Market announcement / 20 Jul 2021

Audited preliminary results 2021

Gateley (AIM: GTLY), the legal and professional services group, announces its audited preliminary results for the year ended 30 April 2021 ("FY21" or the "Year"). 

The results demonstrate resilient double-digit revenue and profit growth, delivered through an increasingly diverse and successful business model, yielding strong and sustained cash generation, which enabled the reinstatement of dividend payments in the Year, with a total dividend of 7.5p (FY20: nil).

The Board is pleased to report that the high levels of activity, strong trading momentum, overall sense of optimism and confidence, which defined the Group’s performance in H2 FY21, have continued into the new financial year (“FY22”) and the Board is confident in the outlook for FY22.

Financial Highlights
 

  FY21 FY20 Change
Revenue £121.4m £109.8m +10.5%
Underlying operating profit before tax1 £20.5m £18.7m +10.0%
Underlying profit before tax1 £19.3m £18.1m +7.1%
Profit before tax  £16.3m £14.8m +10.5%
Group profit after tax  £13.2m £11.7m +12.2%
Basic earnings per share (“EPS”) 11.18p 10.34p +8.1%
Adjusted fully diluted EPS2 13.17p 12.45p +5.8%
Net assets £59.3m £44.8m +32.2%
Net cash/(debt)3 £19.6m £(0.9)m +20.5m


1 Underlying operating profit before tax and underlying profit before tax excludes share based payment charges, amortisation and exceptional items
2 Adjusted fully diluted EPS excludes share based payment charges, amortisation and exceptional items. It also adjusts for the future weighted average number of expected unissued shares from granted but unexercised share option schemes in issue based on a share price at the end of the financial year
3 Net debt excludes IFRS 16 liabilities
4 Activity levels are the utilisation of professional staff hours against budgeted hours

  • Strong financial performance with revenue and profit before tax up 10.5% yielding strong cash generation and a 32.2% increase in net assets
  • Average fee earner headcount rose 9.1% to 770 in FY21 (30 April 2020: 706)
  • Non-legal revenues increased by 27.3%, as complementary consultancy businesses contributed £14m or 11.5% of total revenues (FY20: £11m or 10.0%)
  • Overall activity levels4 increased by 8% YOY
  • Cost-savings realised during the Year, as a result of successful remote working arrangements
  • Strong balance sheet and disciplined working capital management facilitated repayment of all bank debt
  • Staff bonuses and dividend payments resumed with total dividend in the Year of 7.5p (FY20: nil)

Operational Highlights

  • ‘One team’ culture and the retention of fee-earning capacity throughout the early stages of the pandemic enabled the Group to capitalise on the return of strong client demand in H2 FY21 
  • Progression of Platform strategy, to build market-facing structures on which complementary legal and consultancy services are aggregated
  • Net promoter score of +68 achieved from tri-annual client survey
  • Gateley remains the UK’s most active M&A legal advisor by deal volume, according to the latest Experian MarketIQ UK M&A league table
  • Diversified and resilient business model reinforces the Board’s confidence in the future performance of the Group

Current Trading and Outlook

  • Strong trading in the first two months of the new financial year with a good pipeline of new work in most units
  • Acquisition activity recommenced after temporary COVID-19 pause, pipeline remains strong
  • Platform strategy continues apace with on-going integration of all acquired businesses, to widen and enhance pipeline activity in FY22 and beyond

Rod Waldie, CEO of Gateley, said:

“I am delighted with the excellent FY21 outcome, a year in which we exceeded our own pandemic-adjusted performance expectations set in the first month of the Year.  We have, once again, delivered year-on-year revenue growth.  It is testament to the Group’s long-established and resilient business model, which is enhanced by an increasing range of connected services offered to clients via our Platforms – market-facing structures on which we aggregate complementary legal and consultancy services.  This, alongside our embedded ‘one-team’ culture and the outstanding collective contribution of our people, has been the driving force behind a strong financial performance especially in the context of an extremely disruptive year of uncertainty caused by the pandemic.  

“I thank our fantastic people for their exceptionally hard work, commitment and can-do attitude.  This includes the leadership team, whose priority has been the safety of our people throughout the Year and the smooth-running of our operational contingency plan, which resulted in the delivery of excellent service to our clients.  The leadership team was calm and pragmatic throughout and demonstrated good judgment in planning for the worst whilst managing for better.

“I also thank our clients for their support throughout the Year and for giving us the opportunity to work with them on high quality mandates in both legal and consultancy services, which we are increasingly providing in tandem to our clients.

“As we continue our strategy to build a broader professional services business, focusing on both new and existing clients, the demand for these services is strong and we are carrying a robust pipeline of work into FY22.  We remain excited by a wide range of opportunities and are looking forward to continuing to grow the Group, both organically and via acquisition, in line with our strategy.”
 

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