25 September 2013 – interim results/acquisition of stake in company
The group has announced interim results for the six months to 30 June showing a 2% decline in revenue to £79.1m with underlying pre-tax profit declining to £1.4m (2012: £3.0m). Earnings per share on the same basis fell to 2.3p (2012: 5.6p) whilst the interim dividend was reduced to 1.0p (2012: 1.9p). Cash balances at the period end remained strong at £5.0m (2012: £8.0m). These are clearly disappointing results although they has been well-flagged by the company previously. The second half is expected to produce a better performance helped by measures taken to improve efficiency and sales performance.
In an interesting development, Quindell Portfolio, a company previously featured in cityconfidential, has acquired a stake of 22.5% in the group from two institutional investors with payment for the shares being satisfied by the issue of new shares in Quindell. The company has issued 5.17 new shares to the vendors in exchange for each share in Nationwide and at Quindell’s closing price of 16.25p on 23 September this values the Nationwide shares at 84p each, a significant premium to the market price. The acquisition is part of Quindell’s strategy of having a direct ownership stake in repair service networks and should enable the groups to work together to mutual advantage. This must be seen as good news for Nationwide and we maintain our recommendation of BUY.