Slater and Gordon Limited is maintaining its profit guidance despite foreshadowed changes in regulations which could impact its UK business.
The law firm was punished by investors last week, its shares losing three-quarters in value in a week, after the British government announced proposals to limit compensation for road accidents, a big part of Slater and Gordon’s business in UK.
Its shares today clawed back some of the losses. A short time ago, they were up almost 40% to 96 cents.
Today Slater and Gordon released a statement to the ASX reaffirming its 2016 financial year guidance of $1.15 billion in fee revenue and $205 million in earnings.
The company says it’s difficult to assess the impact of any changes to the law relating to road traffic accident whiplash cases. Slater and Gordon said:
Assessment of the impact of any changes to the law relating to road traffic accident whiplash cases on the 2017 financial year and beyond is difficult given the lack of detail available at this stage, the fact that the Ministry of Justice has foreshadowed that the consultation process will not commence until January 2016 and that the earliest date of implementation for any changes to the recoverability of general damages in minor whiplash cases will likely be April 2017. On that basis the full impact of any changes may well not have effect during the course of the 2017 financial year.
Group managing director Andrew Grech says the the proposals are not expected to have a material impact on the business in the UK, given practice diversity and the profile of clients.
“It is also important to note that the proposals (even if enacted in their current form) do not eliminate the right to claim compensation, or the opportunity for people injured in road traffic accidents to obtain advice and assistance with the claims process,” Grech says.
He says the business is well positioned to continue to be a leading provider of services to people who require legal and other assistance as a result of road traffic accidents in the UK in the 2017 financial year and beyond.
“Throughout our 80 year history the company has gained unique experience in responding to regulatory changes when they occur,” Grech says.
“We have successfully done this on many occasions beginning in the 1990s in Victoria and more recently in New South Wales and Queensland. This is what we will do in the UK. Our growth has in no small part been enabled by the consolidating drive of regulatory reform”.
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