Quindell fails to convince

The results tracked this rapid growth, with cash profits surging from £6.7m in 2011 to £52.2m, and adjusted profit before tax up from £6.3m, to £49.2m, giving EPS of 1.4p, once exceptional costs of £5.3m related to acquisitions and financing are removed. The group generated adjusted operating cash of £38.8m during the year, leaving cash balances of £47.2m and a net cash position at the year-end. But this growth has been funded by some £90.9m raised from investors, so now that money has been spent the current year will give investors a better idea of potential returns.

Quindell was formed through a series of acquisitions in 2012 to provide cost savings of up to 20 per cent to a motor insurance industry suffering from falling margins as accident-related personal injury claims rocketed. Combining the claims handling and car-hire operations of Ai Claims, the legal services of Silverbeck Rymer and Pinto Potts, the medical services of Mobile Doctors, and a number of smaller technology deals, the group positioned itself for the 1 April ban on referral fees, or 'ambulance chasing', in the legal world.

Quindell has subsequently spent 2013 winning business, already announcing a number of major contracts. The business strategy hasn't paused for breath, either, with expansion overseas through the acquisition of Canadian insurance broking portal Iter8, and expansion in the property claims market through increasing its stake in 360GlobalNet from 19 to 60 per cent. House broker Cenkos is forecasting an increase in revenue to £443m, by the end of 2013, giving adjusted pre-tax profits of £127.3m and EPS of 2.5p.