More woes for Slater & Gordon
Shares in embattled law firm Slater & Gordon have continued to tumble after it posted a £263m loss and said that bad publicity is continuing to hamper the turnaround of the business.
The Australian law firm reported a A$425.1m (£263m) net loss for the six months to the end of December, from a loss of A$958.3m (£593m) in the same period last year.
The group’s results were affected by a A$350.3m (£217m) impairment charge relating to its 2015 acquisition of the professional services arm of UK-based Quindell, which has since been renamed Watchstone Group.
The firm also reported underperformance across its UK and Australian operations in relation to personal injury claims.
Andrew Grech, S&G managing director, said: “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.
“In Australia, our business leaders have had to combat almost two years of the effects of the negative publicity and sentiment.”
Earlier this month the firm admitted that the continued support of lenders is fundamental as current debt levels exceed the company’s total enterprise value. The company said it was still in talks with lenders to recapitalise the group before a May 26 deadline.
Analysts say the two most likely options for Slater & Gordon are a debt-for-equity swap or the issue of convertible notes to become shares for the creditors at a future date.
Shares in the law firm fell 21% to A$0.125 (7p) following the announcement, compared with an all-time high of more than AUS$8 in April 2015.
Slater & Gordon’s share price has collapsed over the last year, following its disastrous £673m acquisition of the professional services arm of Quindell, in the UK.
The firm employs more than 3,500 people across offices in the UK, including Manchester, Liverpool, Preston, and Chester.
