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Watchstone hit by impairment charges as loss narrows to £178m

Published 27/05/2016

Insurance outsourcer Watchstone posted an improved annual pre-tax loss of £178 million
Insurance outsourcer Watchstone posted an improved annual pre-tax loss of £178 million

Insurance outsourcer Watchstone remains deep in the red after coming under pressure from a string of impairment charges.

The embattled firm - known previously as Quindell - posted an improved annual pre-tax loss of £178 million, down from losses of £205 million in 2014.

But its turnaround was hampered after impairment charges linked to businesses within the group reached £113.5 million for the year, down from £129.1 million.

The company - which overhauled its management team and renamed itself Watchstone in November - said it had made "significant progress" in shoring up the business, with overall trading in line with expectations .

Shares were up more than 1%.

Group chief executive Indro Mukerjee said the firm he joined in September was "disproportionately complex and needed operational improvement".

But he added it had "made strong progress" towards its "key objectives in the last three quarters".

Revenues were 2% lower at £58.8 million for the year ending December 31 2015, while gross profits stepped up 33% to £25.4 million.

Gross written premiums at ingenie - a car insurance broker for young drivers - hit £20.7 million in the first quarter of this year, up 23% compared to the same period in 2015.

It added that average revenues per clinic at healthcare company ptHealth were also up 12% over the period.

The firm said the £637 million sale of its professional services division had delivered a £494.3 million profit.

Non-executive chairman Richard Rose added: " 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.

"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."

Watchstone has been rocked by a series of scandals, with the Serious Fraud Office launching an investigation into the company last August.

Its shares surged between 2012 and early 2014, reaching a height of 660p in February 2014 - valuing the group at around £2.7 billion - but the stock plunged later in 2014 after a US hedge fund publicly questioned the firm's business model.

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