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Watchstone knocked by changes to injury compensation

The firm, formerly known as Quindell, posted higher losses as millennials-focused car insurance business ingenie struggled
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Legal action by Slater & Gordon is still pending

Healthcare and telematics group Watchstone PLC (LON:WTG) posted higher losses as millennials-focused car insurance business ingenie struggled.

Formerly known as Quindell, Watchstone said Ingenie was affected by the reduction in the Ogden discount rate, which unsettled the young driver insurance market.

READ: Watchstone Group revenues stable but Quindell legal case looms

An impairment of £5.6mln was made to the 2017 numbers to reflect the reduction in future profitability, though revenue at the division rose to £14.4mln.

Healthcare is based in Canada and comprises clinics owner ptHealth and software group Innocare. Revenues here rose by 6% with an underlying profit of £0.7mln.

Group sales for the year were £44.8mln (£43.6mln) with a loss of £4.95mln (£3.4mln).

Watchstone is still overshadowed by the legal action stemming from the sale of its professional services business to Slater & Gordon.

The Australian law group is seeking £637mln in damages after writing off the entire cost of the acquisition. Watchstone insists there is no merit to the Slater & Gordon claim.

The company, which is also under investigation by the Serious Fraud Office over its accounts, increased its legal dispute provision by £2.93mln during 2017.

Shares were unchanged at 100p.

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In its interims, management undertook a full review of historic legacy agreements that led to a final US$721,000 final restructuring payment made against one agreement and an onerous contract provision on another resulting in a one-time write down for future expected losses of US$7mln with an associated US$4.1mln reduction in intangible assets to US$81.5mln.

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