Watchstone Group PLC (LON:WTG) – formerly known as Quindell - saw its shares bounce today after the technology firm reported a narrowing in first-half losses as it continues to reduce its cost base and simplify its structure following the troubles seen in its former guise.
In early morning trading, Watchstone shares were up 6.25%, or 5p at 85p.
READ: Watchstone Group, formerly Quindell, faces High Court battle with Slater & Gordon
The small-cap firm – focused on the insurance, automotive and healthcare solutions business – is still tackling legacy issues, including court proceedings from Australian law firm Slater & Gordon Ltd, which acquired Quindell's professional services arm in March 2015 not long after the firm was placed under investigation by the UK Serious Fraud Office over past accounting practices.
Watchstone said today it is continuing to co-operate fully with the ongoing SFO investigation, the only regulatory inquiry to which it remains subject.
In June, the company was issued High Court proceedings by Slater & Gordon in relation to the purchase, with the Australian firm seeking £637mln plus interests in damages for breach of warrant and fraudulent misrepresentation.
Slater & Gordon booked an A$879.5mln impairment in its results for the year ended in June 2016 as a result of issues with the acquired business.
READ: Watchstone: Change of name, change of fortune?
Chief executive to depart at year-end
Soon after the legal proceedings were announced, Watchstone’s chief executive officer, Indro Mukerjee announced plans to resign at the end of the year, to be succeeded by Stefan Borson, the current company secretary.
In today’s statement, the company reported a pretax loss of £2.1mln for the half year to June 30, down from an £8.1mln loss a year earlier, as a fall in revenue to £28.3mln from £30.2mln was offset by lower one-off costs and administrative expenses.
Watchstone said it remains on track with the strategy and execution of its plan to prepare its business for future disposals, as it looks to shrink its cost structure by the end of 2017.
The group also said it will continue to address legal and regulatory matters, and will continue to defend itself "vigorously" and file a "robust defence" in relation to the Slater & Gordon case "imminently".