Quindell puts share price jitters behind it with strong performance
Terry: confident momentum will continue
Alternative business structure (ABS) Quindell Portfolio plc has posted strong interim half-year results after signing service contracts worth about £100m a year, attributing its success in part to strong growth in legal services.
The company, which is building an end-to-end outsourced personal injury service for insurers, reported revenue up by 78% in the six months to the end of June – compared with the preceding six months – to £163.3m, after gross sales increased by 33% to £167.3m.
Profit before tax went up by 49% to £43.4m and adjusted profit before interest, tax, depreciation, amortisation and exceptional costs climbed by 45% to £54m – compared to £52.2m in the whole of 2012.
The statement said trading in the second half of the year was “expected to be positive, accelerating and building on the group’s organic growth potential”.
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Quindell, which is AIM-listed, is aiming towards a full stock exchange listing. Meanwhile, according to the half-year statement, the company is in discussions over a North American dual listing “to ensure the board achieves the optimum valuation for the company’s shareholders”.
Rob Terry, Quindell’s founder and executive chairman, said that eight contracts signed in the second quarter by the company’s services division were expected to increase group revenues by £100m a year from July 2013.
He said these contracts were augmented by “particularly strong growth in legal services and technology sales” and “record levels” of activity in other markets, “particularly North America”.
He concluded: “The Board is confident that its growth and trading momentum shall continue into the second half of 2013 and beyond, meeting the upper end of market expectations.”
Acquisitions played a smaller part of Quindell’s growth strategy in 2013 than in 2012. In April it acquired Accident Advice Helpline and costs drafting firm Compass Costs Consultants. At the end of June the company bought accident rehabilitation and medical reporting firm, React and Recover.
Last year Quindell spent £45.2m on the acquisition of three law firms, Silverbeck Rymer, Pinto Potts, and The Compensation Lawyers – made up of £30.1m in shares and £13.5m in cash, plus £1.5m in deferred cash for the vendors of Pinto Potts depending on performance.
Quindell has seen its share price rise steadily after it more than halved to below 6p in May – prompting the company to issue two clarifications, the second of which blamed “misinformed speculation and shorting activity”. Yesterday, Quindell Portfolio shares closed at just over 12p.
Separately, ‘virtual’ commercial law firm Keystone Law – which began as Lawyers Direct in 2002 – has been granted an ABS licence by the Solicitors Regulation Authority (SRA), effective from 21 October.
The move means that non-solicitor co-founder, Charles Stringer, can become a director. The firm said its application for an ABS licence took just two and a half months to be approved.
Managing partner and co-founder, James Knight, said the ABS application was an “inevitable and logical route… to take”. He described the SRA as “a joy to deal with”.
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