An Australian practice has confirmed it is investigating a possible class action against listed firm Slater and Gordon.

Sydney-based ACA Lawyers said it is exploring whether the Australian and English giant misled the market over the capital raising to acquire Quindell’s professional services division and over its profit forecasting for the 2016 financial year.

Slater and Gordon admitted last week it had downgraded its profit forecasts after experiencing slower case resolutions than expected.

The admission was made last Thursday, although in a fresh twist Slater and Gordon said yesterday that the revised results were circulated to group executives on 9 December and kept confidential for a week.

Slater and Gordon’s share price dropped by 17% following the profit warning. This year the price has fallen from A$6 (£2.90) a share to a low of A$0.83. The price has since recovered marginally, to A$0.98 per share.

Bruce Clarke, principal with ACA Lawyers, said shareholders can have ‘little confidence’ in the company’s projections.

‘What we are seeing at the moment is a company that appears to be unable to accurately provide the market with the information needed to make considered decisions on the value of Slater and Gordon,’ said Clarke.

‘If this is the case, and investors have not been fully informed, then Slater and Gordon could face legal proceedings, including a potential class action by investors who have purchased shares without all available information.’

A spokeswoman for ACA Lawyers said the firm has had ‘a lot’ of interest from investors but is yet to decide on whether to proceed with legal proceedings. Another Australian firm, Maurice Blackburn, has been linked with a similar action but has yet to respond to the Gazette’s request for information.

Any class action would have echoes of proceedings involving shareholders of Quindell, which once claimed to be the largest listed legal services provider in the world.

A firm representing 342 shareholders has sent a letter of claim following the UK company’s share price fall in recent years. Quindell has vowed to contest the action.

Slater and Gordon has admitted that while the first half of 2015 as a whole has been ‘difficult’, the performance of the UK business has been improving during the past few months and is ‘expected to contribute positively to cashflow’ in December and during the remainder of the financial year.

Speaking last week, managing director Andrew Grech said: ‘The trajectory of the UK business provides confidence that we will trade through this period to be in a stronger position by the end of this financial year.’

The firm said its financiers have been kept informed of the position throughout, and Slater and Gordon has more than A$100m ‘headroom’ within its banking facilities.