Alternative business structure (ABS) Quindell plc has nearly 45,000 noise-induced hearing loss (NIHL) cases on the go as it bids to hit the £1bn turnover mark, its latest trading update has revealed.
Overall the third quarter of 2014 saw the AIM-listed company’s personal injury business record sales of £177m – up from £92m in the same period last year – with a further £23m brought in by Quindell’s technology arm.
It said this increase was “primarily to strong organic and synergistic growth; businesses acquired in the last 12 months represented less than 10% of revenue”.
Earnings before interest, tax, depreciation and amortisation (EBIDTA) were £83m, equating to 42% of revenue.
Quindell’s share price has risen marginally on the results, having closed at 154.5p on Friday, a recovery since last month’s unexplained dip below 140p.
Quindell announced earlier this year  that it was shifting its focus from road traffic claims to more remunerative NIHL matters, and it now has 44,500 live NIHL cases. The company said 75% of cases are rejected during the two-stage vetting process – an initial clinic and two separate hearing tests – while settlements are happening quicker and at higher levels than expected.
Investors have been concerned about Quindell’s cash flow because its accounts recognise the expected revenue from cases in advance of actually receiving the cash. The Q3 update said operating cash flow is “significantly ahead” of expectations, with legal services cash collection hitting £760,000 per day, up from £500,000 at the end of the second quarter.
The Quindell board said that it “continues to consider and pursue… all options available to it, including share buy backs, North American listing, disposal or demerger of assets or divisions and strategic and/or financial investments by third parties, in order to maximise shareholder value”.
Chairman Rob Terry said: “Taking in to consideration that volumes are subject to roll out, execution and industry claims frequencies, the Board is confident that the upper end of market expectations can be achieved for the full year for 2014 on revenues of between £750m and £800 million by repeating the same run rate performance delivered by the business in Q3 and taking into consideration seasonal fluctuations in Q4.
“It is clear that in due course, the opportunity to deliver a business with over a billion pounds of revenue, generating significant profits with associated positive cash flows, is within our grasp.”