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Shine Lawyers’ net profit plummets by almost 20%
Shine Justice (ASX: SHJ) has released its half-year 2023 results, revealing that while its total revenue is up 9 per cent, its gross operating cash flow is down over 230 per cent.
Lauren Croft
The holding company of national plaintiff firm Shine Lawyers has published its latest financial half-year results, whereby its net profit has fallen, despite total revenue increasing by 9 per cent and up to $111.2 million in the last six months.
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The group’s net profit after tax (NPAT) has plummeted by 18 per cent, dropping from $13 million to $10.6 million over the six-month period.
Earnings before interest, tax, depreciation and amortisation (EBITDA), however, was at $26.9 million, declining 1.9 per cent from $27.4 million in financial year 2022. Further, the firm’s cash flow is currently down a massive 233 per cent, currently sitting at minus $8.9 million.
Elsewhere, the board has declared an interim dividend of 1.5¢ per share (unfranked) with a record date of 8 March 2023 and a payment date of 22 March 2023.
Last year, Shine Justice reported a 22 per cent net profit increase, which you can read about here.
Commenting on the results, Shine Justice managing director and chief executive Simon Morrison conceded that although the “operating performance” of the group is currently behind, revenue had increased due to growth in new practice areas, such as medical law, and in new states and territories.
“GOCF in the half year was affected by expenditure in growth activities, including class action investigations and growth in team member and file numbers, compared with slower than anticipated case resolutions, as well as expenditure in marketing and recruitment.
“We increased our team but like many businesses, were impacted by staff turnover, a situation in which we are now seeing improvement. We experienced delays in the resolution of cases, in part due to the lingering effects of the COVID-19 pandemic, but are implementing improvements in case execution and cash collection in the second half,” he said in a statement to the ASX.
“We are focused on ensuring that staff utilisation is maximised and operating costs are controlled. The underlying business remains strong, and we look forward to an improved second half, consistent with previous seasonal performance.”
These results come after the firm settled two class actions against Johnson & Johnson Medical and Ethicon for $300 million in an Australian first in September last year, as well as successfully settled a landmark stolen generations class action for $50 million earlier that same month.
With respect to initiatives for FY23, Mr Morrison maintained that “Shine Justice is in a solid financial position, with a committed and talented team and the right strategy to deliver improved results, grow in new and existing markets and leverage opportunities with innovation and integration.”
“We confirm that we are expecting a continuation of EBITDA growth in FY23, in the order of a low double-digit percentage increase, subject to unforeseen economic conditions,” he said.
