LONDON (Alliance News) - Troubled insurance technology and outsourcing company Quindell PLC Wednesday posted a significantly widened loss for 2014 as a result of impairments and exceptional costs following a review into its accounts by audit firm PricewaterhouseCoopers earlier this year.
The company posted a pretax loss of GBP238.0 million for 2014, widened significantly from a loss of GBP8.6 million a year before, as revenue rose to GBP72.0 million from GBP61.0 million, as a result of a big jump in administrative costs, impairments of GBP157.0 million and other exceptional costs of GBP37.4 million.
These exceptional costs included exceptional share-based payments of GBP10.0 million, costs related to legal payments of GBP8.0 million and raising finance of GBP6.1 million, and a loss of GBP5.8 million related to when control was lost of a subsidiary.
The company's accounting policies have been revised and its prior year results adjusted in order to have a "more appropriate and conservative approach" for accounting for revenues. Under its old accounting policies incorporating discontinued activities the company would have posted a pretax profit of GBP175.1 million, up from GBP89.5 million, on revenue of GBP510.3 million, up from GBP294.3 million.
Quindell said a variety of factors had led the business to "become destabilised." Back in April 2014 the company was the subject of a report from Gotham City Research - a short-selling research outfit - which called the company a "Country Club Built on Quicksand." Founder Rob Terry resigned in November 2014 after scrutiny into his dealings in the company's shares.
On completing the sale of its professional services arm to Slater & Gordon, a law group headquartered in Australia, for GBP637 million in May, Quindell said that a review conducted by audit firm PricewaterhouseCoopers raised questions about some of the accounting policies in the businesses that had been sold.
The Financial Conduct Authority has since begun an investigation into public statements made regarding the company's results during 2013 and 2014, and Quindell said that it will co-operate fully with the FCA. It plans to set up internal structures to separate the FCA investigation from its operating business to ensure it can "deliver shareholder value without the distraction of reviews of the past."
The company said it will give a full restatement of its 2014 interim results when it publishes its interims for the half year to end-June.
"Investor trust in the company and its board was eroded and it became clear that decisive action was necessary to bring stability back to Quindell and rebuild the confidence of employees, investors, regulators, customers and suppliers alike. A great deal has been done in a short space of time to turn the tide, and I am confident in the company's long-term future and the potential of our businesses," the company said in a statement.
Quindell said it has requested for its shares to restored to trading, and expects for trading of its shares to resume Thursday at 0800 BST.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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