SLATER AND GORDON LOSS TO TOP $1 BILLION

SLATER AND GORDON LOSS TO TOP $1 BILLION

EMBATTLED legal firm Slater and Gordon (ASX:SGH) is headed for a full-year loss of more than $1 billion after racking up more losses in the second half.

However, managing director Andrew Grech (pictured) has highlighted improvements made in the second half performance as the company tries to rebuild its fortunes after its troubled acquisition in the UK last year.

The Melbourne-based company has revealed today that it is expecting to post a $59.3 million loss in the six months to the end of June, which comes on top of the record $958.3 million loss recorded in the first half of FY16.

"Accordingly the full-year net loss after tax is expected to be $1.017 billion, which includes a significant level of goodwill impairment, non-recurring restructuring expenditure and refinancing costs," says the company in a statement to the Australian Securities Exchange.

Slater and Gordon's FY16 financial result, which is expected to be released next Tuesday, is laden with writedowns related to its $1.3 billion acquisition of UK-based Quindell early last year.

However, Grech describes the profit figures as a 'story of two different halves'.

"The results for the first half were extremely disappointing and well below expectations," he says.

"In the second half we have taken significant steps towards turning around the performance of the UK business.  Whilst the UK performance improvement program is still in its early stages, the second-half results indicate that our efforts are beginning to bear fruit."

The UK acquisition will boost Slater and Gordon's full-year revenue to $908.2 million, from $521.9 million in FY15. 

EBITDAW (earnings before interest, tax, depreciation, amortisation and movement in work in progress) in the latest half-year is expected to be $8.9 million, an improvement from the $58.3 million loss recorded in the first half.

On a normalised basis, full-year EBITDAW is expected to be $36.6 million.  

However, Slater and Gordon's net debt is expected to be higher, rising to $682.3 million from $614.1 million compared to a year earlier. The cause is a sharp drop in the pound sterling following the Brexit vote.

Slater and Gordon says the estimates released today are still subject to approval by the board and to final audit clearance.

The company's shares slipped more than 6 per cent today on the announcement, with the shares trading around 54c.

Read more about Slater and Gordon:

Get our daily business news

Sign up to our free email news updates.

 
Unpacking equity: Finding your funding fit
Partner Content
Armed with a growing business and a great opportunity, a business owner’s next challe...
Australian Business Growth Fund
Advertisement

Related Stories

Australian Ethical profit up six-fold as customer numbers rise

Australian Ethical profit up six-fold as customer numbers rise

Sydney-headquartered investment manager Australian Ethical (ASX: AE...

Hotel Property Investments CEO Don Smith passes away

Hotel Property Investments CEO Don Smith passes away

Following a successful career of almost two decades with Vicinity C...

Australian data protection authority received almost 500 breach reports in December half

Australian data protection authority received almost 500 breach reports in December half

While it’s no secret that cybersecurity attacks have posed a ...

The secret sauce of Coles’ and Woolworths’ profits: high-tech surveillance and control

The secret sauce of Coles’ and Woolworths’ profits: high-tech surveillance and control

Coles and Woolworths, the supermarket chains that together control ...