Slater & Gordon Posts $683 Million Loss on U.K. Unit Writedownby
Shares slump as much as 43% as firm unveils first-half results
Legal firm working with banks on restructure proposal
Slater & Gordon Ltd., the world’s first publicly listed law firm, posted a A$958.3 million ($683 million) first-half loss as it wrote down the value of a U.K. business it bought last year. Its shares slumped.
The Melbourne-based company took a A$876.4 million goodwill impairment charge and said it’s working with its banks on a restructure proposal. The loss for the six months ended Dec. 31 compared with a net profit of A$49.3 million a year earlier.
Most of the writedown -- A$814.2 million -- was attributed to its Slater Gordon Solutions unit, which it bought from U.K. technology firm Quindell Plc for 637 million pounds ($883 million) in May. Slater & Gordon’s shares have plunged amid concerns about its U.K. cashflows and a proposal by the British government to crack down on questionable whiplash claims.
The law firm’s priority in 2016 is to cut debt and establish a capital structure to support a turnaround plan, Managing Director Andrew Grech said in the statement. It scrapped its interim dividend and said it was unlikely to pay a final one too.
Slater & Gordon shares, which were suspended from trading Feb. 24 pending the financial results, slumped as much as 43 percent Monday and were 28 percent lower at 60- Australian cents at 10:18 a.m. They have declined about 90 percent in the past year.