Shine’s Acquisition of Majority Interest in Carr & Co will lead to Earnings Accretion in FY 2019

  • Jan 04, 2019 AEDT
  • Team Kalkine
Shine’s Acquisition of Majority Interest in Carr & Co will lead to Earnings Accretion in FY 2019

Shine Corporate Ltd. (ASX: SHJ) is a national law firm. The Firm's areas of practice include personal injuries law, family law, property law, class actions, wills, probate, and residential conveyancing.

On 4 January 2019, the company released the latest update, which says that it has tried to expand its practice into the verticals of family law through the acquisition of a majority interest in Carr & Co Divorce & Family Lawyers Pty Ltd (Carr & Co). Carr & co. has done their practice in all areas of family law in Perth since being established by William Carr in 1995. The acquisition has already taken take effect from 1 January 2019. The purchase price for 80% of the shares in Carr & Co is $3.6 million, the majority of which will be debt funded. The acquisition is expected to accrete the earnings in FY19.

Carr & Co is a highly respected family law practice in the Perth market, and its highly experienced and well-regarded directors and key employees will remain with the business.

Managing Director Simon Morrison has said that the management of the company is delighted to have Carr & Co join the Shine Group. In addition to meeting the company’s strategic acquisition criteria, the firm will contribute to Shine’s future earnings growth as synergies are realized. The acquisition delivers a strategic expansion opportunity and enhances the company’s family law practice capabilities.

For the FY 2018, the company had achieved an EBITDA of $37.72 million, as compared with $36.49 million in the previous year. Thus, witnessing a growth of 3.29% on a YoY basis. The company had erstwhile reported a Net profit after tax of $19.11 million as compared with $20.15 million previously. This fall was mainly due to the permanent differences brought to account in the previous year which were not applicable in FY18. Encouragingly the gross operating cash flow was reported at the levels of $21.9 million which had represented a record outcome for the Group.

These financial results were considered very encouraging and the improvements that the company had made to their business this year provide them a platform from which they continued to build a profitable business, these efforts had delivered outstanding outcomes for our clients.

The Group settled or resolved more than 6,000 cases for their clients during the year and was successful in procuring damages more than $600 million.

Going into the FY 2019, the company will focus on leveraging Shine’s scale and capabilities for competitive advantage to win in the marketplace. It will also look to Strengthen its brands, niche services, and marketing strategy. The company intends to become a Trusted advisor of choice. The firm has a National, integrated and highly automated service platform. And, it intends to realize benefits accruing from its operations in time and cost-effective manner, not compromising with the quality and compliance aspects.

Meanwhile, the stock price of the company has fallen by 14.94 percent in the past six months as on 3 January 2019. SHJ’s shares traded at $0.70, down by 5.405% (intraday) & it has a market capitalization of circa $128.14 million as on 4 January 2019. (AEST 04:00 PM).


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