Team Internet Regulatory News (TIG)

18 August 2014

The Innovation Group plc

("Innovation Group" or the "Group")

Q3 Interim Management Statement

The Innovation Group plc (LSE: TIG.L), a global provider of Business Process Services ("BPS") and software solutions to the insurance, fleet, automotive and property industries today publishes its Q3 Interim Management Statement for the period from 1 April 2014 to date, in accordance with DTR 4.3 of the FCA Handbook.

Building on a strong first half, further substantial progress has been made during the period across the Group.

In the Group's BPS business we have secured several contract renewals, the most significant of which is with one of the world's leading motor manufacturers and valued at £10m in revenue over its three year term. In addition, a number of new BPS pilots are underway, which if successfully contracted would underpin FY15 expectations. The pipeline in BPS across all of our regions remains strong.

In the Group's software business we have achieved some very important milestones, including completion of the first live US customer implementation of Insurer Claims V7. Several more implementations will be live in the US and UK before the end of the calendar year providing valuable reference sites for the full Insurer suite. Demand in our end-markets is increasing and the pipeline for software remains strong across the US, UK and Australia, albeit with an increased tendency for customers to undertake more detailed procurement-led contracting processes before concluding their purchasing decisions.

The two acquisitions made by the Group in the first half of the year continue to bed in well. Chris Ashworth has brought valuable leadership to our enlarged UK Motor business through the acquisition of Crash-worth Limited, and the UK motor business is now engaged in a number of substantial tenders with Tier 1 and 2 insurers. The integration of LAS, the property 'wet perils' business acquired by the Group in March, is progressing to timetable and is on track to realise the expected synergies in full by the end of the current financial year.

As advised as part of the equity fund raising earlier this year, the Group raised a surplus of c. £25m for a third acquisition that was then in the early stages of negotiation. Negotiations are proceeding and we expect a conclusion by the end of the current financial year, which if, as is currently expected, is successful will be EPS enhancing in FY15 and beyond.

As a global business, currency fluctuations and their translational impact do impact the Group's financial performance. The Euro has weakened further against Sterling during the period and as a significant proportion of the Group's revenue and profit is denominated in Euros, shareholders will be aware that this and any further currency changes will feed through to full year results.

The Board remains confident that its trading and opportunity pipeline puts the Group on track to meet its expectations for the full year.

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About The Innovation Group:

The Innovation Group plc (LSE: TIG.L) is a global provider of business process outsourcing and software solutions to the insurance, fleet, automotive and property industries. Innovation Group provides contact centres, repair networks, process management, supply chain and technology operations and decision support analytics to support accident management, repair and estimation and claims management services. Innovation Group has over 800 global clients including AXA, RSA, American Modern Insurance Group, LeasePlan, The Ford Motor Company, Aviva, Toyota and Zurich. The Group processes more than 4 million claims per year with 20 per cent direct claims cost saving achieved. Innovation Group's 2,300 people are located in the United Kingdom, Australia, Belgium, Canada, France, Germany, Japan, India, Pakistan, South Africa, Spain and United States.

www.innovation-group.com