A pre-close full year update from Quindell Portfolio (QP), the AIM-listed build-and-buy business process services (BPS) provider, shows significant growth from its recent acquisitions. Revenue for the 33 months to 31 December is expected to be £12.5m and adjusted EBITDA will be at £5.7m. QP's cash position is a better-than-expected £3.5m - the market was expectating £1.3m. Investors were pleased and pushed QP’s shares up 10%. There are no previous year comparisons because QP only came into being following the reverse takeover of insurance software and BPO provider Quindell by Mission Capital last May (see here). But in their last available results as separate companies, Mission Capital and Quindell made revenue of £3.1m (FY09) and £4.15m (FY10) respectively.
Although there is some organic growth here, most of this additional new revenue has come from the various acquisitions QP has made since last May. These include energy broker and utility consultant Business Advisory Service, technology provider LearnED, brokerage firm Maine Finance, and its biggest deal for medical evidence group Mobile Doctors. This completed in December 2011, and now gives QP access to some 2,500 medics that provide medical and legal reporting services for personal injury claims, with a claimed 11% market share.
The benefits of all this M&A should be felt in 2012. Barring any major hiccup, Mobile Doctors should really boost QP’s revenue since in its most recent year it made revenue of £27m. In addition, QP said that new contracts from the acquisitions are now worth over £6m annually. So it is confident that FY12 revenue run rate will be “a significant multiple of those reported for 2011”.
QP is led by Mission Capital’s founder Robert Terry, who was also the founding chairman and CEO of insurance BPS provider The Innovation Group (TIG). As we noted recently, TIG is now performing well under the management of CEO Andy Roberts and its platform-based BPS strategy (see TIG boosted by platform strategy). For its clients, QP has developed and markets a cloud-based business process management (BPM) platform, as well as a mobile workforce reporting system called Cloud Connect. As a much smaller, but clearly ambitious player in the insurance BPS space, QP is one we will be keeping an eye on.