18
June 2024
INTERCEDE GROUP
plc
('Intercede', the 'Company'
or the 'Group')
Preliminary Results for the
year ended 31 March 2024
Intercede, the leading
cybersecurity software company specialising
in digital identities, today announces its preliminary
results for the year ended 31 March 2024 ("FY24").
Headlines:
·
Record Group revenues of £20.0 million.
·
Record net profit of £6.0 million.
·
Net cash generation from operating activities of
£9.6 million.
·
Basic EPS of 10.3p.
·
Rebranding acquired Authlogics solutions as part
of an expanded MyID product family, now comprising MyID CMS, MyID
MFA and MyID PSM.
·
Continued investment in product and code,
including internal IT infrastructure.
·
Clear strategic vision on M&A
plans.
·
Strong and unleveraged financial
position.
Financial Highlights
|
|
FY24
|
FY23
|
% Change
|
|
|
£ million
|
£ million
|
|
|
|
|
|
|
|
Revenue
|
20.0
|
12.1
|
65.3%
|
|
Gross profit
|
19.4
|
11.7
|
65.8%
|
|
Profit before Tax
|
5.6
|
0.6
|
833.3%
|
|
Net
Profit
|
6.0
|
1.3
|
361.5%
|
|
EPS - basic
|
10.3p
|
2.3p
|
|
|
EPS - diluted
|
9.6p
|
2.2p
|
|
|
|
|
|
|
|
Gross Margin
|
97.2%
|
96.7%
|
|
|
Net Margin
|
30.2%
|
10.7%
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
17.2
|
8.3
|
107.2%
|
|
Net cash from operating
activities
|
9.6
|
2.9
|
231.0%
|
|
Deferred revenue
|
8.6
|
7.5
|
14.7%
|
|
Total Assets
|
25.7
|
17.4
|
47.7%
|
|
Total Equity
|
13.2
|
7.0
|
88.6%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
6.2
|
1.3
|
376.9%
|
|
Less:
|
|
|
|
|
Amortisation of
intangibles
|
0.2
|
0.1
|
|
|
Depreciation of assets
|
0.1
|
0.1
|
|
|
Right-of-use depreciation
|
0.2
|
0.2
|
|
|
Acquisition costs
|
0.1
|
0.2
|
|
|
Employee Share/Unit incentive &
option plan charges
|
0.2
|
-
|
|
|
Exceptional costs
|
0.1
|
0.1
|
|
|
|
|
|
|
|
Operating Profit
|
5.3
|
0.6
|
783.3%
|
Revenue highlights for the year include:
·
Revenues for the year ended 31 March 2024
totalling £20.0 million were approximately 65% higher than last
year (2023: £12.1 million) and a 67% increase on a constant
currency basis.
·
Contract 1 - announced in December
2023:
- Major new contract win with a
large US Federal Agency.
- Purchase order received, via our
partners, of perpetual licences worth approximately $6.6
million.
- Associated annual support and
maintenance of approximately $1.4 million; this is the Group's
largest single order to date and the Group highlights that this
contract was an exceptional order and deemed 'one-off' due to the
substantial number of perpetual licences purchased, which have been
recognised in FY24.
·
Contract 2 - announced in January 2024:
- A major licence order with
associated support and maintenance totaling approximately $1.0
million for a new client in the US Intelligence Community. In
addition to the perpetual licence order, the client was also
contracted for a separate annual subscription of $0.2
million.
·
Licence orders in the first half of the year
included a multiple MyID PIV licence orders from the US Department
of State (DoS) for its Identity Management System (IDMS) solution
totalling $0.9 million and a new three year licence order for MyID
MFA from a global aluminium producer in the Middle East as well as
key subscription renewals for MyID PSM and MyID MFA.
·
An order for a new licence test environment for an
existing US Federal Agency at the year end with the potential to
expand further in the coming years.
·
In total, 17 new deployments were added in the
year (including MyID MFA and PSM new deployments).
Operating Highlights for the year include:
·
Quarterly release cycle
for MyID CMS (with versions of CMS v12.7 to v12.10 being released
in FY24) and six-monthly releases for MyID MFA (MFA v4.2 and MFA
v5.0 being released).
·
During the year, in response to customer interest,
we released a beta version of our CMS client compatible with Mac
OS.
·
Successfully delivered over 30 projects to a
variety of customers and partners across the UK, Europe, the Middle
East and the United States. These included both new; a large
defence agency in the US, a defence customer in the UK, a global
aluminium manufacturer, a major trust of the UK health agency, a
global technology provider in West Asia; and long standing
customers in federal, defence, telecoms, and finance
sectors.
·
Strengthened our delivery team with new employees
across Development, Test, Professional Services and Customer
Support including an experienced new Director of Software
Development.
·
Investment in internal IT infrastructure continued
and the Group moved a majority of back-end support systems from on
premise into the Azure Cloud. We invested in our development and
testing platforms to increase performance and capacity.
·
The M&A programme continued, focused on
targets that add recurring revenues and have a strong industry and
product logic.
·
The Group successfully maintained ISO 9001 and
27001 certifications without any non-conformances.
·
Successful execution and opening of a major new
contemporary US office in Reston, close to Washington D.C., which
facilitates customer and partner demonstrations with a dedicated
"demo wall" and conference facilities.
·
Our customer Net Promoter Score (NPS) in FY24 was
50 (increased from 31 in FY23) and underscores our commitment to
continue to achieve greater customer satisfaction. Our focus is on
high quality software products, first class support, excellent
professional services and engaging with our customers to obtain
their feedback through executive service reviews and our Customer
Advisory Board, which are all aimed at providing better customer
service and satisfaction.
Outlook
FY24 was an exceptional year for the
Group. Intercede continues to invest in its colleagues, IT
Infrastructure, product development, sales and marketing to
maintain and sustain it current momentum.
We embark into FY25 with good
visibility on the pipeline, known and fully resourced internal
critical investments, and with a clear roadmap on our acquisition
strategy. As mentioned earlier, the focus is on growth and
execution of strategic plans to deliver it.
Board Changes
In the year Charles Pol and Rob Chandhok resigned from the Board
and John Linwood and Daniel O'Brien joined,
with Tina Whitley moving to Chair the Remuneration Committee whilst
Daniel, with his extensive financial experience and acumen, became
Chair of the Audit Committee. All three are independent members of
both Committees.
Royston Hoggarth, Chairman, said:
"In this challenging global
environment, the Group has delivered record revenues in what has
been an exceptional year. We look forward to building on this
momentum."
ENQUIRIES
Intercede Group plc
Klaas van der Leest
Nitil Patel
|
Tel.
+44 (0)1455 558 111
CEO
CFO
|
Cavendish Capital Markets Limited
Simon Hicks/Fergus
Sullivan
Tim Redfern/Ondraya
Swanson
|
Tel.
+44 (0)20 7220 0500
Corporate Finance
ECM
|
About Intercede
Intercede is a cybersecurity
software company specialising in digital identities, and its
innovative solutions enable organisations to protect themselves
against the number one cause of data breach: compromised user
credentials.
The Intercede suite of products
allows customers to choose the level of security that best fits
their needs, from Secure Registration and ID Verification to
Password Security Management, One-Time Passwords, FIDO and
PKI. Uniquely, Intercede provides the entire set of
authentication options from Passwords to PKI, supporting customers
on their journey to passwordless and stronger authentication
environments. In addition to developing and supporting Intercede
software, the Group offers professional services and custom
development capabilities as well as managing the world's largest
password breach database.
For over 20 years, global customers
in government, aerospace and defence, financial services,
healthcare, telecommunications, cloud services and information
technology have trusted Intercede solutions and expertise in
protecting their mission critical data and systems at the highest
level of assurance.
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) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and
is disclosed in accordance with the company's obligations under
Article 17 of MAR.
Strategic
Report
The
Investment Case
Intercede provides business
critical authentication software in a growing cyber security market
and does this by protecting organisations against data breaches.
Our
Business
Intercede has a scalable software
business that has transitioned from Phase One - Transformation to
Phase Two - Growth. The operating model is structured to enable the
Group to grow, and key strategic investments have been made in
people and infrastructure to enable execution of these growth
plans.
The Group's strategy of focusing on
our customers and solving real-world problems has resulted in a net
promoter score of 50 in the financial year. This demonstrates the
Group's capability to deliver value to our customers, which
protects recurring revenue and strongly positions us for new
opportunities.
Our
Market
We believe we are a
recognised global
market leader for MyID CMS solution
and with this competitive advantage we plan to defend and expand on
this through innovation, intellectual investment by recruiting the
best people and introducing flexible pricing to customers. With a
business-critical offering and non-discretionary nature of the
expenditure, the Group has low attrition and growing recurring
revenues.
Since the acquisition of Authlogics
in October 2022, the Group has moved down the authentication
pyramid (See Products) and has been able to further expand its
offering with the addition of MyID MFA and MyID PSM. This has
significantly increased the addressable market, which with an
integrated offering (MyID MFA v5), has enhanced our
opportunities.
Our Current
Financials
Following an exceptional year of
delivery both in growth and other KPIs, the Group is in a strong
position to continue the momentum into the new fiscal year. With
cash generation resulting in a year-end balance of £17.2m, no debt
and tight working capital management, it has the ability to source,
engage and execute on larger M&A transactions.
Our
Business Principles
As the Group has evolved by way of
both organic and inorganic growth, it has adopted an enhanced set
of business principles to deliver on its stated KPIs. The Board is
confirming a key target of doubling revenues from the FY2023 base
of £12m.
Customer First
Approach
Understanding our customers and
their requirements are key for the Group and we are focused on
supporting their use cases with Intercede solutions. Our
customer journey begins when they first engage with the Group and
continues through their software purchase, onboarding, training,
services, and long-term support. At each point of engagement, we
aim to deliver an excellent Intercede service.
Engaging, via Customer Advisory
Boards (CABs) in the US and Europe, educates our teams from
development, sales to professional services how best to address
user enhancement and experience of our software solutions. As the
product innovates and develops, we aim to increase our customer
satisfaction and retention rates, which are already market
leading.
This approach facilitates the Group
aim to increase revenue, delivering even better customer experience
and supporting long term customer relationships and retention. Our
most loyal customer has been with us for more than 20 years, which
underlines our commitment to longstanding relationships.
Invest in
Product
Stable and scalable Intercede
software solutions allow our customers to deploy effective
authentication management across their organisations. To have that
capability the Group constantly invests in the product and has
recently expanded that ability via strategic investment in people
across development, testing and software management.
We innovate constantly to ensure we
maintain technology independence with a wide range of partners and
once deployed, is accessible by all employees within an
organisation. (See Section on Intercede MyID Solutions for further
information).
Colleagues
Putting our colleagues first and
creating an environment where they can perform to their best
abilities is a key principle of the Group. We do this to enable our
colleagues to create the code and product that enables the sales
team to sell and professional services to help successfully
deploy.
During the last two years the Group
has developed a succession plan by recruiting the next generation
of colleagues of the Group, and to date we have been successful in
that KPI. As we invest more in development, testing, presales,
professional services, and customer support, we increase the
bandwidth of the Group. This ensures we can deliver for our
customer as we grow.
By building a more diverse and
representative group of colleagues we increase innovation and
foster growth. We will continue to enable opportunities for
equitable growth, development, and advancement for our employees.
This also attracts and retains engaged talent.
GTMM
The Group has believed in and
enacted a channel go-to-market model (GTMM) whereby our products
and services are delivered to our customers through various
distribution and resale channels. We do this by selecting and
supporting the right channel partners, creating a value proposition
that resonates with customers and partners, with the key aim of
increasing our reach, generating revenue and minimising our direct
sales costs whilst increasing market coverage.
We partner with channels like
distributors and resellers who:
·
align with our values,
·
have a strong customer base and
·
possess the necessary expertise to effectively
sell and distribute our products and services.
A well-defined indirect channel
go-to-market strategy offers several benefits to the Group,
including:
·
access to new markets and customer segments
through the expertise and reach of our channel partners.
·
expanding our market reach in a cost-effective and
efficient manner.
·
streamlining our sales efforts by focusing on what
we do best: we act as subject matter experts.
·
fostering strong relationships with channel
partners, leading to increased loyalty and
collaboration.
During the year 94% of all new
business was contracted through this channel.
Pricing
We believe we have a unique offering
whose combination of features, benefits, and pricing sets us apart
from our competitors. This has enabled us to provide a value
proposition that resonates with both customers and channel
partners.
With the introduction of a new
flexible pricing structure, whereby the Group now offers a
subscription option on MyID CMS in addition to the well-established
perpetual pricing model, we believe we have further increased the
opportunities the Group can achieve.
M&A
Inorganic growth is a key strategy
for the Group, and it enables it to assess gaps in capabilities
across its solutions by considering whether it is cost effective to
build the technology deck or purchase it. In addition, our M&A
is focused on broadening the service offerings, expanding the
client portfolio, and increasing recurring revenues.
As we have moved purposefully down
the employee authentication pyramid, the Group is consciously aware
that a pyramid has more than one side and therefore has
opportunities to expand into markets with complimentary products
and intellectual property via acquisitions.
With an in-house corporate
development capability, the Group has adopted a strict criterion in
assessing these M&A opportunities which it applies
vigorously.
Intercede MyID Solutions
Products
Authentication
Intercede protect our customers
against data breach by enabling them to replace weak user
credentials with stronger authentication simply, securely and at
scale.
The number one cause of a data
breach is compromised user credentials. Put another way, 'hackers
don't break in, they log in.' Intercede solutions enable our
customers to choose the level of security that is appropriate for
them, helping them wherever they are on their journey to better
security.
The authentication pyramid (below)
shows the relative strength of various authentication mechanisms,
with the strength of authentication increasing as the pyramid is
climbed.
·
Passwords and Security Phrases (longer passwords
based on a number of disconnected words) are the weakest as they
only comprise a single factor (if I know your password I can
authenticate as you), are subject to phishing attacks, and are
often reused online where they can be stolen and used by bad
actors.
·
Multi-Factor Authentication, also known as strong
authentication, comprises two or more factors from 'something I
have' (e.g. a phone or smart card), 'something I know' (e.g. a PIN
or password) and 'something I am' (e.g. a fingerprint or face
match) and typically generates a one-time password (OTP) which is
valid for a short time only. Using two factors significantly
increases the level of security as it protects against password
reuse and several automated attacks.
·
The highest level of security is based on
cryptographic keys and includes both Public Key Infrastructure
(PKI) and Faster IDentity Online (FIDO) credentials/FIDO passkeys.
These provide phishing-resistance, making it extremely difficult
for a bad actor to steal and reuse a credential. They are
recognised by the National Institute of Standards and Technology
(NIST) as offering the highest level of authentication
assurance.
The MyID product family
Historically, Intercede have focused
on the 'top of the' pyramid, delivering credential management
systems that enable issuance of high-assurance PKI and FIDO
credentials to security demanding customers in government,
aerospace & defence, healthcare and financial services. With a
business critical offering and non-discretionary nature of the
expenditure, the Group has low attrition and growing recurring
revenues.
Following the acquisition of
Authlogics in October 2022, Intercede has completed the integration
of the Multi-Factor Authentication (MFA) and Password Security
Management (PSM) solutions into a rebranded and fully integrated
MyID product family:
·
MyID PSM - Secure your passwords, with
user-friendly policies to help users set good passwords, and
continuous assessment against the world's largest database of
compromised credentials.
·
MyID MFA - Authenticate to
anything from anywhere, with modern
authentication that is easy to use, deploy and manage.
·
MyID CMS - Issue and
manage high-assurance credentials simply,
securely and at scale, compliant with security guidelines such as
FIPS-201 and NIS2,
Intercede are now a multi-product
company who uniquely offer our customers a solution wherever they
are on their security journey from passwords to PKI, enabling us to
address a wider range of customers including small to medium
businesses.
Market drivers
Intercede offers solutions to a
number of factors in the cybersecurity market which are driving
organisations towards improved security:
·
The number of, and sophistication of cyberattacks,
is on the increase, be they state sponsored due to the current
geopolitical climate, or criminally motivated (e.g. ransomware). Of
particular note is the increased use of Artificial Intelligence
(AI) to generate phishing attacks which are virtually
indistinguishable from genuine communications, as well as the use
of AI-powered deepfake technology to fool voice and facial
recognition systems.
·
The range of cybersecurity legislation is
increasing and driving organisations towards improved cybersecurity
solutions. In the US, a presidential executive order pushing MFA
'to the maximum extent possible' and updates to FIPS 201* in the US
giving guidance on the use a wider range of credentials including
FIDO is one example of this. Of particular note is NIS2** in
Europe. The NIS2 Directive is EU-wide legislation on cybersecurity
providing legal measures to boost the overall level of
cybersecurity in the EU. NIS2 becomes law at the end of 2024, and
member states and organisations affected must comply with local
country regulations by this time.
·
Due to the increased level of cyber-attack
combined with the increasing level of cybersecurity legislation,
spending in cybersecurity is continuing to increase and is seen as
essential.
·
In government, there is a drive to move away from
bespoke or 'GOTS' government off-the-shelf software towards COTS
(commercial off-the-shelf) solutions. This will enable customers to
benefit from vendor investments in roadmap and to keep up with the
rapidly changing cybersecurity landscape including adopting modern
technologies faster.
*FIPS 201 link is:
Giving NIST Digital Identity Guidelines a Boost: Supplement for
Incorporating Syncable Authenticators | NIST
**NIS2 link is:
The NIS2 Directive: A high common level of cybersecurity in the EU
| Think Tank | European Parliament
(europa.eu)
Roadmap
Intercede continues to invest in
research and product development to maintain our market leading
position in digital identity and credential management. Inputs into
the roadmap can be split into three categories:
·
Support and Maintenance - customers gain access to
upgrades and product support. As a security product this is vital
to our customers and Intercede invest in keeping the product family
up to date with the latest security standards and support for third
party systems and devices. This protects our S&M revenue which
is either an annual contract or included in subscription
pricing.
·
Customer funded - on occasion a customer wishes to
accelerate particular features on the product roadmap. This work is
funded with Intercede retaining the intellectual
property.
·
Strategic - a combination of research and
development activities, resulting in new features or modules in the
product family, maintain or increase Intercede's competitive
position. Examples over the current period have
included:
Ø The
addition of FIDO to the MyID MFA solution, bringing high assurance
authentication to an easy deploy mid-market product.
Ø Support
for mobile driving licence style credentials on mobile devices in
the MyID CMS solution, enabling consumer devices to be used for
carrying high-assurance digital identity information.
Ø The
introduction of a self-service client on Apple Mac, enabling
customers to benefit from reduced help desk calls via
user-enablement on a wider range of platforms.
The roadmap process is tightly
managed, taking input from multiple internal and external
stakeholders, including the Client Advisory Boards, and results in
quarterly product updates.
A key initiative of Intercede is to
continue to increase the percentage of resources allocated to
strategic roadmap development to ensure Intercede maintains and
increases competitive advantage.
Specific roadmap items for the
fiscal year FY25 include:
Password Security
management:
·
Increased marketing/awareness campaign of existing
capabilities, particularly around the password breach database -
with over 8 billion records, the largest collection of known
compromised credentials in the world (see https://www.intercede.com/myid-product-suite/myid-psm/).
·
Extend the solution to manage a wider range of
passwords used within the enterprise.
·
Extend the solution to provide enterprise password
management capabilities; where passwords for applications are
learned, scrambled and then replayed at logon, giving a single-sign
on experience.
·
Investigation into providing FIDO Passkeys
management - placing Enterprise and Government organisations in
control of their passkeys.
Multi-Factor
Authentication
·
Provide out-of-the box connectors to enable
specific national ID issued credentials to be used to authenticate
to MyID MFA protected resources, enabling customers to leverage
high-assurance national credentials to protect local
resources.
·
Extend the existing authentication solution to
provide authorisation and single-sign on capabilities, delivering
flexible access control in a mid-market product.
·
Investigation into utilising AI for risk-based and
ongoing authentication.
Credential Management
System
·
Provide the ability to issue FIDO passkeys and
then pass them to a third party IDP for authentication, enabling
customers to leverage MyID CMS to issue high assurance PKI and FIDO
credentials compatible with their existing identity infrastructure
(e.g. Microsoft Entra ID).
·
Enhanced project toolkit enabling customers to
configure the CMS solution to meet their needs without the need for
custom coding.
·
Investigation into use of AI in identity
onboarding and credential management.
·
Investigation into support of quantum resistant
cryptographic algorithms.
·
Investigation into supporting device identity
management (non-person entities) in the CMS in addition to person
identities.
Market Opportunities
Breaking the total market size down
further into market opportunities available to Intercede, follows a
three-step process:
Addressable Market
Intercede's
addressable market is any organisation globally that needs to
secure and manage their user identities. Our key segments are US
federal government (and related aerospace and defence suppliers)
and enterprise/workforce identity, into which we provide password
management, multi-factor authentication and credential management
solutions.
Served Market
Within the
addressable market Intercede have a strong footprint in the US and
EMEA, and a growing footprint in the APAC region.
Actual Market
Within the served markets Intercede
is focused on a number of growth areas:
·
PKI and FIDO credential management in high
assurance environments.
·
Multi-Factor Authentication in the mid-size
enterprise, particularly those affected by NIS2 regulations in
Europe.
·
Multi-Factor Authentication in small businesses,
served by embedding Intercede technology into established managed
service provider (MSP)/managed security service provider (MSSP)
offerings.
·
Password Security Management as a simple first
step on a journey towards better authentication.
Accounting for the actual market
opportunity and Intercede's focused growth areas, the Group is
confident that the stated aim of doubling revenue within 3-4 years
from the 2023 base is achievable.
Summary
Intercede has expanded the product
portfolio to uniquely cover the complete set of authentication
options from passwords to PKI We give our customers choice and help
them wherever they are on their journey to stronger authentication
and better security.
We continue to invest in the CMS,
MFA and PSM products to ensure increased competitive
positioning.
With the increased demand for
high-assurance cybersecurity products, Intercede is well positioned
to capitalise on the reputation gained from multiple high-profile
deployments and to bring enhanced capabilities to the
mid-market.
Financial
Review
Income
Statement
Revenue and operating results
The Group's revenue from continuing
operations increased by 65% to £20.0 million (2023: £12.1 million)
and gross profit increased by 66% to £19.4 million (2023: £11.7
million). Gross margin is broadly flat at 97% as a similar level of
third-party product was sold as part of licence sale in both
years.
The Group's operating profit was
£5.3 million (2023: £0.6 million), after non-cash depreciation
charge for property, plant and equipment in the year of £0.1
million (2023: £0.1 million), a right-of-use depreciation charge of
£0.2 million (2023: £0.2 million) and amortisation costs of £0.2
million (2023: £0.1 million). Acquisition costs for the year were
£0.1 million (2023: £0.2 million) with exceptional expense of £0.1
million relating to costs for moving IT infrastructure to the cloud
(2023: £0.1 million relating to exiting CFO expense overlapping
incoming CFO). Operating expenses increased
by 27% to £14.1 million (2023: £11.1 million).
Tight cost
control continues to be a focus for the Group in conjunction with
considered project expenditure to support revenue growth. Meanwhile
the Group continues to recognise the achievements of its staff with
pay rises and performance-related rewards. Staff costs represents
the highest area of expense representing 80% of total operating
costs (2023: 81%). Intercede had 108
employees and contractors as at 31 March 2024 (2023: 94). The
average number of employees and contractors during the period was
102 (2023: 91).
The statutory profit before tax for
the period was £5.6 million (2023: £0.6 million) and profit for
year was £6.0 million (2023: £1.3 million).
Taxation
The Group has a tax credit of £0.4
million for the year due to amounts received from HMRC in respect
of R&D claims, less US corporation tax payable. (2023: tax
credit of £0.7 million). The Group has
carried forward unused tax losses of £3.7 million (2023: £9.9
million). Intercede makes an R&D claim as part of its annual tax return and can choose whether to carry
taxable losses forward or to request a cash repayment from the UK
government. The Group continues to review its R&D
capitalisation policy in accordance with accounting standards as
the Group develops out its product portfolio.
Finance Income
Net finance income was £0.3 million
(2023: £0.1 million) reflecting increased interest income due to a
combination of higher cash balances and rate rises.
Earnings per share
Earnings per share from continuing
operations in the year was 10.3 pence for basic and 9.6 pence for
diluted (2023: 2.3p pence for basic and 2.2p diluted) and was based
on the profit for the year of £6.0 million (2023: £1.3 million)
with a basic weighted average number of shares in issue during the
period of 58,231,712 (2023: 57,939,548 shares). For diluted the
weighted average number of shares in issue during the year was
62,429,062 (2023: 60,595,485).
Dividend
The Board is not proposing a
dividend (2023: £nil).
Financial
Position
Assets
Non-current assets of £4.2 million
comprise goodwill of £2.4 million (2023: £2.4 million),
identifiable intangibles of £0.6 million (2023: £0.8 million),
property, plant and equipment of £0.4 million (2023: £0.1 million)
and IFRS 16 right of use assets of £0.7 million (2023: £0.2
million).
Trade and other receivables
decreased by £1.2 million to £4.3 million (2023: £5.5 million)
reflecting a more even spread of customer orders over the year,
compared to a concentration towards the end of the previous
year.
Liabilities
Current liabilities increased by
£1.6 million to £11.1 million (2023: £9.5 million) reflecting
increased deferred revenue at the year end of £7.9 million (2023:
£7.0 million).
Non-Current liabilities increased by
£0.6 million to £1.5 million (2023: £0.9 million), which also
reflects increased deferred revenue at the year end of £0.7 million
(2023: £0.6 million) and the impact of increase lease liabilities
of £0.6 million (2023: £0.2 million).
Contingent Consideration
Included in current and non-current
liabilities are contingent consideration amounts due on the
acquisition of Authlogics Ltd. These amounts have been based on the
reasonable estimates by management of Authlogics achieving its
recognised revenue targets for the calendar years ending June 2024
and June 2025. The Group's current and non-current liabilities
include £0.3 million (2023: £0.3 million) and £0.2 million (2023:
£0.2 million) respectively for the contingent consideration
liabilities.
Capital and Reserves
Total equity increased to £13.2
million (2023: £7.0 million), reflecting the profit for the year.
Accordingly, the accumulated deficit account has now moved into a
retained earnings position of £5.7 million for the year (2023: £0.5
million accumulated deficit).
The Group regularly assesses its
capital position and maintains a disciplined approach to the
allocation of excess capital.
Liquidity and capital resources
The Group remains in a good
financial position, with gross cash balances of £17.2 million as at
31 March 2024 compared to £8.3 million held at 31 March 2023.
During the year there has been a cash outflow for investing
activities of £0.4 million (2023: £2.2 million, mainly due to the
£2.0 million acquisition of Authlogics Ltd).
The net cash inflow from operating
activities rose significantly to £9.6 million (2023: £2.9 million)
which reflects an increased profit for the year and good management
of working capital movements thanks to tight management of debtors.
The increased profit for the year is underpinned by strong licence
orders in the year.
The Group has refined its Treasury
Policy and spread its cash balances held across a number of UK
banking institutions with reputable credit ratings.
The Group had no debt at the
year-end (2023: £nil).
Outlook
FY24 was an exceptional year for the
Group. Intercede continues to invest in its colleagues, IT
Infrastructure, product development, sales and marketing to
maintain and sustain its current momentum.
We embark into FY25 with good
visibility on the pipeline, known and fully resourced internal
critical investments, and with a clear roadmap on our acquisition
strategy. As mentioned earlier, the focus is on growth and
execution of strategic plans to deliver it.
By order of the Board
Klaas van der
Leest
Nitil Patel
Chief Executive
Officer
Chief Financial Officer
17 June 2024
INTERCEDE GROUP
plc
Consolidated Statement of
Comprehensive Income for the year ended 31 March
2024
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Continuing operations
|
|
|
|
Revenue
|
19,963
|
|
12,110
|
Cost of sales
|
(560)
|
|
(403)
|
|
|
|
|
Gross profit
|
19,403
|
|
11,707
|
Operating expenses
|
(14,138)
|
|
(11,136)
|
|
|
|
|
Operating profit
|
5,265
|
|
571
|
|
|
|
|
Finance income
|
393
|
|
130
|
Finance costs
|
(63)
|
|
(75)
|
|
|
|
|
Profit before tax
|
5,595
|
|
626
|
Taxation
|
428
|
|
685
|
|
|
|
|
Profit for the year
|
6,023
|
|
1,311
|
|
|
|
|
Total comprehensive income attributable to owners of the
parent company
|
6,023
|
|
1,311
|
|
|
|
|
Earnings per share (pence)
|
|
|
|
- basic
|
10.3p
|
|
2.3p
|
- diluted
|
9.6p
|
|
2.2p
|
|
|
|
|
INTERCEDE GROUP
plc
Consolidated Balance Sheet as
at 31 March 2024
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Non-current assets
|
|
|
|
Goodwill arising on
acquisition
|
2,442
|
|
2,442
|
Other intangible assets
|
611
|
|
785
|
Property, plant and
equipment
|
399
|
|
125
|
Right-of-use assets
|
709
|
|
262
|
|
4,161
|
|
3,614
|
|
|
|
|
Current assets
|
|
|
|
Trade and other
receivables
|
4,307
|
|
5,489
|
Cash and cash equivalents
|
17,226
|
|
8,334
|
|
21,533
|
|
13,823
|
|
|
|
|
Total assets
|
25,694
|
|
17,437
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
584
|
|
584
|
Share premium
|
5,430
|
|
5,430
|
Merger reserve
|
1,508
|
|
1,508
|
Retained earnings / (Accumulated
deficit)
|
5,656
|
|
(492)
|
Total equity
|
13,178
|
|
7,030
|
|
|
|
|
Non-current liabilities
|
|
|
|
Lease liabilities
|
631
|
|
204
|
Deferred Consideration
|
160
|
|
174
|
Deferred revenue
|
667
|
|
550
|
|
1,458
|
|
928
|
|
|
|
|
Current liabilities
|
|
|
|
Lease liabilities
|
173
|
|
261
|
Deferred consideration
|
282
|
|
313
|
Trade and other payables
|
2,686
|
|
1,918
|
Deferred revenue
|
7,917
|
|
6,987
|
|
11,058
|
|
9,479
|
|
|
|
|
Total liabilities
|
12,516
|
|
10,407
|
Total equity and liabilities
|
25,694
|
|
17,437
|
INTERCEDE GROUP
plc
Consolidated Statement of
Changes in Equity for the year ended 31 March
2024
|
Share
|
|
Share
|
|
Merger
|
|
Accumulated
|
|
Total
|
|
capital
|
|
premium
|
|
reserve
|
|
deficit
|
|
equity
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
As at 1 April 2022
|
577
|
|
5,268
|
|
1,508
|
|
(1,842)
|
|
5,511
|
Purchase of own shares for SIP (for
employees)
|
-
|
|
-
|
|
-
|
|
(54)
|
|
(54)
|
Issue of new shares
|
7
|
|
162
|
|
-
|
|
-
|
|
169
|
Employee share option plan
charge
|
-
|
|
-
|
|
-
|
|
50
|
|
50
|
Employee share incentive plan
charge
|
-
|
|
-
|
|
-
|
|
43
|
|
43
|
Profit for the year and total
comprehensive income
|
-
|
|
-
|
|
-
|
|
1,311
|
|
1,311
|
|
|
|
|
|
|
|
|
|
|
As at 31 March 2023
|
584
|
|
5,430
|
|
1,508
|
|
(492)
|
|
7,030
|
Purchase of own shares for SIP (for
employees)
|
-
|
|
-
|
|
-
|
|
(54)
|
|
(54)
|
Employee share option plan
charge
|
-
|
|
-
|
|
-
|
|
134
|
|
134
|
Employee share incentive plan
charge
|
-
|
|
-
|
|
-
|
|
45
|
|
45
|
Profit for the year and total
comprehensive income
|
-
|
|
-
|
|
-
|
|
6,023
|
|
6,023
|
|
|
|
|
|
|
|
|
|
|
As at 31 March 2024
|
584
|
|
5,430
|
|
1,508
|
|
5,656
|
|
13,178
|
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 2024
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Cash flows from operating activities
|
|
|
|
Profit for the year
|
6,023
|
|
1,311
|
Taxation
|
(428)
|
|
(685)
|
Finance income
|
(393)
|
|
(130)
|
Finance costs
|
63
|
|
75
|
Depreciation of property, plant
& equipment
|
84
|
|
66
|
Depreciation of right-of-use
assets
|
196
|
|
246
|
Amortisation
|
174
|
|
83
|
Exchange (gains) / losses on foreign
currency lease liabilities
|
(24)
|
|
40
|
Employee share option plan
charge
|
134
|
|
50
|
Employee share incentive plan
charge
|
45
|
|
43
|
Employee unit incentive plan charge
/ (credit)
|
13
|
|
(51)
|
Employee unit incentive plan
payment
|
(14)
|
|
(3)
|
Decrease / (increase) in trade and
other receivables
|
1,218
|
|
(831)
|
Increase in trade and other
payables
|
721
|
|
334
|
Increase in deferred
revenue
|
1,046
|
|
1,668
|
|
|
|
|
Cash generated from operations
|
8,858
|
|
2,216
|
Finance income
|
403
|
|
116
|
Finance costs on leases
|
(60)
|
|
(44)
|
Tax received
|
428
|
|
574
|
|
|
|
|
Net
cash generated from operating activities
|
9,629
|
|
2,862
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
Purchases of property, plant and
equipment
|
(358)
|
|
(70)
|
Purchase of business (net of cash
acquired)
|
-
|
|
(2,009)
|
|
|
|
|
Cash used in investing activities
|
(358)
|
|
(2,079)
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
Purchase of own shares
|
(54)
|
|
(54)
|
Proceeds from issue of ordinary
share capital
|
-
|
|
169
|
Principal element of lease
payments
|
(279)
|
|
(409)
|
|
|
|
|
Cash used in financing activities
|
(333)
|
|
(294)
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
8,938
|
|
489
|
Cash and cash equivalents at the
beginning of the year
Exchange (losses) / gains on cash
and cash equivalents
|
8,334
(46)
|
|
7,787
58
|
|
|
|
|
Cash and cash equivalents at the end of the
year
|
17,226
|
|
8,334
|
INTERCEDE GROUP
plc
Preliminary Results for the
Year Ended 31 March 2024
NOTES
1.
While the financial information included in this
annual financial results announcement has been prepared in
accordance with UK adopted international accounting standards
(IFRS) and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS, this announcement does not contain
sufficient information to comply therewith. The financial
information set out in this announcement does not constitute the
Group's Statutory Accounts for the years ended 31 March 2024 or
2023. Statutory Accounts for 2023 have been delivered to the
Registrar of Companies and those for 2023, 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 on Wednesday 25 September 2024. 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.
Going concern
assessment
Reported profit in each of the last
five years have been underpinned by increasing recurring revenues
and a continued high level of cash balances. The Directors have
reviewed forecasts for the years ended 31 March 2025 and 31 March
2026 and concluded that the Group is expected to have sufficient
cash to enable it to meet its liabilities, as and when they fall
due, for a period of at least 12 months from the date of signing
these financial statements. Accordingly, they believe it is
appropriate to prepare the financial statements on a going concern
basis under the historical cost convention.
2.
REVENUE
All of the Group's revenue,
operating profits 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
location of the end customer can be analysed as follows:
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
UK
|
388
|
|
539
|
Rest of Europe
|
1,172
|
|
906
|
Americas
|
17,492
|
|
9,879
|
Rest of World
|
911
|
|
786
|
|
|
|
|
|
19,963
|
|
12,110
|
|
|
|
|
Analysis of revenue is as
follows:
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Software Licences
|
7,672
|
|
2,268
|
Professional services
|
3,568
|
|
2,526
|
Support and maintenance
|
8,723
|
|
7,316
|
|
|
|
|
|
19,963
|
|
12,110
|
|
|
|
|
3. OPERATING
PROFIT
Operating profit is stated after
charging / (crediting):
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Staff costs
|
11,259
|
|
9,027
|
Foreign exchange loss /
(gain)
|
167
|
|
(19)
|
Depreciation of property, plant and
equipment
|
84
|
|
66
|
Depreciation of right-of-use
buildings
|
196
|
|
226
|
Depreciation of right-of-use
equipment
|
-
|
|
20
|
Amortisation
|
174
|
|
83
|
|
|
|
|
Included in the staff costs above is
research and development expenditure totalling £3,311,000 (2023:
£3,053,000).
4.
TAXATION
The tax credit comprises:
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Current year - UK corporation
tax
|
-
|
|
-
|
Current year - US corporation
tax
|
(39)
|
|
(30)
|
Research and development tax credits
relating to prior years
|
467
|
|
604
|
Deferred tax on separately
identifiable acquired intangibles
|
-
|
|
111
|
|
|
|
|
Taxation
|
428
|
|
685
|
|
|
|
|
The Group has unused tax losses of
£3,916,000 (2023: £9,946,000) and unrecognised deferred tax assets
of £979,000 (2023: £2,486,000) calculated at the corporation tax
rate of 25% (2023: 25%), being the enacted rate at which the
deferred tax assets would unwind, were they to be recognised.
Intercede makes an R&D Claim as part of its annual tax return
and can choose whether to carry taxable losses forward or to
request a cash repayment from the UK government.
5. EARNINGS PER
SHARE
The calculations of earnings per
ordinary share are based on the profit for the financial year and
the weighted average number of ordinary shares in issue during each
year.
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Profit for the year
|
6,023
|
|
1,311
|
|
|
|
|
|
|
|
|
|
Number
|
|
Number
|
|
|
|
|
Weighted average number of shares -
basic
|
58,231,712
|
|
57,939,548
|
-
diluted
|
62,429,062
|
|
60,595,485
|
|
|
|
|
|
|
|
|
|
Pence
|
|
Pence
|
Earnings per share -
basic
|
10.3p
|
|
2.3p
|
-
diluted
|
9.6p
|
|
2.2p
|
|
|
|
|
The weighted average number of
shares used in the calculation of basic and diluted earnings per
share for each year were calculated as
follows:
|
2024
|
|
2023
|
|
Number
|
|
Number
|
|
|
|
|
Issued ordinary shares at start of
year
|
58,363,357
|
|
57,743,357
|
Effect of treasury
shares
|
(131,645)
|
|
(131,645)
|
Effect of issue of ordinary share
capital
|
-
|
|
327,836
|
|
|
|
|
Weighted average number of shares -
basic
|
58,231,712
|
|
57,939,548
|
|
|
|
|
|
|
|
|
Add back effect of treasury
shares
|
131,645
|
|
131,645
|
Effect of share options in
issue
|
4,065,705
|
|
2,524,292
|
|
|
|
|
Weighted average number of shares -
diluted
|
62,429,062
|
|
60,595,485
|
|
|
|
|
Please see note 7 for details of
issues of ordinary share capital.
6. DIVIDEND
The Directors do not recommend the
payment of a dividend.
7.
SHARE
CAPITAL
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Authorised
|
|
|
|
481,861,616 ordinary shares of 1p
each (2023: 481,861,616)
|
4,819
|
|
4,819
|
|
|
|
|
Issued and fully paid
|
|
|
|
58,363,357 ordinary shares of 1p
each (2023: 58,363,357)
|
584
|
|
584
|
|
|
|
|
There were no changes to share
capital during the year (2023: issue of 620,000 ordinary shares to
facilitate the exercise of options by a Director in September
2022). As at 31 March 2024, the Company had 131,645 ordinary shares
held in treasury (2023: 131,645).
8. INTANGIBLE ASSETS
|
Acquired
intangible assets
|
|
Goodwill
|
|
Total
|
|
£'000
|
|
£'000
|
|
£'000
|
Cost
|
|
|
|
|
|
At 1 April 2022
|
-
|
|
-
|
|
-
|
Businesses acquired
|
868
|
|
2,442
|
|
3,310
|
|
|
|
|
|
|
At 1 April 2023
|
868
|
|
2,442
|
|
3,310
|
Businesses acquired
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
At 31 March 2024
|
868
|
|
2,442
|
|
3,310
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
At 1 April 2022
|
-
|
|
-
|
|
-
|
Charge for the year
|
83
|
|
-
|
|
83
|
|
|
|
|
|
|
At 1 April 2023
|
83
|
|
-
|
|
83
|
Charge for the year
|
174
|
|
-
|
|
174
|
|
|
|
|
|
|
At 31 March 2024
|
257
|
|
-
|
|
257
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
|
At 31 March 2024
|
611
|
|
2,442
|
|
3,053
|
|
|
|
|
|
|
At 31 March 2023
|
785
|
|
2,442
|
|
3,227
|
|
|
|
|
|
|
Acquired intangible assets are made
up of the separately identified intangibles acquired with the
purchase of Authlogics Ltd in October 2022.
END