12th Jan 2015 10:58
LONDON (Alliance News) - Shares in Quindell PLC rose on Monday morning after the insurance outsourcing company made two appointments to its board, said trading remains "robust" and said it remains in talks over the sale of a still-unnamed part of its business.
Quindell said it has named Richard Rose as its non-executive chairman and has hired Jim Sutcliffe as its deputy chairman and strategy director.
Rose is currently chairman of both Booker Group PLC and AO World PLC, while Sutcliffe is the former chief executive of Old Mutual PLC and the former head of Prudential's UK business. Sutcliffe currently works as the chairman of the Codes and Standards Committee of accounting watchdog the Financial Reporting Council.
Rose will replace interim chairman David Currie, who will revert to his role as an independent non-executive director, and his appointment comes after the resignation of founder Robert Terry in November. Terry stepped down amidst a furore over a series of loan-for-stock dealings done by directors of Quindell.
Non-Executive Director Steve Scott also stepped down following the controversy, while finance director Laurence Moorse will be stepping down after its 2015 annual general meeting.
In addition to the appointments of Rose and Sutcliffe, Quindell said it has entered into a deal to receive consultancy services from BaxterBruce Ltd. That will see the company work with Marisa Cassoni, the former Royal Mail PLC finance director, and John Tomlins, a former colleague of Sutcliffe, as its consultants.
Quindell also said its current trading remains "robust", saying its management team is "satisfied" with case volumes, case settlements and digital solutions revenue. It said its earnings and revenue are subject to independent review by accountancy firm PwC and it would provide guidance following the conclusion of the review.
PwC was appointed to handle the review in early December and is looking into Quindell's main accounting policies and expectations for cash generation in 2015. Quindell expects the review to be completed by the end of February.
Operating cash inflow for the second half of 2014 was around GBP13 million, Quindell said, adding that cash generation is a key focus for the company and that it is continuing to work on schemes to improve its working capital. The company said the cash inflow figure is before exceptional items but including initiatives that concluded in the period.
Quindell said its board remains "comfortable" with its cash position, with gross cash at GBP69 million at the end of December.
It also said it is still in discussions under an exclusivity arrangement with one third party over the sale of an operating business and is in talks with a range of other parties regarding possible deals relating to a number other operating businesses. It did not provide any information on the parties involved in the talks, nor the parts of its business on the table.
Shares in Quindell were up 31% to 111.265 pence Monday morning, making it the best performer in the AIM All-Share index on the day. The rise comes after Quindell shares rose 30% last week following news UK hedge fund Toscafund Asset Management LLP has acquired a stake of more than 5% in the business.
So far in 2015, Quindell shares are up 180%, recovering part of the losses it made last year following the publication of a research report by Gotham City Research in April last year, when the shortseller accused Quindell of being a "country club built on quicksand".
In September, Quindell said it had received judgement in its favour in a libel action against Gotham City. But in spite of the victory, Quindell has consistently been forced to reassure the market since the Gotham report amid weakness in its share price, an issue exacerbated by the controversy around the share dealings.
By Sam Unsted; [email protected]; @SamUAtAlliance
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