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.
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