit/(loss) on ordinaryactivities after taxation andretained profit/(loss) for theperiod 28 (376) (244) =========== ========== ========== Basic and diluted profit/(loss)per ordinary share 0.1p (1.1)p (0.7)p =========== ========== ========== Consolidated Balance Sheet As at As at As at 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Fixed assetsTangible assets 22 30 25 ----------- ---------- ---------- Current AssetsDebtors 280 138 379Cash at bank and in hand 1,030 615 672 ----------- ---------- ---------- 1,310 753 1,051 Creditors: Amounts falling due withinone year (1,097) (708) (869) ----------- ---------- ---------- Net current assets 213 45 182 ----------- ---------- ---------- Total assets less current liabilities 235 75 207 ----------- ---------- ---------- Creditors: Amounts falling due aftermore than one yearConvertible debt (1,432) (1,432) (1,432) ----------- ---------- ---------- Net liabilities (1,197) (1,357) (1,225) =========== ========== ========== Capital and reservesCalled-up share capital 4,271 4,271 4,271Share premium account 2,107 2,107 2,107Other reserves 1,508 1,508 1,508Profit and loss account (9,083) (9,243) (9,111) ----------- ---------- ---------- Shareholders' deficit - all equity (1,197) (1,357) (1,225) =========== ========== ========== Consolidated Cash Flow Statement 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Net cash inflow/(outflow) fromoperating activities 274 (649) (604) ----------- ---------- ---------- Returns on investments andservicing of financeInterest received 12 18 35 ----------- ---------- ---------- Net cash inflow from returns oninvestments and servicing offinance 12 18 35 ----------- ---------- ---------- Taxation received 76 182 182 ----------- ---------- ---------- Capital expenditure (4) (2) (7) ----------- ---------- ---------- Cash inflow/(outflow) beforefinancing 358 (451) (394) FinancingRepayment of secured loan - (2) (2) ----------- ---------- ---------- Net cash outflow from financing - (2) (2) ----------- ---------- ---------- Increase/(decrease) in cash inthe period 358 (453) (396) =========== ========== ========== Notes to the Accounts 1. Preparation of the interim financial statements The interim financial statements have been prepared on the basis of theaccounting policies set out in the Group's 2005 statutory accounts. The interim financial statements are unaudited and do not constitute statutoryaccounts as defined in Section 240 of the Companies Act 1985. The figures forthe year ended 31 March 2005 are an abridged version of the Group's statutoryaccounts for that year which have been filed with the Registrar of Companies.The audit opinion on those statutory accounts was unqualified and did notinclude a statement under Section 237(2) or (3) of the Companies Act 1985. The Interim Report will be mailed to shareholders and copies will be availableon the website (www.intercede.com) and at the registered office: Intercede Groupplc, Lutterworth Hall, St Mary's Road, Lutterworth, Leicestershire, LE17 4PS. 2. Basic and diluted profit/(loss) per ordinary share The calculations of profit/(loss) per ordinary share are based on the profit/(loss) for the period and the weighted average number of ordinary shares inissue during each period. 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Profit/(loss) for the period 28 (376) (244) ----------- ---------- ---------- Number Number Number Weighted average number ofshares 33,963,438 33,963,438 33,963,438 ----------- ---------- ---------- Pence Pence Pence Basic and diluted profit/(loss)per ordinary share 0.1 (1.1) (0.7) =========== ========== ========== 3. Reconciliation of movement in shareholders' deficit 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Opening shareholders' deficit (1,225) (981) (981) Profit/(loss) for the period 28 (376) (244) ----------- ---------- ----------Closing shareholders' deficit (1,197) (1,357) (1,225) =========== ========== ========== 4. Reconciliation of operating loss to operating cash flow 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Operating profit/(loss) 2 (538) (386) Depreciation charge 7 13 24 Decrease/(increase) in debtors 99 (20) (263) Increase/(decrease) increditors 166 (104) 21 ----------- ---------- ---------- Net cash inflow/(outflow) fromoperating activities 274 (649) (604) =========== ========== ========== 5. Analysis and reconciliation of net debt As at As at 31 March 30 September 2005 Cash Flow 2005 £'000 £'000 £'000 Cash at bank and in hand 672 358 1,030 ----------- ---------- ---------- Debt due after one year (1,432) - (1,432) ----------- ---------- ---------- Net debt (760) 358 (402) =========== ========== ========== The reconciliation of net cash flow to the movement in net debt is as follows: 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Increase/(decrease) in cash inthe period 358 (453) (396)Cash outflow from decrease indebt and lease financing - 2 2 ----------- ---------- ---------- Change in net debt resultingfrom cash flows 358 (451) (394)Net debt at the beginning ofthe period (760) (366) (366) ----------- ---------- ---------- Net debt at the end of theperiod (402) (817) (760) =========== ========== ========== 6. Creditors: Amounts falling due after more than one year The convertible debt totalling £1,432,000 represents two issues of convertibleloan stock, both carrying an interest coupon of 5%. The first issue totalling£982,000 is convertible at the option of the holder into fully paid ordinaryshares of the Company at 60.0p per ordinary share (up to a maximum of 1,636,048shares) at any time prior to 11 December 2006. The second issue totalling£450,000 is convertible at the option of the holder into fully paid ordinaryshares of the Company at 41.4p per ordinary share (up to a maximum of 1,086,800shares) at any time prior to 31 March 2007. Unless previously redeemed orconverted, the debt will be redeemed at par on 11 December 2006 and 31 March2007 respectively. In recognition of the dilution to be faced by the loan stockholders followingthe Placing on 1 July 2003, they were granted warrants to subscribe for up to2,982,919 ordinary shares at the Placing Price of 7.8p at any time up to theexisting conversion dates referred to above. 7. 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