After months of keeping the market on tenterhooks, embattled telematics play Quindell (LSE: QPP) finally released its full-year numbers for 2014 during Wednesday’s session. And they certainly don’t make for comfortable reading.
The business announced it had clocked up an eye-watering £238m pre-tax loss last year due to gigantic write-downs on the value of its assets, nosediving from the comparatively mild £8.6m loss recorded in 2013. In total Quindell has been forced to swallow £157m worth of impairments as well as £37.4m in exceptional costs.
With Quindell finally having stated its financials for the past year, chairman Richard Rose commented that “a great deal has been done in a short space of time to turn the tide, and I am confident in the Company’s long-term future and the potential of our businesses“. Quindell is now awaiting approval for its shares to begin trading again from tomorrow morning.
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Guess what? Another financial probe launched
While investors now have something quantifiable to go on, Quindell still remains very much a work in progress. Even though Quindell has bulked up its board with a variety of big-name appointments in recent months, the business is still to appoint a chief executive after founder Rob Terry exited last year following dodgy share dealings, rendering the firm still rudderless.
Meanwhile, much head-scratching continues over where Quindell will generate future revenues from following the £637m sale of its Professional Services Division to Australian law firm Slater & Gordon back in March. This area was responsible for the lion’s share of Quindell’s sales.
And while today’s results lifts some of the mystery surrounding what’s been going on at Quindell, the firm’s previous reporting practices are still being raked over. Indeed, the Financial Reporting Council today advised that it is launching its own investigation into the Quindell after restating 2013’s profit after tax of £83m to a loss of £68m, and reducing reported net assets from £668m to £446m.
It went on to add that “the directors and auditor have reported that it has not been possible, so far, for them to determine that all material errors and omissions arising from historic transactions have been identified“.
With Quindell also having announced in June that the Financial Conduct Authority is investigating the firm “in relation to public statements made regarding the financial accounts of the Company during 2013 and 2014“, investors should be prepared for plenty more mud to come out in the wash.
