After a recent spell of new contracts and extensions (see here and work back), The Innovation Group (TIG) has delivered another buoyant performance in H113, albeit slower than this time last year.
Revenue for the six months ended 31 March was up 5%, or 8% in constant currency to £99.8m, vs. 14% ccy growth in H112. Organic growth was 2% after stripping out the October and November acquisitions of Innovation Connect Enterprise in France, Sachcontrol in Germany and InFront Solutions in the UK (see here). TIG has continued with the acquisitions since the start of H2, taking on board motor claims handler Gemini Vehicle Solutions (see here). Operating margins are also on the rise, at 6.6% vs. 3.4% last time.
TIG’s growth is coming from business process services (BPS), where revenue was up 6% to £88.5m. Software revenues meanwhile were flat at £11.3m. But looking ahead, there is more positive news on the software front following recent licence wins with tier two US insurers Homesite and GuideOne (see here). It also won a BPS deal in the US with Austin Mutual Insurance. So we would expect the US to grow its share of group revenues in the second half. However, it still has some work to do turn the US business into profit - it was on the only region in the half to make a loss. TIG faces another challenge in the Asia Pacific market, where revenue fell 10.7%, although it is unclear at this stage what caused the fall.
The UK, TIG’s second largest market after Germany, saw revenue growth of 9.7% to £21.5m, and delivered an EBITDA margin of 20%. So all looking good in the domestic market.