The accounts and opinions filed at the UK’s Company House are signed as at March 31 2016 by the auditor Ernst and Young and Slater & Gordon’s board with a mixed message as to the future of the group.
The firm updated that, inter alia, “proposals have been provided to the lenders in line with the SFA….The Directors, having given consideration to the current financial forecasts for the Group and the Company, the engagement with the banking syndicate and its financial advisers, the comprehensive review, and the performance improvement programmes being implemented by management, consider the going concern basis of preparation is appropriate for the period to March 31 2017“.
This may seem positive on first blush given it is based on forecasts and the auditor has signed off on it, however, the going concern sign-off is only until March 31 2017 – the date at which Slater & Gordon’s creditors can call in its debt obligations if the law firm cannot reverse its financial performance or negotiate further breathing room in its SFA by 30 April 2016.
The firm’s future beyond March 31 2017 remains somewhat up in the air then, with shares likely remain to volatile in the short term, as it is difficult to know whether the banks will agree to a rescue plan that could involve the extension of more credit.
