Intercede said that the US budget presented by Trump last week has caused uncertainty
Companies: Intercede Group plc
Intercede Group shares fell 27% on Friday after the micro-cap warned investors to expect greater losses for the financial year due to increasing and unexpected uncertainty for US budget allocations under the Trump administration.
IGP said that unless further orders are received that can be recognised as revenue in the current period, its full-year revenues are likely to be c.£8.0m. This will likely result in greater losses for full-year.
"The consequent impact on revenue is likely to result in losses for the year to 31 March 2017 being higher than management expectations. In this case, gross cash balances (excluding £4.5m convertible loan notes) are forecast to be approximately £6.0m as at 31 March 2017."
The $3m order announced in January, and £2m of new orders remain in the current period pipeline, and the Company says it is working "diligently" to try to close these orders. But, the US Presidential Budget Proposal issued by Mr Trump on 27 February has raised significant uncertainty for the orders:
"... [he] made a commitment to radically increase military and infrastructure expenditure during the term of the new administration. This commitment has raised considerable and unexpected uncertainty for the short term budget allocations across the Company's target customer base in the US."
Speaking about the warning, Chairman & CEO Richard Parris said the Board had taken a conservative view of its immediate pipeline, but remained confident that the orders would flow into revenue - just not this year.
"This timing issue does not in any way detract from the Board's confidence in the Company's prospects. Intercede is developing products and services which directly address the emerging need for higher levels of cybersecurity. In the next 12 months, European and US regulation will require a range of agencies and organisations to put this in place."
He added that Intercede was well placed to benefit from this trend, utilising the £4.5m raised in January 2017 to invest in new applications for its software and to expand into new markets.
