28th Sep 2005 07:03
Innovation Group PLC28 September 2005 Embargoed for 7am release 28 September 2005 THE INNOVATION GROUP PLC Year End Trading Update The Innovation Group ("TiG"), which specialises in providing transformationalbusiness solutions for the global insurance community that incorporatetechnology, outsourcing and supply chain management, today provides an update ontrading for the full year ending 30 September 2005. When TiG reported its nine months results on 3 August 2005, we highlighted thatthe achievement of full year results in line with expectations would bedependent on the successful signing of two or three licences, one of which,relating to an ongoing pilot, was significant. This pilot has now been completedwith good results; however it has not led to a licence signing in the fourthquarter, and discussions are ongoing. With regard to the two other licence opportunities, one has resulted in TiGbeing selected for a Policy engagement and work has commenced, however thelicence element has not yet been concluded. The second has also not concludedand again discussions continue. Consequently, approximately £7.5m of licenceincome which we expected in the fourth quarter will now not be concluded before30 September 2005. We continue to work closely with all our clients, includingthe clients referred to above, and look forward to providing them with ourproducts and services over the coming months and beyond. Whilst this is disappointing in the near term, the fundamentals of the businesscontinue to improve as we move towards a recurring revenue model and reduce ourexposure towards large licence sales. In line with this strategy, recurringrevenues continued to grow in the second half based on commitments from existingand new clients for our technology and SBPO products. Operating cash flow forthe year to 30 September 2005 is expected to be positive. As a result of our strategy, our expectations for 2006 rely less on licencesales than in previous years. Along with an extensive client base and ourgrowing reputation for successful deliveries, and a healthy pipeline, wecontinue to look forward to the future with optimism. TiG intends to announce its preliminary results on 22 November 2005. Enquiries: The Innovation Group plc 01489 898300Hassan Sadiq, Chief Executive Officer Paul Smolinski, Group Finance Director Robert W. Baird Limited 020 7488 1212Shaun Dobson Smithfield 020 7360 4900Sara Musgrave/Sarah Richardson/Jo Thomas This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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