Shine Lawyers achieved revenue on a cash basis of $162 million (receipts from customers) in 2016/17. This was up by 6% on the previous financial year.
Shine Lawyers generated a net positive $19 million cash (receipts from customers less payments to suppliers and employees) in 2016/17.
This represented a margin of 12% on cash receipts from customers, an almost identical margin to the previous year.
The two major shareholders of Shine Lawyers are Simon Morrison and Stephen Roche. At 30 June 2017, they each held 24.5% of the shares of the company, i.e. 49% in total.
$4.66 million of the $19 million cash generated can be notionally credited to each of the two major shareholders. $4.66 million represents 24.5% of the $19 million.
In addition, Simon Morrison was paid a salary and Stephen Roche a consultancy fee.
Are there any other lawyers in Australia who generate $40 million in revenue (24.5% of $162m) with attributable cash earnings of $5 million per year? These may be the metrics of Australia’s most successful lawyers.
Great metrics for a legal entrepreneur does not necessarily translate into great metrics for shareholders. Shine Lawyers shares are currently below their 2013 IPO price of $1.00. When expectations were at their highest, the share price was over $3.20. At its current price of around 72c, investor sentiment speaks for itself.
What could be worrying investors? Perhaps it is CTP reforms.
The company is expecting what it describes as a “moderate impact” from NSW CTP reforms.
In addition, Suncorp and RACQ are telling anyone that will listen that CTP reforms are necessary in Queensland.
RACQ Insurance chief executive John Myler said an influx of NSW-based lawyers and claims farming had made the situation worse.
He was widely quoted as stating, “despite a steady decline in the number of car accidents, we are seeing a growth in dodgy CTP insurance claims due to people exploiting the system to get cash payouts …”
In the meantime, Shine Lawyers has been successfully diversifying into other areas of law such as disability insurance and superannuation claims, professional negligence, social justice, first party insurance recovery claims, landowners’ rights, aviation, product liability, family law, asbestos claims and class actions.
Shine Lawyers achieved sizeable fees from the DePuy class action claim. Can such major wins be reproduced each and every year?
Shine Lawyers achieved $648 million in damages for its clients in 2016/17. Unlike the success of Shine clients, lawyers and legal entrepreneurs, anyone still holding $1 IPO shares continues to wait for their day in the sun.