Shai - 1:40 pm on Apr 5, 2013 (gmt 0)
Just wanted to come back and update this thread.
We have now removed the GeoIP redirects and have setup each site Geo targeting in WMT correctly. We are also going through the site and changing the product text slightly to reduce the chance of duplicate content. The site was dropping quite a few pages from the index on a daily basis before the removal of GeoIP but now started to grow again so itís obviously working. Will upload a new sitemap today to speed things up in this respect.
The only problem we have is that both sites are on the same UK dedicated server. I will keep it like this for now and see how Google behaves. To compensate, Iíll try and increase Geo signals such as clear address in the footer of each site.
Thanks again for everyoneís input. Its very much appreciated.