Slater and Gordon set to cut UK offices as it reports £493m loss
Struggling personal injury firm writes down A$814.2m from Quindell acquisition as it restructures
February 29, 2016 at 06:27 AM
5 minute read
The original version of this story was published on Law.com
Australian-listed personal injury firm Slater and Gordon is to restructure its UK business and close offices following the global business' A$958.3m (£493m) after-tax loss.
In an announcement to the Australian stock exchange the firm said it would restructure its UK operation and will propose a restructuring of its banking facilities to its banking syndicate.
The UK operations will be reorganised into three divisions, fast track personal injury claims, serious and specialist personal injury claims and general law services.
As part of the reorganisation the firm expects to close a number of sites in the UK and will undertake a consultation process with employees likely to be affected by redundancies.
The restructuring comes as the firm announced it was pushed to an A$958.3m (£493m) loss in the six months to 31 December 2015 by a massive write down of the value its Quindell acquisition.
In its half-year results the firm said it had slashed A$876.4m (£450.8m) off the total value of its business.
Most of that write down was to the value of Slater and Gordon Solutions (SG), the professional services arm of Quindell that Slater and Gordon acquired in March 2015 for £637m. The firm wrote down A$814m (£420m) of the value of that business.
It also wrote down A$9.4m (£4.8m) of its UK business and A$53m (£27m) of the value of its Australian business.
The total goodwill on the firm's balance sheet fell from A$1.2bn (£619m) to $318m (£164m) as a result of the write downs.
Managing director Andrew Grech said: "Clearly today's results are very disappointing... We will therefore be taking a number of necessary steps to improve the operational performance of both the UK business and the broader Slater and Gordon group."
The firm's results state that the performance of SGS was significantly below expectations because of a "misalignment of case intake compared to case resolution rates" and delays in noise induced hearing loss settlements.
It has also announced that it will apply new accounting standards, so that revenue under "no win-no fee" arrangements, is only recognised when it is "highly probable" that it will be delivered. Previously it had recognised revenue when it was "probable" that it would be collected.
The firm's share price dropped to A$0.58 (£0.29) at close of trading in Australia on Monday, a 30.12% fall on its opening price.
Australian-listed personal injury firm Slater and Gordon is to restructure its UK business and close offices following the global business' A$958.3m (£493m) after-tax loss.
In an announcement to the Australian stock exchange the firm said it would restructure its UK operation and will propose a restructuring of its banking facilities to its banking syndicate.
The UK operations will be reorganised into three divisions, fast track personal injury claims, serious and specialist personal injury claims and general law services.
As part of the reorganisation the firm expects to close a number of sites in the UK and will undertake a consultation process with employees likely to be affected by redundancies.
The restructuring comes as the firm announced it was pushed to an A$958.3m (£493m) loss in the six months to 31 December 2015 by a massive write down of the value its Quindell acquisition.
In its half-year results the firm said it had slashed A$876.4m (£450.8m) off the total value of its business.
Most of that write down was to the value of Slater and Gordon Solutions (SG), the professional services arm of Quindell that Slater and Gordon acquired in March 2015 for £637m. The firm wrote down A$814m (£420m) of the value of that business.
It also wrote down A$9.4m (£4.8m) of its UK business and A$53m (£27m) of the value of its Australian business.
The total goodwill on the firm's balance sheet fell from A$1.2bn (£619m) to $318m (£164m) as a result of the write downs.
Managing director Andrew Grech said: "Clearly today's results are very disappointing... We will therefore be taking a number of necessary steps to improve the operational performance of both the UK business and the broader Slater and Gordon group."
The firm's results state that the performance of SGS was significantly below expectations because of a "misalignment of case intake compared to case resolution rates" and delays in noise induced hearing loss settlements.
It has also announced that it will apply new accounting standards, so that revenue under "no win-no fee" arrangements, is only recognised when it is "highly probable" that it will be delivered. Previously it had recognised revenue when it was "probable" that it would be collected.
The firm's share price dropped to A$0.58 (£0.29) at close of trading in Australia on Monday, a 30.12% fall on its opening price.
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