Slater & Gordon announce FY12 Financial Results
24 Aug, 2012
Slater & Gordon, the Australian firm that recently acquired Russell Jones & Walker, today (24th August) notified the Australian Securities Exchange of its FY12 financial results.
Total revenue was up 19.4% on the previous year to $218million. The recently acquired UK subsidiary Russell Jones & Walker (RJW) performed in line with expectations, contributing $12million to the revenue result in the two months since completion. Revenue of $206million for the Australian business exceeded the guidance provided at the half year.
Net profit after tax (NPAT) as $25million, down 10.5% on the prior year after the write down of $10.5million in work in progress and disbursements on the Vioxx class action, which was lost on appeal and for which leave to appeal to the High Court was not granted.
Normalised (for the Vioxx write down and acquisition costs) NPAT was $33.4million, up 15.5% on the previous year. Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 25.9% for the group. Normalised EBITDA for the Australian business was 26.7%, ahead of the guidance given at the half year.
The cash flow from operations for the Australia business represented 50% of the NPAT for the Australian operations before the Vioxx write down. This was below the company’s guidance range for the year of 65-70% due to billing being weighted to June 2012 more strongly than expected.
The company’s gearing remains in line with the board’s expectations.
Directors declared a final dividend of 3.5 cents, bringing the full year dividend to 6.0 cents, up 0/5 cents or 9.1% on the prior year.
Business unit performance
The Australian personal injuries (PI) practice delivered an underlying organic growth rate in fees of 8%.
The Commercial & Project Litigation practice performed in line with expectations following the successful settlement of the Centro class action in June.
The Conveyancing Works business, which was acquired in the first half of the year, also delivered in line with the expectations despite the soft Queensland housing market. The Slater & Gordon conveyancing model is now being rolled out nationally as part of the company’s strategy to leverage its brand strength and national office network into a broader range of consumer legal services.
Slater & Gordon managing director Andrew Grech said that he considered the company to be on track to achieve its five year strategy.
“The performance of the Victorian personal injuries practice shows us what we can achieve when we have critical mass combined with our strong brand, people and systems,” Mr Grech said. “We are now approaching similar scale in New South Wales and Queensland and we are starting to see the results of our investments in those markets.”
“Through Russell Jones & Walker we now also have a future growth platform in a market four to five times that of Australia,” Mr Grech added.
“The potential to exploit the Slater & Gordon brand in markets ourside personal injuries is still largely untapped. We are encouraged by the progress we’ve made to date in conveyancing and family law,” Mr Grech said.