FY21 Financial Results: Shine vs Slater & Gordon and IPH Limited

FY21 Financial Results: Shine vs Slater & Gordon and IPH Limited

Shine Justice(aka Shine Lawyers) settled more than 7,000 matters in financial year 2020/21 with staff numbers at the end of the financial year at 978.

Services revenue for FY21 was $191.9 million up $11m on FY20.

FY21 Profit Before Income Tax was $36.9m compared to $32m in FY20.

Growth in Class Actions was a major contributor to revenue and earnings. Revenue from non-personal injury practice areas has now surpassed personal injury revenue. Personal Injury work suffered a significant decline in revenue of $13.6m. This was more than made up for by other practice areas.

Staff costs in FY21 were $101m or 52.5% of services revenue (50.9% for FY20).

FY21 EBITDA $56.2m (FY20 $51.2m).

The most impressive part of Shine’s financial performance was its improved cashflow. Cash Inflow from Operating Activities was $49m compared to $25m in FY20.

Shine’s market capitalisation is now approx. $184m.

Slater & Gordon

Rival Slater & Gordon, which focuses on personal injury and class actions, had improved business activity in FY21 largely reflected in an increase in work in progress. On a cashflow basis, it underperformed compared to FY20. Receipts from customers were down by $10.7m to $223.4m (FY21). Shine’s receipts from customers $218.5m (incl.GST) were up by $42.9m in FY21 compared to FY20.

IPH Limited

IPH Limited reported its FY21 results (commentary here). It is a company with 900+ employees, i.e. similar numbers to Shine Lawyers. IPH produced an EBITDA of $113m compared to Shine’s $56.2m.

While EBITDA is roughly double for IPH compared to Shine, ASX-investors are valuing IPH at $2.01 billion which is more than 10 times the value of Shine’s market capitalisation of around $184 million.

Article submitted by Peter Frankl

www.peterfrankl.com.au