The struggle continues for Slater and Gordon (S&G) with the firm posting a A$425.1m (£262.6m) net loss for the second half of last year.
The ASX listed law firm said its results were impacted by a A$350.3m (£216.4m) impairment charge relating to its £637m purchase of Quindell’s professional services division in 2015. Quindell has since rebranded as Watchstone Group.
The firm also pointed to underperformance across UK and Australia in relation to the resolution of personal injuries claims and an A$13.7m (£8.5m) cost for restructuring across the firm.
Following the release of the results, shares in the firm fell 22% to A12.5c in Sydney on Monday (27 February).
UK fee and service revenue declined 35% in the last six months of last year. The dip came as the firm was forced into a restructure of its UK operation after posting an A$958m (£493m) loss for the six months ending 31 December 2015, primarily due to a hefty writedown of its UK business.
Managing director Andrew Grech (pictured) said: ‘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. The full impact of the performance initiatives will take time.’
He added Slater Gordon Solutions, formerly the Quindell professional services division, delivered ‘positive earnings and operating cash flow’.
In November Grech provided an update on the firm’s UK restructuring programme which has included a 16% reduction in headcount as well as a re-organisation of the legal services business into three divisions: serious and specialised personal injury claims; family law, employment law and dispute resolution and fast track personal injury claims.
In addition to the reduction in headcount, S&G had also set a target of reducing operating sites from 47 to 32 by January 2017 ‘with further locations scheduled to be re-organised or closed in the remainder of 2017’.
In September it emerged S&G was gearing up to sue Watchstone Group following acquisition of the UK company’s professional services division.
madeleine.farman@legalease.co.uk