25th Sep 2013 08:33
LONDON (Alliance News) - Quindell Portfolio PLC Wednesday said it has taken a 22.5% stake in Nationwide Accident Repair Services PLC as Nationwide reported a decline in profits and revenues in the first half but said it expects an improved performance in the second half and beyond.
Quindell, which provides expertise in software, consultancy and technology, said it had bought a 14.5% stake in Nationwide from Miton Group and an 8% stake from Octopus Investments Nominees Ltd. in exchange for new Quindell shares. It issued 50.1 million shares, meaning Miton and Octopus get 5.17 Quindell shares for every Nationwide share they held.
"We are delighted to be announcing this latest strategic investment in line with our stated strategy of having a direct ownership stake in repair services networks that can take advantage of the volume we manage for our clients," Quindell founder and Chief Executive Rob Terry said in a statement.
"We look forward to exploring with the Board at NARS future opportunities for working together in the market leveraging our combined volume, driving forward the lowering of the costs of claims for the insurance industry and broadening our overall proposition in insurance outsourcing," he said.
Nationwide Accident Repair said it had been informed that Quindell doesn't intend to make an offer for the whole company and it hasn't yet started talks with its new investor about its investment or desire to explore future opportunities to work together.
"Nationwide...remains focused on providing its support service solutions to its customers and the board is confident that Nationwide's growing position in its markets leaves it well positioned over the medium term to create the leading integrated automotive support services group," it said in a response to the Quindell announcement.
Separately, Nationwide Accident Repair Services reported a pretax profit of GBP1.4 million for the
six months to end-June, down from GBP2.4 million a year earlier as revenues fell to GBP79.1 million, from GBP80.7 million.
Revenues were hit by a fall in insurance revenue, while margins came under pressure as its centres in the southwest saw a big decline in repair work after insurer Aviva didn't renew a big contract last year, and other centres got more, but less-profitable, work.
The results were in line with revised expectations after the company issued a profit warning in August.
"We are confident that the measures already adopted to enhance operational efficiency and sales performance will help to deliver an improved performance in the second half of 2013 and beyond," Chairman Michael Marx said in a statement.
The company recently bought vehicle accident repair specialist group, Exway, in the southwest to boost operations in that region, and is also increasingly targeting the insurance markets and newer fleet and retail markets.
It cut its interim dividend to 1 pence, from 1.9P.
Nationwide Accident Repair was up 23.6% at 61.2 pence Wednesday morning, one of the biggest rises on the AIM market, while Quindell was down 2.2% at 16.625 pence.
By Steve McGrath; [email protected]; @SteveMcGrath1
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