Australian law firm Slater and Gordon was the first law firm to be listed on the stock exchange, but it is also the first to post a very public $1 billion loss.
The personal injury and class action law firm, which extended to the UK under an aggressive growth plan, has suffered significant reversals in the UK in particular. The total loss was $1.02 billion.
The firm’s woes have been the subject of much media reportage, including here on LawFuel.
The Herald Sun reported that the loss was due to writedowns totalling $879.5 million, mostly related to the UK division of the firm, which also obtained lower resolutions for noise-induced hearing loss cases.
Case settlements exceeded the number of new files opened in both Australia and in the UK, with a negative movement in work in progress of $41.3 million — two thirds of it in Australia.
Negative cash flow slowed from $83.3 million in the first half to $20.9 million, and the company said significant improvement is still required to turn that around.
The firm also raised the total impairment charge from the $876.4 million announced in its first-half results and announced $33.3 million in restructuring costs related to the UK legal business it bought in May 2015.
“We are confident we have the strategy and people in place to stabilise financial performance during the 2017 financial year,” managing director Andrew Grech (pictured) said.