Quindell increases H1 revenues, profits and transparency
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Interim results from Quindell showed profits almost quadrupling as the company looked to grow revenue fast from new contracts and cases for its legal services division, with management introducing more transparency to results as it looks to improve corporate governance and confound its critics.
The divisive company, which was dismissed by US research house Gotham City as "a country club built on sand" but is much championed by its wide retail investor base, also appointed a new member to the board, with lawyer Stefan Leon Borson joining as chief legal and communications officer.
Unaudited revenues grew 119% to £357.3m thanks to the professional services division growing 108%, with legal services contributing almost two thirds, business processes a quarter and health services 13% of the total. For the full year, management guided to revenues of between £800m and £900m.
The smaller digital solutions unit expanded revenues by 185% and is expected to deliver continued strong growth in the second half of the year.
Quindell said 90% of revenue produced in the period was organic, with 10% being from acquisitions made over the previous 12 months.
Group pre-tax profits increased 292% to £153.7m, with adjusted earnings per share up 79% to 29.6p.
With cash collections of more than £220m, compared to around £270m for the whole of 2013, period-end net cash of £18.9m was a big improvement from the net debt postilion a year earlier and was said to have "increased further in July", with the group cash flow turning positive in that month.
Newly promoted chief executive Robert Fielding said: "We continue to strengthen our position as a market leading, global provider of professional services and digital solutions. Our strategic priorities remain integration, delivery and cash generation whilst also focusing on improving cash margins.
"This year we have seen strong organic growth and our objective is to continue to improve the group's revenue mix which will be driven by growing digital solutions in second half of the year."
Broker Canaccord welcomed the introduction of "significantly more transparency" on the company's services division and said the company's share look "cheap" on conventional valuation metrics.
"For the market to seriously consider these numbers, we believe Quindell will need to deliver on its quarterly cash forecasts for full year 2014."
Shares in the company were down 4.9% to 200p at 08:11 on Thursday.
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