Innovation Group, whose software outsources insurance claims, reported full-year results ahead of expectations and unveiled a fundraising to pay down debt.
Revenue for the year to September 30 rose from £140m to £156m while underlying profits increased from £10.1m to £11.3m. That compared with consensus estimates of £152m and £11m respectively.
Innovation said the proceeds of the fundraising would go to paying down £5m of a £11m black economic empowerment loan relating to South Africa, as well as the acquisition of specialist technology to win new business.
It also unveiled plans to raise £21m via a placing and open offer at 10p a share. The shares closed down 1¼p at 10½p yesterday.
“Innovation’s financial position will be materially improved,” said Andy Roberts, who took over as executive chairman pending the appointment of a chief executive to replace Hassan Sadiq, who left a month ago .
The cash will also be used to roll out its new technology platform, known as Enterprise, which it hopes will allow it to better integrate its business units and to process larger and an increasing numbers of outsourcing contracts.
Statutory pre-tax losses widened from £3.8m to £19.8m after taking an impairment charge of £21.5m, largely relating to a writedown in value at its US outsourcing business. Losses per share widened from 1.06p to 3.19p.
The fundraising is the second in seven months: Innovation raised £5m in May to satisfy a treasury requirement from Barclays.
Ian Spence, an analyst at IS Research, called the placing “exactly the right move” for Innovation.
“There is an emerging consensus view that uncertainty around the election will make the first half of next year a tough environment to raise new money so the timing looks good.”
Source : http://www.ft.com/cms/s/0/d33ef5a2-e13e-11de-af7a-00144feab49a.html
