Quindell Portfolio PLC Announces ‘Positive Momentum’ During Q2

Quindell Portfolio PLC (LON: QPP) confirms EBITDA of at least £25m for the second quarter.

Maynard Paton

Maynard has worked at the Fool since 1999. He ran the Qualiport online portfolio on the Fool from November 1999 to September 2005 and was lead adviser for the Champion Shares & Champion Shares PRO stock-picking services from September 2005 to June 2011, at which point he moved to become Deputy Editor of the UK Fool. Prior to joining the Fool, Maynard worked for a year as a Poll Tax clerk and then for six years at the local authority's IT department in the murky world of ICL mainframes and COBOL programming. He relocated to Kent to join a financial services firm's IT department and there discovered the joys of stock market investing. As well as keeping an eye on share prices and his local housing market, Maynard's interests include karting, martial arts and entertaining his young family.

Published 28 June, 2013 8:14 am BST

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The shares of Quindell Portfolio (LSE: QPP) held steady at 11p during early London trade this morning after the insurance services company said it had experienced “positive momentum” during April, May and June.

The AIM-quoted firm claimed its second quarter had witnessed “multiple significant new contract wins“, with “particularly strong growth” seen within its legal services division.

Quindell also noted its second-quarter earnings before interest, tax, depreciation and amortisation was expected to at least match that of the first quarter, during which EBITDA was £25 million.

The group added that its margins were still ahead of earlier long-term guidance, despite the changes that came into effect on 1 April in relation to the Legal Aid, Sentencing and Punishment of Offenders Act.

Furthermore, Quindell said adjusted earnings had continued to remain in line with market expectations. Current forecasts suggest underlying post-tax profits may surge 57% to about 2.2p per share during 2013.

Rob Terry, the founder and executive chairman of Quindell, said today:

“The Board is pleased with the performance of the group in the second quarter. Quindell has secured a number of significant contracts, which underlines the strength of the offering. The group has a strong balance sheet, excellent debtor control, and more than sufficient funding to fund the growth plans of the management team.“

This morning’s contract announcement comes less than two months after the company published its 2012 results and refuted accounting allegations made by “active shorters“.

Those results showed acquisitions had helped underlying profits surge 680% to £49m, while the allegations concerned the size and structure of the group’s debtor ledger.

It remains to be seen whether today’s statement, which stated cash collection had continued to go according to plan “through a focussed approach to trade debtor management“, can reassure some of the company’s cynics.

The market’s mixed feelings towards Quindell currently leave the shares trading at about 5 times forecast 2013 earnings.

Of course, whether that lowly multiple, today’s progress update as well as the wider prospects of the insurance sector all combine to make Quindell a ‘buy’ is something only you can decide.

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> Maynard does not own any share mentioned in this article.