Your take on the H1 results (to end September 2011) of identity & credential management software provider, Intercede, will depend on whether you tend to be ‘glass half full’ or ‘glass half empty’. Intercede’s glass half full headline on the results is that “underlying revenues” are up 25% compared to H110. By underlying, they are referring to the fact that H110 included a single contract of more than £1 million from Boeing (and excluding that from the comparison). Of course, if you are glass half empty, you would just question why it hasn’t managed to continue pulling in contracts of that size. The reported revenue was actually only up marginally from £3.51 million to £3.53 million.
Look below the surface and the numbers are worrying in its core sales regions. Revenues dropped significantly in the company’s two largest geographies: down more than 50% in the UK (from £838K to £399K), and down by 11% in the US (from £2.0m to £1.8m). ‘Rest of Europe’ edged up marginally from £351 million to £377 million. It was only the ‘Rest of World’ that was the saving grace – up from £285 million to £951 million - and now bigger than UK and Europe combined.
Intercede continues to be positive about its prospects, hence the halving in operating profit to £617K as it undertook planned investments in the business. But things are clearly not all rosy. This area of the market has high growth potential but that also means competition is rife. And it looks like tough economic conditions combined with a competitive marketplace are taking their toll. Intercede has some good news stories on contracts, partnerships with major IT providers, and strong cash generation, but those good news stories are not quite translating into the stunning sales figures it might have been hoping to see.