Slater and Gordon has posted another loss as negotiations with its banks continue and the turnaround of the law firm taking longer than expected.
The ASX listed law firm today reported a $425.09 million loss for the six months to December.
The result included a $350.3 million impairment charge against the value of its troubled UK business.
Revenue was down 22.8% to $322.66 million.
The company says personal injury claims in both the UK and Australia have been underperforming.
Non-recurring restructuring costs including consultants, redundancy and property rationalisation came to $13.7 million.
“This half year result continues to reflect a business that is still very much in the midst of a major transition,” says managing director Andrew Grech.
“While we have made progress in the UK in the past 12 months, the turnaround is taking longer than we anticipated and billed revenue performance in segments of the business is lower than expected.”
He says the full impact of performance improvement initiatives will take time.
“In Australia, our business leaders have had to combat almost two years of the effects of the negative publicity and sentiment,” says Grech.
“Despite this, we have serviced the legal needs of 70,000 clients last financial year. This is a great credit to our 1,200 strong Australian workforce located across 54 regional and
Grech says the company is continuing to work with its lenders towards establishing a sustainable capital structure.
“We look forward to the completion of these negotiations and the establishment of a clear
path forward for our staff and clients.”
The company says current levels of bank debt exceed total enterprise value.
“Discussions with lenders on the recapitalisation plan are ongoing and the Board has reason to believe that a successful outcome will be concluded in coming months,” Grech says.
The company has net debt of $680.4 million, down from $682.3 million in June last year. The company’s market capitalisation is about $56.4 million.
In August last year, the world’s first stock exchange-listed law firm posted a widely expected annual loss of $1.017 billion.
The result included a $879.5 million non-cash impairment against the value of goodwill after its UK business earnings were worse than expected.
In 2015 the shares hit a high of $8.07, valuing the company at $2.8 billion, but have been on steep slide because of its underperforming UK business and the British government plans to limit compensation for road accidents.
The shares last traded at 16 cents.
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