TROUBLED Australian law firm Slater & Gordon has reported a loss of nearly \u00a3500m after a massive writedown on the value of its UK business.<\/p>\n
The listed company suffered another sharp fall in its share price on the news, which prompted the company to begin talks with its lenders over its debt pile of Aus $741m (\u00a3380.4m).<\/p>\n
The stock was down as much as 43.4% in morning trading, falling below A$0.50 for the first time since the company listed in 2007, but later recovered to be 27.7% lower at A$0.60.<\/p>\n
S&G, which has hundreds of staff in Manchester and Liverpool after it acquired a slew of consumer-facing firms such as Pannone, Fentons and Russell Jones & Walker,\u00a0 swung to a net loss after tax for the six months to December 31 of A$958.34m,\u00a0 (\u00a3492m) from a A$59.88m profit a year earlier, thanks mostly to a A$876.45m impairment of intangible assets.<\/p>\n
The lion’s share of that was an A$814.2m writedown on its acquisition of the Liverpool-based professional services arm of Quindell, the British insurance claims processor, which it acquired almost a year ago for \u00a3673m and was financed by an A$890m equity capital raising. <\/p>\n
S&G’s must now come up with a plan – and having its banking syndicate and financial advisers agree to it by the end of April – to repay its debt. If an agreement can’t be reached, the lenders will bring forward the payment of all debts to March 2017.<\/p>\n
For the six months to December 31, S&G lifted revenue by 82% to A$487.47m. The company will not pay a dividend. In December, the company scaled-back its earnings guidance, provided only in November, that it expected revenue of A$1.15bn and ebitda and other items of A$250m for the 12 months to June 2016.<\/p>\n
Andrew Grech, the company’s managing director, who reports said has offered to resign over the crisis at the company, said: “Our primary management focus now is on reinforcing the financial position of the group and improving the operational performance of the UK business.”<\/p>\n
S&G’s shares plunged fell by about 86% n 2015, and have lost more than a quarter of their value again this year.<\/p>\n","protected":false},"excerpt":{"rendered":"
Huge writedown on value of UK assets<\/p>\n","protected":false},"author":29,"featured_media":1731829,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"coauthors":[],"class_list":["post-731829","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-people"],"yoast_head":"\n