Quindell (LSE: QPP) — a provider of software, consultancy and technology-enabled outsourcing in the insurance, telecommunications and related sectors — is currently up close to 4%, following the publication of a trading statement for the first quarter to 31 March 2014.
The statement revealed that gross sales hit a record level, at £162.9m for the quarter, compared with £167.3m for the whole of the first half in 2013. Adjusted EBITDA was £65.9 million, substantially exceeding previous guidance of £50+m, and operating cash flow was around £7m ahead of of prior guidance.
The improvement in operating cash flow generation is attributed to the rapid adoption of “new models” for improving the company’s cash profile and the fact that much of the group’s debt collection is now handled by its own specialist debt recovery team. The company says it anticipates that market expectations for full year cash generation will be exceeded.
Quindell also says its plan to get around 75% of the insurance market to sign up to its “Collaboration Model” (in which Quindell and insurers to work together to reduce car hire durations or eliminate hire completely through incentives) is “progressing ahead of plan”, and that it’s continuing to investigate an equivalent collaboration model for the prepayment of legal costs, with significant interest having been expressed by some major insurers.
Commenting on the statement, founder and Executive Chairman Rob Terry said:
“The Board is pleased to announce our twelfth successive quarter meeting or exceeding market expectations in all key performance indicators. Taking into consideration that volumes are subject to roll out, execution and industry claims frequencies, the Board is confident that the upper end of market expectations should be achieved for the full year for 2014 and that current expectations for cash generation shall be exceeded in 2014.
“It is now clear that in due course, the opportunity to deliver a multi billion pound business generating significant profits with associated positive cash flows is within our grasp, subject to leveraging the significant market lead available to Quindell.“
At 38.4p, Quindell’s share price is up almost 180% on this time last year, compared with less than 4.3% for the FTSE 100.
