ASX:SGH

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Adequate balance sheet and fair value.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.7%

SGH

0.7%

AU Consumer Services

-0.3%

AU Market


1 Year Return

11.8%

SGH

-10.7%

AU Consumer Services

-6.9%

AU Market

Return vs Industry: SGH exceeded the Australian Consumer Services industry which returned -10.7% over the past year.

Return vs Market: SGH exceeded the Australian Market which returned -6.9% over the past year.


Shareholder returns

SGHIndustryMarket
7 Day-3.7%0.7%-0.3%
30 Day10.6%2.8%3.7%
90 Day47.5%29.2%3.8%
1 Year11.8%11.8%-7.4%-10.7%-3.5%-6.9%
3 Year-82.8%-84.7%-1.2%-12.8%18.1%3.0%
5 Year-99.6%-99.6%-29.8%-44.1%44.2%15.1%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SGH (A$1.04) is trading below our estimate of fair value (A$18.16)

Significantly Below Fair Value: SGH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SGH is unprofitable, so we can't compare its PE Ratio to the AU Consumer Services industry average.

PE vs Market: SGH is unprofitable, so we can't compare its PE Ratio to the Australian market.


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 (0.9x) compared to the AU Consumer Services industry average (1.3x).


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?

32.1%

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?

65.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SGH is currently unprofitable.

Growing Profit Margin: SGH is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SGH is unprofitable, but has reduced losses over the past 5 years at a rate of 65.9% per year.

Accelerating Growth: Unable to compare SGH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SGH is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Services industry (-18.5%).


Return on Equity

High ROE: SGH has a negative Return on Equity (-1.02%), as it is currently unprofitable.


Next Steps

Financial Health

How is Slater and Gordon's financial position?


Financial Position Analysis

Short Term Liabilities: SGH's short term assets (A$210.2M) exceed its short term liabilities (A$91.8M).

Long Term Liabilities: SGH's short term assets (A$210.2M) exceed its long term liabilities (A$134.5M).


Debt to Equity History and Analysis

Debt Level: SGH's debt to equity ratio (56.6%) is considered high.

Reducing Debt: SGH's debt to equity ratio has increased from 53.1% to 56.6% over the past 5 years.


Balance Sheet


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: Whilst unprofitable SGH has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: SGH is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 1.9% per year.


Next Steps

Dividend

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


Dividend Yield vs Market

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

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

2.7yrs

Average management tenure


CEO

John Somerville

2.67yrs

Tenure

AU$1,857,468

Compensation

Mr. John Somerville, BSC GDip Applied Information Systems MBA has been the Chief Executive Officer of Slater and Gordon Limited since February 07, 2018. He is the Managing Director and a Director since Sep ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD1.32M) is above average for companies of similar size in the Australian market ($USD277.63K).

Compensation vs Earnings: John's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
John Somerville
CEO, MD & Director2.67yrsAU$1.86mno data
Scott Butterworth
Chief Financial Officer1.92yrsAU$1.05mno data
Michael Neilson
Executive Director of Legal & Governance2.08yrsAU$934.95kno data
Dominique Requin
Chief Operating Officerno datano datano data
Kate Van Poelgeest
National Media & Communications Managerno datano datano data
Carolyn Noumertzis
Chief Human Resources Officer3.08yrsno datano data
Julie Clayton
Principal Lawyer of Project Litigation24.75yrsno datano data
Ben Hardwick
Head of Class Actionsno datano datano data
Dina Tutungi
Chief Client Officerno datano datano data
Kirsten Morrison
Executive Officer2.42yrsno datano data
Peter Gordon
Legal Consultant10.5yrsAU$223.57kno data

2.7yrs

Average Tenure

Experienced Management: SGH's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Somerville
CEO, MD & Director2.67yrsAU$1.86mno data
Michael Neilson
Executive Director of Legal & Governance2.08yrsAU$934.95kno data
Elana Rubin
Independent Non-Executive Director2.58yrsAU$298.07kno data
Mark Dewar
Non-Independent Non-Executive Director1.42yrsAU$169.95kno data
Jacqui Walters
Independent Non-Executive Director2.58yrsAU$298.07kno data
James MacKenzie
Independent Chairman of the Board2.83yrsAU$626.79kno data
Merrick Howes
Non-Independent Non-Executive Director2.83yrsAU$158.38kno data

2.6yrs

Average Tenure

Experienced Board: SGH's board of directors are not considered experienced ( 2.6 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.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


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$143.966m
  • 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, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/25 10:36
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


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.