Insurance software specialist Innovation capped a hectic year - in which it lost its chief executive and was hit with a £44m legal case relating to the design of policy software - with news that it's tapping the market for £21m by way of a fully underwritten placing at 10p a share.
The latest fund-raising is earmarked to pay down expensive debt in South Africa, to acquire new technology and to help secure larger contracts - it also said it was fully insured for any legal costs it may incur as a result of the legal action.
Innovation sells software used in the insurance claims cycle and during the year processed more than 4m incidents. However, underlying volumes were around 10 per cent lower, as fewer new car sales and unusual weather patterns reduced expected claims in some markets, although transactional revenues were in fact 16 per cent higher at £125m thanks to new customer wins and foreign exchange movements.
Meanwhile new platforms such as Innovation Insurer are now shipping, while Project Enterprise, an enhanced technology platform that has cost £12.5m to develop, is being rolled out worldwide. Both projects will provide clients with innovations such as asset tracking and telematics based crash detection.
Before news of the cash call Investec predicted adjusted 2010 pre-tax profits of £11m and EPS of 1p (from £8.2m and 0.7p in 2009).
| INNOVATION GROUP (TIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 11p | MARKET VALUE: | £75.0m | |
| TOUCH: | 10-11p | 12-MONTH HIGH: | 14p | LOW: 3p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 12p* | NET CASH: | £11.7m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 60.9 | 1.91 | 0.07 | nil |
| 2006 | 79.7 | 8.47 | 1.28 | nil |
| 2007 | 111 | 10.4 | 1.17 | nil |
| 2008 | 140 | -3.78 | -1.06 | nil |
| 2009 | 156 | -19.8 | -3.19 | nil |
| % change | +11 | - | - | - |
*Includes intangible assets of £91m, or 13p a share | ||||
