SLATER AND GORDON LOSS TO TOP $1 BILLION

Written on the 24 August 2016 by Nick Nichols

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:


Author: Nick Nichols

Latest News

BOQ WILL BOUNCE BACK, CEO SAYS

MORTGAGE growth of 30 per cent or greater will drive an improvement in the second half for the Bank of Queensland ...

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

QUEENSLAND WEATHER UPDATE: MAJOR AIRPORTS STILL IN BUSINESS DESPITE CANCELLATIONS AND DELAYS

DESPITE the storms and flash floods which are continuing to wreak havoc across several Queensland cities and towns...

STARS ALIGN AS GOLD COAST ICON REBRANDS

TODAY marks a shift in the Gold Coast's constellation as the iconic Jupiters Hotel and Casino officially rebra...

Related News

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter