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Wednesday, September 26, 2012

Quindell Portfolio - Rapid growth, but barely scratched the surface

Quindell Portfolio Plc

Rapid growth, but barely scratched the surface

  • Quindell Portfolio is a leading provider of software, consulting and outsourcing services to a broad portfolio of clients, primarily in the insurance and telecommunications sectors.
  • Significant Growth – Since our overview note, Quindell has announced three further acquisitions and a major contract win.
  • Strong Interims – On 4th September 2012 the group announced strong interim results, which highlighted considerable revenue and adjusted EBITDA growth, among other developments.
  • Future Opportunities – As we stressed in our overview note, Quindell has over £500 million of contracts currently under discussion.
  • Upgraded Forecasts – In light of recent announcements, we have upgraded our revenue forecast for 2013 to £252 million from £247 million, and upgraded our 2012 and 2013 Adjusted EPS forecasts to 1.04p and 1.79p from 0.98p and 1.57p, respectively.
  • We recommend the shares as buy at 10.25p with an upgraded 25p target price.

    Click to Download Full Report

    Table: Financial overview
    Year to 31st Dec.
    2010A
    2011A
    2012E
    2013E
    Revenue (£m)
    0.2
    13.7
    154.3
    252.2
    EBITDA1 (£m)
    (0.1)
    6.7
    35.4
    64.3
    PBT1 (£m)
    (0.1)
    6.3
    34.1
    62.8
    EPS1(p)
    (0.09)
    0.73
    1.04
    1.79
    Dividend (p)
    0.0
    0.0
    0.0
    0.0

    Source: GECR and company
    Notes:1 Adjusted for exceptional costs and amortisation of intangibles

    Buy
    Target price
    25p
    Key data
    Share Price
    10.25p
    52 week high/low
    10.63p / 1.88p
    Primary exchange
    AIM
    EPIC
    QPP
    Shares in issue
    2,765m
    Market Cap
    £283.43m
    Sector
    Software & IT Services
    Valuation
    Historic P/E
    14.0
    2013 Forward P/E
    5.7
    Historic P/FCF
    21.1
    NAV
    £107.4m
    TNAV
    £35.95m
    Affiliations: None.
    Important: All disclaimer information can be found on the last page of the document


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