11th Oct 2007 07:00
Innovation Group PLC11 October 2007 The Innovation Group plc Trading Update 11 October 2007 The Innovation Group plc ("Innovation" or the "Group") (LSE:TIG.L/TIG.LN),which provides outsourcing services and software solutions to the world'sinsurance providers, today announces a trading update for the year ended 30September 2007. The results are ahead of the Board's expectations in constantcurrency, and in line with the Board's expectations post currency effect. The transformation into a technology-led BPO provider is now complete,reflecting the fact that approximately 77% of Innovation's revenues are nowrecurring. Innovation signed several multi-million pound recurring revenuecontracts with blue chip clients including the Group's largest ever BPO dealwith Royal and SunAlliance, estimated to be worth more than £25 million overfive years. Like BPO, software revenue is up year on year, reflecting a significant increasein both recurring software and solution delivery revenue. The IBM relationship delivered good progress in 2007 and the integration ofUS-based First Notice Systems has exceeded internal plans. The Board is pleased with the progress of the business to date and encouraged bythe current high level of demand for its services across the globe. Thisdemand, supported by an encouraging pipeline of prospects, together with higherthan expected levels of future recurring revenue, leads the Board to reviseupwards its expectations for the year to 30 September 2008*. Announced separately today is the proposed strategic acquisition of Nobilaswhich will combine with Innovation's Motorcare business to provide Pan-Europeancapability. The aforementioned upward revision of the Group's expectations willbe offset in 2008 by the financial impact of the Acquisition. The Acquisitionis expected to be earnings enhancing from 2009*. * This statement is not intended to constitute a profit forecast for thefinancial year ending 30 September 2008 or any other year, nor should thisstatement be interpreted to mean that earnings or earnings per share for thecurrent or future financial years will necessarily match or exceed the historicpublished earnings per share for either Innovation or Innovation and Nobilascombined. Hassan Sadiq, Chief Executive Officer, said: "Our focus on building long term client relationships continues to driveInnovation forward. The business is making excellent progress and we arepleased to report an underlying upgrade to our expectations for 2008." A presentation to analysts will be held at 9.30am today at College Hill'soffices, The Registry, Royal Mint Court, London EC3N 4QN. The Group intends toannounce its preliminary results on 4 December 2007. Enquiries: The Innovation Group plc +44 (0) 1489 898300Hassan Sadiq, Chief Executive OfficerPaul Hemsley, Group Finance Director College Hill +44 (0) 20 7457 2020Sara Musgrave +44 (0) 207457 2049Ben Way +44 (0) 207 457 2055 Notes to editors: The Innovation Group plc ("Innovation" or "Group") provides outsourcing servicesand software solutions to insurers and other risk carriers. The softwaresolutions are designed for the handling of policy and claims administrativeprocesses within the insurance industry. The solutions can be utilised inconnection with the Group's outsourcing operations or implemented on a standalone basis. Approximately 77% of the Innovation Group's total revenues are nowrecurring with the remainder coming from the sale and support of its softwaresolutions. The Group provides software and outsourcing services on a non-brandedbasis and does not perform insurance underwriting functions. The global BPO market is estimated to grow at 14% CAGR from 2007 to 2010according to IDC (May 2006) and outpace IT services. In North America, BPO isestimated to grow by an 8.8% compound annual growth rate to $100 billion by2009. Gartner 2005. Datamonitor, August 2006, has also said there has been a continued increase inthe propensity to outsource business processes in the insurance industry with47% of insurers using one or more BPO services in 2006 compared to 41% in 2005.Claims and policy administration BPO (Innovation's specialty) are the highestpriority business functions for BPO and among the fastest growing BPO areas. Innovation has over 220 global clients including the Ford Motor Company, Aviva,AXA Insurance, Royal & SunAlliance, Toyota (South Africa) and Zurich (UK). TheGroup processes more than 3 million claims per year with 20% direct claims costsaving achieved. The software operates in 8 languages and the Group hasapproximately 2000 people across offices in North America, the UK, Germany,South Africa, Australia and Japan. www.innovation-group.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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