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Intercede – new contracts… but take a look at the balance sheet

By Steve Moore | Monday 4 December 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Intercede (IGP) has announced “a contract with a UK Government Ministerial department”, following half-year results and “a contract with a large European bank” last week…

The latest contract sees the company stating “Intercede's MyID will enable this customer to eliminate a reliance on the use of potentially insecure passwords for secure authentication” and “financially, the new contract will generate revenue for the group of around £250,000 in the current financial year and potentially up to £500,000 in the following year”.

This follows the European bank contract to “supply its MyID product for over 10,000 employees in addition to recurring support and maintenance services. The deal is worth more than £250,000 over a three-year period with most of the value accruing in the first 12 months of the contract period”.

These though come after results for the six months ended 30th September 2017 showed a £1.3 million decline in net current assets to £2.7 million and there also (a £0.6 million increased) £4.8 million of non-current liabilities. Non-current (property, plant and equipment) assets were just £0.6 million – meaning a £1.5 million net liabilities position.

Gross cash was £4.8 million, though that more than £2 million down and with the other liabilities and customer delays it looks to be a question of when’s it discounted fundraising ahoy? My stance remains sell / avoid.

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