Interim Results

Intercede Group PLC
11 December 2007

11 DECEMBER 2007



                              INTERCEDE GROUP plc
                  ('Intercede', 'the Company' or 'the Group')


            Interim Results for the 6 Months Ended 30 September 2007


Intercede (AIM: IGP.L) is a leading developer of identity management software,
called MyID, which manages the secure registration, issuance and life cycle of
digital identities for a wide range of uses.


SUMMARY


- 28% increase in sales to £1.6m (2006: £1.2m).

- Gross margin rose to 99% (2006: 98%).

- Operating profit of £0.1m (2006: Operating loss of £0.3m).

- Cash balances rose significantly to £1.6m at 30 September 2007 (30 September
  2006: £0.4m).

- Delivery of MyID technology as the smart card management system for the US
  Transport Workers Identity Card (TWIC), which has the potential to result in
  the issue of more than 6 million new identity cards.

- Further development of MyID for existing and new partners including RSA
  Security, Thales e-Security, Oracle and Secure Services Corporation.

- Contract wins via a variety of partners in the US and Europe.



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


'Our financial and operational performance leaves us very well placed to exploit
a growing global market for identity and smart card solutions. There has been a
number of significant achievements during the period, providing further evidence
that our partnering strategy is providing many different routes into a growing
market.  The level and pace of customer and partner activity is at an all time
high and I remain confident that the long term growth potential for Intercede
has never been stronger.'

ENQUIRIES

Intercede Group plc                                   Tel.[phone]
Richard Parris, Chairman & Chief Executive
Andrew Walker, Finance Director

Pelham Public Relations
Archie Berens                                         Tel.[phone]

KBC Peel Hunt
Richard Kauffer                                       Tel.[phone]





About Intercede

Intercede Group plc is a leading developer and supplier of smart card and
identity management software listed on the London Stock Exchange (IGP LN)
(IGP.L). Intercede's MyID software manages the secure registration, issuance and
lifecycle of digital identities for a wide range of uses. This requires the
integration of multiple technologies and products from many different vendors,
including smart cards, biometrics, digital certificates, Open Platform applets
and physical access control systems.

Intercede works with a number of market leading OEM, re-seller and technology
partners that supply MyID technology to the global marketplace including: Athena
Smartcard Solutions, Gemalto, Oberthur Card Systems, Oracle, RSA Security,
SafeNet, Thales, VeriSign and a variety of systems integrators and other
security product and service providers.

Intercede and MyID are registered trademarks or trademarks in the UK, US and/or
other countries.

For more information on Intercede and MyID visit http://www.intercede.com.



                              INTERCEDE GROUP plc


           Interim Results for the Six Months Ended 30 September 2007


Chairman's Statement

Business Review

I am pleased to be able to report that good commercial and technical progress
has been made during the first half of the year. Revenues have increased by 28%
and the Company has generated a profit before tax of £45,000 compared to a loss
before tax of £314,000 in the same period last year. As a result of this
enhanced performance and the placing on 16 May 2007 which raised £678,000 net of
expenses, the level of cash balances increased by £922,000 to £1,575,000 during
the six months ended 30 September 2007. This places Intercede in a much stronger
position to exploit a growing global market for identity and smart card
solutions.

Significant advances during the year to date include:

1.  The delivery of MyID as the smart card management system for the US
    Transport Workers Identity Card (TWIC).

2.  The ongoing development of a customised version of MyID to power Thales
    e-Security's SafeSite Management Server (SSMS).

3.  The receipt of £500,000 in September from Thales e-Security in respect
    of advance licence fees under the existing OEM agreement.

4.  The delivery of a new version of MyID to RSA Security, a division of
    EMC, for incorporation in a major product release of RSA Card Manager.

5.  Intercede's admission to the Oracle Extended Identity Management
    Ecosystem following the integration of MyID with Oracle's Identity Manager.

6.  The establishment of a new partner agreement with Secure Services
    Corporation, a US Healthcare provider.

7.  The sale of an additional 28,000 licences to a US Federal banking
    organisation.

8.  The go-live deployment of MyID for a major US bank to facilitate a
    combined physical and logical smart card security system across its branch
    network.

9.  A new contract through our VeriSign partner for an HSPD-12 solution for
    a major US Federal agency.

10. The extension of an existing HSPD-12 contract by a further 15,000 licences.

11. A new contract in partnership with VeriSign for an EU Government agency.

12. Further project development contracts secured with Lockheed Martin, Lloyds
    TSB, the UK NHS and VeriSign.



Of the items listed above, I would like to draw particular attention to the TWIC
programme. TWIC is a common identification credential for all personnel
requiring unescorted access to secure areas in more than 140 US ports. The
Transportation Security Administration (TSA) will issue qualifying workers with
a smart card containing the worker's digital certificate and a fingerprint
biometric. Intercede's technology is supplied via RSA Security to Lockheed
Martin who are the prime contractor on this project.

The TWIC card uses some of the same technology and standards as Federal PIV
cards issued under the HSPD-12 initiative and builds on Intercede's core
capabilities in this area. The TSA plans to issue TWIC cards in more than 50
ports before the end of Q1 2008 and aims to have issued more than 1 million
cards within the first year. The TWIC programme has the potential to be extended
to other groups of workers involved in critical national infrastructure
including railways, airports, utilities, petrochemicals and hazardous materials.
This could push the number of cards issued to more than 6 million.

The TWIC contract demonstrates the high volume security and scalability of the
MyID platform. Under Intercede's OEM contract with RSA Security, the first one
million licences for TWIC will be offset against the advance licence fees
payable over the first three years of the agreement through to September 2008.
Additional licences above 1 million will attract incremental licence fees and
annual maintenance. This single agreement represents an attractive and
potentially substantial future revenue stream for Intercede.

Under the US Government HSPD-12 initiative, Intercede has now sold more than
165,000 licences, excluding TWIC and FRAC, to Federal Agencies. This constitutes
successful initial penetration of a market that has grown more slowly than
expected over the last year due to short term US Government budgetary
constraints, but which nevertheless represents a significant long term
opportunity.


Financial Results

Sales during the period totaled £1,546,000 which, at a gross margin of 99%,
resulted in an operating profit of £90,000. This compares with sales in the
corresponding period last year of £1,212,000 at a gross margin of 98% and an
operating loss of £264,000.

Continued tight control over costs and cash management resulted in a £244,000
cash inflow before financing which compares with a £707,000 outflow during the
comparative period. This inflow, coupled with the placing of new shares in May
2007 which raised £678,000 net of expenses, resulted in cash balances totalling
£1,575,000 as at 30 September 2007.

This is the first set of financial statements prepared under International
Financial Reporting Standards (IFRS). The results for comparative periods have
accordingly been restated from UK Generally Accepted Accounting Principles to
IFRS. The transition has not had a material impact on the results, details of
which are outlined in Note 4 to the Accounts.

Outlook

The first half of the year has been profitable for Intercede. However, as in
previous years, the full year outcome will be dependent upon our partners being
able to close long sales cycle contracts in a timely fashion and our subsequent
ability to deliver and recognise revenues in accordance with the Group's
accounting policy. Nevertheless, the level and pace of customer and partner
activity is at an all time high and I remain confident that the long term growth
potential for Intercede has never been stronger.


Richard Parris
Chairman & Chief Executive
11 December 2007



Intercede Group plc
Consolidated Income Statement

                                                     6 months ended          6 months ended          Year ended
                                                       30 September            30 September            31 March
                                                               2007                    2006                2007
                                                              £'000                   £'000               £'000


Revenue                                                       1,546                   1,212               2,620

Cost of sales                                                  (21)                    (25)                (74)

Gross profit                                                  1,525                   1,187               2,546

Administrative expenses                                     (1,435)                 (1,451)             (2,895)

Operating profit/(loss)                                          90                   (264)               (349)

Financial income                                                 23                      13                  25

Financial expenses                                             (68)                    (63)               (126)

Profit/(loss) before tax                                         45                   (314)               (450)

Tax                                                              90                      71                  71

Profit/(loss) for the period                                    135                   (243)               (379)


Earnings per share (pence)
      - basic                                                  0.4p                  (0.7)p              (1.1)p
      - diluted                                                0.3p                  (0.7)p              (1.1)p


All of the Group's trading activities relate to continuing operations. The comparatives for the periods ended
30 September 2006 and 31 March 2007 have been restated as outlined in the Notes to the Accounts.




Intercede Group plc
Consolidated Balance Sheet
                                                        As at                    As at               As at
                                                 30 September             30 September            31 March
                                                         2007                     2006                2007
                                                        £'000                    £'000               £'000
Non-current assets
Property, plant and equipment                              37                       31                  38

Current Assets
Trade and other receivables                               223                      491                 234
Current tax assets                                          -                       71                   -
Cash and cash equivalents                               1,575                      405                 653

                                                        1,798                      967                 887

Total assets                                            1,835                      998                 925

Equity
Share capital                                           4,292                    4,271               4,271
Share premium account                                   2,764                    2,107               2,107
Other reserves                                          1,508                    1,508               1,508
Equity reserve                                            109                      109                 109
Retained earnings                                     (9,629)                  (9,628)             (9,764)

Total equity                                            (956)                  (1,633)             (1,769)

Current liabilities
Trade and other payables                                  288                      359                 313
Current tax liabilities                                   182                      142                 101
Deferred income                                           556                      496                 583

                                                        1,026                      997                 997
Non-current liabilities
Convertible loan notes                                  1,765                    1,634               1,697

Total equity and liabilities                            1,835                      998                 925


The comparatives for the periods ended 30 September 2006 and 31 March 2007 have 
been restated as outlined in the Notes to the Accounts.




Intercede Group plc
Consolidated Statement of Changes in Equity


                                              Share        Share         Other     Equity      Retained
                                            capital      premium      reserves    reserve      earnings      Total
                                               £000         £000          £000       £000          £000       £000


At 1 April 2006 - UK GAAP                     4,271        2,107         1,508        214       (9,577)    (1,477)

IFRS transition (see note 4)                      -            -             -          -          (22)       (22)

At 1 April 2006 - IFRS                        4,271        2,107         1,508        214       (9,599)    (1,499)

Change in equity component on                     -            -             -      (105)           214        109
extension of convertible loan notes

Retained loss for the period - UK GAAP            -            -             -          -         (249)      (249)

IFRS transition (see note 4)                      -            -             -          -             6          6

At 30 September 2006 - IFRS                   4,271        2,107         1,508        109       (9,628)    (1,633)

Retained loss for the period - UK GAAP            -            -             -          -         (119)      (119)

IFRS transition (see note 4)                      -            -             -          -          (17)       (17)

At 31 March 2007 - IFRS                       4,271        2,107         1,508        109       (9,764)    (1,769)

Issue of shares, net of costs                    21          657             -          -             -        678

Retained profit for the period - UK               -            -             -          -           129        129
GAAP

IFRS transition (see note 4)                      -            -             -          -             6          6

At 30 September 2007 - IFRS                   4,292        2,764         1,508        109       (9,629)      (956)





Intercede Group plc
Consolidated Cash Flow Statement

                                                          6 months ended         6 months ended         Year ended
                                                            30 September           30 September           31 March
                                                                    2007                   2006               2007
                                                                   £'000                  £'000              £'000


Cash flows from operating activities
Operating profit/(loss)                                               90                  (264)              (349)
Depreciation                                                           8                      7                 15
Decrease/(increase) in trade and other receivables                    12                  (175)                 82
Increase/(decrease) in trade and other payables                       29                  (278)              (277)
Taxation received                                                     90                      -                 71

Net cash from operating activities                                   229                  (710)              (458)

Investing Activities
Interest received                                                     22                     14                 25
Purchases of property, plant and equipment                           (7)                   (11)               (26)

Net cash from/(used in) investing activities                          15                      3                (1)

Financing Activities
Proceeds on issue of shares                                          678                      -                  -

Net increase/(decrease) in cash and cash equivalents                 922                  (707)              (459)

Non-cash movement                                                   (68)                     45               (18)
Net debt at beginning of period                                  (1,044)                  (567)              (567)

Net debt at end of period                                          (190)                (1,229)            (1,044)




Intercede Group plc
Notes to the Accounts





1.   Preparation of the interim financial statements

The financial information contained herein does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985.

The AIM rules require the Group's financial statements for the year
ending 31 March 2008 to be prepared under International Financial Reporting
Standards (IFRS). As the results presented in these consolidated interim
statements will form part of the results for that year, these interim statements
are accordingly presented under IFRS. The accounting policies differ in some
respects to the accounting policies used for the last audited financial
statements for the year ended 31 March 2007, which were presented under UK
Generally Accepted Accounting Principles (UK GAAP).

The Group is not required to apply IAS 34 Interim Financial Reporting at this 
time.

The results for the comparative periods have been restated under IFRS in
accordance with the requirements of IFRS 1. An explanation of how IFRS has
affected the reported financial position, financial performance and cash flows
of the Group is provided in note 4.

The comparative figures for the financial year ended 31 March 2007 are not
the Group's statutory accounts for that financial year. Those accounts, which
were prepared under UK GAAP, have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The audit opinion on those statutory 
accounts was unqualified and did not include a statement under Section
237(2) or (3) of the Companies Act 1985.

The Interim Report will be mailed to shareholders and copies will be
available on the website (www.intercede.com) and at the registered office:
Intercede Group plc, Lutterworth Hall, St Mary's Road, Lutterworth,
Leicestershire, LE17 4PS.


2.  Earnings per Share

The calculations of earnings per ordinary share are based on the
profit/(loss) for the period and the weighted average number of ordinary shares
in issue during each period ie September 2007: 35,569,896; September 2006 &
March 2007: 33,963,438. The diluted earnings per share is based on a weighted
average of  48,211,164 which reflects the potential conversion of all existing
convertible loan stock, warrants and share options. Basic and diluted earnings
per share are the same for both of the comparative periods as potential dilution
cannot be applied to a loss making period.


3.         Dividend

The Directors do not recommend the payment of a dividend.


4.         Explanation of transition to IFRS

As outlined in note 1, the AIM listing rules require the Group to present its
results under IFRS for the year ending 31 March 2008.

In accordance with IFRS 1, the Group has applied the applicable mandatory
exemptions and the following optional exemptions:

i)   Business combinations that took place prior to the transition date of 
     1 April 2006 have not been restated; and

ii)  IFRS 2 Share Based Payments has not been applied to any share options
     granted prior to 7 November 2002.

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and associated
assumptions are based upon historical experience and various other factors that
are believed to be reasonable under the circumstances, the results of which form
the basis of making judgements about carrying values of assets and liabilities
that are not readily available from other sources. Actual results may differ
from these estimates. The accounting estimates that have the most risk of
causing a material adjustment to the carrying value of assets and liabilities
are in relation to the measurement and impairment of intangible assets and
goodwill and the recognition of current and deferred income tax assets and
liabilities.

The only adjustment identified as being necessary as a result of the
transition to IFRS relates to the requirement for a holiday pay accrual in
accordance with IAS 19. The accruals required are £22,000 at 1 April 2007,
£16,000 at 30 September 2007 and £33,000 at 31 March 2007. The impact on the
income statement is a £6,000 credit to profits for the 6 months to 30 September
2006 and an £11,000 charge against profits for the year ended 31 March 2007.




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