LONDON (Alliance News) - Innovation Group PLC shares fell sharply Wednesday after it said that contract delays will offset the gain it is making on the sale of its UK Innovation Symbility contracts, meaning its results for the current financial year will still only be in line with market forecasts.
The company, which provides business process services and software services to the insurance, fleet, automotive and property sectors, said that while it has made progress in the first half, it expects a financial impact on its results from some contract slippage in the signing of some significant UK software contracts.
The contract delays, along with lower claims volumes in its UK property business due to the benign weather conditions, will largely offset any positive impact on its profit from the sale of UK customer contracts associated with its Innovation Symbility joint venture business.
Innovation is selling the contracts to Symbility Solutions Ltd for GBP4 million and has entered into a five-year deal with Symbility for the continued use of Symbility software by Innovation's property unit.
Despite the challenges, Innovation said it expects its adjusted profit for the year to the end of September to be in line with market consensus forecasts, based on current currency rates persisting for the remainder of the financial year.
In a separate statement Wednesday, Innovation said it has signed a new GBP3.6 million deal with a European motor insurer. It said GBP2.5 million of the contract will be recognised in the next 12 months.
Innovation shares were down 15% on Wednesday morning, one of the worst performers in the FTSE All-Share index.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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