Listed Australian firm Slater and Gordon says it is now big enough in the UK and has ruled out making any further acquisitions in the near future.
Group managing director Andrew Grech (pictured) told today’s annual general meeting that the firm – which has grown rapidly through a series of UK takeovers – will redirect its attention to ‘enhancing operational performance’.
The firm has endured a difficult year, with the share price tumbling throughout 2016 and an ongoing investigation into financial statements by Australian regulators.
Grech acknowledged that the UK business had a ‘slower than expected start’ to the financial year, caused by the impact of integrating staff from different firms and the loss of productivity caused by the transition to a new case management system. Grech also identified the introduction of MedCo, the independent panel for whiplash diagnosis, as a factor in a first-half contribution that will be ‘significantly lower than it has been historically’. He told shareholders he is confident these impacts are ‘temporary and will be remedied in the second half’.
Grech said the firm will now focus on its existing business rather than buying firms, as has been the policy since arriving in the UK in 2012.
‘We believe that taking a leadership position in the UK will provide us with a durable competitive advantage as it has done in Australia, without the need for further acquisitions in the near term,’ he said.
The biggest acquisition to date has been the professional services division of Quindell, bought for £637m earlier this year. This means RTA cases make up around 95% of the firm’s ‘core legal cases’ (excluding noise induced hearing loss cases), with the remainder employers and public liability cases.
Grech said the firm has reduced expectations for resolving RTA cases in 2016, from 77,000 to 70,000. Slater and Gordon will also limit RTA case intake for the year to around 73,000 against the previous estimate of 95,000.
Grech said he still expects 40-50% of noise induced hearing loss cases, bought through the acquisition of Quindell's professional service division, to be successfully resolved.