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LONDON (Alliance News) - The Innovation Group PLC Tuesday expressed confidence in its full-year outlook for adjusted profits at steady exchange rates, as it posted a decline in pretax profit in its first half due to higher amortisation following acquisitions.
Innovation Group provides software and outsourcing services for the insurance industry and related automotive, fleet and property sectors.
It proposed an interim dividend of 0.12 pence for the half year to end-March, up from 0.1 pence a year before.
The company posted a pretax profit of GBP3.3 million, down from GBP4.8 million, as a rise in revenue to GBP112.8 million from GBP101.7 million was offset by higher cost of sales and exceptional costs.
Innovation Group booked exceptional costs of GBP1.6 million related to restructuring in its UK and US Motor and Property BS divisions after acquisitions it made during the year, and amortisation of intangible assets following acquisitions rose to GBP4.3 million from GBP2.1 million.
The company said it had seen some challenges in the first half, primarily benign weather conditions in the UK hitting the volume of property claims. Innovation Group has separated its business into two divisions; Business Service and Software.
Revenue in Business Services rose 16%, boosted by acquisitions. Software revenue fell to GBP5.7 million from GBP9.0 million as a result of delays in contract wins.
"The last six months have seen us deliver double digit increases in revenue and adjusted profit and, at the same time, our newly separated Software and Business Services divisions are now tightly aligned to their target markets. Both teams are fully focused on the opportunities ahead and it is particularly encouraging to see our Software business begin to gain traction," said Chief Executive Officer Andy Roberts in a statement.
Shares in Innovation were trading down 1.8% at 28.00 pence Tuesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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