Final Results

Intercede Group PLC
22 May 2001


                             INTERCEDE GROUP plc

                         ('Intercede' or 'the Group')

             Preliminary Results for the Year Ended 31 March 2001

Intercede is a leading independent producer of security management software
for computers, networks and software applications. Intercede obtained a
listing on the Alternative Investment Market in January 2001 and today
announces its maiden preliminary results for the year ended 31 March 2001.

HIGHLIGHTS

*     Turnover increased almost threefold to £2.0 million (2000: £0.7 million)

*     Particularly strong growth in software licences to £0.6 million (2000: £
      0.04 million)

*     Pre-tax loss of £1.1 million (2000: £0.9 million)

*     Strengthened Balance Sheet: £2.2 million of new funds raised in January
      2001 flotation

*     Expanded salesforce to exploit market opportunity

*     Ongoing development of international network of partnerships

*     Significant broadening of proprietary Edefice software suite: Version 5
      launched April 2001

Richard Parris, Chairman & Chief Executive of Intercede, said today:

'The past year has been an extremely significant one for Intercede. We wanted
to structure ourselves for the next phase of our growth and a key milestone
was our flotation in early 2001. We have also made rapid strides in the
development of our core product, Edefice. We are now very well positioned to
seize the opportunities in the global markets for IT security.'

                                                                   22 May 2001

ENQUIRIES:
Intercede Group plc                           Tel.      [phone] (today)
Richard Parris, Chairman & Chief Executive    01455 558111 (thereafter)
Andrew Walker, Finance Director

College Hill                                  Tel.      [phone]
Matthew Smallwood
Archie Berens
Clare Warren



                             INTERCEDE GROUP plc

             Preliminary Results for the Year Ended 31 March 2001

                             CHAIRMAN'S STATEMENT



The past year has been one of the most important in our history, with the
successful flotation of the Group onto the Alternative Investment Market of
the London Stock Exchange in January 2001 - the first company to list in 2001.

Excellent progress has been made in broadening the EdeficeTM software suite,
thus strengthening our position as a leader in the security management
software market. New business levels have continued to grow, with a
thirteenfold increase in EdeficeTM software licences and a threefold increase
in overall sales revenues. In a difficult recruitment market for specialised
staff, the Group has more than doubled the number of professional staff
employed, notably in the areas of software development and sales.



Results

In the year ended 31 March 2001, turnover increased 186% to £2.0m (2000: £
0.7m), reflecting the continued growth in the sale of our software licences,
third party products, professional services and support. Growth in Intercede's
software licences was particularly strong, with an increase in revenues from £
0.04m to £0.6m. Operating losses increased to £1.1m, up 33% over the previous
year (2000: £0.8m), reflecting the Group's continued investment in product
development and recruitment. Pre-tax losses amounted to £1.1m (2000: £0.9m).



Business and Product Development

During the financial year, Intercede completed the transition from being a
security systems integrator to becoming a producer of its own core security
technology as embodied in the EdeficeTM Security Management Software Suite.
Additionally, during the same period, the Group has started to reduce its
dependence on direct UK sales to end users, in favour of building an indirect
sales model through its network of larger international partners.

Throughout the year, the Group has significantly broadened its EdeficeTM
Security Management Software Suite. The latest version, EdeficeTM V5, which
was released on 23 April 2001, is a functionally rich and highly scalable
software package. Utilising the latest web delivery systems and Intercede's
patent pending technology, EdeficeTM provides a distributed management
platform from which an enterprise can manage its entire security policy and
infrastructure. EdeficeTM has been designed to accelerate security systems
deployment and to simplify its management. This is particularly beneficial for
solutions using smartcards and PKI technologies.



The Group has experienced strong revenue growth from supplying EdeficeTM
software to support new projects at major high street banks, government
departments and more than 50 hospitals and health authorities. In addition,
Intercede continues to generate ongoing incremental sales revenues and annual
maintenance fees for EdeficeTM and third party products from existing
customers in the financial services and healthcare markets. Important new
customers secured during the year include Abbey National, the Bank of England,
Compaq, ICL and the Metropolitan Police. The Group's largest order to date,
which related to EdeficeTM software and associated smartcards, was fulfilled
during the year for Lloyds TSB.

Consistent with our substantial product investment, we have expanded our sales
force to exploit the significant opportunities in the market place. Additional
software development and technical support staff have also been recruited,
thereby more than doubling the number of people employed at the year end.



International Expansion

Intercede has positioned itself for international expansion through a number
of strategic partnerships with international computer and networking
companies. These relationships cover Europe and the United States of America
and are expected to generate significant revenues through increased sales of
our product over the next 24 months.



Finance

At the time of the Company's flotation in January of this year, 4,636,652
shares were placed at a price of 60p raising £2.2m for the Company, net of
costs. Net cash available for continuing expansion as at 31 March 2001
amounted to £2.0m, compared to £0.8m as at 31 March 2000. Net assets as at 31
March 2001 amounted to £1.4m, compared to £0.4m as at 31 March 2000.



Strategy and Outlook

Despite the recent turbulence in sentiment towards the technology sector,
industry analysts nevertheless predict that the Internet Security sector is
poised to outperform in 2001. There has been little evidence of a slowdown in
IT security spending for mission critical applications and the use of the
Internet for business and the corresponding need for better security continues
to grow rapidly.

The network security products market is forecast to grow from $7.7bn in 2001
to $21.2bn in 2005 (Source: Datamonitor). The security management tools
market, within which Intercede focuses, is estimated to grow from $2.0bn to
$3.9bn in the same timescale. Clearly the Group has a large potential market
to aim at.



The security management market exists because many enterprises have not
implemented comprehensive security systems that can protect their information
assets from theft or fraud, prevent disruption to mission critical networks
and systems or fully comply with legislation. Instead, companies frequently
choose to deploy best-of-breed solution strategies that only solve specific
security problems. However, as a growing number of products are introduced to
respond to particular threats, the administration and management of users and
security policies becomes increasingly complicated.

As the administrative difficulty of security management intensifies, so does
the likelihood of human error. At the same time, businesses are continuing to
demand interoperability and scalability across entire IT infrastructures. As a
result, a world-wide market is emerging for products that provide universal
security management functionality across multiple operating systems from one
centralised platform. This is the market that our EdeficeTM proprietary
software is designed to exploit.

In order to seize this clear opportunity, we are using the funds raised on the
Group's admission to AIM to increase development investment in line with the
needs of current customers and to build an increasingly channel focused sales
team.

The strong technical differentiation of EdeficeTM, coupled with the quality of
existing UK reference sites and high levels of interest from international
partners, gives us confidence that we have the components in place to achieve
further significant progress in the current year and to realise our ambitious
plans for long term growth.

Richard Parris

Chairman & CEO

22 May 2001

                             INTERCEDE GROUP plc

             Preliminary Results for the Year Ended 31 March 2001

                               FINANCIAL REVIEW



Intercede has made substantial progress since February 1999 when it received
its first external funding. The £2.1m invested to date has been used to
develop a software platform which is capable of deployment across a wide range
of organisations. The further development and international exploitation of
this platform will be funded using the £2.2m generated from the flotation in
January of this year.

The Group's primary objective is to maximise the opportunity that exists
within the IT security management market which is still in the early stages of
its global development. A structural change is underway whereby all
organisations will conduct their business electronically in the medium term.
Whilst there is scope for debate about how far away the medium term is,
particularly in light of current uncertainties within the technology sector,
the key issue the Board is addressing is how to obtain and deploy the
necessary resources to grow the Group into a market leader in its chosen
sector.

The Group's first external funding, which came from venture capital sources,
was provided in February 1999 and subsequent injections, up to and including
the flotation in January of this year, have resulted in £4.1m being raised to
date.

With £2.0m of funds remaining available for continuing expansion as at 31
March 2001, this means that £2.1m has been invested to date (£1.2m over the
past 12 months) to bring the Group to its current position.

The main elements of this are:


  * An increase in the number of staff from 5 to 15 to 32 over the past two
    years.

  * This has resulted in research and development expenditure increasing
    from £0.05m to £0.2m to £0.4m over the past three years.

  * That expenditure, which typically represented real time application
    development on specific projects for early adopters such as the major
    banks and the UK Government, has enabled the Group to transform the
    specialist software code written to date into a more broadly based
    software platform with a level of functionality that can be deployed
    across a wide range of organisations.

  * EdeficeTM V5, formally launched on 23 April 2001, therefore represents a
    significant output from the funds invested to date. The challenge is how
    to use this software platform, and future planned versions, to serve a
    wider range of customers.

  * The sales resource has accordingly been strengthened in recognition of
    the need to develop effective channels for the global deployment of
    EdeficeTM in order to maximise the Group's growth potential.

  * Sales have grown from £0.2m in the year ended 31 March 1998 to £2.0m in
    the year ended 31 March 2001.

  * Within that, sales of the Group's own software have grown from £nil to £
    0.6m.

  * The challenge is to increase the proportion of our own software sales,
    and associated support and maintenance, from its current level of 30% to
    in excess of 80% over time.

  * Sales of third party products and consultancy services remain valuable
    however, particularly to the extent that they facilitate the consumption
    of our own software and ensure that we remain at the leading edge of
    technical development which addresses the real needs of our potential
    customer base.

  * The Group's gross margin has increased from 35% to 53% in the past two
    years, primarily due to the development of our own software. Increasing
    the proportion of sales attributable to software will provide further
    margin growth to cover the Group's future cost base.

In summary, the Group has made substantial progress over the past 12 to 24
months, both as outlined above and in securing the necessary funding for its
continued development. The trading results for the year ended 31 March 2001
are in line with the projections prepared in October 2000 as part of the
process of obtaining admission onto AIM, and the cash position has been
consistently higher throughout that period. The Board recognises the need for
strong cash management at all times.

Andrew Walker

Finance Director

22 May 2001

                             INTERCEDE GROUP plc

             Preliminary Results for the Year Ended 31 March 2001

                     Consolidated Profit And Loss Account


                                                                     Year ended
                                                                       31 March
                                                                    2001   2000
                                                             Notes £'000  £'000

Turnover                                                           2,014    703
Cost of sales                                                      (945)  (459)

Gross Profit                                                       1,069    244
Other operating expenses                                         (2,188)(1,082)

Operating loss                                                   (1,119)  (838)
Interest receivable and similar income                                48      4
Interest payable and similar charges                                (54)   (33)

Loss on ordinary activities before taxation, being retained   2  (1,125)  (867)
loss on ordinary activities after taxation and for the year

Basic and diluted loss per ordinary share                     3    (8.8)p (7.4)p
                                                                  


All operations of the Group continued throughout both years and no operations
were acquired or discontinued.

There are no recognised gains or losses in either year other than the loss for
the year.



                             INTERCEDE GROUP plc

             Preliminary Results for the Year Ended 31 March 2001

                          Consolidated Balance Sheet


                                                                 As at 31 March
                                                                 2001      2000
                                                                £'000     £'000
Fixed assets
Tangible assets                                                   119        61

Current assets
Stocks                                                              8         8
Debtors                                                           663     1,098
Cash at bank and in hand                                        2,042       101

                                                                2,713     1,207

Creditors: Amounts falling due within one year                (1,341)     (378)

Net current assets                                              1,372       829

Total assets less current liabilities                           1,491       890

Creditors: Amounts falling due after more than one year          (59)     (518)

Net assets                                                      1,432       372

Capital and reserves
Called-up share capital                                         4,090     2,916
Share premium account                                           1,011         -
Other reserves                                                  1,508     1,508
Profit and loss account                                       (5,177)   (4,052)

Shareholders' funds - all equity                                1,432       372



                             INTERCEDE GROUP plc

             Preliminary Results for the Year Ended 31 March 2001

                       Consolidated Cash Flow Statement


                                                                  Year ended 31
                                                                          March
                                                                     2001  2000
                                                           Notes    £'000 £'000

Net cash outflow from operating activities                     5  (1,093) (634)

Returns on investments and servicing of finance
Interest received                                                      42     4
Interest paid                                                        (27)  (34)
Interest element of finance lease rentals                            (12)   (3)

Net cash inflow / (outflow) from returns on investments                 3  (33)
and servicing of finance

Capital expenditure
Purchase of tangible fixed assets                                    (80)  (32)
Sale of tangible fixed assets                                           1     -

Net cash outflow on capital expenditure                              (79)  (32)

Cash outflow before financing                                     (1,169) (699)

Financing
Issue of ordinary share capital
- By Intercede Limited                                                990    40
- By Intercede Group plc in connection with admission to            2,185     -
AIM
Repayment of secured loan                                            (10)  (10)
Repayment of directors' loans                                         (8)  (40)
New 7% convertible unsecured loan stock                                 -   450
Capital element of finance lease rentals                             (24)   (6)
Receipts from sale and lease back of assets                            26    55

Net cash inflow from financing                                      3,159   489

Increase / (decrease) in cash in the year                      6    1,990 (210)



                             INTERCEDE GROUP plc

             Preliminary Results for the Year Ended 31 March 2001



NOTES

1.     The financial information set out in this announcement does not
constitute the Group's Statutory Accounts for the years ended 31 March 2000 or
2001, but is derived from those accounts. Statutory Accounts for 2000 have
been delivered to the Registrar of Companies and those for 2001, which have
been approved by the Board of Directors, will be delivered following the
Group's Annual General Meeting. Accounting policies have been consistently
applied throughout both accounting periods. The Company's auditors have
reported on those accounts; their reports were unqualified and did not contain
statements under Section 237(2) or (3) of the Companies Act 1985.




2.     TAX ON LOSS ON ORDINARY ACTIVITIES

There is no charge in respect of corporation tax in either year due to the
availability of losses. There was no provided or unprovided deferred taxation
liability at either year end. Tax losses carried forward as at 31 March 2001
total £2,218,000.




3.     BASIC AND DILUTED LOSS PER ORDINARY SHARE

The calculations of loss per ordinary share are based on the loss for the
financial year and the weighted average number of ordinary shares in issue
during each year.

                                                            Year ended 31 March
                                                            2001           2000
                                                           £'000          £'000

        Loss for the year                                (1,125)          (867)


                                                          Number         Number

        Weighted average number of shares             12,771,716     11,665,500


                                                           Pence          Pence

        Basic and diluted loss per ordinary                (8.8)          (7.4)
        share




4.     DIVIDEND

The Directors do not recommend the payment of a dividend.


5.     RECONCILIATION OF OPERATING LOSS TO OPERATING CASH FLOW

                                                                            
                                                         2001          2000
                                                        £'000         £'000
                                                              
        Operating loss                                 (1,119)        (838)

        Depreciation charge                                 34           20

        Decrease in stocks                                   -           47

        (Increase)/decrease in debtors                   (549)          106

        Increase in creditors                              541           31

        Net cash outflow from operating activities     (1,093)         (634)


6.     ANALYSIS AND RECONCILIATION OF NET DEBT


                                                  2000  Cash Flow Non-Cash  2001
                                                 £'000      £'000    £'000 £'000

Cash at bank and in hand                           101      1,941       -  2,042
Overdrafts                                        (49)         49       -      -
                                                    52      1,990       -  2,042

Debt due within one year                          (18)      (442)       -  (460)
Debt due after one year                          (483)        461       -   (22)
Finance leases                                    (52)        (2)    (14)   (68)

                                                 (553)         17    (14)  (550)

Net (debt)/cash                                  (501)      2,007    (14)  1,492


The reconciliation of net cash flow to the movement in net debt is as follows:

                                                                     2001  2000
                                                                    £'000 £'000

Increase/(decrease) in cash in the year                             1,990 (210)
Cash inflow/(outflow) from decrease/(increase) in debt and lease       17 (448)
financing

Change in net debt resulting from cash flows                        2,007 (658)
New finance leases                                                   (14)     -

Movement in net debt in the year                                    1,993 (658)
Net (debt)/cash at beginning of year                                (501)   157

Net cash/(debt) at end of year                                      1,492 (501)


        During the year the Group entered into finance lease arrangements in
        respect of assets with a total capital value at the inception of the
        leases totalling £14,000 (2000: £nil).


7.     ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held on Wednesday 4 July
2001.


8.     ANNUAL REPORT AND ACCOUNTS

Copies of the full Statutory Accounts will be despatched to shareholders in
due course. Further copies will be available from the Registered Office of the
Company at Lutterworth Hall, St. Mary's Road, Lutterworth, Leicestershire,
LE17 4PS.