The latest RNS on the 5th August (see here) has many negatives that address past issues and many positives that create a solid foundation for the future.
The market will digest the information, both good and bad and I would expect once things have settled down that Quindell then start releasing good news.
This is anticipated as Quindell have with the latest RNS provided investors with all the known bad news. Only good news therefore left to release.
Some of the positives:
- At least £1 per share to be returned to shareholders (subject to court approval).
- Top quality CEO to be appointed soon.
- £535m cash in the bank. How many AIM companies have no debt and half a billion pounds?
- £55m in escrow account for any issues with SGH deal – SGH have publicly stated they are happy with the QPP deal. You would therefore expect this cash to be returned to QPP.
- £40m (Minimum) expected as QPP share from future NIHL income.
Some of the negatives:
- Restating of the accounts. This was expected and mainly impacts the part of the business sold to SGH.
- Investigations by the authorities. If fines are imposed on Quindell, these, based on the past history of companies in the same position would not be material. The SFO and FCA are in place to look after the publics interested and they would not therefore be looking to impose large fines that erode shareholder value. In my opinion they would target individuals who have gained from any wrong doing.
Private Investors should be looking forward to the next batch of RNS updates and the release of information that will push the share price North.
The presentation by Mark Williams (see here) provides detailed information regarding the 2014 accounts and provided me as an investor with great confidence that the business is in safe hands.