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UPDATE 1-UK's Quindell soothes investor cash concerns, names new CEO
June 19, 2014 / 8:30 AM / in 3 years

UPDATE 1-UK's Quindell soothes investor cash concerns, names new CEO

(Adds details, analyst comment, share movement)

June 19 (Reuters) - Quindell Plc, a British IT outsourcing and consultancy services provider, assured investors that it would meet full-year cash and earnings expectations, and appointed a new chief executive.

The company has been in the limelight since April when U.S.-based Gotham City Research questioned Quindell’s revenue model and profit quality.

Quindell’s AIM-listed shares jumped as much as 7 percent in early trade on Thursday. They have shed more than a quarter of their value since Gotham’s comments on April 22.

The company, which provides services mainly to the insurance and telecom industries, said cash collection was in line with expectations, with its legal services unit raking in about 500,000 pounds ($846,900) a day in the second quarter.

Quindell said it expected to post strong operating cash flow in the final quarter of this year.

“There have been some questions about the operating cash flow of the company,” Daniel Stewart analyst Sophie Blandford said, adding that Quindell saying it had collected half a million pounds a day in the second quarter was a “very positive thing”.

The company also said adjusted earnings per share would meet full-year market expectations, and that it expected to get 250 million pounds per annum from signing a number of new contracts and extending existing ones.

Quindell promoted Robert Fielding, who heads its services unit, to chief executive. It said former CEO and Chairman Robert Terry would retain his role as chairman.

Shares in Quindell were up 4.6 percent at 18.38 pence at 0813 GMT.

The shares plunged last week after the company could not meet the requirements for a premium listing on the London Stock Exchange. ($1 = 0.5904 British Pounds) (Reporting by Richa Naidu in Bangalore; Editing by Gopakumar Warrier)

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