Troubled firm Slater & Gordon has announced that it will cut off its UK business to focus on Australia.
The severed UK operation will be run by Anchorage Capital and other lenders in a debt for ownership swap. Slater and Gordon announced on the Australian Stock Exchange that "the separation of the UK operations provides the best option to enable both the Australian and UK operations to succeed in their own right and will enable the company to focus its management's time and resources on the Australian business."
Perhaps unsurprisingly there will be a rejigging of the S&G board in Australia with Andrew Grech and John Skippen both stepping down as directors. The new board will be headed by James MacKenzie, a former director of rival firm Maurice Blackburn.
S&G was the first law firm to float in 2007, but the value of its shares have suffered a fall in recent times reminiscent of one of its PI clients tumbling head first down a flight of stairs. S&G recorded a AUD1 billion loss in the financial year 2015/16 and a loss of AUD546m in the financial year 2016/17. Its shares were suspended last year. In July this year, the firm agreed in principle to a AUD36.5 million settlement payment to its own disgruntled shareholders.
And the firm's adverts haven't been great either.
S&G launched in the UK in 2012 and tried to expand rapidly, but its acquisition of Quindell's legal division in 2015 was disastrous and has been blamed for the firm's failure. Quindell had overstated its financial results, saying it was profitable when it had been making a loss. At the time of the Quindell purchase, Andrew Grech, S&G's then Managing Director, suggested that it would change the fortunes of the firm. In a way, he was right:
S&G didn't respond to RollOnFriday's emails for comment.
Tip Off ROF
The severed UK operation will be run by Anchorage Capital and other lenders in a debt for ownership swap. Slater and Gordon announced on the Australian Stock Exchange that "the separation of the UK operations provides the best option to enable both the Australian and UK operations to succeed in their own right and will enable the company to focus its management's time and resources on the Australian business."
Slater & Gordon realised it would have to chop off a limb to progress. Based on a true story. |
S&G was the first law firm to float in 2007, but the value of its shares have suffered a fall in recent times reminiscent of one of its PI clients tumbling head first down a flight of stairs. S&G recorded a AUD1 billion loss in the financial year 2015/16 and a loss of AUD546m in the financial year 2016/17. Its shares were suspended last year. In July this year, the firm agreed in principle to a AUD36.5 million settlement payment to its own disgruntled shareholders.
And the firm's adverts haven't been great either.
S&G launched in the UK in 2012 and tried to expand rapidly, but its acquisition of Quindell's legal division in 2015 was disastrous and has been blamed for the firm's failure. Quindell had overstated its financial results, saying it was profitable when it had been making a loss. At the time of the Quindell purchase, Andrew Grech, S&G's then Managing Director, suggested that it would change the fortunes of the firm. In a way, he was right:
If only they'd watched the video |
S&G didn't respond to RollOnFriday's emails for comment.
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Look at the last filed accounts of the UK entity Slater Gordon Solutions Legal Limited. It states:
"Revenue for the period was £118.7 million (2013 (restated): £73.4 million). Loss before tax for the period was £172.8 million (2013 (restated): loss of £21.6 million).
As a result of the review of accounting policies following the acquisition by Slater and Gordon Limited, a number of changes were made (see Note 3). These changes had the impact of reducing the prior year profit before tax from £53.7 million to a loss before tax of £21.7 million.
Following the acquisition by Slater and Gordon Limited, a rebranding exercise was performed. As a result, the brand intangibles recognised on previous acquisitions have been fully impaired (£4.7 million (2013: £Nil)."
"Fully impaired" indeed.
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Shame they didn't give too hoots about the staff being well and truly done over .
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