Embargoed for release 7am 9 July 2012
Quindell Portfolio Plc
("Quindell" or the "Group")
Pre-Close Trading Statement
Quindell Portfolio 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 report that turnover for the six months ended 30 June 2012 is expected to be circa £45m (Q1: circa £12 million, Q2: circa £33 million), with adjusted EBITDA (1) of circa £14.8m (Q1: £5.5m, Q2: £9.3 million).
· The Group has had an exceptionally strong first half of 2012, continuing the positive developments achieved in 2011
· Results for the six month period to 30 June 2012 is expected to be comfortably in line with market expectations with adjusted EPS (2) of circa 0.44 pence (Q1: 0.18p, Q2: 0.26p)
· Operating cash flow to EBITDA ratio of circa 60%, ahead of market expectations, and cash at the end of the period of circa £21 million (31 December 2011: £3.7 million)
· The Software and Consultancy Division
o Finished H1 2012 with new record level license pipelines
o Agreed multiple new contracts and extensions across key markets and a range of geographies
o Delivered over £8 million of revenue in Q2
o Technology recognised as market leading by various industry bodies and publications
· The Technology Enabled Outsourcing Division
o Acquisition of Ai Claims Solutions Plc
o Agreed acquisition of Silverbeck Rymer solicitors
o Announced its first major new contract valued at circa £120 million over next three years
o Signed significant new business towards the end of the period for legal services, accident management and credit hire, increasing run rate volumes
o Our core brand extension businesses have continued to trade ahead of business plan
· The Board remains extremely confident of meeting market expectations for the full year
1. Adjusted EBITDA is Profit before interest, tax, depreciation, amortisation and exceptional costs relating to acquisitions and their integration
2. Adjusted EPS is Profit after tax, excluding exceptional costs and amortisation, divided by the weighted average number of shares in issue
H1 2012 Pre-Close Statement
The first six months of 2012 have continued to be a period of significant progress for the Group.
As announced on 4 July 2012, the Group's Software and Consulting Division finished the first half of 2012 with licence pipelines at new record levels. During the quarter we agreed multiple new contracts and extensions to existing client contracts across our key markets, being Insurance and Telecoms, and a broad range of geographies including the UK, South Africa, North America, Australia and in Continental Europe. Our clients now include blue chip insurance or telecoms brands in each of these major markets with a mixture of "on premise" and "software as a service hosted applications", demonstrating the viability and global applicability of our industry technology solutions.
Second Quarter revenues including initial licence fees, other success or milestone based fees and other software and consulting revenues in combination exceeded £8m in a quarter for the first time. This has resulted in the Software and Consulting business delivering over £11m revenue in total for the first half of 2012. These new contracts, together with our new business pipelines, helps to further underpin market expectations for this division for the full year 2012 and beyond.
In addition we have continued to move forward the industry recognition of our insurance technology solutions with inclusion in independent market research by Celent in their insurance industry technology reports and with our 'Challenger ICE' insurance claims solution being shortlisted for the Technology Award in our joint submission with insurethebox for the 2012 British Insurance Awards.
The first half of 2012 has also been a period of significant progress for our Technology Enabled Outsourcing Division. In January, the Group announced that it had agreed terms to acquire Silverbeck Rymer solicitors, and this contract was concluded, subject to obtaining Solicitors Regulation Authority and FSA approvals, in June 2012. In April 2012 the Group completed its acquisition of Ai Claims Solutions Plc.
In May 2012 we were pleased to be able to announce that we had won a contract worth circa £120 million over a three year period, which was the first of what we anticipate will be a number of major deals that use a combination of one or more of our insurance outsourcing service offerings. In addition to this major contract, our legal services, accident management and credit hire outsourcing businesses have signed significant new business, increasing run rate volumes towards the end of the period. The pipeline is also healthy at the moment with over £500 million of contracts currently under discussion. During the past six months, our core brand extension businesses have also continued to perform well, trading ahead of business plan and generating strong cash flows.
Overall, EBITDA increased relative to 2011 as the Group benefited from a combination of the growth from the newly acquired businesses, cross selling between the Group's subsidiaries and further integration savings. The result was that adjusted EBITDA1 is expected to be circa £14.8m, an EBITDA margin of approximately 33% (Q1: £5.5 million Q2: £9.3 million).
As previously indicated, the Group continued to generate good levels of cash from its operations during the six months to 30 June 2012, with an operating cash flow to EBITDA conversion ratio of circa 60% and with the Group's cash balance at the end of the period being approximately £21 million (31 December 2011: £3.7 million) together with drawn down working capital facilities relating to acquisitions of circa £30 million, which have ample headroom for the anticipated growth.
The Board remain extremely confident of meeting market expectations for the full year.
Rob Terry, Chairman and Group Chief Executive of Quindell, said: "With the integration of our core insurance outsource services operations over the last six months, the good performance of our core brand extension business and with continued growing demand for our technology, we have been able to deliver an extremely strong first six months of 2012. Our combined offerings are generating a great deal of interest in the insurance market, which has surpassed even our own expectations. The team and I are looking forward with confidence to the remainder of 2012 and the opportunity of continuing to help our existing and prospective clients.
As a result, the Board remain extremely confident of meeting market expectations for the full year and beyond and believe the Group's ability to do so is clearly demonstrated by the 0.26 pence EPS achieved in Q2 prior to the Group having the earnings enhancing benefit of Silverbeck Rymer that commences in the second half of the year. "
For further information:
Quindell Portfolio Plc
Rob Terry, Chairman & Group Chief Executive
Laurence Moorse, Group Finance Director
Tel: 01329 830 501
Tel: 01329 830 543
Cenkos Securities plc
Nominated Adviser and Broker
Stephen Keys / Adrian Hargrave (Corporate Finance)
Alex Aylen / Andy Roberts (Sales)
Tel: 020 7397 8900
Redleaf Polhill Limited
Tel: 020 7566 6720
Notes to Editors:
About Quindell Portfolio Plc
Quindell Portfolio Plc is a provider of sector leading expertise in Software, Consulting and Technology Enabled Outsourcing in its key markets being Insurance, Telecommunications and their Related Sectors.
Quindell joined the market through Mission Capital Plc, now renamed Quindell Portfolio Plc. The Company was readmitted to the market on 17 May 2011 following the acquisition of Quindell Limited prior to the immediate acquisition of Quindell's technology and outsourcing partners. In December 2011, Mobile Doctors Group Plc was acquired increasing 2012 run-rate revenue to over £50 million. On the 1 April 2012, Ai Claims Solutions Plc became a subsidiary of Quindell, increasing run rate revenue to over £150 million.
Our Industry Sectors
In today's digital world the line between traditional industry sectors continues to blur, however the focus on tight service management is common to them all. We believe that excellent customer service, tight cost control and integrated supply chain management is not the prerogative of any single industry sector and with our solutions in multiple industry sectors savings of over 20% against industry norms are being delivered to the bottom line.
The pressures on an organisation can come simultaneously from multiple directions including the need to add customers, increase wallet share, reduce costs and improve customer satisfaction. At Quindell we have the People, the Processes and the Supply Chains, underpinned by our sophisticated Champion and Challenger Business Process Management Technology Platform and Industry Solutions to help our customers tackle these efficiently and effectively.
With a clear understanding that having the best products and services on offer is not always enough and that getting your customers to use or adopt them is key, effective conversion lies at the core of our unique Champion and Challenger tools and techniques. Using these solutions Quindell has helped its customers achieve sales and service conversion rates ranging from 75% to 90%, way above industry norms. But life does not stand still, and complacency can kill any business, so the embedded Champion and Challenger continual improvement focus of our Learning Solutions is at the heart of all we offer. Using our industry insight and expertise, Quindell takes the holistic view of our client's challenges.
For example, when considering the Insurance industry today where 50% of the cost of an auto claim is associated with Personal Injury, including legal services, medical reporting and rehabilitation, it is clear that an organisation will not be able to achieve the levels of savings and customer satisfaction desired without addressing the injury to the driver as well as the repair of the vehicle. This is why at Quindell we have designed our insurance solutions and supply chains to address the full end to end cycle, with the ability and expertise to treat an injured party as well as repairing their vehicle. This makes Quindell a truly unique and ethically based proposition for the insurance industry today.
Quindell Portfolio's companies have worked with over 2000 brands from Small to Medium Enterprises and Blue-chip organisations around the globe. Today we count a number of the world's top Insurance and Telecommunications blue chip companies within our client base, as well as hundreds of customer centric organisations working in both the distribution and supply of their services.
Our award winning Business Transformational, Software, Consulting 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