Shine Lawyers, the local firm associated with US legal celebrity Erin Brockovich, is firmly in profit but its business has been hit by a fall in work in the resources sector.
Net profit after tax was $3.9 million for the six months to December, a vast improvement from the $1.33 million for the same half the year before.
However, the latest half year results include a $5 million impairment of goodwill relating to the firm’s energy and resources practice, also sometimes called the land access practice.
On a like-for-like basis, revenue fell to $73.95 million from $78.47 million. On a statutory basis, revenue was up 15.5%.
The same six months in 2015 was hit by $14.4 million of provisions.
A short time ago, Shine shares were down 2.8% to $0.67.
The results in brief:
In December, Courtney Petersen resigned as CEO after less than two years in the job. There was no reason given for the departure but it came in the same month as a profit warning.
Managing director Simon Morrison, a founder of the law firm, says the underperformance of the energy and resources practice resulted in lower than expected revenue.
“The group has focused on ensuring that staff utilisation is maximised and operating costs are controlled tightly,” he says.
“More recently, we have undertaken a review of corporate overheads and are taking steps to improve efficiency and reduce costs.”
Morrison says the half year statutory net profit after tax of $3.9 million is solid and the group recorded record fees billed for the first half.
“The underlying business remains sound and we look forward to an improved second half performance,” he says.
He says there’s a strong pipeline of work in emerging practice areas, including class actions.
The company reaffirmed full year EBITDA guidance, but in the lower range, of $36 million to $40 million.
An unfranked interim dividend of 0.6 cents a share was declared.