The government policy in the UK is trying to remove £1bn per annum cost. Intention is to flow a £40 to £50 saving to each policy holder of motor insurance ( they had just increased insurance premium tax by over 50%).
SGH is 15% of market, hence loss to earnings is £150m minus any restructuring.
Redde plc a legal business in UK stated MVA work was only 2.5% of their revenue. Their share price was down 7%.
NAHL Plc a consumer marketing business directing work to lawyers for PI was down 25%.
The government policy will happen, it's good politics.....This could make Slaters the strongest law firm over the long run in the UK. The smaller firms will close up.
Slaters need a new senior management team, restructure the UK business. Then this will be a great long term asset to have.
SGH Price at posting:
69.0¢ Sentiment: Buy Disclosure: Held
