Looks like more and more people are lawyering up as law firm Slater and Gordon (ASX: SGH) have delivered shareholders a net profit of $2.2 million in FY22. The second half in particular proved a highly litigious few months following a poor first half where it suffered losses worth $7.5 million.
Compared to FY21, when the net profit after tax, was $14.5 million, the Company’s FY22 profits lag behind but are slowly bouncing back as it recovers from the impact of Covid-19 lockdowns, particularly in Victoria.
Slater & Gordon CEO, John Somerville, commented, “When we reported our half year results in February, we said we had started to see signs of improvement following the lifting of lockdowns and we are pleased that the second half saw the continuation of that trend with the business returning to deliver an overall profit for the year.”
Getting on board with the trend of going virtual, the Company has been continually investing in its digital ventures as more clients choose to engage with Slater and Gordon online. It is embedding flexible and hybrid working practices for the clients and employees.
The Company has also been active on the philanthropic front with 73 Slater and Gordon employees volunteering to support Afghan refugees with their applications on a pro bono basis.
Furthermore, Slater and Gordon also received recognition by the Bar Association of Victoria for being one of only 14 law firms, and one of only two plaintiff firms, in the State to have reached the Australian Law Council’s Equitable Briefing Policy target of briefing women barristers.
Over the past year, the Company’s total revenue and other income from continuing operations of $182.6 million was made up primarily of fees billed of $155.4 million and WIP (work in progress) growth of $26.6m. In the prior corresponding period, its total revenue and other income was $203.8 million, comprising primarily fees billed of $154.2 million and WIP growth of $48.1 million.
In the first half of FY22, the Company’s performance was affected by COVID-related lockdowns across metropolitan Melbourne, Sydney and Canberra along with Covid-related work restrictions that continued into the second half.
Due to the lockdowns and other restrictions, fewer people got into road and workplace accidents, which was good for the general population but reduced the demand for lawyers. People with latent claims from the prior period had already been assisted by Slater and Gordon.
These circumstances resulted in lower file openings and delays in progressing existing claims during the first half of FY22. But, as the lockdowns and restrictions eased and people returned to the roads and workplaces, enquiry levels returned to pre-pandemic levels, much to the satisfaction of Slater and Gordon. The barriers to claims progression were also largely removed.
Thanks to that, in the second half, the Company’s performance improved, and it moved from a $7.5 million loss in the first half to a minor, albeit notable, profit of over $2 million for the full year.
Somerville noted that while the Company is making significant progress, it still has more work to do to catch up to its pre-pandemic level profits.
Alinda is a Business Reporter for The Sentiment
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