Slater and Gordon head optimistic despite colossal drop
Despite suffering a $1 billion annual loss, Slater and Gordon remains adamant it has a clear strategic focus on the year ahead, with its Australian business set to retain its position as the “clear market leader”.
The global firm posted a widely expected annual loss of $1.017 billion after tax, down 1,731 per cent on the corresponding year.
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The results included an $879.5 million non-cash impairment against the value of goodwill.
The first half of the 2016 financial year saw Slater and Gordon post a $958.3 million loss and an additional $59.3 million loss in the second-half.
Total revenue for the financial year stands at $908.2 million.
Slater and Gordon group managing director Andrew Grech said despite the overall results reflecting a “very tough, challenging and disappointing year”, its Australian business remains strong.
“In Australia, our business remains strong and overall performance was pleasing,” Mr Grech said.
“Notwithstanding that pleasing performance, there are a number of areas of the Australian business which have underperformed, including the conveyancing practice which we are now in the stage of actively addressing.”
“[Overall] Slater and Gordon Lawyers remains the clear market leader in Australia but it is a highly competitive market and we’ll need to stay a step ahead of competitors to preserve our position.”
Slater and Gordon Lawyers Australia recorded growth of 6.6 per cent in personal injuries law over the 2016 financial year and 13.4 per cent in general law.
Total revenue for Slater and Gordon Australia over the 2016 financial year stood at $265.6 million, up 8.1 per cent on the corresponding period last year.
Mr Grech said ensuring the Australian business has the resources it needs will assist it in maintaining this growth.
“Key to this … is delivering improvements to the Australian business in areas of weakness,” he said.
“We’ll continue to improve our governance and reporting systems and processes. We’ve made significant headway in this area over the last several months and we intend to continue that.”
On a global scale, Mr Grech said the firm believes it will be able to build margins similar to the levels it’s been able to achieve in Australia.
“We believe the company's strategy in the UK is sound and its execution over the next 12 months or so provides the best option to begin the process of restoring value for all of our shareholders and other stakeholders,” he said.
“In the UK, there are indicators suggesting that over time we can build margins similar to the levels we've been able to achieve in Australia.”
However, Mr Grech noted that despite his optimism, he remains realistic about the challenges ahead.
“I would say that whilst there are positive signs of progress in the last six months, we're certainly not getting ahead of ourselves,” he said.
“There's a lot to do, we know that we'll be judged by the results that we deliver over the next 12-18 months.”