Quindell buyer Slater and Gordon’s share price plummets on $958m loss largely due to a huge UK writedown
The company which bought embattled Quindell almost a year ago has reported a nearly AUD$1bn loss today, driven by a huge writedown of its UK assets.
Slater & Gordon shares nearly halved after it posted a $958m (£492m) loss for the six months ended December 31st, primarily due to a $814.2m writedown on its acquisition of the professional services arm on Quindell.
While Slater & Gordon's UK revenue was in line with expectations, its personal injury sector came in below expectations. Looking ahead, it expects to be hit by proposed legislative changes which will make it harder to claim for injuries from road accidents in the UK.
Shares in the company closed down 30.1 per cent to AUD$0.58. It's lost around 90 per cent of its value since the beginning of 2015.
Read more: Watchstone, formerly known as Quindell, sells property business for £1
"Clearly today's results are very disappointing. In particular the decline in business performance in the UK is of serious concern to all at Slater and Gordon and equally will be on concern to our investors," Andrew Grech, managing director of Slater and Gordon, said.
"We will therefore be taking a number of necessary and significant steps to improve the operational performance of both the UK business and the broader Slater and Gordon group."
Slater and Gordon raised eyebrows when its bought the professional services arm of troubled Quindell last year. Since then, it's been slapped with a possible class from a rival law firm on its "devastating" share price drop.
Quindell, now known as Watchstone, has been working hard to distance itself from the company's scandal engulfed past. Its shares rocketed when the company relaunced under its new name in December.
Quindell's woes started in April 2014 with a research note from US analyst Gotham City Research, accusing it of having "magical… paper profits".