12th Oct 2009 07:00
12 October 2009
Innovation Group plc
Trading Update for the Year ended 30 September 2009
Innovation Group plc ("Innovation" or "the Group"), the leading provider of enterprise software, business process outsourcing ("BPO") and repair and service network management solutions to the global Property and Casualty insurance industry, today releases a trading update for the year ended 30 September 2009.
The Board expects adjusted profit before tax* will be in line with market expectations when preliminary results are announced in early December 2009. Net cash will be substantially ahead of market expectations, in excess of £10m (gross cash approx. £36m).
As stated in the Q3 Interim Management Statement, announced on 18 August 2009, reduced economic activity has significantly reduced claims volumes in all territories during the year. This reduction has also contributed to our US BPO business growing much slower than we had anticipated which may result in a non cash goodwill impairment charge against the US business.
In order to mitigate these effects, as previously indicated in the Q3 Interim Management Statement, the management team has taken actions to:
Instigate a rigorous cost reduction programme, which is now fully implemented, designed to re-size the outsourcing businesses to the current level of claims volumes being experienced. This programme has achieved annualised savings of approximately £6m and has been financed out of operating cash.
Make up the revenue shortfall as a result of the reduction in the volume of claims through the sale of specialist technology, as evidenced by recent 'win' announcements.
Win more outsourcing business from new and existing clients. This brings significant benefit into the 2010 financial year and beyond, and reduces the need for one-time licence fees to achieve targeted levels of profitability in the future.
Enterprise, our next generation BPO and SaaS services platform, is on budget and on schedule to go live in UK, France and Spain in Q1.
*Adjusted profit before tax is profit before tax after adding back the amortisation charge, impairment charge, a share based payments charge and exceptional costs.
Enquiries:
|
Innovation Group Hassan Sadiq, Chief Executive Officer Jane Hall, Group Finance Director |
Tel: +44 (0) 1489 898300 |
|
Financial Dynamics Juliet Clarke / Matt Dixon / Erwan Gouraud |
Tel: +44 (0) 20 7831 3113 |
About Innovation Group
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 1,000 global clients including AXA Insurance, RSA, AAA NCNU, LeasePlan, The Ford Motor Company, Aviva, Toyota (South Africa) and Zurich (UK). The Group processes more than 4 million claims per year with 20% direct claims cost saving achieved. Our 2,400 people are located in United Kingdom, Australia, Belgium, Canada, France, Germany, Japan, Netherlands, Pakistan, South Africa, Spain, and the United States.
www.innovation-group.com
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