Listed legal services provider Quindell today sought to calm investors’ concerns by promising of £250m-worth of new contracts. It also announced that it had appointed a new chief executive, with founder Rob Terry remaining as chairman.
The company’s share price dipped to around 12p last week after it failed in a bid for a premium listing. It had previously been hit by a damning report from an American analyst.
Quindell, which is holding its annual general conference today, has announced a number of new and extended contracts worth around £250m a year.
These contracts, with terms from one to five years, are across the range of the group’s customers, including intermediaries, insurers and brokers. The company said these include one of the UK’s leading brokers, a subsidiary of a major global insurance company, which in the last few days has extended its relationship with the group for a period of five years.
In a bullish statement to the London Stock Exchange, Quindell said it expects to increase annual revenue from £650m to £900m. It added that in legal services alone the group plans to collect £500,000 a day during the second quarter of this year.
The statement said: ‘The group continues to have substantial cash resources and banking facilities available to fund it during this continued period of growth. The board is confident, in line with expectations, that the group will return to a broadly neutral operating cash position on a quarterly basis in the third quarter of 2014 and deliver strong positive operating cashflow in the final quarter of 2014 and beyond.’
The board also announced that Robert Fielding, currently in charge of the services division, will become group chief executive. Terry who last year became executive chairman, will remain as chairman.
Stephen Joseph, formerly with Bank of America Merrill Lynch, becomes head of investor relations; and Michael Bancroft, formerly with BTG Pactual, JP Morgan and UBS, is appointed as head of corporate development.
The share price rose 0.25% to 18p within four hours of the statement this morning.
The current value is still more than 50% down on the highest recorded price set in April, before a critical report from an investor called Gotham City Research. Quindell has said it intends to take legal action over the contents of the report.