Gateley maintains dividend after solid first half
By Josh White
Date: Wednesday 15 Jan 2025
(Sharecast News) - Gateley Holdings reported a robust performance for the six months ended 31 October on Wednesday, with revenue rising 5.3% to £86.3m and underlying profit before tax increasing 5.9% to £10.6m.
The AIM-traded company said it maintained a stable underlying operating profit margin of 10.5%, while achieving organic revenue growth of 3.2%.
Consultancy services continued to drive growth, with revenue increasing by 13.6% to £25.7m, representing 29.8% of total group revenue, compared to 27.6% in the prior year.
Legal services revenue grew organically by 2.1%, reflecting consistent demand in the segment.
Fee earner utilisation improved to 88%, up from 83% in the same period last year.
Gateley said it ended the period with a strong balance sheet, transitioning from a net debt position of £2.2m in the first half of the 2024 financial year, to net cash of £1.2m.
The company declared an interim dividend of 3.3p per share, matching last year's payout.
Reported profit before tax declined 54.8% to £3.3m due to non-recurring items, including costs related to prior acquisitions and strategic investments.
However, the underlying performance remained strong, supported by strategic hiring and the integration of Richard Julian and Associates, which exceeded expectations.
The group highlighted ongoing investment in its workforce, increasing average fee earner headcount by 4.4% to 1,081, and welcomed 10 new legal services partners during the period.
A focus on stakeholder alignment saw 70% of staff participating in equity-related incentive schemes.
Looking ahead, Gateley noted resilient activity levels, particularly in transactional services, and a promising merger and acquisition pipeline.
The board said it remained confident in achieving full-year results in line with market consensus, underpinned by diversification across professional services and returns from recent organic investments.
"The group continues to benefit from the resilience created by our strategy of investing in a diverse and complementary range of professional services," said chief executive officer Rod Waldie.
"We are pleased that our more recent organic investments are beginning to generate positive returns alongside the strong performance from our recently acquired businesses.
"Our balance sheet provides a strong foundation from which to take a long-term view of potential opportunities to further invest in both legal and consultancy services."
At 1144 GMT, shares in Gateley Holdings were down 1.92% at 128p.
Reporting by Josh White for Sharecast.com.
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