Slater and Gordon shares have plumbed fresh depths yet again after the law firm reported a first-half loss of $425 million largely due to another $350 million writedown of its troubled UK business.
The shares, which were valued at $8.07 less than two years ago, dropped 25 per cent to 12 cents on Monday after the firm said revenue for the six months to December 31 slipped 33.8 per cent to $322.7 million amid underperformance in both UK and Australia personal injury claims.
“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,” managing director Andrew Grech said in a statement.
“In Australia, our business leaders have had to combat almost two years of the effects of the negative publicity and sentiment.”
The downturn in sentiment came following regulatory changes and accounting issues in the UK, where it acquired the former Quindell business for $1.3 billion in 2015.
The changes led to a loss of $1.02 billion in the 2015/16 financial year and a collapse in share price from its all-time high of $8.07 in April 2015.
The shares hit an all-time low of 14 cents last week after Slater and Gordon warned of the upcoming impairment but, after opening at 16 cents, set another unwanted record on Monday.
At 1330 AEST, the shares were down 3.5 cents, or 21.88 per cent, at 12.5 cents.
First-half fee and services revenue fell 17.5 per cent in Australia and 39.9 per cent in the UK.
Mr Grech reiterated that Slater and Gordon is in negotiations with its lenders over its capital structure, and that support is crucial to a company whose bank debts exceed its enterprise value.
SLATER’S FH SLUMP
* Net loss $425.1m v $958.3m net loss in pcp
* Revenue down 33.8pct to $322.7m
* No interim dividend