Insurance claims outsourcer Quindell Portfolio (QPP:AIM) seems to be back in fashion. While this morning's services division teach-in would, I'm sure, have proved helpful for those City number crunchers less familiar with the story, that's not what's got the bulletin boards buzzing and the share price jumping.


No, it's news of rampant cash collection that led to the stock's rough 9.5% leap to 13p, more than double the plunging 6p nadir in May. Quindell has been hoovering in outstanding fees and payments from clients without a knuckle-duster or baseball bat in sight. You can read the details for yourselves, but in short, average trade debtor days have been slashed, easing one of the major concerns of sceptical market watchers.


This figure had ballooned last year from £31.7 million to £202.3 million, sparking a swathe of damning comment from some sections of the private investor community. Yet Quindell's acquisitions spree was the glaring omission, the seeming big jump a consequence of a first time consolidated balance sheet. Even otherwise savvy investors and commentators had failed to appreciate this important point at the time.


Chief executive and Quindell founder Rob Terry (pictured below) told me firmly at the time that he was more than comfortable with his firm's financial controls and explained his aim to cut average debtor days below six months, details I tweeted to followers. Funnily enough, that's exactly what he's delivered today, and it's not the first time Terry has delivered on a promise, he's produced the swathe of large contracts predicted too, including its biggest ever. Yes, overall debtors are up, to £243.9 million as of the end of June, but that 21% increase is comfortably in line with topline growth of 33% over the same period. That seems like a pretty tight grip on the balance sheet to me.

Rob Terry, CEO Quindell

True, Terry is clearly not everyone's cup of tea. I've chatted with a handful of City people whose remarks would fall in to the 'humorous, if disparaging' pigeon hole. But I've little time for personality battles, my eye is drawn to the investment opportunity only. And love it or hate it, Quindell has become a growth story that investors ignore at their peril. In less than two years it has emerged from the ashes of an Aim-listed cash shell and grown in to a multi-million pound business. It is destined for promotion to the main market perhaps later this year, a move that will almost certainly catapult this half a billion pound business in to the FTSE 250.


QUINDELL PORTFOLIO - Comparison Line Chart (Rebased to first)

I first picked up the story in June last year (see page 8 of PDF), with the stock trading at just 5.63p, and have followed it closely ever since, writing about the story again at the end of December. The share price has done a fair bit of jumping and slumping during those months, yet they today trade on a 2013 price/earnings multiple of just 5.2, based on Cenkos' 2.5p earnings per share estimate. That rating falls to 4.1-times the 2014 3.2p EPS. I still think that's hugely compelling, but investors will have to decide for themselves. Quindell posts half-year results to end June on Monday 19 August.

Issue Date: 14 Aug 2013