Half Yearly Report

Quindell Portfolio Plc

("Quindell" or "the Group")

Interim Results

Quindell Portfolio Plc (AIM:QPP.L), the business transformation consultancy and technology enabled group, which exploits and enables industry change, announces unaudited interim results for the nine months ended 30 June 2011.

These interim results, which cover the period 1 October 2010 to 30 June 2011 following the decision to change the Company's year end from 30 September to 31 December, reflect the two acquisitions by the Company during the period together with the Group's ongoing central costs. They have been prepared by consolidating the results of Quindell Limited and Business Advisory Service Limited from their respective acquisition dates of 16 May 2011 (with seven weeks results included) and 20 June 2011 (two weeks of results included). As such, they are not representative of the current trading performance of the Company. Included below within Highlights are the six months results for Quindell Limited for ease of comparison.

Highlights

Note 1: Profit before tax, excluding amortisation, depreciation, net interest and exceptional costs as described in the Consolidated Income Statement.

Commenting on the results, Robert Terry, Chairman and Chief Executive Officer of Quindell Portfolio Plc, said: "I am delighted to be able to present these first set of results following Admission to AIM. We have made good progress in the weeks since the acquisition of Quindell Limited across a number of fronts including new strategic partnerships, contract wins, development of the Board and management team and integration of the newly acquired businesses."

For further information:

Notes to Editors:

About Quindell Portfolio Plc

Quindell, the business transformation consultancy and technology enabled group, which exploits and enables industry change was founded in 2000. The Group develops, provides and utilises its own multi-channel e-business based Enterprise Resource Planning and Business Process Management solutions and related services to facilitate efficient and effective management of customer acquisition and servicing within finance, insurance, telecoms, utilities and other related industries. Quindell provides consultancy on, and fully utilises its technology within its own Business Process Outsourcing operations, online strategies, permission based marketing, membership models and cross selling to maximise revenue per customer.

For further information, please visit www.quindell.com 

Introduction

I am pleased to present to shareholders the first set of interim results following the Company's readmission to AIM and recent acquisition of Quindell Limited, a reselling and sales outsourcing company with expertise in technology and sales and service Business Process Outsourcing. The business also completed in the period its acquisition ofBusiness Advisory Service Limited (BASL), one of the UK's leading business price comparison companies. These events, together with the change of the Company's name from Mission Capital PLC to Quindell Portfolio Plc which was approved by shareholders on 14 July 2011, mark the commencement of an exciting new period for the Group.

Quindell Portfolio Plc is a high growth, technology enabled group which exploits and enables industry change. We are a business transformation consultancy and technology company using leading practice business techniques to drive cross selling opportunities and improve profit margins. We combine technology and sector knowledge to generate savings for our clients. Throughout our business, we Watch market trends and drivers and Advise clients of the market propositions that will most benefit them.

The scope and scale to do this remains as evident as it ever has done, with continual improvements in telecoms, IT and communication making more technologies cost effective where only a few years ago costs were prohibitive. There is also now a renewed desire for both consumers and businesses to achieve greater efficiencies in their cost base.

Our strategy

Quindell has two main areas of business. We sell and use our own Business Process Management and decision support based technology solutions on a cloud based SaaS and/or initial licence fee with hosting basis. We also operate sales generation and service delivery based Business Processing Outsourcing (BPO), using both on and offshore resources.

Within these two areas we use technology enabled solutions, working with clients on brand extension, typically in industries that are subject to significant change. We operate in sectors where we have substantial knowledge, using model office reference environments to test and demonstrate our industry solutions. We have over 1,000 clients, ranging from SME to blue chip businesses within the legal, finance, insurance, telecoms & utilities and leisure & retail sectors.

As a Group we are firmly committed to growth, both organically and by acquisition, that enhances long term sustainable earnings per share. The Board intends to grow the business in four key ways:

·; By organically leveraging the cross-selling potential to the significant permission-based marketing customer base now available to the business

·; Through establishing joint ventures, to gain access to larger customer bases currently loyal to a particular brand;

·; Through acquisition of companies that benefit and broaden Quindell's existing range of solutions, either in the areas of software, BPO or model offices; and

·; We will also look to extend our geographic reach to enable Quindell to develop and sell globally.

The Group targets strong EBITDA conversion in all key areas of the business, and following its acquisition of BASL, the Group now operates with a South African call centre based sales operation and back office administration function. This offshore lower cost infrastructure will now be leveraged across multiple areas of the business. 

We have ensured that shareholder and management interests are aligned. Approximately 46% of the Company's shares are owned by members of the Board (over 80% when you include key staff) and are subject to lock-in arrangements. The executive bonus scheme is dependent on achieving 200% EPS growth.

Progress in period

The Group has already completed a number of important milestones in leveraging our technology and business process consultancy within both our own operations and with third party clients.

In June, we announced the agreement of a strategic alliance with 360GLOBALNET Limited ("360") to work in partnership in certain consultancy engagements in the insurance sector. 360 provides innovative decision-support technology, products and services primarily to the financial services industry. As part of this alliance, we invested circa £0.3m in specialist technology to use in model office environments to demonstrate the potential benefits of the application of disruptive technologies and leading practice techniques in reducing the cost of claims and enabling business process re-engineering within the supply chain.

We also announced in June our strategy of 'Watch and Advise' and confirmed our commitment to independence from any suppliers when dealing with business customers within our cost comparison operations.

June saw major contract wins for the Group and its associates with the signing of a number of major affinity group contracts for utilities and telecoms including an agreement to provide utilities contracts to circa 3,000 members of the Good Garages Scheme where we achieved an average saving of 22% for electricity and 17% for gas. We also signed a contract to allow access to a base of circa 15,000 customers of a major telecoms fixed line provider. Our BPO 'sales' organisation now signs over £1 million of business per week generating commissions of over £100,000 per week in addition to the multiple e-commerce franchises that are sold monthly to brand extenders.

Financial review

These interim results, which cover the period 1 October 2010 to 30 June 2011 following the decision to change the Company's year end from 30 September to 31 December, reflect the two acquisitions by the Company during the period together with the Group's ongoing central costs. They have been prepared by consolidating the results of Quindell Limited and BASL from their respective acquisition dates of 16 May 2011 (with seven weeks results included) and 20 June 2011 (two weeks of results included). As such, they are not representative of the current trading performance of the Company. 

Total revenues in the period were £1,822,000 compared with £154,000 for the prior full year and £154,000 for the comparative 9 months to June 2010. For the current period, the Software and Consulting division recorded revenues of £857,000 (47%) and the Business Process Outsourcing division, £965,000 (53%).

Adjusted EBITDA (which excludes exceptional costs relating to acquisitions, depreciation, amortisation and interest) totalled £847,000 compared to an adjusted loss of £81,000 for the prior full year and an adjusted loss of £39,000 for the comparative 9 months to June 2010. Profit after tax for the 9 months to 30 June 2011 was £17,000 (year ended September 2010, a loss of £99,000, and 9 months ended 30 June 2010, a loss of £47,000).

The Group's operating cash flow was an inflow of £898,000 for the current nine month period, with exceptional acquisition cash outflows of £362,000. The Group's cash balance at the end of June 2011 was £1,119,000.

Basic EPS for the 9 months ended 30 June 2011 was 0.005 pence per share, and Adjusted EPS was 0.210 pence per share.

Quindell Limited, which was the main contributor to the Group's results in the period and whose year end is 30 December recorded six month revenues to 30 June 2011 of £4,017,000 compared to £4,150,000 in the previous 12 months to 30 December 2010. Its adjusted EBITDA for the six months to 30 June 2011 was £1,725,000 compared to £1,775,000 for the year ended 30 December 2010. Cash increased by £612,000 to £699,000 in the six months to 30 June 2011.

Acquisitions

The Group completed two major acquisitions in the current period. The acquisition of Quindell Limited, which included its minority stake in LearnED Limited and interests in the contracts of TMC (Southern) Limited, and the acquisition of BASL.

Quindell Limited was acquired in exchange for 1,243,427,731 shares in the Company at a cost of £30.7m based on 2.47 pence per share. BASL, which at the date of acquisition has a forward order book of signed contracts, of approximately £2.7m. was purchased for a total cost of £8.2 million by issuing 270,000,000 shares in the Company valued at 3p per share, a premium of 21% on the admission price, and £100,000 in cash.

As both of these acquisitions were completed towards the end of the reporting period, we are still in the process of identifying separate intangible assets, however provisional estimates for fair values give goodwill values of £21.6 million and £6.0 million for Quindell Limited and BASL respectively.

Outlook

Market expectations for 2011 are visible when compared to HI run-rate, and earnout and warranted performance expectation of our acquisitions to date. Within our BPO Service business, initial prospect discussions are underway, and we are ready to launch our delivery capability in this area in the coming months. Looking further ahead, our internal and external business transformation projects provide visibility, combined with the above, to meet 2012 market expectations. Whilst major contracts are being discussed, wins are still needed to achieve the 200% EPS growth target from 2011 to 2012 on which the executive bonus scheme is based.

The Directors believe that the Group has significant potential for growth, both organically, and through earnings enhancing acquisition targets. Strategic agreements, initial proof of concepts and contract wins across all three main areas of the business during the first half of the year, have provided confidence for the Directors that the Company will continue to demonstrate significant growth in the second half of the year and beyond.

Condensed Consolidated Income Statement

for the nine months ended 30 June 2011

All results relate to continuing activities.

Condensed Consolidated Statement of Comprehensive Income

for the nine months ended 30 June 2011

Condensed Consolidated Statement of Changes in Equity

for the nine months ended 30 June 2011

Condensed Consolidated Statement of Financial Position

as at 30 June 2011

Condensed Consolidated Cash Flow Statement

for the nine months ended 30 June 2011

Notes to the Accounts

1 General information and basis of preparation

The consolidated interim financial statements include those of Quindell Portfolio Plc and all of its subsidiary undertakings (together "the Group") drawn up at 30 June 2011. Subsidiary undertakings are those entities controlled directly or indirectly by the Company. Subsidiaries are consolidated using the Group's accounting policies. Business combinations are accounted for using the acquisition method of accounting. The Board has considered whether the acquisition of Quindell Limited constitutes a reverse acquisition under IFRS 3 'Business Combinations'. Having considered the criteria for determining the acquirer and acquiree set out in appendix B of IFRS 3 the Board is satisfied that the acquirer is Quindell Portfolio Plc and therefore has adopted acquisition accounting for the business combination of those two companies.

This financial information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. Full accounts for the year ended 30 September 2010, which include an unqualified audit report, did not draw attention to any matters by way of emphasis, and did not contain statements under section 498 (2) or (3) of the Companies Act 2006, have been delivered to the Registrar of Companies.

The Group's audited consolidated financial statements for the year ended 30 September 2010 were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

During the period, the Company's reporting end date was extended from 30 September to 31 December, and accordingly these financial statements cover the nine month period to 30 June 2011.

Adoption of new and revised International Financial Reporting Standards

A number of new, revised or amended standards and interpretations are effective for the current financial year, but none have had any material impact on the condensed financial information.

Accounting policies

The unaudited consolidated interim financial information for the nine months to 30 June 2011 has been prepared in accordance with accounting policies that are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 September 2010, the key policies adopted being:

Revenue recognition

Revenue represents amounts derived from the provision of services which fall within the Company's ordinary activities after deduction of trade discounts and Value Added Tax. Revenue is normally recognised on provision of goods and services. Income from membership fees is recognised over the related membership period. Service revenue is recognised on an individual assignment basis, over the related assignment period, in line with work in progress or key milestones as applicable. On certain BPO sales and service contracts where there is fixed and contracted term lengths and no other services are required to be performed during the remainder of the contract, then under IFRS requirements these receivables under the contracts are recognised at the point of sale.

The Company derives its Service revenues from the provision of administration and consultancy services to third party clients or providing white labelled solutions and the provision of solutions and services clients.

Goodwill

Goodwill on the acquisition of a business is recognised as an asset at the date the business is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is not amortised but is reviewed for impairment at least annually.

Other intangible assets

Intangible assets with finite useful lives are initially measured at cost, or their fair value on date of acquisition, and amortised on a straight line basis over their useful economic lives, which are reviewed on an annual basis. The residual values of intangible assets are assumed to be nil. The estimated useful economic lives of intangible assets are as follows:

Property, plant and equipment

Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Depreciation is not provided on freehold land, including that comprising the golf course and the land element of the clubhouse. On other assets depreciation is calculated to write off the cost less estimated residual values over their estimated useful lives as follows:

Assets in the course of construction are capitalised as expenditure is incurred. Depreciation is not charged until the asset is brought into use. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term of the relevant lease. Residual value is calculated on prices prevailing at the date of acquisition.

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

2 Business segments

The Group has two reportable operating segments, which are separately disclosed, together with a central cost centre which includes unallocated corporate costs.

* EBITDA is shown before exceptional costs

3 Exceptional costs

4 Taxation

The tax charge of £nil (9 months ended 30 June 2010 £nil, year ended 30 September 2010 £nil) is zero due to the brought forward losses available to the Group.

5 Earnings per share

6 Cash flow

Cash generated from operations

Reconciliation of net cash flow to movement in net funds

7 Acquisitions

The Company made two significant acquisitions during the current period. These acquisitions are primarily responsible for the significant changes in the value of assets and liabilities as presented in the Condensed Consolidated Statement of Financial Position.

Quindell Limited

On 16 May 2011 the Group acquired the entire issued share capital of Quindell Limited. Quindell Limited develops, provides and utilises its own multi-channel e-business based Enterprise Resource Planning and Business Process Management solutions and related services to facilitate efficient and effective management of customer acquisition and servicing within finance, insurance, telecoms, utilities and other related industries.

The provisional fair value of the identifiable assets and liabilities of Quindell Limited at acquisition date are set out below.

The goodwill of £21.6 million comprises the value of expected synergies arising from the acquisition and the workforce, which is not separately recognised.

Business Advisory Service Limited

On 20 June 2011 the Group acquired the entire issued share capital of Business Advisory Service Limited (BASL). BASL is a business price comparison company, offering competitive electricity, gas, telecoms and insurance for businesses in the UK.

The provisional fair value of the identifiable assets and liabilities of BASL at acquisition date are set out below.

The goodwill of £6.0 million comprises the value of expected synergies arising from the acquisition and the workforce, which is not separately recognised.

The above values for the acquired identifiable assets and liabilities are provisional fair values as both acquisitions were completed close to the period end and consequently work is continuing to be carried out on their identification.

8 Trade and other payables

Included within Trade and other payables at 30 June 2011 is an amount totalling £2,858,000 (30 June 2010 £nil, 30 September 2010 £nil) representing the Board's estimate of the deferred consideration payable on Quindell Limited's purchase of TMC (Southern) Limited's contracts which is to be settled by the issue of Ordinary shares of 1 pence each in the Company.

9 Share capital

Ordinary shares of 1 pence each in the Company were issued during the period as follows:

The number of Ordinary shares in issue at 30 June 2011 amounted to 1,621,602,603 shares.

10 Post balance sheet events

On 14 July 2011, the Company's shareholders approved the change of name of the Company from Mission Capital PLC to Quindell Portfolio Plc.

On 14 July 2011 warrants totalling 52,558,866 entitling the holder to subscribe for Ordinary shares of 1 pence each in the capital of the Company were issued. The warrants are exercisable at the admission price of 2.47 pence per share and may be exercised in whole or in part at any time subject to the following expiry dates:

On 21 July 2011, the Company agreed to acquire 3% of Ingenie Limited, the new insurance brand for drivers aged 17 to 25, in exchange for £75,000 in cash, the issue of 5,000,000 1 pence Ordinary Shares in the Company valued at £150,000 based on 3 pence per share and certain discounts being applied to consulting work up to first live transaction date of the Ingenie system.

On 22 July 2011, the Group exercised its option to acquire the remaining share capital of LearnED Limited ("LearnED"), a technology company specialising in the areas of remote learning, e-commerce, work and time management, scheduling, GPS and telematics. The purchase of the shares took Quindell's ownership of LearnED from approximately 26% to 100%. The shares in LearnED were acquired by the issue of 11,840,000 1 pence Ordinary Shares in the Company.