Slater & Gordon (ASX: SGH) shares fell to all-time lows this morning after the firm revealed a $10.6 million swing into the red for its December half results, as lockdowns led to less work in its personal injury law (PIL) business.
The Melbourne-based company, also known for its class action work, reported a $7.5 million loss compared to a $3.1 million profit in the previous corresponding period.
"While these results are disappointing, the fact that we have been able to largely absorb the impact of the significant disruptions caused by the COVID pandemic to date shows we have made reasonable progress in rebuilding the resilience of our business. However, we clearly have more work to do," CEO John Sommerville said.
"This half demonstrated how unpredictable the impacts of COVID and the government restrictions can be."
The personal injury law division accounts for the bulk of the firm's revenue, and was down 14.3 per cent at $71.8 million. Fees actually rose slightly, but work in progress-related revenue plummeted by around two-thirds as lockdowns in Victoria and NSW impacted file progression.
"It was pleasing to see the resilience of our Personal Injury Law fees, which demonstrates the hard work put in by our people in extremely trying times," Sommerville said.
At the time of writing SGH shares are down by almost 6 per cent at $0.63, having fallen to as low as $0.61 earlier this morning.
The law firm notes that until the December half its performance had not been materially impacted by the pandemic, and while there has been some improvement following the easing of restrictions, COVID-related restrictions on work remain which may continue to affect performance.
Class action fees also declined in the half by 5 per cent, although SGH says a highlight was securing compensation and an apology for First Nations survivors of abuse suffered as children at the Garden Point Catholic Church mission on Melville Island.
Slater & Gordon also highlights a continued focus on social justice with 73 employees working on a pro bono basis to support Afghan refugees with immigration applications.
Expenses have also gone up by 3 per cent, mostly because of ongoing investment in hiring talent to support growth, as well as a build-up of leave provisions arising from extended lockdowns in Victoria and New South Wales.
The firm has neither sought nor received Jobkeeper assistance at any time.
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