First ever publicly-traded law firm braces itself for largest financial loss in legal sector history
Slater & Gordon expected to post financial loss in excess of £580 million
Aussie-listed Slater & Gordon (S&G) is preparing to post what is believed to be the largest financial loss ever recorded within the legal sector.
Issuing a profit warning to both its shareholders and the Australian Securities Exchange yesterday, S&G revealed it was set to make an eye-watering loss of over A$1bn (£580m) in the 2015/16 financial year.
S&G became the first publicly-traded law firm ever when it floated on the Australian exchange back in 2007.
Trying to remain positive, S&G’s group managing director, Andrew Grech, claimed the firm’s UK arm was “beginning to bear fruit”. In a statement, he said:
Slater & Gordon’s FY16 performance is a story of two different halves. The results for the first half were extremely disappointing and well below expectations. In the second half we have taken significant steps towards turning around the performance of the UK business. Whilst the UK performance improvement programme is still in its early stages, the second half results indicate that our efforts are beginning to bear fruit.
Late last year, and reacting to the news that then Chancellor of the Exchequer, George Osborne, was looking to ban general damages for minor injuries, the firm saw its share price plummet. From a 2015 summer high of A$6 (£2.87), the personal injury specialist’s share price dropped to a low of just A$1 (48p).
The massive financial losses sustained by S&G — which has around 27 locations across the UK — occurred towards the back end of 2015. The lion’s share of which is being attributed to the £680m acquisition of Quindell’s legal services division. Since being licensed to operate in the UK in 2012, S&G snapped up a whole series of firms including historic outfits such as Russell Jones & Walker and Pannone.
Keen to find out how the financial losses would impact trainees at S&G, Legal Cheek contacted the troubled PI outfit back in March.
The firm, which offers around 15 training contracts and legal apprenticeships annually, said that while there would be a period of “reorganisation”, it was unwilling to comment on whether those currently completing their training would keep their jobs.
Due to submit its final audited 2015/16 financials next week, the firm’s net debt currently sits at A$682.3m (£393m).