Restructuring efforts from law firm Slater & Gordon (ASX: SGH) have failed to ward off a loss of $10.3 million for 1H19, as the group continues its path to recovery after a woeful foray into the UK market.
The result compares to a profit of $141.2 million at the end of 2017, a figure that was only supported by a one-off gain of $211.2 million after disposing of the UK business.
"Undoubtedly these results show that there is still work to do to continue to improve but they also show that we are heading in the right direction," says Slater & Gordon chair James Mackenzie (pictured).
In response the company has announced its senior lenders will be released from a voluntary escrow implemented in December 2017, formed as part of a refinancing and settlement scheme.
Once the escrow comes to an end tomorrow, all senior lenders except for Anchorage Capital Group - which snapped up the group from Barclay's in 2017 - will be free to trade their Slater & Gordon shares on the ASX or otherwise.
With results in the red and the looming liberation of trading for senior lenders, the market response has been bearish pushing SGH stock down 14.23 per cent to $2.17 at noon.
Improved class action revenues partially offset what would have been a weak revenue result thanks to reduced income from the group's personal injury law business.
Revenue came in at $75.1 million at the end of 2018, compared to $85.3 million in 2017.
Mackenzie explains the business now has a simplified operating model and a clearly defined service offering, putting the firm in a position where it can focus on the future and growing its core services.
"We have come a long way in the past 12 months," adds Mackenzie.
"This time last year we had just completed a recapitalisation of the business and were embarking on our transformation program."
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support