Slater and Gordon admits to owing more than it is worth

Listed Australian-based firm Slater and Gordon has given further indications of its financial woes as it braces shareholders for the release of half-year results. In an update to the Australian Stock Exchange this morning, Slater and Gordon Limited said that ongoing negotiations with lenders are vital to survival. 'It is clear that based on performance expectations and liquidity the continued support of the company’s lenders is fundamental, as current levels of bank debt exceed total enterprise value.'

The business said it expects negotiations with banks to be concluded 'in coming months'.

Preparing the market for bad news on UK operations, the update states that 'Slater and Gordon's UK business has shown signs of improvement, but recovery is slower than expected. Whilst progress is being made in terms of realigning the cost base of the business to its future needs, billed revenue performance in segments of the business is lower than expected.'

In 2015/16 the UK business reported a loss of £37 million. 

In Australia, the statement said the firm has 'started to show signs of being impacted by negative sentiment about the business and increased competition in key segments'. As a result fee and services revenue in the first half of the year 'is expected to be lower than the prior comparative period', with declines across both personal injury law and general law. 

Slater and Gordon Limited's share price slipped to 20 Australian cents, its lowest ever, on the news. 

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Slater and Gordon admits to owing more than it is worth