Gateley (GTLY) delivered a strong first-half performance, with organic sales growth of 10.2 per cent matched by that of acquisitions. The group also attracted a slew of new recruits, with eight new legal partner hires and a 17.3 per cent rise in total staff numbers since the end of April 2018 to 928.
All divisions reported rising revenues, except for corporate – where Gateley provides legal advice in relation to corporate, family, private client and taxation services. Here, a decline of 5.6 per cent to £7.3m was attributed to transactional advisory activity levels, and a tough comparative figure.
Two acquisitions during the period – GCL Solicitors, and the (non-legal) human capital consultancy Kiddy & Partners – have now been integrated. And while these deals prompted a substantial increase in net debt, this should fall from £8.2m to £3m by the financial year-end.
Management reckons full-year numbers will meet market expectations, which were upgraded following November’s trading update. Broker N+1 Singer expects adjusted pre-tax profits of £18.5m and earnings per share (EPS) of 13.2p for the year ending April 2019 (up from £15.4m and 11.1p in FY2018).
| GATELEY (GTLY) | ||||
| ORD PRICE: | 140p | MARKET VALUE: | £155m | |
| TOUCH: | 138-141p | 12-MONTH HIGH: | 190p | LOW: 120p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 21p* | NET DEBT: | 36% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 38.6 | 4.2 | 3.1 | 2.2 |
| 2018 | 46.4 | 5.0 | 3.5 | 2.6 |
| % change | +20 | +19 | +14 | +18 |
| Ex-div: | 14 Feb | |||
| Payment: | 15 Mar | |||
| *Includes intangible assets of £9.5m, or 9p a share | ||||
