Pre-tax losses at Slater and Gordon almost doubled in 2020, the firm’s latest annual report shows. But the national firm remains upbeat about underlying performance after committing millions of pounds to a restructuring programme.
Group accounts disclose that the pre-tax deficit climbed to £18m in calendar 2020, up from £9.6m the previous year. Income fell from £192.9m in 2019 to £158.1m, a decline attributed to Covid-19 and a £20m dip arising from the firm’s decision to exit medical reporting and rehabilitation services.
The group figures follow those of its subsidiary Slater and Gordon UK Limited, which the Gazette reported on 10 January.
In 2020 group profits were hit by £11.3m of non-recurring costs, which Slater disclosed to ’give a more comparable view of year-on-year underlying performance’. That sum included £2.9m in redundancy payments, £2.2m spent on legacy litigation and £6.2m of restructuring costs.
In 2019 the bottom line had benefited from £11m of funds received resulting from settlement of the Watchstone litigation in October that year. The claim arose when Slater sued Watchstone Group (formerly known as Quindell) for the full £637m value of its 2015 acquisition.
Slater and Gordon’s primary measure of profitability is adjusted EBITDA. This is defined as operating profit before interest, tax, depreciation and amortisation, adjusted for accounting rules relating to lease modifications and loss on share issuance, and excluding non-recurring items. Adjusted EBITDA fell to £10.1m in 2020 from £16.3m the previous year.
In a strategic overview, chief executive David Whitmore said Slater ended 2020 with a 12% higher caseload than in 2019 ‘despite the Covid-19 reductions in market activity’. Some 46,000 new cases came on to the books and 97% of the firm’s 1,700 staff ‘seamlessly pivoted to remote working’.
Slater said it had performed ‘resiliently’ in 2020 across its four core divisions of personal injury, consumer, collective actions, and financial planning business Adroit. In personal injury, the firm bolstered its offering with the acquisition of north-west personal injury firm Jigsaw Law. The company ended 2020 with net assets of £107.9m and £13.8m of cash.
Chief financial officer Alison Wilford said 2021 ‘continued to be impacted by Covid-19’, but the firm ‘expects to see an upturn in 2022 performance as the UK begins to return to normality’.
Slater was unable to comment further on its trading figures for 2021, confirming these will be published in the next few months.
