Quindell Portfolio – 13.125p

3 April 2013 – trading update/new contract

A trading update from the company has confirmed that 2013 has started well – it has achieved a 100% record in converting its pilot agreements with potential customers to full relationships and this is providing the visibility of revenues and profits required to meet expectations for the current year.  These are pretty demanding with pre-tax profits expected to rise to over £120m compared with the £44m expected for 2012.  The results for last year are expected on 7 May.

The group has also announced that it has won a significant 5 year contract with the RAC which could be the largest contract ever won by the group.  The shares have failed to participate in the recent market rally and yet, if the profit forecasts referred to earlier are achieved, earnings per share for 2013 could be  2.4p meaning that the shares are on a prospective p/e ratio  of just 5.5x.  BUY.

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