Listed national plaintiff firm Slater and Gordon Lawyers (ASX: SGH) has released its full-year results for the financial year ending 30 June 2022, which show that the firm was “adversely impacted” by COVID-19 lockdowns, particularly in Victoria.

However, the results also show that the firm is “now back on its trajectory of improvement”, with the second half of the last financial year seeing the firm move from a loss to an overall profit for FY22.

The firm has reported a net profit after tax (NPAT) of $2.2 million, down from $14.5 million in FY21, marking an 85 per cent drop. Net revenue also fell 10 per cent to $182 million.

It also reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $29.3 million, compared to $48.6 million last year.

The firm also saw its gross operating cash flow down from last year’s figure of $15.4 million to $6 million this year, which it said reflected its ongoing investment in growth areas of the business, as well as the impact of the pandemic and prolonged lockdowns on the pace of file progression in the first half of the year.

Lawyers Weekly reported on the firm’s FY21 results here.

The news follows the release of the financial year 2022 results from fellow national plaintiff firm Shine Lawyers, which saw a net profit increase of 22 per cent; Clyde & Co, who revealed its Australian offices are bringing in the most revenue; Ashurst, which saw a 12 per cent revenue increase; Clifford Chance, which saw equity partner profits rise by 10 per cent; Herbert Smith Freehills, which recorded close to $2 billion in revenue; Pinsent Masons, which saw a PEP increase of 16 per cent; and IPH, which acquired a Canadian IP firm as it announced its end-of-year results.

VIEW ALL

Firm commentary

In its market update, Slater and Gordon said that COVID-19 lockdowns across metropolitan Melbourne, Sydney and Canberra during the first half of FY22 and the ongoing pandemic-inspired workplace restrictions “impacted” the company’s performance and end-of-year result.

“Those lockdowns and other restrictions, resulted in fewer road and workplace accidents, with those people with latent claims from the period prior to the lockdowns having already been identified and assisted during the FY20 and FY21 lockdown periods,” the firm wrote.

“These circumstances resulted in lower file openings and in delays in progressing existing claims during the first half of FY22.”

However, the firm went on, “with the lockdowns and other restrictions being relaxed toward the end of the first half and into the second half and with people returning to the road and workplace, enquiry levels returned to pre-pandemic levels”.

“The barriers to claims progression were also largely removed,” it said.

That second-half performance saw the company move from a $7.5 million loss to a profit of $2.2 million by year’s end.

Moreover, the company added, it did not qualify for or receive any JobKeeper support from the federal government.

The firm also noted that, in the past year, 73 of its employees volunteered to support Afghan refugees with immigration applications, and it was recognised by the Bar Association of Victoria as one of only 14 law firms that reached the Law Council’s Equitable Briefing target.

CEO reflections

Slater and Gordon chief executive John Somerville thanked the firm’s staff for their commitment, empathy and care shown to clients in an “unwavering” fashion in the last 12 months.

“When we reported our half-year results in February, we said we had started to see signs of improvement following the lifting of lockdowns, and we are pleased that the second half saw the continuation of that trend with the business returning to deliver an overall profit for the year,” he said.

“Our firm continues to make good progress on its improvement and growth plans, but we recognize we still have more work to do.”