After a pleasingly positive trading update a few months back (see Innovation Group second half on track) insurance software and business process services firm The Innovation Group (TIG) ended its year (to 30th Sept.) 'slightly ahead' of market expectations, and with the prospect of ‘profitable growth and good margins’ in the years ahead.
Headline revenues rose by 10% (15% at constant currency, ccy) to £193.7m of which 3% (8% ccy) was organic. Gross margins held steady at 41% but near-flat operating profits (due to a 10% uplift in SG&A) left margins 20bps light at 5.7%. Pre-tax profits rose by 15% to £11.8m, including a previously reported £1.4m boost from accounting adjustments at TIG’s South African associate. Tax credits helped knock nearly 40% off the tax provision, which helped boost net profits by 56% to £8.9m.
TIG has many moving parts, both operationally and geographically, and we may look at these in more detail in a later post. But the ‘elephant in the room’ is of course archrival Quindell (chaired, led and co-founded by TIG founder Rob Terry) which is on a manic ‘mission from God’ land-grab which appears (at least on the face of it) to be in TIG’s (and a few others’) ‘space’ (start here and work back and back and back …).