Quindell PLC (QPP) Shares Soar As Revenue Doubles

Updated on

The Gowex saga is (mostly) over, but for another target of Gotham, the battle continues. Quindell PLC (LON:QPP) shares are soaring this morning as the company announced that first half revenue more than doubled. As we detailed earlier, Quindell bears include Gotham Research and Coatue Capital, while bulls include a famous UK hedge fund, Polygon. Right now shares are up 23% in London trading on the latest news from the company. Below are some highlights from the company’s the press release.

Released on Monday 14 July 2014

Quindell Plc
(“Quindell”, the “Company” or the “Group”)


Quindell Plc (AIM: QPP.L), a leading provider of software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their related sectors is pleased to provide a pre-close statement and trading update for the six months ended 30 June 2014.


  • Revenue of circa £355 million up 117% (H1 2013: £163.3 m) due primarily to strong organic and synergistic growth; businesses acquired in the last 12 months represented less than 10% of revenue
    • Solutions revenue of circa £62 million up 176% (H1 2013: £22.5 m)
    • Services revenue of circa £293 million up 108% (H1 2013: £140.8 m) driven by major organic contract wins announced during H2 2013 and H1 2014
  • Adjusted EBITDA1,2 of circa £155 million up 187% (H1 2013: £54.0 m) due to H1 2014 mix having an increased proportion of Solutions revenue and growth of Legal Services revenue
  • Adjusted EBITDA1,2 margin of circa 43% up over 10 percentage points (H1 2013: 32.3%)
  • Adjusted Profit Before Tax1,3 of circa £154 million up 193% (H1 2013: £52.5 m)
  • Adjusted EPS1,4 of circa 30 pence up 82% (H1 2013:  16.5 pence)
  • Basic EPS, EBITDA and Profit Before Tax are all expected to be ahead of their respective adjusted numbers

Quindell PLC Cash Flow and Debtor Management

  • Adjusted operating cash flow5 for the half year ahead of expectations and guidance with circa £51 million outflow compared to original guidance of £60 million outflow during planned significant growth in H1
  • Cash generation increasing with over £220 million of cash collected inH1 2014 – circa 67% of the value of total trade related receivables (including accrued income) as at December 2013
    • Cash generation represents circa £1.8 million of cash received per business day
    • Legal Services on track collecting circa £0.5 million per business day by the end of the period, targeted to rise to £0.75 million and £1 million by Q3 and Q4 respectively underpinning H2 cash guidance
    • Legal Services cash collection targets viable due to circa 110,000 cases in progress as at 30 June 2014
  • Collaboration model success in Hire and Repair continues to drive improvements in trade debtors with aging reducing to 4.6 months (H1 2013: 4.8 months) – year end target to be approaching circa 4 months
  • Cash at 30 June 2014 also ahead of plan at circa £84 million; Bank borrowings and other trade finance was circa £60 million

Quindell PLC Integration of Group’s Telematics Businesses

  • Himex and ingenie acquisitions completed with Group ownership now at 99.9% and 100% respectively
  • Both acquisitions anticipated to be earnings enhancing in 2015 and beyond

Quindell PLC Outlook

  • The Board is confident of meeting all its key performance indicators for full year market expectations (cash conversion, adjusted EBITDA and adjusted EPS) on full year revenue guidance of £800-900 million
    • Quindell’s success in driving down the cost of insurance claims and maintaining or improving its cash margin reduces turnover without claims volume reduction whilst increasing EBITDA margin %
    • The Board continues to be selective, turning away business to control growth and optimising cash flow £800 – £900 million of revenue provides the opportunity to exceed prior cash guidance in H2 2014
  • All of the above results in the Board’s future EBITDA margin guidance increasing to 35 to 40%
  • The Board guides, given anticipated scenarios for H2, breakeven or better Adjusted operating cash flow in Q3 and a significant Adjusted operating cash inflow in Q4 and confirms that with the cash resources available there is no need to raise further funds to support market expectations in 2014 and beyond
  • The strategic priority for the Group is to continue to focus on integration, delivery of strategy and cash generation whilst strengthening management and enhancing corporate governance as appropriate for the scale of the business, therefore the Board has budgeted to constrain growth as detailed above


Leave a Comment