More problems for Slater & Gordon
Independent Financial Research
Things just keep getting worse for the world’s first listed law firm After promising an update in January on its 2016 first half operating cash flow, Slater & Gordon (ASX:SGH) recently demurred. Perhaps the reason for the delay is mundane but on top of the resignation of its long-serving CFO, admission of accounting errors, withdrawal of 2016 guidance, and the replacement of its auditor, I think skepticism is warranted. Even more so after the company confirmed earlier in January that its bankers – led by NAB (ASX:NAB) and Westpac (ASX:WBC) – had appointed McGrathNicol to examine its books. The firm’s half year result will be released later in February but in the meantime let’s discuss a few items that McGrathNicol will be looking at closely. A good rule of thumb is that a company’s liabilities are usually real so I’ll assume Slaters’ $1.6bn in liabilities are too. Note that the $150m+ in ‘off balance-sheet liabilities’ (operating leases and bank guarantees) revealed in the footnotes need to be added to the firm's $720m in borrowings. Read full article here: (VIEW LINK)
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