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Identity management software supplier Intercede has delivered a strong performance in FY11 despite challenging market conditions in the UK and Europe. As its trading update anticipated (see Intercede in cyber security sweet spot), revenues increased 11% to £6.9m and PBT climbed to £2m (FY10: £0.5m). The business was nicely cash generative too, reporting cash balances up 28% to £6m.
It’s the US market which is driving the growth thanks to wins with both government and commercial organisations – revenues from the USA were up 42% to £3.9m. As expected, it was much tougher in the UK with the cancellation of the government’s National Identity scheme, from which Intercede had expected to benefit. The UK business shrank by almost 15% to £1.4m. Things were even more challenging in the rest of Europe where revenue was down 33% on the previous year at just £928k.
That said the outlook for the company is bright with a number of factors supporting the Intercede’s expectations of future growth. It has continued to invest in its MyID Identity and Credential Management System with the release of v9 on schedule earlier this year. The software was also the first to achieve compliance with the key Personal Identity Verification (PIV) standard in the US. This is making it popular both with government agencies and crucially, private sector organisations in the US including Boeing, Lockheed Martin and Booz Allen Hamilton. The private sector now accounts for over half its revenues, compared to less than 40% last year (of course the decline in public sector spending will have ‘helped’ too).
Opportunities for future growth include the use of MyID as a platform for issuing trustworthy identities on mobile devices (which in turn is being driven by the proliferation of devices in the enterprise); the UK’s recently announced Identity Assurance programme and upcoming national identity card schemes in other countries. The challenge for Intercede will be to ensure it has the scalability and flexibility to address these opportunities. Chairman and CEO, Richard Parris is well aware of this though and appears to be confidently implementing the next stage of Intercede’s ‘growth plan’.
