Monday, 12 October 2009

TIG building cash but revenues must wait

(By Philip Carnelley, 10:00, 12 Oct 09) Today’s trading update from insurance BPO and software provider The Innovation Group (TIG) is, at best, neutral. FY09 has been about damage limitation and management is now saying that benefits from higher levels of outsourcing business will come through in 2010. TIG’s business has been hard hit by lower levels of economic activity, leading to lower insurance claims volumes. Indeed, the US BPO business is growing much slower than anticipated which may result in a (non-cash) impairment charge. But as a result of cost-cutting action, management expect year-end net cash will be ‘substantially ahead’ of market expectations. TIG’s shares are slightly down on the news, at 13p – still below the 15p offered last March, and the 16p turned down earlier this month (see Innovation says 'No' again).

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