August 19, 2008 / 7:48 AM / 11 years ago

Innovation Group cautions on FY as credit tightens

Aug 19 (Reuters) -British software company Innovation Group Plc TIG.L needs to close “a number of commercial arrangements” in order to meet its full-year expectations, it said Tuesday, sending its shares plunging.

The company, which provides business process outsourcing services for insurers, said the credit squeeze has limited its investment activity and led to the abortion of a planned acquisition.

These have had an impact on planned adjusted profit of about 1 million pounds, the company said.

At 0739 GMT Innovation shares were down 23 percent at 16 pence.

The integration of the Nobilas business is going to plan, but Innovation sees a reduction of about 1 million pounds in adjusted profit, arising from its decision to retain staff and property here, it said.

However, the group said it has refinanced its bank loans and mortgage “on more advantageous terms” and has secured new facilities for general corporate purposes.

It expects to be in a positive net cash position at the year end and continues to look forward to 2009 and beyond “with confidence,” it said.

Reporting by Kumar Alagappan in Bangalore; Editing by Rosalba O'Brien

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