July, 2019

Slater and Gordon shares plunge on UK woes

Slater and Gordon has suffered its worst share price slump as UK authorities probe the accounts of a company it recently bought a slice of for $1.


2 billion.

Shares in UK-listed insurance technology group Quindell have been suspended as the country’s Financial Conduct Authority launched an inquiry into public statements about its 2013 and 2014 financial accounts.

Slater and Gordon, the world’s first publicly listed law firm, recently bought Quindell’s professional services division, a purchase it said would make it the largest personal injury law firm in the UK.

News of the FCA inquiry saw Slater and Gordon shares take their sharpest dive since the company listed on the share market in 2007.

The stock dived 23 per cent to an intra-day low of $4.74 on Thursday before recovering slightly to close $1.07 lower, or 17.5 per cent, at $5.06.

The shares have fallen more than 36 per cent since hitting a high of $8.07 in April.

Slater and Gordon said it was confident it had no liability in relation to the Quindell investigations because it acquired a subsidiary rather than a parent company.

It stands by its due diligence of the acquisition, which involved 70 lawyers, plus its own accounting policies.

“Slater and Gordon has been aware of the concerns raised publicly in relation to the accounting policies of Quindell at all stages of its engagement with Quindell,” the company said.

“Slater and Gordon remains confident in both its due diligence enquiries … and its accounting policies which reflect historical evidentiary experience of case file resolution in Australia and the UK.”

Quindell said a review of its accounting practices by PwC in December 2014 found some of its policies were “at the aggressive end of acceptable practice”.

OptionsXpress market analyst Ben Le Brun attributed the sell off in Slater and Gordon shares to uncertainty about the implications of the Quindell probe.

“It is an uncertainty and markets price out uncertainty, they assume worst case scenario,” he said.

“That’s why the share price is being dogged in this session.”

Macmahon gets $65m to exit Mongolia

Macmahon shares have jumped after the $US65 million sale of its Mongolian coal contract, but the mining contractor and industry’s short-term prospects are still viewed as bleak.


Macmahon expects to net $US62 million from the sale to an unnamed private company.

That is well below the $A100 million in forecast revenue from the project in 2015 alone.

However Macmahon had also been in a dispute with state-owned Erdenes Tavan Tolgoi over what Macmahon alleged was at least $US30 million in unpaid work in Mongolia.

The cost was greater than that, leading to work stoppages last year that contributed to Macmahon downgrading this year’s revenue guidance from $A750 million to $A1 billion, to $A750-$A850 million.

Investors were happy to see Macmahon get out of Mongolia, with its shares adding 2.2 cents, or 47.8 per cent, to 6.8 cents.

However the stock remains well below the 72 cents it was trading at three years ago.

OptionsXpress market analyst Ben Le Brun said Thursday’s sale was a good short-term balance sheet fix given Macmahon’s estimated $A160 million in gross debt and more than $A250 million in impairments so far this year.

However it was no substitute for real good news such as improvements in earnings or sales pipelines, he said.

It is a difficult trading environment for Australia’s large mining services industry, with peer Bradken reported on Thursday to be considering a $A400 million recapitalisation plan to get it out of trouble with lenders.

“Macmahon is in big trouble, selling the Mongolian operation to my mind reeks of desperation,” Mr Le Brun told AAP.

“Putting out the first fire of the debt load is positive.

“Selling crown jewels in the name of fixing your debt situation raises questions marks against the backdrop of the mining slowdown.”

Macmahon defended its balance sheet, saying it was now in a net cash position after the sale and had cut costs.

It also said it was tendering for more than a dozen projects worth $A2.2 billion.

Executive chairman Jim Walker said the Mongolia sale would help in its discussions with bank lenders, who began reviewing Macmahon when it lost a major contract at Fortescue Metals’ Christmas Creek mine.

Hardwick backs Tigers’ tall timber

Richmond coach Damien Hardwick is backing his three-pronged tall attack to get the job done against Sydney on the confines of the SCG.


Hardwick has shown a willingness to play tall forwards Jack Riewoldt, Ben Griffiths and Ty Vickery in the same attack this season and he sees no reason to leave out one of his big men given the smaller dimensions of the SCG.

“They’re all different in the way that they play,” Hardwick said on Thursday.

“We’re quite capable of playing Jack and Griff up the ground and Ty as well at various stages. “They cover the ground well for bigger players. “But the big thing about this is we’ve got to make sure that we kick some goals at ground level. “We were disappointed in that facet of our game last week (in the loss to West Coast). We couldn’t manufacture a goal.”

The last time these two sides played was back in round 23 last season when the barnstorming Tigers scored an upset win over the ladder-leading Swans – their ninth in a row – to confirm their spot in the finals.

Hardwick said that a lot had changed since then but admitted his players would take some confidence from the stunning three-point victory at ANZ Stadium.

Richmond will need to curb the influence of Swans’ tall targets Kurt Tippett and Lance Franklin, which Hardwick said would require a defensive effort from the entire team. “Probably the mistake sides make is Sydney don’t overly take a lot of marks inside 50 but they’re incredible at ground level,” he said.

“You even look at guys like Tippett and Franklin – from a marking point-of-view they’re reasonably consistent – but they’re very dangerous at ground level also. “We’ve just got to make sure that we bring our ‘A-game’, we get numbers back there to help those players to get the ball back out.”

A duel between Alex Rance and Franklin is a tantalising prospect, but while Hardwick agreed Rance had done well on the Sydney superstar before, he stopped short of declaring it his preferred match-up.

Tigers fans can look forward to seeing Rance in action for another four years after the All-Australian defender signed a new deal with the club last week, ending months of speculation the devout Jehovah’s Witness could walk away from the game.

Hurricanes to channel Collins for semi-final inspiration

The 34-year-old Collins died in a car crash in France earlier this month, devastating rugby circles in Wellington, where the hulking loose forward had become a cult figure.


Collins prowled across the Wellington turf for eight years with the provincial team, Hurricanes and All Blacks, flexing his bulging biceps and preparing a bone-jarring welcome for anyone who dared run into the space he was covering.

And Hurricanes coach Chris Boyd said the Brumbies can expect a similar kind of welcome in front of a sold-out crowd on Saturday when his side host their first home semi-final since 2006, when Collins was patrolling the park.

“We will carry Jerry, as we did last week and the week before,” Boyd told reporters on Thursday. “He’s a part of us and it’s a tragedy that he’s not with us anymore.

“He’ll certainly give us some momentum on our D (defence).”

The Hurricanes learned of Collins’ death just before they played the Otago Highlanders on June 5 and destroyed their under-strength compatriots 56-20 in an emotionally charged performance in Napier.

The victory sealed the top-seed for the playoffs and secured home advantage for the semi-finals and final next week, should they win on Saturday.

After years of underperforming, the Hurricanes have impressed with steel in their pack and on defence and led by an All Blacks-laden backline produced breath-taking counter-attacking tries from deep inside their own territory.

The home side will be at virtually full strength with Beauden Barrett returning from a minor calf injury and keen to further press his credentials as the starting flyhalf for the All Blacks at this year’s World Cup.

All Blacks winger Cory Jane will miss the match with a minor hamstring tear that, according to Boyd, was almost fully repaired but causing just enough discomfort to rule him out of contention.

The Brumbies have trained just once this week after they returned from South Africa, where they destroyed the Stormers in Cape Town, though have lost winger Henry Speight, who received a five-week ban for a dangerous tackle.

Brumbies prop Scott Sio is expected to earn his 50th Super Rugby cap in the match, though he could find himself targeted by the vastly improved Hurricanes pack.

The Brumbies scrum is a weak point with the side having the second lowest success rate in the competition at 82 percent, while they have also conceded the second most penalties (50).

(Editing by John O’Brien)

BHP to cut 140 jobs in SA

About 140 jobs at BHP Billiton in Adelaide are set to go amid warnings more will follow in the wake of crashing commodity prices.


South Australian Treasurer Tom Koutsantonis says the latest cuts bring to 900 the number of jobs lost in the resources sector in SA over the past 12 months and “things will get worse before they get better”.

“A lot of resource companies both nationally and internationally are doing it very, very hard,” he said.

“Quite frankly, I think BHP are going to have some considerable job losses over the coming months and years.”

The latest job losses will come from BHP’s support services for its Olympic Dam operations with those to be made redundant told of their fate on Thursday.

It is understood they will be offered packages in excess of Fair Work Act requirements and some may be redeployed to other roles.

BHP said it was continuing to review its operational areas and more job cuts were expected.

“When these are known we will communicate with our employees who are affected quickly and respectfully,” the company said in a statement.

Mr Koutsantonis said it was important to remember that BHP remained committed to the Olympic Dam project and continued to employ about 4000 people at Olympic Dam and in Adelaide.

“While these 140 jobs are regrettable, we have to look to the positive,” he said.

“It is the largest copper deposit found anywhere in the world in the last 25 years, it is the largest uranium deposit found anywhere in the world in the last 25 years and the largest mining company in the world owns this deposit and is committed to its expansion.”