LONDON (Alliance News) - Quindell PLC on Friday said it has completed the sale of its professional services division to Australian law firm Slater & Gordon Ltd for GBP637 million and announced the composition of its new board following the deal, including the appointment of former Tory party leader Michael Howard
Quinell also outlined the final findings from the review conducted by PricewaterhouseCoopers into its accounting policies.
Quindell said that following the sale of the professional services arm to Slater & Gordon, for GBP637 million upfront plus a further deferred cash consideration due on fees from the division's legacy noise-induced hearing loss claims, new non-executive directors have been appointed to the board under Non-Executive Chairman Richard Rose.
The most notable of the appointments is Howard, the former leader of the Conservative Party, who served in cabinet roles under Prime Ministers Margaret Thatcher and John Major. He has been appointed as senior non-executive director.
Also joining the board are David Young and Tony Illsley, both as non-executive directors. Young has held non-executive positions with the likes of Partnership Assurance Group PLC and British Gas Insurance in the past, while Ilsley currently serves as a senior non-executive director of telecoms company KCOM Group PLC and is a non-executive director on the board of two subsidiaries of Camelot, the operator of the National Lottery.
Mark Williams now takes up his position as the group finance director of Quindell following the deal, while his predecessor Laurance Moorse steps down.
Robert Fielding, Quindell's chief executive, steps down from his position in order to join Slater & Gordon, as the company has previously announced, and the group is making progress on identifying a replacement for him.
In addition to the sweeping board changes, Quindell said the review conducted by PricewaterhouseCoopers into its accounting policies has now been finalised. Quindell said the review concluded that the accounting policies historically used by the company in respect of recognising revenue and deferring case acquisition costs in a number of its disposed of businesses "were largely acceptable but were at the aggressive end of acceptable practice".
PwC also found that some of the practices used by Quindell were "not appropriate", in particularly regarding revenue from noise-induced hearing loss cases and related balances which became significant during the course of 2014.
Quindell said that, having undertaken its own review of PwC's findings, it has decided to adopt "a more conservative approach to accounting for revenue and profit" as regards its Professional Services arm, which has now been sold to Slater & Gordon. As a result, Quindell will provide a "definitive view" of the historical results using a more conservative accounting approach and said the changes will result in a fall in profit and revenue.
Quindell said it is in talks with auditors on the financial effect on its historical results and said these talks will be included in its results for 2014, which it said it expects to publish before the end of June.
Shares in Quindell were trading up 0.3% at 130.08 pence on Friday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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