Identity management software provider Intercede ended the financial year (to March 31) broadly in line with reduced expectations set in February (see here) with revenue down 3% from £6.96m to £6.73m. It also uncovered the extent of the operating losses warned about - from an operating profit of £829k in the previous year, it slumped down to a loss of £764k (it dropped from PBT of £910k to a pre tax loss of £673k).
Lower than expected sales in North America due to budget pressure and uncertainty was the prime culprit despite sales rising 7% in the region. Profitability was impacted by an increase in product development and the headcount to cater for it, resulting in a 24% increase in administration expenses.
With its focus on managing digital identities, this long established company is in a good place in the market but has yet to really see the benefits and is being outperformed by fellow UK-based identity management provider GB Group (see GB Group building scale, driving up revenue). Both have had to invest in their portfolios but GB Group has the edge on timing.
Intercede is banking on the rise of mobile and cloud usage, plus on-line provision of services for citizens to grow the business but with other technology and security areas clamouring for budget, organisations have been slow to adopt digital identities. There were adoption bright spots during the year however. The company increased the number of user identities it manages under MyID from 5m to 7m users, although it will be a stretch to reach its target of 100m by 2020. It had a boost at the start of the current financial year when it won a homeland security project for a G8 government. The contract value is expected to exceed £1.5m in the year ended March 31 2014, and run to £10m over a five-year period.