Market announcement / 16 Jul 2024

Audited Results 2024: Fuelling growth through continuing investment

We are pleased to announce our audited results for the year ended 30 April 2024 (“FY24” or the “Period”), which continue our unbroken record of year-on-year revenue growth.

The Group delivered a good financial performance in FY24, increasing revenue by 6.0% to £172.5m, extending Gateley’s unbroken record of revenue growth since IPO in 2015. The board continued to invest for growth in line with its stated strategy and was pleased to deliver underlying profit before tax of £23.0m (FY23: £25.1m) after reinstating the payment of employee bonuses this year of £4.5m (FY23: £nil), in recognition of our people’s contribution to a resilient outturn and our more positive outlook as we move into FY25.

The balance sheet remains strong, maintaining a net cash position. The Group has significant headroom in its banking facilities to enable further investment in organic and acquisitive opportunities.

Financial highlights

We present below our financial performance for the Period both on an underlying and statutory basis.

Underlying FY24 FY23 Change
Group revenue £172.5m £162.7m 6.0%
Group underlying operating profit1 £20.3m £25.0m (18.9)%
Group underlying profit before tax1 £23m £25.1m (8.1)%
Underlying adjusted fully diluted EPS2 14.20p 16.28p (12.8)%
Dividend per share 9.5p 9.5p -%
Net assets £80.3m £78.1m 2.8%
Net cash3 £3.8m £4.3m (11.6)%

 

Reported FY24 FY23 Change
Group profit before tax £14.0m £16.2m (13.9)%
Group profit after tax £10.1m £12.2m (17.7)%
Basic earnings per share (‘BEPS’) 7.74p 9.77p (20.8)%

 

  • Diversified business model yielding organic revenue growth of 2.8%, comprising 0.8% in Legal and 9.1% in Consultancy services
  • Consultancy revenues now 28.9% of the Group (FY23: 25.7%)
  • Steadily improving activity throughout Q4 (and ongoing) resulted in utilisation of 83% for the Period, just below the Group’s operational target of 85%
  • Operating profit margin, on a pre-bonus basis, decreased 1.0% to 14.4% (FY23: 15.4%), reflecting salary and other cost inflation and ongoing organic and acquisitive investment
  • Underlying operating profit margin of 11.7% (FY23: 15.4%) reflects the reinstatement of Group staff bonuses
  • Net assets increased by 2.8% to £80.3m (FY23: £78.1m), including net cash of £3.8m (FY23: £4.3m)
  • Proposed final dividend of 6.2p (FY23: 6.2p), taking total dividends for the Period to 9.5p per share (FY23: 9.5p)

Operational highlights

  • Average headcount at 30 April 2024 increased by 6.7% to 1,536 (FY23: 1,439), including an increase in fee earning professional staff of 6.8% from 1,000 to 1,068
  • Fuelling growth through investment in diversification and strategic hires, including:
    • Continued execution of M&A strategy with the July 2023 acquisition of Richard Julian and Associates Limited (“RJA”)
    • Strategic hiring onto the Business Services Platform to seed legal services class actions and international arbitration businesses and to create an intellectual property commercialisation and valuation offering in our patent and trademark attorney businesses
  • Non-dilutive recirculation of internal share ownership facilitated in April 2024 with the Group’s Employee Benefit Trust purchasing shares to fulfil anticipated FY25 restricted share scheme awards

Current trading and outlook

  • The Group continues to perform well against its strategy set out at IPO, being to generate growth and resilience through diversification, delivering strong returns for our stakeholders
  • Ongoing investment for short-term margin stability followed by long term improvement
  • FY25 has started in line with the board’s expectations, with a good pipeline of work, including steadily improving transactional services activity 

1 Underlying operating profit and underlying profit before tax excludes remuneration for post-combination services, gain on bargain purchase, share-based payment charges, acquisition related amortisation and exceptional items
2 Adjusted fully diluted EPS excludes remuneration for post-combination services, gain on bargain purchase, share-based payment charges, acquisition related amortisation and exceptional items. It also adjusts for the future weighted average number of expected unissued shares from granted but unexercised share options in issue based on a share price at the end of the financial year
3 Net cash excludes IFRS 16 liabilities

Commenting, Rod Waldie, Chief Executive Officer of Gateley, said:

“I am pleased with our FY24 outturn given our cautious view of market conditions during the Period, particularly around the turn of the calendar year in H2. Our people have worked hard to deliver another year of growth via our increasingly diverse and resilient business model, combining complementary legal and consultancy services.

“During the Period we continued to make organic and acquisitive investments in both our legal and consultancy services and in related systems. RJA Consultants was acquired onto our Property Platform in July 2023, adding further expertise and capacity to our quantity surveying and project management offering. It is already performing ahead of the board’s expectation.

“Our legal services class actions team, established in May 2023, launched its first case in late February 2024. Our investment in this team is a high-profile example of the type of investment that we are looking to make to enhance our returns over the medium to longer-term.

“Our M&A and lateral hire pipeline remains encouraging and we are committed to further enhancing each of our Platforms as suitable opportunities arise, aided by our net cash position and ample headroom in our banking facilities.

“Looking forward, we are encouraged by strengthening transactional activity levels, which began in Q4 FY24. Our immediate outlook is best characterised as cautiously optimistic. Our resilient and financially robust foundation, allied to our unbroken track-record of growth, underpins our confidence to continue our long-term strategy of investment in people and systems. This strategy has worked well for us since IPO in 2015 and through disciplined application of it, we ensure that the Group remains well-positioned for further growth and enhanced returns for all stakeholders.” 

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