Innovation Group (TIG) continued its recent renaissance and pushed adjusted pre-tax profits ahead by 24 per cent to £21.9m on a constant currency basis. Trading was boosted by the largest ever business process services (BPS) deal with a UK insurer, and worth £75m over seven years. Moreover, important business wins helped to lift software deals to the highest level ever in one year.
The group provides software and business services for insurers to help them handle claims more efficiently. And successful contract wins included a five-year renewal of an existing contract with Enterprise Rent-A-Car, and worth £25m, and an extended subsidence claims management agreement with Direct Line, bringing in an additional £20m by December 2017.
The group’s largest division is in Germany where adjusted operating profits grew by 20 per cent to £8.9m, and while like-for-like turnover was flat, total divisional revenue grew by 14 per cent thanks to the acquisition of the loss-adjusting business of Sachcontrol for £1.2m. Revenue was also up 10 per cent in the South African operation, but weakness of the South African rand meant that revenue in sterling terms slipped from £40.7m to £39.1m. Like-for-like turnover in the UK was flat, although overall it grew 10 per cent after including the acquisition of GVS and a full year’s contribution from Marishal Thompson acquired in 2012.
Broker Investec Securities forecasts adjusted pre-tax profit for the current year of £26m and adjusted EPS of 1.9p (from 1.4p in 2013).
| THE INNOVATION GROUP (TIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 35p | MARKET VALUE: | £ 346m | |
| TOUCH: | 34-35p | 12-MONTH HIGH: | 36p | LOW: 23p |
| DIVIDEND YIELD: | nil | PE RATIO: | 45 | |
| NET ASSET VALUE: | 13p* | NET CASH: | £26.9m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 156 | -19.8 | -3.20 | nil |
| 2010 | 162 | -1.70 | -0.58 | nil |
| 2011 | 176 | 10.2 | 0.56 | nil |
| 2012 | 194 | 11.8 | 0.63 | nil |
| 2013 | 204 | 14.4 | 0.78 | nil |
| % change | +6 | +23 | +24 | - |
*Includes intangible assets of £117m, or 12p a share | ||||
