AUSTRALIA'S first listed law firm, Slater & Gordon, has posted a 12.1 per cent rise in half year earnings.
The firm's board yesterday announced a net profit of $9.5 million for the half year to 31 December 2009. Revenue increased 16.4 per cent year on year to $58.8 million.
Slater & Gordon managing director Andrew Grech tempered suggestions the growth was due to recent acquisitions, putting it down to organic growth of the business.
But the company did acquire three businesses in the last six months of last year, which contributed less than one million dollars to the fee growth.
It acquired Long Howland, a firm based in Gunnedah specialising in personal injury law, commercial litigation and private client services, as well as McGlades, a firm based in Melbourne specialising in personal injury law and Kenyons, a Melbourne firm specialising in personal injury law and commercial litigation.
Explaining the acquisitions, Grech said: "We had a relatively modest additional revenue from acquisitions in the first half and we also continued to invest in other growth initiatives."
But the performance of the firm's personal injury practices enabled it to continue to support the development of a broader range of legal services, which were not necessarily holding themselves up.
"Our returns in some of the non personal injuries practice are not yet up to our target levels but in all cases they are improving," Grech said.
A $13.5 million operating cash flow for the half was well above the company's target range, Grech said. The first half result included the recovery of some deferred cash flow resulting from the FY09 implementation of a new practice management system.
The firm is expecting strong growth in the full year, it said yesterday. Recently completed acquisitions and the proposed competition of the Adams Leyland acquisition in early April are expected to deliver additional revenue of about $4 million in the second half.
Slater & Gordon also said yesterday that claims on behalf of former Storm Financial clients continue to be progressed. Any net increase in earnings for Slater & Gordon arising from resolution of Storm client matters will not be material, it said.
Also, a "significant proportion" of the company's commercial litigation resources have been assigned to the Storm action to the exclusion of other budgeted work and some of the work on Storm has already been taken to account as work in progress.