Fund management guru Neil Woodford is renowned for making investors money and Woodford-backed IDEX has suddenly sparked to life after striking a deal with credit cards giant, Mastercard.
IDEX is a Norwegian-listed fingerprint identity technology developer being run by Hemant Mardia, once the CEO of microwave technology kit designer Filtronic (FTC:AIM). It also has UK offices in Harrogate and Farnborough.
On 21 April the shares jumped 25% to 8.75 NOK (Norweigan Krone) after striking a deal to supply its flexible off-chip fingerprint sensor to help run Mastercard’s nex generation, biometric cards. Biometrics are fast becoming the security technology of choice, using eye-scanning, voice recognition or, in this case, fingerprints.
Dr. Hemant Mardia, CEO of IDEX, commented, 'We are very pleased to be partnering with a true pioneer in the development of easy and secure transaction environments for consumers across the world.
'Our partnership has achieved first mover advantage in the mass market adoption for biometric cards, and we expect initial commercial deployment to begin in 2017.'
This significant bit of business was won after extensive trials in South Africa, and both IDEX and Mastercard anticipate the technology becoming available to UK card users early in 2018.
EARLY STAGE FINANCIALS
IDEX is now valued at 4.7bn NOK, or roughly £430m. That’s a pretty hefty rating for a company still dripping in red ink on fairly modest revenue. Last year to 31 December 2016 IDEX ran up a pre-tax loss equivalent to £18.4m on revenue of barely more than £3.5m. It also burned through a little more than £21.1m of cash, although it does have the safety blanket of £48.5m remaining on the balance sheet
Woodford first invested in IDEX in May 2015, taking a rough 11% stake in a private share subscription at 5.65 NOK through his Woodford Patient Capital Trust (WPCT) fund. He also took warrants over a further 26.25m shares priced at 8.5 NOK. These have since been exercised and Woodford’s stake has now built up to circa 26% of IDEX.
IDEX was founded in 1996 and listed on the Oslo stock exchange in 2010. The says it has a portfolio of blue-chip, used in a range of biometrically enabled applications, such as mobile, smart cards and Internet of Things (IoT). IDEX's addressable market represents a fast-growing multi-billion unit opportunity, so the company claims.
Investors interested in gaining access to IDEX may be best served through the Woodford Patient Capital Trust given IDEX’s listing is confined to the Norweigan stock market. Or perhaps that will change down the line. AIM IPO anyone?