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Intercede Warns Of Revenue Delay Risk After Trump Budget Proposal

LONDON (Alliance News) - Shares in Intercede Group PLC dropped Friday after it warned there may ...

Alliance News 3 March, 2017 | 9:29AM
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LONDON (Alliance News) - Shares in Intercede Group PLC dropped Friday after it warned there may be a chance that some of its revenue will be delayed into next year, and expects its annual revenue to fall.

If the revenue is delayed, Intercede said this would likely result in losses for the full year to the end of March being higher than management expectations.

The software and service company was down 23% at 40.00 pence Friday morning.

The company said that, unless further orders can be recognised in its current period, its revenue for the year will be around GBP8.0 million, down from GBP11.0 million the prior year.

Intercede noted that a further GBP2.0 million of orders remain in its current pipeline, including US government and defence contractor customers.

It said it is "working diligently" to close the orders, but new US President Donald Trump's budget proposal on Monday made a commitment to "radically increase" military and infrastructure spending under the new administration, and this has raised "considerable and unexpected" uncertainty over short-term budgets amongst its customer base in the US.

As such, there is a risk that a proportion of the outstanding orders will be delayed into the next financial year.

However, Intercede said it expects the hit from the Presidential budget to be short term in nature, and believes in the medium and long term the trend towards cybersecurity will significantly increase budgets.

"While we remain confident that these orders will flow to revenue, there can be no certainty that this will occur within the current financial year. This timing issue does not in any way detract from the board's confidence in the company's prospects," said Chairman and Chief Executive Officer Richard Parris in a statement.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Intercede Group PLC 33.10 GBX -1.19 -

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