It may be net-net nothing... but it still matters.
I agree because SGH's accounts due to their nature are more then most a matter of faith and where faith is required nothing is more damaging then breaching it.
Not even cash flow is useful to the outside observer due to how subsidiary acquisitions expenses flow entirely through investing cash flow and mismatch with the current revenues purchased that flow through the operating cash flow.
SGH is way to complicated for me to have a firm view on...
SGH is way to complicated for me to have a firm view on. But its fun to watch and what I really want to watch out for is if it continues to unfold badly will IMF fund a class action
I agree with that. For all the lumpiness of its earnings, IMF is a much simpler and more straightforward legal services business than SGH.
I actually thought SGH can fund a case against itself. It's kind of win-win...
If they win the case, may be their insurer can fit the bill while they get paid the fee.
If they lose the case, well... they proved that all is well.
And they get to increase WIP while they work on the case.
Perfect.
Never really occurred to me before, but SGH is a company of lawyers, while IMF is actually a company of financing law suits.
I view IMF more as an investment manager of an alternative asset class then a company of lawyers. Lawyering only really comes into it for case selection.
Slater and Gordon Limited (Slater and Gordon) advises that on Friday 24 July 2015, United Kingdom time, the claims management services agreement (Agreement) between Swinton Group Limited (Swinton) and its Professional Services Division (PSD) was ended, with effect from midnight on 31 October 2015.
The PSD has been providing first notification of loss services to Swinton, a leading UK insurance broker, and legal and complementary services to not-at-fault Swinton customers since December 2012.
The impact of the end of the Agreement is not expected to be material to FY16 earnings, but Slater and Gordon has elected in the current circumstances, to make this announcement nevertheless.
Quindell Plc (AIM: QPP.L), the provider of sector leading expertise in software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their related sectors is pleased to announce an extension of a material contract with Swinton, one of the UK’s largest insurance brokers.
Swinton has agreed to extend its relationship with Quindell to 31 March 2015. This extension follows a first year where a significantly improved customer journey was achieved compared to industry norms and to that experienced from previous partners. This contract is material to Quindell’s revenues and one of the largest signed to date.
Swinton is one of the UK’s largest insurance brokers with over 1.2 million auto policy holders and the contract will see Quindell service all aspects of the claims process.
Does not compute
Not material = material.
hmmmmmmm! Maybe they are not trained in statistics and are confusing their p level
It is entirely possible that, QPP expanded too quickly (or saw the opportunity to write up a lot of revenue and profits by chasing more cases, especially those noise-induced hearing loss ones) and SGH just happened to come in getting all these cases without much outlay while getting a share of the potential proceeds at the back end of the case cycle. However, I wonder if there were adequate quality due diligence on QPP's part in acquiring those cases, so the final outcome is highly uncertain.
Also, it is not clear how the non-NIHL cases are actually going financially... especially cash flows. It seems that the PSD is overall running cashflow negative, even if you take out the cash outlay related to the NIHL cases.
In case you missed it, Slater & Gordon shares staged an impressive turnaround yesterday after a heavy early sell-off.
And here's a clue to why.
Slater & Gordon's biggest shareholders appear to have stepped up their war with the company's doubters, pulling stock from prime brokers and creating a potential short-squeeze.
When Slaters opened down 20 per cent at about $2.70 on Thursday - thanks to Quindell's restated accounts - hedge funds were set for a feast day.
Instead, one major shareholder is believed to have pulled its 16 million Slaters shares from the lending pool, representing about one-quarter of the stock available for borrow. [Fingers were pointing at Fidelity International as the owner of the 16 million shares].
All of a sudden, hedge funds were scrambling. Almost all of the supply was out of the market and there was potential for a short squeeze which could undo all of their profits from Slaters' sorry situation.
Any thoughts on the SGH report? Very complicated to me...
A couple more posts from FT's long running series on Quindell.
http://ftalphaville.ft.com/2015/08/...n-complicated-indebted-and-yet-to-be-audited/
According to the cash flow statement, the company paid about A$50m in fees related to the A$1.3bn deal, or about 4 per cent of the consideration. They break down as $24m costs involved in the acquisition of businesses, A$9m for origination of loans, and an A$18m cost of raising equity.
Or to put it another way, Slater & Gordon spent more cash than its existing business produces in a year paying people to help with its takeover of a scandal hit UK basket case which, so far, has only lost it more money.
Any thoughts on the SGH report? Very complicated to me...
A couple more posts from FT's long running series on Quindell.
http://ftalphaville.ft.com/2015/08/...n-complicated-indebted-and-yet-to-be-audited/
I haven't read the SGH report... probably not much point, as it won't make much sense any way.
But this was a good laugh from the FT Alphaville article.
Amazing when you put it like that.
Ultimately, this story is about whether or not they've been overstating WIP. The jury is still out on that. Time will tell.
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