Quindell Portfolio has issued a trading statement this morning, I suspect in response to the poor share price performance over the last 10 days which has seen the share price fall nearly 30%.
The Company says that it has had a strong fourth quarter and that the full year result will be "significantly ahead of market expectations". Volumes have been strong in the Services Division and since the 3rd December update " the Group has entered into additional long term agreements and its pilot volumes, both in regard to current run rates and anticipated volumes , have more than doubled."
The Company has also received SRA (Solicitors Regulation Authority) approval for Quindell Legal Services Limited to operate as an ABS (regulated organisation providing legal services but having some form of non-lawyer involvement).
So why have the shares fallen so much in the last couple of weeks? In my view a combination of factors: the share price had nearly quadrupled since July and were therefore ripe for some profit taking; there may have been more short term involvement in the shares that "panicked" on the fall exacerbating the situation and also there may have been concerns that the new proposals from the Government restricting legal fees for road traffic claims would hurt Quindell's business model.
Quindell has given a robust defence today saying that:
"even in light of the most recent government announcement to enter a period of consultation regarding whiplash injuries and raising the small-claims track threshold from £1,000 up to £5,000, the Board believes that Quindell is uniquely placed to operate post this suggested regulatory change, even at its extremes, and will continue to be able to operate a profitable business model during this period of significant industry consolidation."
Rob Terry, Chairman and Chief Executive said: With the changes to legislation within the UK insurance industry now fast approaching, our solutions and services based proposition of maintaining income and competitive advantage for our insurance clients and reducing costs for the overall insurance market is proving to be highly attractive. Quindell welcomes any proposals that protect consumer rights and champion industry change. Above all else, the market needs clarity. Our combined model and diversified offering means we can still operate profitably within the scope of the new proposals whilst supporting lowering the cost of claims for the industry as a whole.
According to this statement the Company should…
