ASX:SGH

Stock Analysis Report

Executive Summary

Slater and Gordon Limited, a law firm, operates legal practices in Australia.


Snowflake Analysis

Fair value with acceptable track record.


Similar Companies

Share Price & News

How has Slater and Gordon's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SGH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

SGH

17.0%

AU Consumer Services

1.5%

AU Market


1 Year Return

-54.5%

SGH

11.5%

AU Consumer Services

15.6%

AU Market

Return vs Industry: SGH underperformed the Australian Consumer Services industry which returned 11.5% over the past year.

Return vs Market: SGH underperformed the Australian Market which returned 15.6% over the past year.


Shareholder returns

SGHIndustryMarket
7 Day-2.0%17.0%1.5%
30 Day-4.8%3.9%0.4%
90 Day12.4%12.4%4.1%
1 Year-48.7%-54.5%14.4%11.5%20.6%15.6%
3 Year-93.6%-94.3%24.8%12.8%37.1%18.7%
5 Year-99.8%-99.9%-27.5%-40.0%50.9%17.1%

Price Volatility Vs. Market

How volatile is Slater and Gordon's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Slater and Gordon undervalued compared to its fair value and its price relative to the market?

2.11x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate SGH's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate SGH's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: SGH is good value based on its PE Ratio (2.1x) compared to the Consumer Services industry average (20.1x).

PE vs Market: SGH is good value based on its PE Ratio (2.1x) compared to the Australian market (18.8x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SGH's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SGH is good value based on its PB Ratio (0.8x) compared to the AU Consumer Services industry average (1.8x).


Next Steps

Future Growth

How is Slater and Gordon forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

17.1%

Forecasted Consumer Services industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Slater and Gordon has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Slater and Gordon performed over the past 5 years?

15.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SGH has high quality earnings.

Growing Profit Margin: SGH became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SGH has become profitable over the past 5 years, growing earnings by 15.8% per year.

Accelerating Growth: SGH has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SGH has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Services industry (0.6%).


Return on Equity

High ROE: Whilst SGH's Return on Equity (39.23%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Slater and Gordon's financial position?


Financial Position Analysis

Short Term Liabilities: SGH's short term assets (A$192.5M) exceed its short term liabilities (A$81.4M).

Long Term Liabilities: SGH's short term assets (A$192.5M) exceed its long term liabilities (A$173.2M).


Debt to Equity History and Analysis

Debt Level: SGH's debt to equity ratio (188.5%) is considered high.

Reducing Debt: SGH's debt to equity ratio has increased from 29% to 188.5% over the past 5 years.


Balance Sheet

Inventory Level: SGH has a high level of physical assets or inventory.

Debt Coverage by Assets: SGH's debt is covered by short term assets (assets are 1.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: SGH is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: SGH is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Slater and Gordon's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%2.3%markettop25%5.5%industryaverage2.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate SGH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SGH's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SGH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SGH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: SGH is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SGH's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

John Somerville 0

2yrs

Tenure

AU$819,168

Compensation

Mr. John Somerville has been the Chief Executive Officer of Slater and Gordon Limited since February 07, 2018. John Somerville is Managing Director and director since September 26, 2018. 


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD550.33K) is above average for companies of similar size in the Australian market ($USD254.67K).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Somerville
CEO, MD & Director2yrsAU$819.17kno data
Scott Butterworth
Chief Financial Officer1.3yrsAU$1.17mno data
Michael Neilson
Executive Director of Legal & Governance1.4yrsAU$504.35kno data
Dominique Requin
Chief Operating Officer0yrsno datano data
Kate Van Poelgeest
National Media & Communications Manager0yrsno datano data
Carolyn Noumertzis
Chief Human Resources Officer2.4yrsno datano data
Julie Clayton
Principal Lawyer of Project Litigation24.1yrsno datano data
Ben Hardwick
Head of Class Actions0yrsno datano data
Dina Tutungi
Chief Client Officer0yrsno datano data
Kirsten Morrison
Executive Officer1.8yrsno datano data

1.9yrs

Average Tenure

Experienced Management: SGH's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
John Somerville
CEO, MD & Director2yrsAU$819.17kno data
Michael Neilson
Executive Director of Legal & Governance1.4yrsAU$504.35kno data
Elana Rubin
Independent Non-Executive Director1.9yrsAU$175.00kno data
Mark Dewar
Non-Independent Non-Executive Director0.8yrsAU$18.17kno data
Jacqui Walters
Independent Non-Executive Director1.9yrsAU$175.00kno data
James MacKenzie
Independent Chairman of the Board2.2yrsAU$250.00kno data
Merrick Howes
Non-Independent Non-Executive Director2.2yrsAU$158.38kno data

1.9yrs

Average Tenure

Experienced Board: SGH's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 83.6%.


Top Shareholders

Company Information

Slater and Gordon Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Slater and Gordon Limited
  • Ticker: SGH
  • Exchange: ASX
  • Founded: 1935
  • Industry: Specialized Consumer Services
  • Sector: Consumer Services
  • Market Cap: AU$138.429m
  • Shares outstanding: 138.43m
  • Website: https://www.slatergordon.com.au

Number of Employees


Location

  • Slater and Gordon Limited
  • 485 La Trobe Street
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SGHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2007
OQHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2007
SGHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2007

Biography

Slater and Gordon Limited, a law firm, operates legal practices in Australia. The company provides legal services in various areas, such as workers compensation, motor vehicle accidents, public liability, asbestos, silicosis, military compensation, comcare, institutional abuse, superannuation and disability insurance, medical law, commercial litigation, will, and employment law. It also offers union services, class actions, and estate litigation. The company was founded in 1935 and is based in Melbourne, Australia. Slater and Gordon Limited is a subsidiary of AIO V Finance (Ireland) DAC. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 10:35
End of Day Share Price2020/02/18 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.