TIDMIGP
RNS Number : 3470H
Intercede Group PLC
07 June 2017
7 June 2017
INTERCEDE GROUP plc
("Intercede", the "Group" or the "Company")
Preliminary Results for the Year Ended 31 March 2017
Intercede, the leading specialist in digital identity,
credential management and secure mobility, today announces its
preliminary results for the year ended 31 March 2017.
Highlights
-- Revenues of GBP8.3m (2016: GBP11.0m), reflecting a stronger
second half, in line with the same period last year.
-- Operating expenses increased to GBP12.9m (2016: GBP12.5m)
reflecting continued high levels of investment in technology
development totalling GBP4.0m (2016: GBP3.9m).
-- Average number of employees and contractors unchanged year on year at 125.
-- Loss for the year of GBP3.9m (2016: loss of GBP1.0m).
-- Successful fundraising totalling GBP4.9m during the year
(GBP4.6m net of expenses) in support of new market
opportunities.
-- Cash balances of GBP6.9m at 31 March 2017 (2016: GBP5.3m).
-- Launch of RapID, RapID-SL and MyID as a Service (MyIDaaS) cloud-based services.
-- Significant recent contract wins include a major US
Government Agency, a US Healthcare group and a major US Aerospace
& Defence contractor.
-- Appointments of Helen Adams as Chief Sales Officer (formerly
ARM VP Sales, Europe & Asia Pacific) and Chuck Pol as
Non-Executive Director (formerly Chairperson, Vodafone
Americas).
Richard Parris, Chairman & Chief Executive of Intercede,
said:
"I am pleased to report Intercede's considerable progress during
a challenging year. We have recovered successfully from a difficult
first half, returning to the record revenue levels of the previous
year in the second half. We have completed a significant fund
raising, positioning the Group well to capture the potential growth
in our addressable markets. We have strengthened the management
team with key personnel who bring directly relevant experience to
our strategic aims. Finally, we have continued to develop new,
market-leading applications for our software which, I believe, will
find sizeable and profitable markets in the medium term.
Notwithstanding our reported results, Intercede is in excellent
shape and I view the future with a high degree of confidence."
Contact
Intercede Group plc Tel. +44 (0)1455 558111
Richard Parris Chairman & Chief Executive
Andrew Walker Finance Director
FinnCap Tel. + 44 (0)20 7220
0500
Stuart Andrews Corporate Finance
Simon Hicks Corporate Finance
Steven Norcross Corporate Broking
Capital Access Group Tel. +44 (0)20 3763 3400
Scott Fulton Media
Ed Welsby Investors
About Intercede
Intercede is a software and service company specializing in
identity, credential management and secure mobility. Its solutions
create a foundation of trust between connected people, devices and
apps and combine expertise with innovation to provide world-class
cybersecurity. Intercede has been delivering solutions to high
profile customers, from the US and UK governments to some of the
world's largest corporations, telecommunications providers and
information technology firms, for over 20 years. Intercede's
product portfolio includes MyID, an identity and credential
management system that assigns trusted digital identities to
employees citizens and machines. In 2015, Intercede launched MyTAM,
enabling trusted applications to be loaded into a mobile device's
Trusted Execution Environment (TEE), providing hardware-level
security for Android apps. In 2016, Intercede launched RapID, a
secure, easy to implement authentication service for mobile apps
and cloud services to completely eliminate the need for
passwords.
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
Preliminary Results for the Year Ended 31 March 2017
CHAIRMAN'S STATEMENT
Introduction
It has always been my view that success in business is best
gauged by how well management copes with adversity. The year to 31
March 2017 was a challenging period for Intercede; however, I am
pleased to report that the management team has responded admirably.
Revenue for the year was GBP8.3m (2016: GBP11.0m) which, given our
reporting a 49.0% fall during the first half, highlights a return
in the second half to the record levels of business recorded by the
Group in 2015/16. The improvement is both a testament to the
on-going attractions of MyID and a reminder that its addressable
market is dominated by a small number of large, highly secure
organisations.
Mindful of this, the Intercede team has been focused on
developing further applications for its market leading
cybersecurity software. We have been at the forefront of mobile
usage in evolving MyID for this important segment of our original
market. RapID provides a compelling answer to the questions posed
by the growth of mobile transactions, particularly in banking,
while MyTAM is an innovative security solution for developers
within the Internet of Things (IoT). We have also recently launched
MyID as a Service (MyIDaaS) which takes the core functionality of
MyID and offers it as a cloud-based service that is easy to
operate. We believe MyIDaaS provides a proven, cost effective
solution for enterprises of all sizes that need to comply with new
regulations for protecting customer information.
These developments, and the associated investment in skilled
people and marketing, are reflected in our results for the year. I
am convinced that we have positioned Intercede well for the demands
of these new markets.
The Group has continued to expand its customer base and
interaction with partners. During the year, Intercede has won
orders from within its traditional markets of the US Federal
Government, with an order from the Department of State, and
Aerospace & Defence, namely CDG (part of Boeing), MBDA and
Hanscom Air Force Base. There was also growth in the banking
sector, with new wins from LGT Vestra and the Swiss National Bank,
and the newer market of healthcare, with orders from Alexion
Pharmaceuticals and Mayo Clinic. In addition, there has been
significant repeat business from existing customers including ANZ,
Boeing, the US Department of Homeland Security Transportation
Security Administration, Deutsche Telekom, Telus, the US Federal
Aviation Administration, the US Federal Reserve Bank, Northrop
Grumman, RDW, the United Health Group and Wells Fargo.
Following the year end, Intercede has won orders from BAE
Systems, M.C. Dean and Verizon. Intercede is proud to note that
MyID is now used by five of the seven largest Aerospace &
Defence companies.
Establishing Intercede at the heart of the critical eco-systems
in place or being developed in our space is central to the Group's
strategy. I am pleased to report that we are working with a number
of partners including ARM, Centrify, Citrix, Intel, LG Electronics,
Microsoft, MobileIron, Symantec and VMWare (Airwatch) to further
this aim.
Since its foundation, Intercede has developed largely through
the use of its own funds. However, recognising the need to
accelerate our progress in key areas, the Group raised a total of
GBP4.6m (net of costs) via the issue of Convertible Loan Notes
(CLNs) and new equity in January 2017. These funds are already
being deployed successfully and will provide the Group with
considerable resources with which to address our expanding market
place. Notwithstanding this investment, at the financial year end
on 31 March 2017, Intercede had cash and short term deposits
totalling GBP6.9m (31 March 2016: GBP5.3m).
Financial Results
The following section is extracted from the Company's
forthcoming Annual Report and contains graphics to support the
commentary. These graphics can only be viewed by reading a PDF
version of this announcement, which can be accessed by clicking
here:
http://www.rns-pdf.londonstockexchange.com/rns/3470H_-2017-6-6.pdf
For those unable to access the PDF, the data represented
graphically is instead set out in tabular format below.
Revenue, Opex, Profit/Loss & Cash
GBPm Revenue OpEx Profit/Loss Cash
2013 6.7 7.5 -0.6 6.8
2014 9.8 9.4 0.8 7.2
2015 8.8 10.2 -1.3 5.9
2016 11.0 12.5 -1.0 5.3
2017 8.3 12.9 -3.9 6.9
The substantial increase in operating expenses (OpEx) over the
last five years primarily reflects continued high levels of
strategic investment to exploit new market opportunities. This
investment is expected to result in increased revenue and cash flow
generation in future periods. The 2017 year-end cash includes net
funds raised of GBP4.6m during the year.
Employees and ID's
Average Number
of Employees ID's (millions)
2013 77 7
2014 90 9
2015 113 11
2016 125 12
2017 125 13
Intercede's strategic investment plan has resulted in a
progressive increase in employees, resulting in one of the largest
teams with cryptographic key management experience and expertise
anywhere in the world. The introduction of RapID, MyIDaaS and MyTAM
is expected to result in exponential growth of apps and devices
under the management of Intercede's software.
Research & Development (R&D)
R&D Tax
Credit (in
GBPm R&D Expenditure arrears)
2013 2.3 0.1
2014 2.9 0.4
2015 3.6 0.4
2016 3.9 0.9
2017 4.0 0.9
Research and development (R&D) is an important part of
Intercede's investment strategy. Money spent on people qualifies,
in arrears, for UK government tax credits which are paid in cash in
the following year.
Regional Sales
Rest of
GBPm North America World
2013 4.8 1.9
2014 6.0 3.8
2015 4.5 4.3
2016 8.7 2.3
2017 6.4 1.9
The US represents Intercede's largest market with sales to North
America again approaching 80% of total sales during FY 2017.
Revenue Breakdown
Professional Software
GBPm S&M Services Licences Other
2013 2.5 1.7 2.4 0.1
2014 2.8 2.1 4.6 0.3
2015 3.1 2.5 2.6 0.6
2016 3.5 2.6 4.8 0.1
2017 4.0 1.7 2.6 0.0
The last five years has seen progressive growth in recurring
Support & Maintenance (S&M) revenues due to a cumulative
increase in customers which has also resulted in a substantial
level of ongoing Professional Services activity. Software license
revenues from the traditional MyID business tend to be lumpy but
the introduction of the RapID, MyIDaaS and MyTAM cloud-based
services (which currently represent less than 5% of total annual
revenues) is expected to both increase growth and smooth future
volatility.
Review of Operations
Intercede's heritage is in securing sensitive data assets in the
most data critical industries but today few companies, in any
market sector, can afford to ignore the requirement to more
effectively establish digital identity and create the trust
relationships that enable 21st Century commerce. The volume of data
held has increased dramatically, the regulatory requirements are
much more onerous, cybercrime is sophisticated and widespread,
consumers are demanding answers and yet much of the world's data is
still protected by little more than a username and password
combination. That situation cannot continue and it represents a
significant market opportunity that Intercede is ideally placed to
address.
I believe that Intercede's products will be integral to the way
we all conduct a wide range of activities; from work through
transactions to managing every day activities. It is a developing
market but I am encouraged by the new enquiries we are now
receiving, from companies large and small, that recognise the need
for change.
Our goal has been to evolve the business in order that it can
provide support to this broader range of customers. We have
developed cloud-based delivery and applications. We have adapted
our products to enable mobile usage. We have produced one of the
few applications which allow the secure deployment of apps within
the Internet of Things.
Over the last few years, the Directors' believe that Intercede
has built one of the most talented teams in the world to address
this evolution while maintaining its core principles. We have
demonstrated our ability to bring products and, increasingly,
services to the market. Indeed, I am pleased to report that
Intercede:
(1) was the first company to receive an authority to operate
(ATO) a mobile derived credential service within the US
Government;
(2) was selected to provide a proof-of-concept implementation of
RapID within the Italian banking industry for PSD2 authentication;
and
(3) has begun operations of a production MyTAM service for
retail banking consumers in Korea.
Intercede now works with some of the largest organisations in
the world; both as customers or as partners.
Intercede's Customer base includes:
US Department of Homeland Security, Kuwait National ID, US
Federal Aviation Administration, US Nuclear Regulatory Commission,
US Social Security Administration, HM Government (UK), RDW, Airbus,
Boeing, Lockheed Martin, Northrop Grumman, Australian Government
Department of Defence, Booz Allen Hamilton, Deutsche Telekom, BASF,
REWE, Telus, United Health Group, Wells Fargo, Handelsbanken,
Coutts, Barclays, Swedbank, ANZ.
Intercede's Interoperability Partners include:
RSA Security, Microsoft, Intel, Gemalto, ARM, Symantec, Giesecke
& Devrient, Thales, Oberthur Technologies, Entrust, Immix
Group, Blackberry, Imagination Technologies, Samsung, NIST,
Verizon, NXP Semiconductors, Cross Match Technologies, LG, Citrix,
MobileIron, IdenTrust, ForgeRock, Centrify, Ping Identity, Solacia,
VMware Airwatch, Evidian, Trustonic.
We are continuing to strengthen our team and, therefore, our
ability to address our widening market. Since the end of our
financial year, I am pleased to report that we have recruited two
high profile and competent team members who will add materially to
Intercede's efforts.
Charles ("Chuck") Pol has recently served as Chairperson of
Vodafone Americas, a role he has held since 2013 and in which he
has led the development of applications for the Internet of Things.
Chuck joined Vodafone Americas as President of its Global
Enterprise division where he built a US-wide mobile business
focused exclusively on Enterprises. Prior to Vodafone Americas,
Chuck held senior roles at BT Americas including Chief Operating
Officer and President. On leaving BT in 2008, Chuck was President
of BT Global Financial Services where he was responsible for BT's
relationships with the top 40 global investment banks.
Chuck, who was appointed on with effect from 1 June 2017, is now
Intercede's Senior Independent Director, reflecting his
considerable experience within the North American technology and
telecoms industries.
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, leading a global team which, under her
leadership, delivered more than half of ARM's total revenue which
was last reported as GBP1.3bn. Her mandate will be to manage the
growing sales, marketing and business development activity at the
Group across all principal product lines and services. Helen is
specifically tasked with increasing the Group's engagement with its
growing partner base. In addition, given her silicon industry
background, Helen will also be responsible for leading the
development and growth of its emerging Internet of Things
business.
Chuck and Helen join a talented team which is focused clearly on
our vision, mission and goals. I would like to take this
opportunity to thank that team for its efforts during the last year
and to congratulate them on their successes. I believe that the
Group is ideally placed to benefit from the likely evolution of the
interconnected world in which we live. This position is a
reflection of our enthusiasm and skills; values which will be, I am
sure, a factor in the success of Intercede.
Outlook
Intercede is now ready to address the demands of a significantly
wider customer base. Our team has developed a range of applications
for our digital trust software and services which lead the
evolution of security across most of the eco-systems in place or
likely to form part of interconnectivity for a generation to
come.
We face the future with increased confidence and our growth
prospects appear significant. We must be mindful of the challenges
ahead, but I am convinced that these are surmountable and that the
Group is on the cusp of a period of sustained growth and
shareholder value creation.
Richard Parris
Chairman & Chief Executive
INTERCEDE GROUP plc
Preliminary Results for the Year Ended 31 March 2017
STRATEGIC REPORT
Introduction
Intercede is a cyber security software and services company
specialising in digital trust for a hyper-connected, increasingly
mobile world.
The Group's vision is a world without passwords and its mission
is to provide the enabling technology and services to make this
possible for people and things. Intercede's core pillars of
strength can be outlined as follows:
-- For over 20 years, Intercede has been providing trusted
identities to people, devices and apps for some of the world's
largest corporations and government agencies.
-- Intercede's product innovation roadmap leverages over 1,000
man years of internal expertise and is underpinned by strong
customer demand and a committed set of international partners.
-- New solutions can be engineered at high speed by a specialist
team with longevity of employment. Product design is also informed
by major customers and interoperability partners.
-- Software is US and UK Government accredited, which secures
access to regulated markets. Traditionally it was delivered as an
on premise solution but can now be delivered via the Cloud to make
it a scalable solution with the potential for exponential
growth.
These core strengths mean that Intercede is well placed to take
advantage of opportunities in the market, in particular:
-- Passwords are universally recognized as being insecure and
inconvenient by organizations and end users.
-- A growing number of governments and industry bodies are
enacting legislation to mandate enhanced levels of security by
removing passwords. This increased regulation covers a wide range
of activities including banking & finance, general data
protection and critical national infrastructure.
-- In-house cybersecurity skills are in short supply creating an
increased demand for outsourced security solutions.
-- There is a growing demand for cloud-based identity as a
service (IDaaS) solutions to meet the scalability requirements of
large end user populations, particularly in the consumer and IoT
markets.
Intercede have the heritage, skills and technology platform to
deliver digital identity solutions across a wide range of market
sectors and geographical regions, meeting the growing demand for a
secure and convenient alternative to passwords.
Strategic Investment
Intercede has embarked upon a period of substantial investment
in order to take advantage of the opportunities outlined above. The
costs associated with this strategy are being incurred now but the
benefits, in terms of increased revenues and cash flow generation,
are anticipated to arise in future periods.
The main areas of selective investment are:
-- The development of mobile security applications involving
interoperability with technologies such as iOS, Android, Windows
and BlackBerry.
-- The establishment and launch of RapID, a cloud-based service
that enables service providers to simply replace passwords with a
digital identity, protecting themselves against identity fraud and
the resultant data breach.
-- Increased collaboration with major industry players such as
Intel, Microsoft, ARM and Google.
-- Strengthening of the dedicated Intercede Services team
focused on delivering Intercede solutions into the consumer and IoT
markets.
-- Enhancing the core MyID platform to support US Standard FIPS
201-2 compliant derived PIV credentials, thereby extending
Intercede's strong position in the US federal government market to
incorporate the growing demand for digital identity on mobile
devices.
-- Re-engineering and expansion of the MyID platform as a
cloud-based service to improve scalability to consumer levels and
to ensure all of the new areas of opportunity are supported.
-- Sales and marketing to promote and protect the MyID, MyTAM
and RapID names and technology and to build industry
relationships.
To support this investment Intercede raised GBP4,945,000 in new
funding during the year (GBP4,624,000 net of costs) via the issue
of convertible loan notes and equity. The funding has come from new
and existing institutional and other investors, as well as
experienced technology entrepreneurs. This demonstrates the
confidence of our long term backers as well as illustrating that
our strategic story resonates strongly with a new generation of
technology and security savvy investors.
Trading Results
Revenues for the year ended 31 March 2017 totalled GBP8,286,000,
a 25% reduction on the previous year's record revenues of
GBP11,004,000. The US presidential race resulted in delays from
government agencies making investment decisions but we have seen
the resumption of business for the MyID platform. We are pleased to
see that revenues generated in the second half of the year matched
the record revenues achieved in both halves of the previous
year.
The rate of investment in the Company's newer products, RapID
and MyTAM, continues and business development has resulted in the
identification of target markets and talks with reference customers
in each of those markets. Work continues on pilot RapID solutions
for customers in the wealth management and banking sectors and
revenues are expected to be generated in the coming months. While
MyTAM continues to be sold as a standalone product it will also
become a core component in an Internet of Things product that will
address a number of challenges in the IoT market, namely security,
interoperability and control via a single interface. The Directors'
believe that this development work is expected to result in
significant revenues in the coming years.
In the second half of the year, a cost-cutting review removed
GBP600,000 of annualised costs from the business without impacting
our development of new products. This partly offset the strategic
investment as outlined and resulted in a lower than initially
planned increase of 3% in operating expenses from GBP12,511,000 to
GBP12,891,000. The drop in revenues has primarily lead to a
GBP4,721,000 operating loss (2016: GBP1,917,000 operating
loss).
Staff costs continue to represent the main area of expense,
representing 78% of total operating expenses (2016: 79%). Intercede
had 121 employees and contractors as at 31 March 2017 (2016: 123).
The average number of employees and contractors was unchanged from
the previous year at 125.
Expenditure on research and development (R&D) activities
totaled GBP3,994,000 (2016: GBP3,905,000), approximately 62% of
which related to the areas of strategic investment outlined above
(2016: 71%). In accordance with the IFRS recognition criteria, the
Board has continued to determine that all internal R&D costs
incurred in the year are expensed. No development expenditure has
been capitalised as at 31 March 2017 (2016: GBPnil).
The net finance cost for the year was GBP57,000 (2016: GBP32,000
income) as a result of the interest payable on the convertible loan
notes issued during the year.
An GBP888,000 taxation credit for the period (2016: GBP892,000
taxation credit) primarily reflects cash received following the
2016 R&D claim as a result of the investment activities
outlined above. 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.
A loss for the year of GBP3,890,000 (2016: loss of GBP993,000)
resulted in a basic and fully diluted loss per share of 8.0p (2016:
loss per share 2.1p).
Financial Position
The Group's cash position remains strong with cash and short
term deposits totaling GBP6,891,000 as at 31 March 2017 (2016:
GBP5,289,000). The increase reflects the fundraising that was
announced on 28 December 2016 but, it is also worth noting that,
following a difficult first half of the year, the Group generated
cash from its operating activities in the second half.
The Group has no plans to commence the payment of dividends and
will do so when the Board considers this to be appropriate.
Treasury
The Group manages its treasury function as part of the finance
department. Whilst the Group's operations are primarily based in
the UK it has successfully exported its technology throughout the
world for many years. This results in invoices being raised in
currencies other than sterling; the most notable being US dollars
and euros. A number of suppliers also invoice the Group in US
dollars and euros. The Group's current policy is not to hedge these
exposures and the exchange differences are recognised in the
statement of comprehensive income in the year in which they
arise.
Key Performance Indicators (KPIs)
The following KPIs are some of the tools used by management to
monitor performance in addition to the more traditional financial
statement and sales pipeline information that is provided to the
Board each month.
2014 2015 2016 2017 Target
Trusted identities,
devices and apps 9 million 11 million 12 million 13 million 250 million
Sales growth 45% (10%) 25% (25%) 30%+
Export sales 91% 85% 96% 95% 80%+
North American sales 61% 51% 79% 77% 50%+
New deployments
with revenues over
GBP20,000 10 6 6 8 10+
All of the above KPIs are geared towards the traditional MyID
business. The introduction of RapID and MyTAM is expected to result
in the growth of devices (IoT enabled equipment) and apps (online
banking) under the management of Intercede's software. This suite
of software supports the overall target of 250 million identities,
devices and apps under management by 2020.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Group are as
follows:
-- The Group operates in multiple markets, both geographically
and by sector, so there is a risk that territory and global
macro-economic conditions may result in one or more of these
markets being adversely affected and the revenues of the business
impacted accordingly. This risk is mitigated to an extent, both
through the long term nature of customer relationships and the
diversification that results from operating in multiple
markets.
-- The Group operates in a complex and competitive technological
environment so the business will be negatively affected if the
Group does not enhance its product offerings and/or respond
effectively to technological change. This risk is mitigated by
ongoing investment in research and development.
-- Technology companies are exposed to intellectual property
infringement and piracy. The Group rigorously defends its
intellectual property in the primary jurisdictions within which it
operates.
-- The Group's performance is largely dependent on the
experience and expertise of its employees. The loss or lack of key
personnel is likely to adversely impact the Group's results. To
mitigate this risk, the Group aims to put in place appropriate
management structures and to provide competitive remuneration
packages to retain and attract key personnel.
By order of the Board
Andrew Walker
Finance Director
INTERCEDE GROUP plc
Consolidated Statement of Comprehensive Income for the year
ended 31 March 2017
2017 2016
GBP'000 GBP'000
Continuing operations
Revenue 8,286 11,004
Cost of sales (116) (410)
-------- --------
Gross profit 8,170 10,594
Operating expenses (12,891) (12,511)
-------- --------
Operating loss (4,721) (1,917)
Finance income 13 32
Finance costs (70) -
-------- --------
Loss before tax (4,778) (1,885)
Taxation 888 892
-------- --------
Loss for the year (3,890) (993)
-------- --------
Total comprehensive expense attributable
to owners of the parent company (3,890) (993)
-------- --------
Loss per share (pence)
- basic (8.0)p (2.1)p
- diluted (8.0)p (2.1)p
-------- --------
INTERCEDE GROUP plc
Consolidated Balance Sheet as at 31 March 2017
2017 2016
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 695 864
------- -------
Current assets
Trade and other receivables 1,280 1,146
Cash and cash equivalents 6,891 5,289
------- -------
8,171 6,435
------- -------
Total assets 8,866 7,299
------- -------
Equity
Share capital 499 487
Share premium 673 232
Equity reserve 60 -
Merger reserve 1,508 1,508
(Losses)/retained earnings (2,354) 1,131
------- -------
Total equity 386 3,358
------- -------
Non-current liabilities
Convertible loan notes 4,124 -
Deferred revenue 141 122
4,265 122
Current liabilities
Trade and other payables 1,390 1,795
Deferred revenue 2,825 2,024
------- -------
4,215 3,819
------- -------
Total liabilities 8,480 3,941
------- -------
Total equity and liabilities 8,866 7,299
------- -------
INTERCEDE GROUP plc
Consolidated Statement of Changes in Equity for the year ended
31 March 2017
Share Share Equity Merger (Losses)/ Total
capital premium reserve reserve retained equity
earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2015 487 232 - 1,508 2,257 4,484
Purchase of own shares - - - - (610) (610)
Employee share option
plan charge - - - - 115 115
Employee share incentive
plan charge - - - - 334 334
Employee treasury share
transfer - - - - 28 28
Loss for the year and
total comprehensive
expense - - - - (993) (993)
------- ------- ------- --------- -------
As at 31 March 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 new shares 12 441 - - - 453
Equity component of
convertible loan notes - 60 - - 60
Loss for the year and
total comprehensive
expense - - - - (3,890) (3,890)
------- ------- ------- ------- --------- -------
As at 31 March 2017 499 673 60 1,508 (2,354) 386
------- ------- ------- ------- --------- -------
All amounts included in the table above are attributable to
owners of the parent company.
INTERCEDE GROUP plc
Consolidated Cash Flow Statement for the year ended 31 March
2017
2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (4,721) (1,917)
Depreciation 194 186
Loss on disposal of property,
plant and equipment 48 -
Employee share option plan charge 60 115
Employee share incentive plan
charge 488 334
Employee unit incentive plan (credit)/charge (20) 58
Employee unit incentive plan payment (28) -
Employee treasury share transfer - 28
Increase in trade and other receivables (364) (100)
(Decrease)/increase in trade and
other payables (417) 611
Increase/(decrease) in deferred
revenue 820 (66)
Cash used in operations (3,940) (751)
Finance income 14 36
Taxation 888 892
------- -------
Net cash (used in)/generated from
operating activities (3,038) 177
------- -------
Investing activities
Purchases of property, plant and
equipment (73) (197)
------- -------
Cash used in investing activities (73) (197)
------- -------
Financing activities
Purchase of own shares (143) (610)
Proceeds from issue of ordinary
share capital 453 -
Proceeds from issue of convertible
loan notes 4,495 -
Convertible loan note issue costs (321) -
------- -------
Cash generated from/(used in)
financing activities 4,484 (610)
------- -------
Net increase/(decrease) in cash
and cash equivalents 1,373 (630)
Cash and cash equivalents at the
beginning of the year 5,289 5,895
Exchange gains on cash and cash
equivalents 229 24
------- -------
Cash and cash equivalents at the
end of the year 6,891 5,289
------- -------
INTERCEDE GROUP plc
Preliminary Results for the Year Ended 31 March 2017
NOTES
1. The financial information set out in this announcement does
not constitute the Group's Statutory Accounts for the years ended
31 March 2017 or 2016, but is derived from those accounts.
Statutory Accounts for 2016 have been delivered to the Registrar of
Companies and those for 2017, which have been approved by the Board
of Directors, will be delivered following the Group's Annual
General Meeting. The Company's auditors have reported on those
accounts; their reports were unqualified and did not contain
statements under Section 498 of the Companies Act 2006.
The Annual General Meeting will be held at 2.00 pm on Wednesday
13 September 2017 at the registered office of the Company. Copies
of the full Statutory Accounts and the Notice of Annual General
Meeting will be despatched to shareholders in due course. Copies
will also be available on the website (www.intercede.com) and from
the registered office of the Company: Lutterworth Hall, St. Mary's
Road, Lutterworth, Leicestershire, LE17 4PS.
2. SEGMENTAL REPORTING
All of the Group's revenue, operating profits and net assets
originate from operations in the United Kingdom. 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:
2017 2016
GBP'000 GBP'000
UK 403 462
Rest of Europe 960 1,312
North America 6,367 8,699
Rest of World 556 531
------- -------
8,286 11,004
------- -------
3. TAXATION
The tax credit comprises: 2017 2016
GBP'000 GBP'000
Current year - UK corporation - -
tax
Current year - US corporation
tax (34) (40)
Research and development tax credits
relating to prior years 922 932
------- -------
Taxation 888 892
------- -------
The Group has unused tax losses of GBP11,773,000 (2016:
GBP9,460,000) and unrecognised deferred tax assets of GBP2,001,000
(2016: GBP1,703,000) calculated at the UK corporation tax rate of
17% (2016: 18%).
4. LOSS PER SHARE
The calculations of loss per ordinary share are based on the
loss for the financial year and the weighted average number of
ordinary shares in issue during each year. Basic and diluted loss
per share are the same as potential dilution cannot be applied to a
loss making year.
2017 2016
GBP'000 GBP'000
Loss for the year (3,890) (993)
---------- ----------
Number Number
Weighted average number of shares
- basic 48,835,080 48,429,489
- diluted 48,835,080 48,429,489
---------- ----------
Pence Pence
Loss per share - basic (8.0)p (2.1)p
- diluted (8.0)p (2.1)p
---------- ----------
The weighted average number of shares used in the calculation of
basic and diluted earnings per share for each year were calculated
as follows:
2017 2016
Number Number
Issued ordinary shares at start
of year 48,735,005 48,735,005
Effect of purchase of own shares (294,000) (305,516)
Effect of issue of ordinary share
capital 394,075 -
---------- ----------
Weighted average number of shares
- basic 48,835,080 48,429,489
---------- ----------
Add back effect of purchase of N/A N/A
own shares
Effect of share options in issue N/A N/A
Effect of convertible loan notes N/A N/A
in issue
---------- ----------
Weighted average number of shares
- diluted 48,835,080 48,429,489
---------- ----------
5. DIVIDEND
The Directors do not recommend the payment of a dividend.
6. SHARE CAPITAL
2017 2016
GBP'000 GBP'000
Authorised
481,861,616 ordinary shares of
1p each (2016: 481,861,616) 4,819 4,819
------- -------
Issued and fully paid
49,903,143 ordinary shares of
1p each (2016: 48,735,005) 499 487
------- -------
The increase in issued and fully paid ordinary shares of 1p each
represents the issue of 379,542 shares on 29 July 2016 to
facilitate the July 2016 Free Share award and the issue of 788,596
shares on 27 January 2017, at an issue price of 57.0p per ordinary
share, in connection with the fundraising that was announced on 28
December 2016.
As at 31 March 2017, the Company had 294,000 ordinary shares
held in treasury (2016: 294,000). There were no purchases or
transfers of shares to or from treasury during the year. During the
previous year, the Company purchased 32,500 ordinary shares for a
consideration of GBP47,000; 32,500 options were exercised using
treasury shares and 15,000 ordinary shares were transferred to an
employee pursuant to an incentive arrangement.
7. Convertible loan notes
2017 2016
GBP'000 GBP'000
Non-current
8% Convertible loan notes (29 4,124 -
December 2021)
------- -------
Borrowings are repayable as follows:
2017 2016
GBP'000 GBP'000
Between two and five years 4,124 -
------- -------
On 30 January 2017 the Company issued GBP4,495,000 convertible
loan notes that carry an interest coupon of 8.0% pa payable
quarterly. The Company has granted security by way of a composite
guarantee and debenture in favour of Welbeck Capital Partners LLP
to secure the repayment of principal and interest due on the
convertible loan notes to the holders. Holders of the convertible
loan notes may convert into ordinary shares, at a conversion price
of 68.8125 pence per ordinary share, at any time until the final
redemption date of 29 December 2021.
The amount recognised in the balance sheet in relation to the
convertible loan notes is as follows:
2017 2016
GBP'000 GBP'000
Nominal value of convertible loan
note issue 4,495 -
Issue costs (321) -
Equity component at date of issue (60) -
------- -------
Liability component at date of
issue 4,114 -
Effective interest rate adjustment 10 -
------- -------
Liability component at 31 March 4,124 -
------- -------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKADKFBKDBAK
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