SHINE EXTENDS VOLUNTARY SUSPENSION AMID PROFIT WARNING
Written on the 25 January 2016
SHINE Corporate (ASX:SHJ) has extended its voluntary suspension from the ASX ahead of what is expected to be an announcement of a significant fall in forecast earnings.
In the latest rumblings from the competitive legal sector, the Brisbane-based legal firm indicated its earnings this financial year were under review and would be lower than originally forecast.
The directors provided an earnings guidance of between $52 million and $56 million in August last year.
Shine entered a trading halt early last week, later requesting to be suspended from the official quotation before shares were due to resume trading.
The company was expected to make an announcement this morning, instead extending its voluntary suspension.
"Shine Corporate Ltd's management is currently reviewing its work in progress (WIP) recovery rates and provisioning," the company says in a statement.
"The company expects a material reduction in its previous FY2016 EBITDA guidance pending finalisation of this review."
The move comes on the heels of a tumultuous time for listed law firms, headlined by Slater and Gordon (ASX:SGH) which has withdrawn its profit guidance for FY2016 following poorer than expected returns from work on its books.
Shares in Shine are locked at $2 each, while Slater and Gordon's share price has toppled to 66c apiece following an ASIC investigation into its books last year.
Shine's shares have fallen more than 56 per cent since April last year, while Slater and Gordon's shares are down almost 90 per cent from highs reached around the same time.
The company is yet to determine with 'sufficient certainty' its revised earnings guidance range. An announcement is expected to be released to the market on Friday 29 January.