The adjustment comes after the firm reviewed its recovery rates and provision modelling with an actuarial consultant.

As a result of the review, the firm has increased its provisioning for work in progress (WIP) by a one-off sum of $17.5 million in 2015-16.

This recalculation of WIP was made on the basis that all current cases may not succeed, so provisioning must be relative to recovery rates, the firm said in a statement on the ASX.

Shine also conducted a review of its current business performance, which wiped a further $10.5 million off the initial earnings guidance.

Performance in the first half of 2015-16 was below budget due to “lower income, driven by poor fee-earner to file ratios and under performance by some fee-earners”, according to the statement.

In response, the firm committed to bringing in tighter performance management and recruitment policies.

The firm also pointed to “greater than expected” write-offs due to factors that included regulatory reform and continuing market competition, especially in Queensland.

Full results for the first half of 2015-16 are due to be released on 23 February.

The firm has now resumed trading on the ASX after a seven-day suspension from the market announced in anticipation of the earnings guidance review.

Update: Share prices dropped by 73.25 per cent on Friday as trading resumed after the announcement, opening at $2 and closing at $0.53.