SLATER & GORDON have closed off the first half of the 2007—08 financial year with an after-tax profit of $6.9 million, up 56 per cent on the previous period. The firm also increased its total revenue by 25 per cent year-on-year up to $37.4 million.
It’s certainly good news for shareholders — the firm has also announced that a fully-franked interim dividend of 2 cents per share.
A spate of acquisitions, as well as the opening of two new offices during this first half has brought the firm’s total office network to 25 locations nationally. On top of that, the firm has several other acquisitions in the pipeline, including that of Coffs Harbour firm Crane Butcher McKinnon, plus a new office due to open in Gosford, north of Sydney.
Delivering on its aim to diversify geographically, the firm has increased the percentage of its total revenue that comes from outside Victoria from 34 per cent last year to 43 per cent.
“We’ve continued to perform well and grow our positions in our well-established markets of Victoria and Western Australia, but we are now seeing New South Wales and Queensland emerge as substantial practices in their own right. About a third of our staff are now based in those two states,” the firm’s managing partner Andrew Grech said.
While the firm has also managed to increase its earnings before interest and taxes margin from 23.1 per cent last year to 26.7 per cent, Grech believes it will be difficult to maintain that margin moving forward into the second half of the financial year.
“We were able to deliver a 256 per cent increase in revenue in the first half without the corresponding increase in costs. To date we’ve been able to absorb most of the new business without any big increases in overheads but now we’re running close to capacity and are starting to boost our resources to give us the fire power to continue to drive our growth plans,” he said.
The revenue forecast for the full year 2008 has been raised to $73.5 million — around 12 per cent higher than the prospectus forecast of $65.4 million.