Thanks tracer.
What I also like was an explanation around timing of Quindell. They had been monitoring them for a while, in 2014 a vendor who had sold business into Quindell approached Slater's and said he had concerns over how the business wa being managed - thought Slater's could do a bette job. Then timing....
* after deciding Quindells parts added up tot he type of the business they needed to expand further into UK Slater's became concerned of asset impairment the longer they left it.
* asset impairment in terms of critical staff becoming disechnated with Quindell and potentially leaving
* asset impairment in key institutional clients increasing concern of governance issues and potentially ceasing SLA
* If left too long it could have gone past the point where there is true value in the assets
* underlying business is strong basically a group of quality law firms
* remain convinced they can add value to the assets - already signs that the staff are galvanised and refreshed for the 'fight'
On buy value:
* chief negative comment about value paid cones from Bank Of America. They say no mor than the sum of what Quindell paid 240GBP - Slater disagree with that because the value of a business is in its earning capability - the 647GBP is a discount to what Quindell wanted and the underlying case load coupled with network it ha provided will generate wealth - hence confident FY16 revenue forecast
Also liked, explain of often used win rate metric. Australia PI is around 70% with some case types 90%. But what that does;t show is they rate a case a loss if it is abandanoned in the very early stages due to not strong evidence. By implication that will impact the win rat percentage but a pro-rate much less impact on Op Cashflow, presumably not much in the way of costs are incurred in that initial file review.
Also like the positivity increasing higher value GL work - 1/2 way towards their target 10 to 15% of work coming from GL. Made greta inroads into GL last year. This will ultimately show up as increased margins.
Also liked. ASIC themselves say they have never seen anything like the interest in Slater's surveillance case. Nothing unusual every year 70 to 80 companies are reviewed for all sorts of reasons and that goes unnoticed. Nobody in ASIC informed th press, nobody in SGH informed the press...
Well worth 1/2 hour tim listening to the interview. Overall Andrew seemed to go out of his way not to be agitated or dismissive. He acknowledged the hard work ahead and was not drawn into a counter-debate about the shorter arguments. Instead focusing on business performance an let results do the talking.
I say good on yer Andrew.
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