1 July 2013 – strategy update/acquisition
The group has confirmed that following its aggressive expansion by acquisition over the last couple of years, future growth will largely be organic with acquisitions only likely to be relatively small bolt-ons. Thus, for 2014, it is expected that between 80/90% of growth will be organic. The group has also announced that it has acquired accident rehabilitation and medical reporting specialists React and Recover. The acquisition was funded by the issue of 70.7m shares in Quindell at a price of 17.5p and the payment of £625,000 in cash. This equates to £13m with the shares issued at that price with React and Recover set to report post-tax profits of £2m in the year to 31 December 2013. The slowdown of the expansion programme will be welcomed by investors as it will enable them to judge the company’s progress more accurately – we continue to rate the shares as a SPECULATIVE BUY.