Interim Management Statement

19 August 2011

The Innovation Group plc

("Innovation" or the "Group")

Interim Management Statement

The Innovation Group plc (LSE: TIG.L), a global provider of Business Process Outsourcing ("BPO") and software solutions to the insurance, fleet, automotive and property industries today publishes its Interim Management Statement for the period from 1 April 2011 to date, in accordance with DTR 4.3 of the FSA Handbook.

The Board of Directors (the "Board") is pleased to report that, despite prevailing economic conditions, trading has continued positively in the period under review, building on the strong performance delivered by the Group in the first half of the financial year. The Group has continued to generate good levels of cash from its operations, and the conversion rate of EBITDA to operating cash flow remains strong. Margins are tracking to plan and, as expected, gross margin, EBITDA margin and adjusted profit margins are all significantly improved from last year.

During the period under review, the Group has been successful in winning significant new contracts with Tier 1 insurers together with a number of smaller contracts and contract renewals, and continues to pursue other large pipeline opportunities. This can be most clearly evidenced by the £40m subsidence claims handling contract recently secured with RBSI in the UK, the largest contract win in the Group's history, and two of the new contracts in Germany announced earlier in the period.

The Group has also maintained good momentum in developing its software capabilities. Internally, the roll-out of Enterprise continues to progress well. Externally, the Group continues to be pleased with the initial industry response to its recently reengineered and launched "Insurer" suite of products which has received highly encouraging reports from Industry Analysts. As previously stated, whilst the sales cycle can be lengthy, the Board continues to believe that revenue for these software products will start to build in FY 2012.

The Board is confident that the Group's performance remains on track to meet its expectations for the current financial year.

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Notes to Editors:

The Innovation Group plc (LSE: TIG.L) is a global provider of business process outsourcing and software solutions to the insurance, fleet, automotive and property industries. Innovation Group provides contact centres, repair networks, process management, supply chain and technology operations and decision support analytics to support accident management, repair and estimation and claims management services. Innovation Group has over 800 global clients including AXA, RSA, American Modern Insurance Group, LeasePlan, The Ford Motor Company, Aviva, Toyota and Zurich. The Group processes more than 4 million claims per year with 20 per cent direct claims cost saving achieved. Innovation Group's 2,300 people are located in the United Kingdom, Australia, Belgium, Canada, France, Germany, Japan, India, Pakistan, South Africa, Spain and United States.

www.innovation-group.com

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