Announcing widened losses, the former Quindell says it is preparing its remaining businesses for disposal
Watchstone, the group formerly known as Quindell, said it is preparing its remaining businesses for disposal, including its Ingenie telematics and broking business.
Announcing group losses from continuing operations of £4.9m for the year to December, compared with a prior year loss of £3.4m, chairman Richard Rose said, “We remain on track with the execution of our plan to prepare our businesses for future disposals.”
He said that the key consideration would be to maximise shareholder value.
Watchstone has made a number of disposals over the past year, and only two businesses remain in the group: Ingenie and Canadian healthcare operations.
|2017 £000||2016 £000||2017 £000||2016 £000|
|Underlying cost of sales||-7,983||-7,565||-24,582||-23,096|
|Underlying gross profit||6,446||6,362||20,298||19,588|
|Underlying administrative expenses excluding depreciation and amortisation*||-5,130||-4,949||-23,908||-24,490|
|Underlying Group operating loss||-4,681||-6,044|
|Total Group loss before tax from continuing operations||-4,950||-3,403|
For the year, Ingenie reported improved revenues of £14.4m (2016: £13.9m), but underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.3m, down from £1.4m a year earlier.
Chief executive Stefan Borson said Ingenie had “challenging end to the year”.
Instability in motor pricing following last year’s Ogden rate cut was felt particularly hard in Ingenie’s young driver market, with the effects continuing in to 2018, Borson said.
“These market challenges and the consequential impact on volumes and its revenues in the year has been reflected in a reduction of the long-term growth forecast for the business,” and resulted in an impairment charge of £5.6m for 2017, he said.
In December, Selim Cavanagh joined ingenie as chief executive from LexisNexis Risk Solutions.
Watchstone’s increased its provision for legal costs relating to Australian law firm Slater & Gordon’s £637m lawsuit over the sale of Quindell’s Professional Services Division.
“We are determined to fight off what we consider an unmeritorious claim,” Borson said.
“Slater & Gordon’s allegations of deceit and the associated breach of warranty claim are wholly without merit and should never have been advanced.”
He added that Watchstone is in “active dialogue” with Slater & Gordon regarding any deferred consideration due from noise induced hearing loss cases.