Quindell Cash Allegations, who is Correct?

The self-styled Sheriff of Aim* has reiterated his allegations that Quindell have no cash.   

The following are indicators as to why cash is not an issue for Quindell.

Announcements and Actions from Board of Directors

1) NARS announcement
Quindell statement 20th November 2014 made it clear that their stake in the National Accident Repair business was not being sold.

If the business was looking for a cash injection this would be an easy route to c£8m.

2) Financial Director
The Group Financial Director is not stepping down until suitable replacement and board changes implemented. Laurence Moorse would not do this unless the projected financial information given to the market credible.

Reason being Laurence Moorse’s credibility would be zero until the figures are proven to be correct. He would find it very difficult to get another position as a Financial Director.

3) KPI Statements

Board of Directors have made several announcements stating that all KPIs will be achieved and market expectations met, including CEO Robert Fielding in an RNS on 10th November.

Cash Position Indicators

1. Legal settlement cash inflow per day increased to £750k in Q3 and is predicted to be £1m per day by the end of 2014. Quindell guidance is £30m – £40m adjusted operating inflow (before tax, interest and exceptionals) in Q4 and £100m in H1 2015.

2. Hearing Loss settlements have commenced and cash is coming into the business. Guidance with regard to cash takes no account of hearing loss settlement inflow.


3. NIHL cases settled earlier than the anticipated 18 months and at higher fees than anticipated. The impact of this will not be known until Quindell have completed their review. Review results are imminent.

4. The Solutions division is growing, and has a high conversion rate of profit to cash.


5. Insurers are paying within the collaboration protocol timescales of around 30 days which is reducing trade debtors.


6. The company over-delivers. Operating cash flow was £9m better than guidance in Q3.

7. Number if solicitors employed by Quindell according to SRA website increased again in November. Why would Quindell employ more and more staff if they have a cash issue?

8. Whistleblowers have contacted QPPSAG and confirmed suppliers are being paid on time and ahead of time. This includes Claims Management Companies and those working as consultants for the medical side of the business.


Summary

The cash position can not be finally put to bed until the year-end figures are released.

All indicators are year-end figures will deliver the cash inflow required to sustain a growing business.

In the unlikely event this isn’t the case the business only has to reduce the number of new cases its legal services business takes on. This would without question result in Quindell continuing as a sustainable business. The only impact would be the growth of this part of the business would stagnate.

Cash is not an issue for the business and I would not expect Quindell to make a statement about the obvious.

.

Sheriff of Aim*

Title has much in common with Idi Amin, ex President of Uganda, who wore a grand looking swimming proficiency badge on his military uniform.

Completely meaningless and as Adi Amin was so self-centered he never realised people laughing behind his back.

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