Slater & Gordon Limited (SGH)



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General Information
Company Name: Slater & Gordon Limited
Stock Code: SGH
Website: www.slatergordon.com.au
GICS Sub-Industry: Specilised Consumer Services
Market Cap ($M): 1,269
Equiv. Shares (M): 209

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 6.080 $ 6.000 $ 6.150 $ 5.990 $ 6.080 317,747 0%

Current Broker Consensus Recommendation more
Recommendation: Buy (1.6667)
Recommendation Date: 12th Nov 2014
Brokers Surveyed: 3

Company Overview

Business Description:
Slater & Gordon Limited (SGH) is an Australian law firm specializing in insurance claims, commercial, family and asbestor-related law. SGH also provides advice to organizations involved in commercial or business disputes. SGH operates core business with 70 offices throughout Australia and across 12 locations in the UK. SGH now includes five brands in total: Slater & Gordon (national), Trilby Misso Lawyers and Conveyancing Works (Queensland), Russell Jones & Walker and Claims Direct (UK).

Strategy Analysis:
SGH's strategy is to continue to lead the consolidation of the national personal injuries litigation market, to extend the geographical reach of the business, to expand the range of services we offer clients and to continue to build the Slater & Gordon brand. SGH is pursuing an ongoing acquisition program and the acceleration of the organic growth of the business through advertising and other national brand building initiatives. This will lead to expansion into new and emerging geographical markets. The Company will also continue to pursue opportunities to increase its presence in practice areas outside the personal injuries sector. SGH is also seeking to benefit from system and process efficiencies to support the growing business. Slater & Gordon reported NPAT up 61.29% to $19.08m for the half-year ended 31 December 2012. Revenue from ordinary activities were $145.69m, up 46.47% from last year. Diluted EPS was 11 cents compared to 7.6 cents last year. Net operating cash flow was $17.49m compared to $4.09m last year. The interim dividend declared was 2.75 cents, compared with 2.5 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 90.3 43.6 15.2 13.9 11.5 1.9 50.0
2015  F 78.4 37.9 21.6 16.1 9.6 1.6 50.0
2014  A 63.8 31.1 32.6 13.4 8.0 1.9 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Corporate Travel Management (CTD) $906 M 0.3692 0.4704 0.2052 48.6395 33.0800 27.4472 1.20 1.71 2.11
iSelect (ISU) $348 M -0.6363 2.3458 0.1333 55.4167 16.5629 14.6154 0.00 0.00 2.03
InvoCare (IVC) $1,283 M 0.0997 -0.0347 0.1327 26.1025 27.0408 23.8739 2.96 3.08 3.44
Slater & Gordon (SGH) $1,254 M 0.3207 0.1357 0.1483 19.2814 16.9774 14.7847 1.33 1.62 1.89

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
SGH 0.72 18.5 2.94 1.30 3.02
Market 0.91 15.3 1.20 1.75 1.52
Sector 1.41 18.3 2.59 1.43 2.61

Directors
Name Position Start Date
Mr Kenneth John Fowlie Executive Director 01 July 2003
Mr Andrew Alexander Grech Managing Director 27 June 2001
Ms Rhonda O'Donnell Non-Executive Director 07 March 2013
Mr Ian Court Non-Executive Director 22 March 2007
Ms Erica Lane Non-Executive Director 22 December 2008
Mr John Skippen Non-Executive Director,Non-Executive Chairman 26 May 2010

Management
Name Position
Hayden Stephens Chief Executive Officer - Personal Injuries
Wayne Brown Chief Financial Officer,Company Secretary
Cath Evans Chief Operating Officer - UK
Kirsten Morrison Company Secretary
Neil Kinsella Head of UK

Substantial Shareholders
Holding Name
21,534,125 (11.10%) National Australia Bank Limited
19,873,068 (10.08%) Perpetual Limited and subsidiaries
17,370,052 (9.96%) Mawer Investment Management Ltd

Calendar of Events
Date Event
18 September 2015 Report (Annual)
11 August 2015 Report (Prelim)
11 February 2015 Report (Interim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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