Slater and Gordon shares have hit a fresh all-time low after the law firm flagged falling revenue at its Australian business, with customers heading elsewhere in the wake of the company's problems in the UK.
Shares in Slater and Gordon fell 25.9 per cent to 20 cents after the firm warned that half year fee and services revenue in Australia is expected to be lower than in the prior corresponding period, and its total debts now exceed the value of the business.
The firm also said further impairments against its troubled UK business were likely as the unit's recovery was taking longer than expected.
Slater and Gordon said it is continuing to work with its lenders on a recapitalisation plan, with negotiations set to continue for several months.
"The continued support of the company's lenders is fundamental, as current levels of bank debt exceed total enterprise value," Slater and Gordon warned in a statement to the Australian Securities Exchange.
Slater and Gordon has not yet finalised its first half results, which are due to be released on February 27, but can already gauge the continuing fallout from the situation in the UK.
"Slater and Gordon's Australian business has more recently started to show signs of being impacted by negative sentiment about the business and increased competition in key segments," it said.
The UK business it acquired in March 2015 led to a loss of $1.02 billion in the 2015/16 financial year, and caused a collapse in its share price from an all-time high of $8.07 in April 2015.
The shares were valued at 27 cents each prior to the market opening on Thursday but swiftly fell as low as 18 cents.
Slater and Gordon has been working to improve earnings and cashflow but on Thursday said billed revenue in the UK would be lower than anticipated.
The firm said the unit was carrying $327.2 million in goodwill at the end of the last financial year and warned it was likely this would be impaired.
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