By: 28 February 2017
Slater & Gordon share price falls again as it hangs on for survival

Slater & Gordon could be facing a fight for survival after reporting a A$425.1 million (£262 million) loss in its half year financial results.

The firm now has total total liabilities of A$1.3 billion which outstrip its A$1.2 billion of assets. Its share price fell to an all time low of A$0.125.

The group’s results were dragged down by a A$350.3 million (£216 million) impairment charge relating to its 2015 acquisition of Quindell, which is now known as Watchstone Group. S&G also reported underperformance in both the UK and Australia in personal injury claims.

Its UK legal operation saw revenue fall by 35% to A$75.6 million (£47 million), while Slater Gordon Solutions saw a drop of 40% to A$140.7 million (£87 million).

“While we have made progress in the UK in the past 12 months, the turnround is taking longer than we anticipated and billed revenue in segments of the business is lower than expected,” said Andrew Grech, S&G managing director.

“I would like to acknowledge the hard work of our UK team for continuing to deliver excellent client results across a wide array of service lines in this period of transition.

“In Australia, our business leaders have had to combat almost two years of the effects of the negative publicity and sentiment.”

Grech said that the firm was continuing to work with its lenders towards establishing a “sustainable capital structure” for the group.

“It is clear that based on current performance expectations the continued support of the Company’s lenders is fundamental, as current levels of bank debt exceed total enterprise value. Discussions with lenders on the recapitalisation plan are ongoing and the Board has reason to believe that successful outcome will be concluded in coming months.”

Slater and Gordon also confirmed that it had been served with two notices to produce documents by ASIC, the Australian financial regulator. It said that it was complying with investigations and hoping that they could be concluded as soon as possible.