Quindell PLC Shareholder Circular Correction (2172J)
April 01 2015 - 10:15AM
UK Regulatory
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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