Interim Management Statement

18th February 2010

The Innovation Group plc

Interim Management Statement

The Innovation Group plc ('Innovation' or 'the Company' or 'the Group'), a global provider of enterprise software and business process outsourcing solutions to the global insurance, financial services, motor and fleet industries, today publishes its Interim Management Statement in accordance with DTR 4.3 of the FSA handbook.

The Board announces that despite the challenges of current economic conditions, the Group is making good progress towards winning and establishing new customers with a substantial number of pilot (proof of concept) projects underway across our geographic operations. The largest of these are in the UK, US and South Africa and the Board is encouraged that the potential contract size is increasing up to £5m per annum. This activity will help to address the issues of scale and volume in the second half of the year and is complementary to the cost actions taken last year which continue to be a focus for management.

Further to the successful £20m fundraising completed in December 2009, the Group has started to apply the additional working capital as planned to generate future margin enhancement.

Following the business review undertaken by Andy Roberts, the Group will take an exceptional restructuring charge of approximately £3.0m in the first half of this financial year. This charge will be primarily in respect of the two underperforming divisions and will generate savings in the second half and beyond. Elsewhere, the Board notes the good performance across all remaining regions.

Performance in the Group is historically weighted to the second half and this trend will continue this year taking account also of the expected reduction in licence revenue in the first half, compared to last year, as the Group re-establishes its focus on business process outsourcing.

Overall, the Board is confident that, unless there is further deterioration in economic conditions in our market, full year results will be in line (before exceptional restructuring costs) with its expectations.

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About Innovation Group

The Innovation Group plc (LSE: TIG.L) is the leading provider of enterprise software, business process outsourcing and repair and service network management solutions to the global property and casualty industry. Innovation 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 has over 8,000 global clients including AXA Insurance, RSA, AAA NCNU, 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. Our 2,300 people are located in the United Kingdom, Australia, Belgium, Canada, France, Germany, Japan, India, Netherlands, Pakistan, South Africa, Spain and United States.www.innovation-group.com