The share price of alternative business structure Quindell went into meltdown again today after it emerged that founder and former chairman Rob Terry has sold 25m shares over the last fortnight.
However, it then began to recover after the company announced that Swinton Group, one of the UK’s largest insurance brokers, has signed a multi-year contract renewal.
Having opened at 47p, the shares dipped to 24p before swinging back up again to 32.75p at close of trading.
The fall came on Quindell’s announcement to the stock exchange that Mr Terry – who resigned last month – had sold enough shares to fall below the 3% ownership threshold at which share sales have to be made public. Quindell said in an announcement on 26 November that Mr Terry had 38m shares; according to yesterday’s, he now has 13m, or 2.99% of the company.
He had already sold 8.85m as part of the aborted sale and repurchase scheme that hit the share price so badly and forced his resignation. At the time he used the money to buy a further million shares, but that left him about £6m to the good.
About 45 minutes after this announcement, Quindell then revealed that Swinton, which has more than 1.2m motor policy holders, has renewed its contract for Quindell to exclusively handle all aspects of the motor claims process, including accident management, hire, repair services, legal services and rehabilitation.
Steve Chelton, head of claims at Swinton, said: “We have enjoyed an excellent working relationship with Quindell over the past two years, providing our customers with an unparalleled service when they most need it following an accident. Quindell continues to exceed expectations in all aspects of their service throughout the supply chain and we look forward to continuing this relationship.”
The company also said that Insurethebox, the UK’s largest provider of telematics insurance, had renewed its contract for Quindell’s technology products, while an unnamed leading motor-cycle insurer had also signed up to its technology.
Group CEO Robert Fielding said: “We are delighted to announce these new contracts and renewals which demonstrate that our service and technology offerings continue to be attractive to leading organisations in the insurance sector.”
There continues also to be concern about Quindell’s cash position, especially in light of its admission earlier this week that “the growth in cash receipts in the final quarter of the year has not been as significant as previously anticipated”.
Quindell’s accounting methods – which involve accounting for some income from cases before the cash is received – has been under scrutiny for some time and PwC has now been called in for an independent review.
The Daily Telegraph’s Questor column, which has long been advising investors to sell Quindell stock, reiterated the call today, saying: “The company has bizarrely called this a ‘natural point’ to conduct an ‘independent review’. Questor thinks reviewing the main accounting methodology just three weeks before the end of the year and after recognising millions in revenue and profit is about as natural as Frankenstein’s monster.”