Quindell outperforms expectations following ABS conversion

Quindell Portfolio the AIM-listed company which received its alternative business structure (ABS) licences last month, has reported strong 2012 results, ahead of market expectations. 

In October Quindell Legal Services Limited acquired Pinto Potts Solicitors ("Pinto Potts") for an initial £1.5 million of cash plus 87,500,000 Quindell shares, with another £1.5 million in cash consideration being payable in the second half of 2013.  This was rapidly followed by the acquisition of The Compensation Lawyers ("TCL") in December, for a payment of £30,000 in cash and the issue today of 2,200,000 Quindell shares.

It seems that the acquisition strategy is proving to be a success. Quindell, which also offers outsourcing services in the insurance and telecoms sectors, expects revenue to be approximately £165m, with adjusted EBITDA of approximately £47m (including the figures of the acquired law firms for the period during which they were in partnership with Quindell prior to the issuance of the ABS licence).  Furthermore, Quindell is achieving an EBITDA margin of 28% - a figure that many firms would like to emulate.

Rob Terry, Chairman and Group Chief Executive said: 

“ Quindell Legal Services is now the UK's largest, claimant focused, personal injury law firm (based on forecast run rate volumes) having secured long-term relationships with some of the UK's most respected motor related brands during 2012. These long-term relationships are part of Quindell's wider claims outsourcing arrangements covering vehicle repair, hire, recovery, broader legal services, medical reporting and multi disciplinary rehabilitation services all helping to lower the total cost of claims for the insurance industry whilst protecting the quality of customer journey and the rights of the consumer.”

At the end of the day, the success of listed companies will be determined by their share price.  Qunidell’s shares are currently trading at around 14.75 – a very considerable improvement on the 52 week low of 4.70 which was seen last summer.  This will doubtless make the former Pinto Potts and TCL owners very glad that they took such a significant element of their sale consideration in Quindell stock.