The share price of Quindell (LSE: QPP) fell 3p, or 8%, to 36p during early trading this morning after the AIM firm announced preparations for a full listing on soaring profits in 2013, and the company expects to join either the FTSE 250 or FTSE 100.
Quindell’s profit increased 202% to £107m in 2013, while revenue increased to £380m from £163m a year earlier after performance from the technology business significantly beat expectations.
More than 50% of technology revenue came from telematics — otherwise known as “black box” insurance — which offers personalised car insurance, reducing costs based on how well motorists perform.
In total, software and consultancy revenue increased 168% to £80m. Of those sales £34m were in the US, which was a strong growth area for the insurance outsourcer, and the group is confident its European success is repeatable across the Atlantic.
Rob Terry, Quindell’s founder and executive chairman, commented:
“Trading in 2014 [is] ahead of plan for all key performance indicators, being profitability, cash generation and EBITDA margin. We are determined to ensure we achieve the optimum valuation for the Company’s shareholders, the best and most innovative services and technology for our clients, and a great place to work for our staff. All of this gives me and our team, immense confidence in our ability to grow from this platform and continue the success in 2014 and beyond exceeding current market expectations.”
Adjusted earnings per share hiked 75% to 2.5p and the group claims it has “sufficient working capital resources” to exceed 4p earnings per share in 2014.
A maiden dividend of 0.1p was announced and a progressive dividend policy has been adopted. If you buy now then you can secure a dividend yield of 0.5% in 2014.
Of course, the decision to ‘buy’ — based on those ratings, today’s results and the wider prospects for the telematics industry — remains entirely your decision.
