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Class action firms deliver strong FY20 results
Two of Australia’s leading class action firms have delivered over $700 million in claims for their clients, reported improvements in their corporate and business structures and confirmed a period of financial success amid the COVID-19 pandemic.
Naomi Neilson
Leading ASX-listed class action firms Slater and Gordon (ASX: SGH) and Shine Lawyers (ASX: SHJ) have each demonstrated significant economic success despite the current global pandemic, delivering $950 million and $730 million respectively to clients.
Slater and Gordon
Slater and Gordon delivered approximately $700 million in personal injury compensation and announced a further $250 million in class action settlements on behalf of the more than 55,000 Australians who were victims of corporate dishonesty and wrongdoing.
Chair James MacKenzie said the progress could not have been made without “passion and dedication [from] our people to our clients” and thanked the firm for “their incredible efforts during the disruption caused by the COVID-19 pandemic”.
The total results indicated “continued improvement” despite reporting net loss after tax for the full year to June 2020 of $1.2 million, which includes the costs for transforming the company as well as the cost of normalising its incentive program.
Slater and Gordon achieved earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) before specified items of $28.1 million compared to $17.5 million in the previous reporting year. Revenue on this basis increased by 12 per cent and the costs increased by 6 per cent. At the same time, the company benefited from strong management of its working capital and a strengthened balance sheet.
“The work that we have undertaken to continue to transform the company is delivering results and we are firmly focused on the future,” Mr MacKenzie said.
“Most importantly, we are united in our purpose to deliver affordable, high-quality legal services to the thousands of everyday Australians who need help to access justice.”
Shine Lawyers (Shine Justice)
Shine Justice – the holding suite of Shine Lawyers – has settled or resolved more than 5,600 cases during the year and procured damages of over $730 million. Although the largest firm in the suite, the results are also made up of the other Shine Justice firms – including Carr & Co, Emanate Legal and Best Wilson Buckley Lawyers.
The group achieved EBITDA of $51.5 million, compared with $47.44 million in the last reporting year. Net profit after tax came to $21.55 million compared with $14.03 million previously. Gross operating cash flow also came to $34.56 million, representing a firm and solid outcome of the group and an uplift overall from the previous reporting year.
Over the reporting year, Shine Justice refined its corporate structure to improve further efficiencies as well as further integrate the brands under the Shine Justice banner.
Managing director and CEO Simon Morrison said: “Our leadership embeds the culture within the group that respects our history, embraces our values and inspires our [high performance]. We are grateful to all our team members for their willingness to adapt to ensure continued delivery of outstanding service throughout a year like no other.
“The challenges posed for business and the entire community by the COVID-19 global pandemic in the second half of the financial year were met by the team at Shine Justice with resilience and we delivered a financial result in accordance with our guidelines.”
Despite COVID-19, Shine Justice reported a strong financial position and is predicting further growth in the next financial year. It intends to grow into new markets and make use of its opportunities to innovate and integrate its brands.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
