TIDMQPP

RNS Number : 2172J

Quindell PLC

01 April 2015

1 April 2015

Quindell Plc

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

Shareholder Circular Correction

On 30 March 2015, the Board of Quindell wrote to Shareholders advising them that the Company had entered into a conditional sale and purchase agreement to dispose of the Professional Services Division ("PSD") to Slater and Gordon Limited ("SGH") for an initial cash consideration of GBP637 million and further contingent cash consideration payable in respect of the future settlement of its clients' noise induced hearing loss ("NIHL") cases ("Disposal"). Words and expressions where defined in that Circular shall, unless the context provides otherwise, have the same meaning in this announcement.

It is noted on page 6 of the Circular that the profits attributable to the Professional Services Division were stated as follows:

"During the financial year ended 31 December 2013, the profits before tax generated by the Professional Services Division contributed in aggregate GBP82,500,000(1) to the Group. During the six months ended 30 June 2014, the profits before tax generated by the Professional Services Division contributed in aggregate GBP113,400,0002."

The Board has noted that there was a failure to fully transcribe profits related to entities forming part of the Disposal as disclosed in the Circular (predominantly in respect of iSaaS Technology Limited and Intelligent Claims Management Limited, entities previously included within the Company's "Digital Solutions" division in historic financial information). As a result, the corrected total profits attributable to the Professional Services Division are as follows:

"During the financial year ended 31 December 2013, the profits before tax generated by the Professional Services Division contributed in aggregate GBP96,000,000(1) to the Group. During the six months ended 30 June 2014, the profits before tax generated by the Professional Services Division contributed in aggregate GBP130,700,000 2."

The Company also confirms that during the financial year ended 31 December 2013, the adjusted profits before tax generated by the retained businesses (all save for those detailed as within the Professional Services Division) contributed in aggregate GBP6,800,000 to the Group (excluding the net gain on re-measurement of investments on becoming associates and associates on acquisition of control in the 12 months ended 31 December 2013 of GBP4,200,000 as announced in Note 9 of the 2013 Annual Report). Subject to audit, during the six months ended 30 June 2014, the adjusted profits before tax generated by the retained businesses contributed in aggregate GBP8,500,000 to the Group (excluding the provisional estimate of the gain on re-measurement of acquisitions/investments in relation to the Himex group in the six months ended 30 June 2014 of GBP14,500,000 as announced in Note 5 of the Interim Statement of 21 August 2014).

The Board also confirms the following:

   -- The Directors consider the Disposal to be in the best interests of Shareholders as a whole. The Directors have 
      received advice from Rothschild in connection with the Disposal. In providing advice to the Directors, Rothschild 
      has relied upon the Directors' commercial assessment of the Disposal. The recommendation detailed in the Circular 
      and repeated here was based on accurate and full information and is not impacted by the transcription error 
      highlighted above; 
 
   -- The Company intends to make a capital distribution to Shareholders as detailed in the Circular and not a 
      distribution by way of special dividend so as to try and ensure that the return of capital is tax efficient for 
      any private Shareholders; 
 
   -- 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 up to GBP500 million (representing in excess of GBP1 per share); 
 
   -- Further strategic detail in respect of the retained business will follow in the period following Completion; 
 
   -- Further non-core assets are expected to be disposed of during 2015; 
 
   -- It is intended that outstanding bank debt will be repaid on Completion; 
 
   -- Having undertaken its own review and considered the draft findings of PwC, the Board expects to conclude that it 
      will adopt a more conservative approach to accounting for revenue and profit in the Professional Services 
      Division which is the subject of the Disposal.  The Board has not yet finalised either the precise policies to be 
      adopted or their financial impact and so it is not currently possible to provide a definitive view of the 
      historical results on this basis although the changes will likely result in a reduction of revenue and profit; 
 
   -- The Board will continue to be strengthened following the Disposal with further announcements in due course; and 
 
   -- Re-branding and retained business re-launch strategy planning has commenced.

The Company will write to Shareholders enclosing this announcement and confirms that the General Meeting of the Company to approve the Disposal will be held, as previously detailed, at 10.00 a.m. on 17 April 2015 at Botleigh Grange Hotel, Grange Road, Hedge End, Southampton SO30 2FL.

The Company's securities are expected to be restored to trading at 3.45 pm today.

Notes

1. Profit in respect of the financial year ended 31 December 2013 represents an aggregation (after eliminating intercompany balances) of the figures derived from the unaudited management information used for the preparation of the audited accounts for that year and applies the accounting policies as detailed in the published annual accounts for that year. To the extent that Quindell Legal Services Limited, Mobile Doctors Limited and Quindell Business Process Services Limited (formerly Ai Claims Solutions Limited) are included in these figures, the information used in respect of those companies has been audited. The profits attributable to companies and businesses acquired by the Group during the course of the year ended 31 December 2013 are taken into account from the effective date of acquisition. As per the section headed "Independent PwC report and accounting policies" of the announcement by the Company dated 30 March 2015, the accounting policies adopted in preparing these numbers are now likely to change.

2. Profit in respect of the six months ended 30 June 2014 represents an aggregation (after eliminating intercompany balances) of the figures derived from the unaudited management information used for the preparation of the unaudited financial statements for that period and apply the accounting policies as detailed in the published annual accounts for the year ended 31 December 2013. As per the section headed "Independent PwC report and accounting policies" of the announcement by the Company dated 30 March 2015, the accounting policies adopted in preparing these numbers are now likely to change.

For further information:

 
 Quindell Plc                                      Tel: 01489 864 200 
 David Currie, Non-executive Interim 
  Chairman 
 Robert Fielding, Group Chief Executive 
 Stephen Joseph, Head of Investor Relations 
 
 Tulchan Communications                            Tel: 020 7353 4200 
 Susanna Voyle 
 Victoria Huxster 
 
 Cenkos Securities plc, Nominated Adviser          Tel: 020 7397 8900 
  and broker 
 Stephen Keys 
 Mark Connelly 
 
 Rothschild, Financial Adviser                     Tel: 020 7280 5000 
 Majid Ishaq 
 John Byrne

This information is provided by RNS

The company news service from the London Stock Exchange

END

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