Crisis-hit Quindell calls in PwC to probe accounts

Troubled outsourcer moves to calm City fears with independent review

Quindell has moved to patch up its battered reputation in the City, calling in auditor PwC to look over its books after a torrid year for the insurance outsourcer.

The auditor has been hired to carry out an independent review into Quindell’s “main accounting policies and expectations as to cash generation into 2015”.

PwC has begun work and is expected to deliver its report within weeks.

The review will attempt to draw a line under a terrible run for the firm, culminating in the departure of founder and former chairman Rob Terry as well as former finance director Laurence Moorse.

Both were forced to leave last month after taking part in a controversial share-dealing arrangement that sent the share price tumbling.

Interim non-executive chairman David Currie said the review was the “natural next step” to help prop up confidence in the business. Shares in Quindell fell as much as 8 per cent after the review was announced.

The AIM-listed firm also admitted it has taken less cash than expected at its professional services division during the final quarter.

The board said cash generation remains “a key focus” and measures are being taken to improve “the working capital profile of the group”. Short-sellers that have targeted Quindell have honed in on cash flow as a key issue.

The firm, which handles outsourced insurance claims, recognises a certain amount of revenue from claims while they are being processed.

PwC’s review is understood to have a particular focus on noise-induced hearing-loss cases, a growing part of Quindell’s business and a newer area of the market.

The board stressed that the business “remains comfortable” and said current plans were still achievable, “taking into account the group’s cash reserves and continued access to its three credit facilities”.

Chief executive Robert Fielding said: “The group’s business remains robust and we believe we have sufficient resources to deliver on management’s plans.”

The review caps a torrid year for Quindell. The troubles began in April when £1 billion was wiped off the company’s value by an aggressive note from US short-seller Gotham City Research.

Quindell denied Gotham’s claims and won a legal victory against Gotham after it failed to provide a defence in court.

Since then Quindell has failed to gain a main market listing; faced the collapse of a joint venture with the RAC and parted company with joint broker Canaccord Genuity. The shares have fallen 82 per cent since the start of the year. Today they lost 2.5p to 52.87p.