LONDON (Alliance News) - The Innovation Group PLC Monday said it's on track to meet full year expectations after a strong start to the year, as it also announced a GBP35 million cash deal to buy flood and storms claims management company LAS Claims Management Ltd.
Innovation, which provides software for the insurance, fleet, automotive and property industries, said it had seen positive progress in its US business since the start of October, with motor volumes from new Tier 1 carriers up since December, and a number of its software projects moved on to user trials.
"Overall, on a local currency basis, the board is confident that the group's trading performance is on track to meet its expectations for the current financial year," it said in a statement.
Separately, it said it will buy LAS Claims Management from Gresham private Equity, funded by a GBP65 million placing and open offer it has launched to cover the costs of recent and potential future acquisitions.
The company also acquired Crash-worth Ltd at the end of January for GBP11.75 million, a deal that enlarged its UK motor business.
The LAS Claims Management deal will enlarge its property business, and comes at a time when the UK is suffering some of the worst flooding in recent history.
The vast majority of LAS's revenue comes from water-related claims, also known in the insurance industry as "wet" perils. It provides customers with a full suite of outsourced services that handle claims across a range of property-related perils including storm, burst pipes, flood, fire, theft and accidental damage.
LAS made GBP34.2 million of revenues and a GBP0.3 million pretax loss in the year to July 31, 2012. However, it has since been restructured and has secured several significant contract wins, meaning its current annulised earnings before interest, tax, depreciation and amortisation is running at about GBP3.5 million.
Innovation expects to complete both the LAS acquisition and the fund-raising before the end of March.
Shares in Innovation were trading down 0.4% at 33.60 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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