"Solid six months trading performance..." reads the almost wistful epigraph above Gateley' s (GTLY) first set of financial interims as a public limited company. But the only law firm on the LSE has its eyes fixed on the future, expecting its newly fashioned corporate structure to help it move faster and more effectively than peers structured as limited liability partnerships.
Regardless, Gateley's position as a mid-tier dealmaker is helping. It is free from the foreign exchange swings and costly international expansions that have troubled many larger law firms this year. Add to this robust mid-market transactional activity and better utilisation of billing professionals, and it is little surprise fees in the dominant corporate group jumped a fifth against admittedly modest 2014 comparatives.
Management says the listing has greatly raised the company's profile among clients, particularly in London. "That doesn't get you fees and business per se," reports chief executive Michael Ward, "but it's a good start, and gets the conversation going".
Since floating, Gateley has also changed the way it reports its capital structure. 'Amounts due to members' are now treated as £9.9m of current and non-current loans, which will be paid back to partners in the next two years. That should strengthen the net asset position, which excludes the significant human capital contained in five-year partner lock-ins.
For the year to April 2016, broker Cantor Fitzgerald forecasts adjusted pre-tax profit of £11.8m (FY2014 pro-forma: £10.5m) and EPS of 9p.
| GATELEY (GTLY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 105p | MARKET VALUE: | £110m | |
| TOUCH: | 103-106p | 12-MONTH HIGH: | 110p | LOW: 94.5p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 7p | NET DEBT: | 171%^ | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 26.7 | 2.6 | 1.9 | na |
| 2015 | 29.6 | 2.9 | 2.0 | 1.9 |
| % change | +11 | +12 | +5 | - |
Ex-div: 24 Dec Payment: 22 Jan *Pro-forma figure for 2014 ^Includes £9.9m in loans from legacy partners. | ||||
