LONDON (Alliance News) - Technology firm Watchstone Group PLC said Thursday it sunk to a half-year loss after revenue dipped and legal costs continued to bite, as it looks to shake-off legacy issues from when it was known as Quindell.
For the six months ended June, Watchstone sunk to a pretax loss of GBP3.5 million from a profit of GBP12,000 a year prior. This was after revenue fell to GBP19.7 million from GBP22.9 million the year before.
Profit performance was hurt by a non-underlying charges of GBP782,000 compared to GBP2.3 million in non-underlying gains the year prior. This was primarily driven by GBP2.6 million in legal and regulatory costs. The year prior such costs stood at GBP2.7 million but were offset by a GBP7.0 million in tax-related gains.
On an underlying basis - excluding one-off costs - the pretax loss deepened to GBP2.7 million from GBP2.3 million the year prior.
Watchstone continues to face legal claims made by Australian law firm Slater & Gordon alleging "deceit and the associated breach of warranty" related to its purchase of a Quindell business. Watchstone - known as Quindell until November 2015 - reiterated that it continues to see the claims as "wholly without merit" ahead of the trial expected in late 2019.
"We are making good progress in developing the underlying quality of our businesses and their long term value whilst simultaneously resolving the group's legacy matters as efficiently as possible," Watchstone Chief Executive Officer Stefan Borson said. "We remain confident of a satisfactory ultimate outcome for our shareholders."
Shares in Watchstone were 0.6% higher at 100.00 pence on Thursday.