24 August 2012

Income up sharply at pioneering ABSs

Two of the UK’s first alternative business structures – Slater & Gordon (S&G) and Co-operative Legal Services – have reported strong increases in income.

Slater & Gordon, which is listed on the Australian Stock Exchange, said today that revenue for the year to 30 June 2012 was up 19.4% to A$218 million (£143m). It listed in 2007 and reported revenues of A$80m in 2008.

The announcement said that its new UK subsidiary, Russell Jones & Walker (RJW), “performed in line with expectations, contributing A$12m (£7.9m) to the revenue result in the two months since completion”.

The UK business is on track to achieve the acquisition forecast revenue of A$72m (£47m) in 2013, with total company revenue expected to be A$290m.

The company said its first priority in the UK is to settle the business into the S&G group and deliver the forecast results, and set the stage for the long-term growth plans. It is looking to deliver 8-10% organic revenue growth in the UK.

The group’s net profit after tax in 2012 was A$25m, down 10.5% on the prior year after the write down of A$10.5m in work in progress and disbursements on a Vioxx class action, which was lost on appeal and for which leave to appeal to the High Court was not granted.

S&G managing director Andrew Grech said that he considered the company to be on track to achieve its five year strategy, while “through Russell Jones & Walker we now have a future growth platform in a market four to five times that of Australia”.

Meanwhile, half-year results from the Co-operative Group revealed that turnover at Co-operative Legal Services grew 19% to £17.1m in the first six months of 2012, but profits sank 63% to just £700,000.

The group’s business review said the profits figure was in line with expectations and reflects investment in future growth. It notes the roll-out of legal services provision across the group’s bank branches as one of the operational highlights of the period under review. Earlier this year it announced plans to create 3,000 jobs in its legal services business within the next five years.

Overall the group’s sales grew marginally to £6.6bn, with operating profit down from £264m in the first half of 2011 to £174m in 2012.

 

By Legal Futures

Tags: ABS, Alternative business structures, Co-op, Slater & Gordon