Slater & Gordon, the world’s first publicly traded law firm, has announced that it expects losses of more than $760 million (A$1 billion) for its 2015-16 fiscal year.
In an announcement to the Australian Stock Exchange, the Melbourne-based firm said its net loss after tax for the second half of 2015-16 is expected to be almost $45.2 million (A$59.3 million), which when added to its losses of $730.4 million (A$958.3 million) for the first half of this year gives the firm a full-year net loss of $777.47 million (A$1.02 billion).
Slater & Gordon, which saw its general counsel quit in March amid mounting economic troubles at the firm, said in a statement that the figures include “a significant level of goodwill impairment, nonrecurring expenditure and refinancing costs.”
Andrew Grech, the firm’s group managing director and one of The American Lawyer’s top 50 legal industry innovators three years ago, said that Slater & Gordon’s financial performance was one of two different halves.
“The results for the first half were extremely disappointing and well below expectations,” Grech said. “In the second half, we have taken significant steps towards turning around the performance of the U.K. business. While the U.K. performance improvement program is still in its early stages, the second-half results indicate that our efforts are beginning to bear fruit.”
Slater & Gordon’s unaudited gross revenue for 2015-16 is $692.3 million (A$908.2 million), while as of June 30, net debt stood at $520.1 million (A$682.3 million)—up from $468.1 million (A$614.1 million last year.
The firm, known for its landmark initial public offering in 2007, has expanded rapidly in recent years, moving into U.K. legal market through its 2012 acquisition of Russell Jones & Walker, followed by its whopping $960 million purchase of British insurance claims processor and outsourcer Quindell plc in March 2015.
However, Slater & Gordon’s growth has stalled dramatically in recent months. In June 2015, the firm’s share price plummeted 25 percent as a result of accounting errors in the U.K. related to its ill-fated Quindell deal. Earlier this year, Slater & Gordon restructured its U.K. operations—including office closures—and struck a refinancing deal with its lender banks.