This time last year, Slater & Gordon made its mark in the history books when it listed on the ASX, becoming Australia’s, and possibly the world’s first listed law firm.
One year on and so far so good — if the financials are anything to go by. In the 2007 financial year, the firm delivered $63 million in revenue and an after tax profit of around $11 million, topping its prospectus revenue forecast by around $4 million and profit forecast by $1.5 million.
It then brought in $37 million in revenue and $7 million in profit in the first half of 2008, putting the firm well on its way to its forecast revenue of $73 million (revised from the original prospectus forecast of $65 million) and profit of $11 million.
The firm’s share price chart over its first year, much like that of the market in general, closely resembles a rollercoaster track. From an initial listing price of $1, the firm’s 35 million shares listed on the first day’s trading at $1.32 and closed on the first day at $1.40. The price peaked around $1.90, and at the time of writing sits at around $1.35.
However the firm’s chief operating officer, Mike Feehan, said the firm is comfortable with that performance.
“I think we did better than our peers in the small cap end of the market who pretty much got gruelled during the market selldown,” he said. “We’re still obviously well and truly above the offered price and we’re above the price that we listed at on day one. So I guess, given the market volatility, that’s probably been an okay result from the share market point of view.”
One of the key things that has kept the firm well and truly in the media spotlight over the past year has been its rapid spate of acquisitions throughout the country. Feehan saidthat since listing, the firm has completed acquisitions of seven firms, with another one subject to due diligence, in locations ranging from Nowra in New South Wales to Bunbury in Western Australia and Brisbane. It has also opened an additional two offices in Queensland and Victoria with another scheduled to open soon in Sunshine, Melbourne.
This has all been part of a concerted effort by the firm’s management to diversify geographically. According to Feehan, midway through the 2008 financial year the firm was deriving 41 per cent of its fees from outside its traditional base in Victoria, which is up from 34 per cent at the end of 2007.
Significantly; Feehan said, this comes on top of strong growth in Victoria as well. The strategy has also involved building the firm’s presence in regional areas — such as Coffs Harbour, Nowra and Bunbury -which the firm’s management have identified as growth areas.
Slater & Gordon has also attracted a fair bit of publicity over the year for its involvement in some very high profile class actions, including against Telstra, Centro Properties Group and now one in the pipeline against Opes Prime and ANZ.
So the fact that the firm has been able to build itself a considerable national profile probably won’t come as any great surprise. A brand awareness survey completed in 2007 showed that the firm now has 96 per cent brand awareness in Melbourne, up from 83 per cent in 2004. In the other capital cities brand awareness ranges from 40 per cent in Brisbane to 60 per cent in Canberra. Possibly the most astounding result is in Darwin, in which Feehan said the firm has achieved 54 per cent brand awareness, despite having no offices in Darwin nor having ever advertised there.