Slater and Gordon’s share price in Australia has dropped again to $A0.20 (12p) following a downbeat trading update.
In a statement to the Australian Stock Exchange in advance of the release of the firm’s half year results, which are expected on 27 February, Slater and Gordon said that recovery was slower than expected in the UK while its Australian business has been hit by “negative sentiment”.
“Revenue performance [in the UK]reflects slower than anticipated progress with various productivity improvement initiatives and slower than expected case settlement profiles,” said the firm.
“Recent trading experience and the slower than expected recovery in the UK have caused the Company to adjust expected traiding results from the UK downwards, and this is likely to have an adverse impact on assessed asset values.”
It also said that it had A$327.2 million (£202 million) of goodwill on the balance sheet for its UK business which could be impaired.
The firm also confirmed that it was continuing to work with its lenders to agree on a recapitalisation plan and that it expected negotiations to to conclude in the coming months.
“It is clear that based on performance expectations and liquidity the continued support of the Company’s lenders is fundamental, as current levels of bank debt exceed total enterprise value.”
As for its Australian business, the firm said that revenues would in all likelihood be lower than in previous comparative periods with declines across its PI and general law operations.