LONDON (Alliance News) - Software and outsourcing services provider Innovation Group PLC Monday resumed paying dividends, declaring an interim dividend of 0.1 pence per share, as it reported higher revenues in the first half of the year but a drop in profits due to exceptional charges.
For the six months ended March 31, the group reported a significant drop in its pretax profit to GBP4.8 million, down 29% from the GBP6.8 million reported last year, and 20% lower at constant currencies from the GBP6.0 million recorded last year.
Innovation said the drop in profits was caused by exceptional costs and higher levels of amortisation of acquired intangible assets due to increased acquisition activity, as well as a higher share-based payment charge taken due to increased certainty over the vesting of certain long-term incentive plans.
Revenue in the period rose 2% to GBP101.7 million from GBP99.8 million a year earlier, up 9% on a constant currency basis, boosted by contract renewals and new business wins, as well as recent acquisitions.
Approximately 75% of the group's revenues are generated outside of the UK.
"The business is trading in line with the board's expectations based on our strong pipeline of new business and revenues building from contracts won in the first half and prior periods. In addition to this, I'm also delighted to be announcing today the reintroduction of dividend payments to shareholders," said Chief Executive Andy Roberts in a statement.
The group said it will adopt a progressive dividend policy, which it said will reflect the group's profitability, whilst taking into account the need to continue to finance the development and expansion of the business.
In a separate statement Monday, Innovation said it has signed several new contracts in North America, in both its property and motor divisions, together expected to generate revenues over around USD10.0 million over the next three years.
It said its US property division signed two new three-year contracts, both with Tier 1 insurers, for its property contractor network programme. The group said it will provide a managed repair service for homeowners, acting on behalf of the insurance carrier.
Within its motor division, the group signed three new contracts, one with a Tier 1 insurer, and two other with large Tier 3 insurers, which it said are all for its direct motor repair programme.
Net cash at the end of the period was GBP59.8 million, compared with GBP26.8 million the prior year, which Innovation said was boosted by a recent placing and open offer, as well as continued strong cash generation by its businesses.
"Our business continues to perform in line with expectations. The solid foundations, long term contracted relationships, practical innovation, and good cash generation shows our strategy is working and I look to the full year with confidence," said Non-Executive Chairman David Thorpe
Innovation shares were trading 0.8% higher at 31.00 pence Monday morning.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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