Watchstone Group PLC (LON:WTG), the beleaguered firm formerly known as Quindell, remained deep in the red after a string of impairment charges.
Pre-tax losses narrowed to £178mln for the year, a marginal improvement from the £205mln loss seen in 2014 after impairment charges linked to its businesses reached £113.5mln for the year.
The company, which renamed itself in November following a management overhaul, said it had nonetheless made “significant progress” in shoring up the business and that trading was in line with expectations.
“The new board has successfully refocused the group's strategic priorities while drawing a line under the past by working tirelessly to deliver the highest standards of corporate governance,” said non-executive chairman Richard Rose.
Sale of professional services division
Revenues were 2% lower at £58.8mln for the year ending December 31, while gross profits rose by a third to £25.4mln.
The £637mln sale of the group’s professional services division had delivered a £494.3mln profit. The disposal pushed total profit after tax to £274.9mln, compared to a loss of £374.5mln last year.
"The sale of our legal services business and the significant return of value to investors marked the start of rebuilding shareholder confidence and we are confident of continuing to deliver value,” said Rose.
Gross written premiums at ingenie, an insurance broker for young drivers, hit £20.7mln in the first quarter of this year, up 23% compared to the same period in 2015.
A series of scandals
2015 was a period of radical change, said the group.
Watchstone was shaken by a series of scandals after the Serious Fraud Office launched an investigation into the company last August.
“The group I joined in September 2015 was disproportionately complex and needed operational improvement,” said group chief executive Indro Mukerjee.
The company’s shares surged between 2012 and early 2014, peaking at 660p in February 2014, which valued the group at around £2.7bn.
Former boss Rob Terry built the group from a Hampshire country club to one of the biggest companies of AIM, before a series of rapid acquisitions went wrong.
Investor confidence
It restated past earnings figures and wrote down the value of previous acquisitions, which led to the SFO investigation.
The stock tanked in 2014 after a US hedge fund publicly probed Quindell’s business model.
“Watchstone now has solid foundations on which to build further and the board and the management team are committed to maximising the potential of the remaining businesses,” said Rose.
Investors appear to be slowly renewing their confidence in the group as shares rose just over 4% to 237.5p.