WTG.L Regulatory News (WTG)

29 May 2015

Quindell Plc

("Quindell" or the "Company" or the "Group")

Completion of the disposal of the Professional Services Division

Board Appointments

Completion of the Independent Review and other matters

On 30 March 2015, Quindell (AIM: QPP.L) announced the proposed sale of its Professional Services Division to Slater and Gordon Limited ("Slater and Gordon") for an initial cash consideration of £637 million and further contingent cash consideration and certain Board changes that would follow completion of that disposal ("Completion"). Following approval from shareholders, the Solicitors Regulation Authority and the Financial Conduct Authority, Completion has now occurred.

Board Appointments and Resignations

The Company announces the Non-executive Directors that will today join the Board to be chaired by Richard Rose, Non-executive Chairman. The Right Honourable Lord Howard of Lympne, CH, QC will join the Board as Senior Non-executive Director. In addition, David Young and Tony Illsley will join the Board as Non-executive Directors and will chair the Company's Audit Committee and Remuneration Committee respectively.

Richard Rose: Mr Rose is Non-Executive Chairman of AO World plc, Booker Group plc, Crawshaw plc, Anpario plc and Blue Inc Limited. Previously, he has held a number of positions in organisations such as AC Electrical Wholesale, where he was Chairman from 2003 to 2006 and Whittard of Chelsea plc, where he was Chief Executive Officer and then Executive Chairman from 2004 to 2006.

The Right Honourable Lord Howard of Lympne, CH, QC: Lord Howard is the former leader of the Conservative Party, a distinguished lawyer and served as a Member of Parliament for 27 years. He filled many government posts, including Home Secretary, Secretary of State for Employment and Secretary of State for the Environment, as well as Shadow Foreign Secretary and Shadow Chancellor. After his retirement from the House of Commons at the 2010 General Election, Lord Howard was created a Life Peer. He was created a Companion of Honour in the Queen's Birthday Honours List, 2011. Lord Howard is the Non-executive Chairman of Entrée Gold Inc. and the Non-executive Chairman of Soma Oil & Gas Holdings Limited.

Tony Illsley: Mr Illsley has held a variety of senior business positions including Chief Executive of Telewest Communications PLC, President of Pepsi Cola Asia Pacific and Senior Independent Non-Executive Director of easyJet PLC. He is currently Senior Non-executive Director of KCOM plc, and is a Non-Executive Director of Camelot Global Services Limited and Camelot UK Lotteries Limited.

David Young: Mr Young qualified as an accountant with Arthur Andersen before joining Morgan Grenfell as an Investment Banker specialising in Mergers & Acquisitions. In 1994, he joined listed insurance broker Bradstock Group PLC, initially as Finance Director before becoming Chief Operating Officer and, ultimately, Chief Executive. On leaving, Mr Young joined Barchester Group, a strategic and advisory business aimed at technology businesses. Mr Young has held numerous non-executive positions and audit committee chairs with insurance and financial services businesses including Partnership Assurance Group plc, the British Gas Insurance group, the Key Retirement Group and is a consultant to Independent Audit Limited.

In addition, as announced on 14 April 2015, Mark Williams has joined the Board with immediate effect as Group Finance Director. Disclosures under Schedule 2(g) of the AIM Rules for Companies are set out below.

As previously announced, Laurence Moorse, Robert Bright, Robert Burrow and Vice Admiral Robert Cooling will today resign from the Board. David Currie will remain on the Board but will step down today as Non-executive Interim Chairman to become a Non-executive Director.

Robert Fielding, Group Chief Executive, has transferred to Slater and Gordon as part of the sale of the Professional Services Division and, accordingly, has resigned from the Board. The Company has commenced an external and internal search process to identify a suitable candidate for the Group Chief Executive Officer role and is making good progress in that search.

Independent Review

On 8 December 2014, the Company announced that PricewaterhouseCoopers LLP ("PwC") was being engaged to carry out an independent review into, inter alia, certain Group accounting policies and expectations as to cash generation into 2015.

PwC's review is now complete and as previously detailed on 30 March 2015, it has identified that certain of the accounting policies historically adopted by the Company, in respect of recognising revenue and deferring case acquisition costs in a number of the Group's disposed of businesses, were largely acceptable but were at the aggressive end of acceptable practice. PwC also identified that some policies were not appropriate, principally the noise induced hearing loss cases revenue and related balances that became significant during 2014.

Having undertaken its own review and considered the findings of PwC, the Company has concluded that it will adopt a more conservative approach to accounting for revenue and profit in respect of the now disposed of Professional Services Division. The Company will provide a definitive view of the historical results on a more conservative approach and the changes will result in a reduction of revenue and profit. The Company is in discussions with its auditors as to the financial effect on its historical results, and the conclusions of such discussions will be included in the audited results for the year ended 31 December 2014 which are expected to be published prior to the end of June 2015.

Return of capital

As previously announced, the Company proposes to use the majority of the proceeds of the disposal to fund a substantial return of capital to its shareholders. The cash proceeds of the disposal will be kept on deposit and managed prudently until a distribution is effected.

It will be necessary for the Company to undertake a reduction of capital as the most appropriate means of returning the proceeds of the disposal to shareholders. The Company's results for the period ending 30 June 2015 will be subject to audit review in advance of the reduction of capital. Consequently, the Board expects the reduction of capital and initial return of capital (which the Company will endeavour to structure in a tax efficient manner) to be made to shareholders before the end of November 2015.

As detailed in the Circular dated 30 March 2015, the Company has agreed to the placement of £50 million of the initial consideration into an escrow account for a period of up to eighteen months in respect of the customary warranties given to Slater and Gordon in the Sale and Purchase Agreement. In addition, Quindell's third party debt has been settled as at Completion.

The precise amount of any distribution to shareholders has not yet been determined but the Directors expect that, in aggregate, the initial tranche will be at least £1 per share and up to a maximum of £500 million in total. The distribution will be payable to shareholders at that time and the relevant record date will be published in advance of the capital return.

Commenting on the Board appointments, Richard Rose, Non-executive Chairman, said: "This announcement represents a significant milestone in the transformation of Quindell. We are pleased to be able to put in place a Board with the skills necessary to guide Quindell as it begins life as a very different Company."

David Currie, outgoing Interim Non-executive Chairman said: "I'd like to take this opportunity to thank the entire team both within the Professional Services Division and the rest of the Group, ably led by Robert Fielding, for reaching this outcome. This is a watershed moment for the Company and we wish Robert and all our colleagues moving to Slater and Gordon well as they begin their careers with their new employer. At Quindell, we look to the future with great confidence and excitement."

Schedule 2 (g) of the AIM Rules for Companies Details

Richard Sidney Rose (58)

Mr Rose was a previously a director of Select (Retail) Limited which, following his resignation, underwent a Creditors' Voluntary Liquidation in 2009.

There is no further information required to be disclosed in respect of Mr Rose pursuant to Schedule 2 (g) of the AIM Rules for Companies.

Rt. Honourable Lord Michael Howard of Lympne (73)

There is no further information required to be disclosed in respect of Lord Howard pursuant to Schedule 2 (g) of the AIM Rules for Companies.

Anthony Kim Illsley (57)

Mr Illsley was previously a director of Aggregator Limited which, following his resignation, underwent a Creditors' Voluntary Liquidation in 2008.

There is no further information required to be disclosed in respect of Mr Illsley pursuant to Schedule 2 (g) of the AIM Rules for Companies.

Mark Pritchard Williams (50)

There is no further information required to be disclosed in respect of Mr Williams in pursuant to Schedule 2 (g) of the AIM Rules for Companies.

David Thomas McAree Young (53)

Mr Young was a director of Bradstock Financial Services Limited, which was placed into liquidation in August 1999, 2 months after Mr Young retired as a director following the withdrawal of financial support by its parent.

There is no further information required to be disclosed in respect of Mr Young pursuant to Schedule 2 (g) of the AIM Rules for Companies.

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