TIDMQPP
RNS Number : 9108E
Quindell PLC
16 April 2014
Embargoed for release until 7.00 Wednesday 16 April 2014
Quindell Plc
("Quindell", the "Company" or the "Group")
Q1 Trading Statement
Quindell Plc (AIM: QPP.L), the provider of sector leading
expertise in software, consultancy and technology enabled
outsourcing in its key markets, being Insurance, Telecommunications
and their related sectors is pleased to provide its trading
statement for the first quarter ended 31 March 2014.
Highlights
-- Gross sales of GBP162.9 million (H1:2013: GBP167.3 million)
-- Adjusted EPS(1) of 0.82 pence (H1:2013: 1.1 pence)
-- Previous market guidance for Q1 Adjusted EBITDA(2) GBP50+ million
-- Adjusted EBITDA(2) of GBP65.9m (H1:2013: GBP54.0 million)
-- Adjusted EBITDA(2) margin of 40.5% (H1:2013: 32%)
-- Continued positive trend of operating cash flow ahead of guidance
-- Momentum in Collaboration Model uptake continues expectation of 75% adoption
-- Full year cash generation market expectation now anticipated to be exceeded
-- Cash at 31 March 2014 of circa GBP150 million post acquisitions and investments
Services Division
-- Recent wins mean Group is now delivering significant organic growth
-- Quindell is active in some element now approaching 1 in 3 of claims handled by UK insurers
Solutions Division
-- Leading position in telematics based insurance technology confirmed
-- Continues to be industry pioneer with Video and Crowdsourcing contracts
Rob Terry, Founder and Executive Chairman of Quindell said: "The
Board is pleased to announce our twelfth successive quarter meeting
or exceeding market expectations in all key performance indicators.
Taking into consideration that volumes are subject to roll out,
execution and industry claims frequencies, the Board is confident
that the upper end of market expectations should be achieved for
the full year for 2014 and that current expectations for cash
generation shall be exceeded in 2014. It is now clear that in due
course, the opportunity to deliver a multi billion pound business
generating significant profits with associated positive cash flows
is within our grasp, subject to leveraging the significant market
lead available to Quindell."
Notes
1. Adjusted EPS is Profit after tax, excluding exceptional
costs, share based payments and amortisation, divided by the
weighted average number of shares in issue
2. Adjusted EBITDA is Profit before interest, tax, depreciation,
share based payments, amortisation and exceptional costs
3. Adjusted operating cash flow is cash generated by the
operation before exceptional costs, tax and interest
Q1 Trading Statement
The Group's first quarter of 2014 has continued to be a period
of significant progress for Quindell with it being a record three
months in terms of revenue, as well as the Group's key measures of
profitability and EPS. The Group has also, importantly, continued
its positive trend of exceeding guidance on operating cash flow
generation during this period of significant growth and now expects
to exceed current market expectations for cash generation during
2014.
Overall, gross sales for the Group totalled GBP162.9 million for
the quarter and Adjusted EBITDA was GBP65.9 million, an EBITDA
margin of approximately 40.5%. This Adjusted EBITDA result of
GBP65.9 million compared to previous guidance for Q1 of Adjusted
EBITDA of GBP50+ million. The Group has also continued its positive
trend of exceeding guidance in relation to operating cash flow
generation during Q1, with operating cash flow for the period of
circa GBP7 million ahead of prior guidance. Cash at 31 March 2014
was circa GBP150 million after paying out a significant amount of
cash in relation to acquisitions and investments completed in the
period, in line with the stated strategy for use of proceeds from
the GBP200 million fund raise completed in November 2013.
The Group's momentum in operating cash flow generation has
increased beyond prior expectations with new models being adopted
rapidly to improve the cash profile of the Group and with much of
the Group's debt collection now being undertaken by its own
specialist debt recovery team, "Compass Law". The management and
collection of cash from trade debtors continues to be a specific
area of focus during this period of significant growth for the
business. As a result, cash collection across the business is ahead
of plan by circa GBP7 million and full year guidance is increased
accordingly. This strong cash collection led to average trade
debtor days continuing to reduce slightly in Q1 compared to the
significantly improvement already achieved at the end of 2013 and
the Group expects to further significant reductions in trade debtor
days during the remainder of 2014.
The Group's Collaboration Model (which enables Quindell and
insurers to work together and to benefit in the reduction of car
hire durations, and the offering of initiatives such as cash
alternatives to car hire in certain cases) provides a fundamental
change to the cash profile of a significant part of the Group's
Services Division as insurer debt is settled within one month of
presentation of an agreed invoice.
The Group previously reported that its guidance was for circa
75% of the insurance market to sign up to the Collaboration Model
(mainly during the first half 2014) and this process is progressing
ahead of plan. Momentum in the pace of adoption of the Model
continues to grow with top tier insurers signing up on a regular
basis. An equivalent Collaboration Model for the prepayment of
legal costs is also continuing to be investigated by the Group, and
the significant interest that had been expressed by some major
insurers is being followed up with the expectation that this will
result in the acceleration of payments (the total value of payments
now being targeted is up to GBP175 million, resulting in the
potential for further significant cash generation beyond current
market expectations in 2014 - based upon current year end market
expectations of accrued income in relation to Legal Services) with
no significant loss of profitability, changing our industry model
for all future Legal Services revenues.
Services Division
The Group's Services Division had another strong quarter in
terms of its trading performance and development of new organic
business underpinning future growth. The Group is now actively
involved in some form in between 1 in 5 and now approaching 1 in 3
claims handled by UK insurers. This growth arose in a large part
due to the inclusion at the start of the period of the previously
announced new business, ensuring that the Group is now delivering
very significant organic growth in the first half of 2014 and
beyond. The Services Division has already announced further
significant contract wins which continue to scale in Q2 2014 and
therefore has no need to win any further new business to meet the
upper end of current market expectations for 2014, subject as
always to continued claims frequencies and other events beyond its
control in the market.
Solutions Division
The Group's Solutions Division has similarly experienced a
positive first quarter of the year, with particular traction in the
area of telematics insurance solutions continuing to be achieved in
the UK and in North America.
The Group also is pleased to announce that it has reached
agreement in principle on two significant contracts via its
subsidiary 360Globalnet for the implementation of Digital Video and
Crowdsourcing Solutions to significantly improve the claims process
initially for property claims but with applicability for all claim
types.
The provision of services and technology to one of the UK
largest direct insurers using 360Globalnet's live video streaming
and Withyouin5 video-enabled crowdsourcing service, enable early
claim resolution decisions to be made, thus significantly speeding
up the claims process for customers whilst also supporting
improvements in the management claims spend and the possible
identification of fraud.
These contracts will see the direct insurer use key elements of
360Globalnet's "Digital Strategy for Insurers" in its Property
Claims. It is anticipated that the two contracts over an initial
five year term represent a value of circa GBP20 million, with
additional contracts being discussed which could easily double
these revenues. All of the contracts under discussion exceed
current guidance for profitability within the Solutions Division.
The conclusion of these initial agreements in principle follows a
rigorous fifteen-month month proof of concept, delivering results
way beyond initial expectations and is based around a supplier
relationship, in its current form, since 2010.
Paul Stanley, Chief Executive Officer of 360Globalnet and Key
Advisory Board member of Quindell, said: "We are excited to
announce these contracts which represent the first major
implementation of totally new digital technology, using our
proprietary video over Internet platform 360Siteview and
Crowdsourcing Services Withyouin5."
Rob Terry, Founder and Executive Chairman of Quindell said "This
is a first in the Global Insurance Industry and we are pleased that
it has been implemented by one of the UK's largest direct insurers.
The agreements once again demonstrate Quindell and 360Globalnet's
ability to develop and deliver new market-leading models with
global application and we expect to be announcing a significant
number of further contract of this type and scale during 2014 and
beyond."
For further information:
Quindell Plc
Rob Terry, Founder and Executive Chairman Tel: 01489 864201
terryr@quindell.com
Laurence Moorse, Group Finance Director Tel: 01489 864205
moorsel@quindell.com
Cenkos Securities plc
Joint Broker and Nominated Advisor Tel: 020 7397 8900
Stephen Keys/Bobbie Hilliam
Canaccord Genuity Limited Tel: 020 7523 8000
Joint Broker and Financial Advisor
Simon Bridges
Bruce Garrow
Media Enquiries
Redleaf Polhill Limited Tel: 020 7382 4730
Rebecca Sanders-Hewett quindell@redleafpr.com
Jenny Bahr
Notes to Editors:
About Quindell Plc
Quindell Plc is a provider of sector leading expertise in
software, consultancy and technology enabled outsourcing in its key
markets being insurance, telecommunications and their related
sectors. Quindell enters 2014 with a run rate of gross sales
approaching GBP600 million and approaching GBP200 million of
EBITDA, and has announced new contract wins since the start of 2014
that amount to a further GBP500+ million due to start during 2014.
Our award winning business transformational, software, consultancy
and outsourcing solutions are recognised as delivering significant
savings and additional sales to our customers every year.
For further information, please visit www.quindell.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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