Interim Management Statement

15 February 2011

The Innovation Group plc

("Innovation Group" or the "Group")

Interim Management Statement

The Innovation Group plc (LSE: TIG.L), a global provider of business process outsourcing and software solutions to the insurance, fleet, automotive and property industries today publishes its Interim Management Statement for the period from 1 October 2010 to date, in accordance with DTR 4.3 of the FSA Handbook.

The Board is pleased with the trading performance seen since the start of the financial year, benefiting from and building upon the Company's successful transition last year to a more predictable, business process outsourcing ("BPO") based revenue and profit platform. Year-on-year revenue growth is in line with our Group plan, with revenue from BPO activities continuing to represent 87% of the total. Operating cash flow was strong and the conversion rate of EBITDA to cash is currently ahead of our expectation.

The Group continues to run several sizeable proofs of concept in all major geographies. All of these are progressing well and the Board is confident of a good conversion rate to full-term contracts in the coming months. Customer retention remains good and during the period the Group secured several wins in the UK, US and Australia as well as renewing a contract with its largest client in Spain.

As previously announced the Group has, during the period, made two small acquisitions for a maximum total cash consideration of £3.5m. The first, Wintec, is a leading franchised windscreen repair network with over 250 mobile and fixed repair centres operating across Germany. The second, an acquisition in South Africa of TJH Financial Services, is an insurance administrator, providing underwriting administration as well as policy administration and claims handling services for insurers and brokers. Both of these acquisitions complement and broaden the Group's existing range of outsourcing services.

The Group's development programmes for Insurer Claims, Policy, Analytics and BPO (Enterprise) remain on track with the new version of our claims software product, Insurer 7.0, having been launched internally, on time and to budget, in January. We are pleased by the initial feedback from industry analysts and are encouraged with the pipeline which is now starting to emerge in the US, UK and Australia. Although the sales cycle for product sales remains long, over time, we expect revenue for this product to build in 2012 and beyond.

The Board is pleased that, as achieved in the second half of the last financial year, all regions continue operating profitably into 2011 and the Board remains confident in the Group's ability to meet its expectations for the current 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