Shine Lawyers (now known as Shine Justice) has produced a solid financial result for the full financial year 2019/20 (FY20). The strategy begun years ago to diversify from personal injury law has paid off in FY20.
Non-personal injury work represented 36% of EBITDA and significantly increased in dollar terms by 58% compared to FY19 (EBITDA).
The specific areas of law that boosted revenue included Abuse, Disability, the Super business and class actions. Family law was another area of growth although family law was boosted by the acquisition of Carr and Co with FY20 being its first full year as part of Shine.
Personal injury (PI) work declined in its contribution to earnings (EBIDA). PI revenue was down “primarily due to write-offs, impact of restructuring and downsizing of non-performing work types in prior periods,” according to Shine’s CFO.
Overall, staff costs were kept under control during the year which also contributed to profitability. Employee Benefits Expense represented 50% of revenue, down a couple of percentage points from 2019.
Revenue increased by 2.9% compared to FY19. On a cash basis, receipts from customers was almost identical to FY19
With its long-tail matters, the law firm is certainly a lot more attractive for investors in this Covid environment than companies in many other sectors. In fact, the company anticipates an increase in claims arising from working from home incidents. There will also be Covid-19 class actions pursued in the aged care and tourism sectors.
In the personal injury law sector, Shine anticipates that population growth and increasing car ownership will add to more motor vehicle accidents.
Revenue of the company in FY20 was $181 million. New practice areas represented 37% of revenue in FY20 up from 33% in FY19. Group revenue was $183 million.
At a 79 cent share price (28/8/20) Shine Justice’s market capitalisation is $137 million.