Slater & Gordon swings to loss of nearly 1bn on UK writedown

Slater & Gordon, the Australian company that bought most of beleaguered UK insurance technology group Quindell nearly a year ago, reported a first half loss of nearly AUD1bn on Monday.

For the six months to 31 December, the company swung to a loss after tax of $958.3m (£493.6m) compared with a profit of $49.29m in the same period a year ago.

This was despite an increase in revenue to $487.5m from $267.7m, and was primarily on the back of a $814.2m (£420m) writedown incurred on its acquisition of the professional services arm of Quindell.

Last April, Melbourne-based Slater & Gordon bought Quindell’s personal injury business for AUD1.3bn with the intention of tapping into the car accident claims market.

However, since then, the proposed tightening of UK compensation laws to crack down on fraudulent injury claims has put earnings prospects for that business in doubt.

The company – whose bookkeeping has been the subject of an eight-month review by the Australian Securities and Investment Commission (ASIC) – said it will not be paying a dividend.

Shares in Slater & Gordon have fallen sharply in the last year amid worries about the Quindell deal and the way in which the firm draws up its accounts.

The ASIC said on Monday that its investigation into the law firm included “the recoverable amount of goodwill attributable to the company’s Australian and UK businesses”.

Slater & Gordon shares tumbled 30% to AUD0.58.