ABSs to the fore as Quindell claims 15% of PI market and Countrywide sees profits rise
On the up: positive noises from Quindell and CCS ahead of Stock Market moves
Quindell Portfolio, the alternative business structure (ABS) that has acquired three law firms in the past 12 months, will have “15% of the UK market for personal injury claims” this year, it has claimed.
Meanwhile, another major ABS – Countrywide Conveyancing Services (CCS), one of the country’s largest conveyancing operations – has reported profits of £8m for last year, up 4% on 2011.
By coincidence, both are seeking admission to the London Stock Exchange – Quindell is planning to move up from AIM, while Countrywide Holdings, of which CCS is part, is looking to return to the main list after six years in private hands.
In a trading update issued yesterday, Quindell chairman and chief executive Rob Terry said this would enable Quindell and its shareholders “to benefit from the broader investor pool that is available to companies on this market”.
Quindell has been building an end-to-end claims outsourcing offering for insurers, and it said it has converted all the pilots of the service to full relationships ahead of 1 April.
It said: “Readiness for the forthcoming regulatory changes within the UK insurance sector that come into force on 1 April 2013 is, without doubt, one of the leading considerations within the boardrooms of the group’s prospective customers and this, together with further clarity now being issued by the government as the 1 April date approaches, means that sales cycles are continuing to be accelerated.
“This acceleration has also increased as recent contract wins have been confirmed without going through a pilot stage as prospective customers have been happy taking references from existing clients.” It said it now has “visibility of the outsourcing volumes required to meet the market’s current full year revenue expectations for 2013”.
Quindell said it continues to be approached by prospective acquisition targets. “The group remains focused on only making acquisitions that would be earnings enhancing on a standalone basis, before taking into account additional earnings that can be generated by the ‘waterfall effect’ of using the acquired companies for the group’s existing volumes, which based on forecasts for 2013 now represent circa 15% of the UK market for personal injury claims.”
Mr Terry said the civil justice reforms on 1 April “are continuing to provide us with the opportunity to win additional new business and we expect this to stimulate further growth throughout 2013 and beyond as a result of this, and as our customers also continue to grow”.
CCS – the trading name of Countrywide Property Lawyers – recently became an ABS licensed by the Council for Licensed Conveyancers. The increase in profits was on the back of a 14% rise in turnover to £26m.
The annual results of Countrywide Holdings said the income rise, as well as a 19% hike in costs, was mainly due to its work managing HSBC’s controversial legal panel. This also explained a near doubling of the number of completions recorded by the company to 59,180 last year.
“The volume throughput of this [HSBC] contract is reflected in our completion volumes (an increase of 93% year on year) largely delivered through our market-leading panel management business and also through our in-house separate legal representation services.
“While the volume of completions has increased by 93%, income only improved by 14% due to lower fees earned from panel management and separate legal representation completions which drove the growth in volume.”
Excluding HSBC, trading was broadly in line with 2011 “as the market has remained subdued”, the report said. However, “our private conveyancing service continues to build momentum across the branch network and in particular through the Hamptons International network, and is attracting excellent customer and agent satisfaction levels in the higher-value markets”.
Across the whole group, Countrywide reported a 6% increase in revenue to £540m, with profits up 12% to £63m. The lettings division performed particularly strongly.
Group chief executive Grenville Turner said: “Over the last six years, Countrywide has been transformed into the UK’s largest integrated property services group. We capitalised upon significant growth opportunities via strategic acquisitions and high street branches to enjoy leading market shares in all our core businesses. We are now embarking on a new chapter in our growth plans with continued investment in key strategic areas.”
Tags: ABS, Alternative business structures, conveyancing, Jackson report, personal injury
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