Roughly 18 months since it broke the mould to become London's first listed law firm, Gateley (GTLY) is in acquisition mode. Having affixed its name to two more specialist businesses - tax specialist Gateley Capitus and property consultancy Gateley Hamer - in its first half, bosses there say further deals remain "firmly on the agenda". That's because the group wants to diversify its income stream, one of the major goals laid out to shareholders at the time of the IPO.
Other goals include widening the group's geographic spread. A new office has opened in Reading, which now has 13 members of staff, including five partners. Total staff numbers since October 2015 have grown 13 per cent to 701, with 15 partners hired since the float. These investments appear to be paying off: revenue is up by nearly a fifth at the halfway stage and good cash generation left adjusted cash profit ahead by 11 per cent.
Management is proud of the group's unique offering for UK investors: a chance to buy into a traditional law firm. The plc structure also means all employees - not just partners - can participate in the company's share scheme.
Broker Cantor Fitzgerald still expects pre-tax profit of £13.4m and EPS of 9.8p for the year ending April 2017, compared with £11.9m and 9p in FY2016.
| GATELEY (GTLY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 118p | MARKET VALUE: | £126m | |
| TOUCH: | 116-120p | 12-MONTH HIGH: | 126p | LOW: 95p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 12p* | NET DEBT: | 59% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 29.6 | 2.9 | 2.0 | 1.9 |
| 2016 | 35.2 | 4.2 | 3.1 | 2.2 |
| % change | +19 | +44 | +52 | +16 |
Ex-div: 9 Feb Payment: tbc *Includes intangible assets of £4.1m, or 3.8p a share | ||||
