Market announcement / 13 Sep 2022

Audited preliminary results 2022

Gateley (AIM: GTLY), the legal and professional services group, announces its audited preliminary results for the year ended 30 April 2022 ("FY22" or the "Period"), which continued the Group's pre and post IPO unbroken record of year-on-year revenue and profit growth, and out-performed market expectations set at the start of the year.

The Group delivered a strong financial performance in FY22, achieving significant organic growth and strengthening the business further through diversification and investment into new complementary service lines, while maintaining control on costs in the face of market specific and macro-economic headwinds. The balance sheet remains strong and the Group has significant headroom in its banking facilities to invest in further organic and acquisitive growth opportunities.

Financial highlights

  FY22 FY21 Change
Group revenue £137.2m £121.4m +13.0%
Group underlying operating profit before tax1

£22.5m

 £20.5m +9.8%
Group underlying profit before tax £21.6m £19.3m +11.9%
Group profit before tax £18.0m £16.3m +10.4%
Group profit after tax £14.3m £13.2m +8.3%
Basic earnings per share ('EPS') 12.00p 11.18p +7.3%
Adjusted fully diluted EPS2

14.31p

 13.17p +8.7%
Net assets £72.9m £59.3m +22.9%
Net cash3 £10.4m £19.6m -£9.2m


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 cash excludes IFRS 16 liabilities

  • Group organic revenue growth was 10.9%, comprising 8.7% in legal service lines and 26.7% in consultancy services
  • Total growth in non-legal revenues of 44.9%, as complementary consultancy services contributed £21.3m or 15.5% of total revenues (FY21: £14.7m or 11.5%)
  • Adjusted underlying operating profit margin broadly maintained at 16.4% (FY21: 16.9%)
  • Net assets increased by 22.9% to £72.9m
  • "Gateley Agile" initiative, which builds on flexible working introduced during the pandemic, continues to deliver cost savings, mitigating some inflationary pressure
  • Personnel costs declined as a percentage of Group revenue to 63.0% (FY21: 63.8%)
  • Proposed final dividend of 5.5p (FY21: 5.0p) taking total dividends for the Period to 8.5p (FY21: 7.5p)
  • Group dividend policy remains to distribute up to 70% of our after-tax profits each year

Strategic Highlights

  • Three earnings-enhancing acquisitions completed in the Period, expanding the Group's Property and Business Services Platforms
  • Total headcount at 30 April 2022 of 1,368 (FY21: 1,081). Total headcount of professional staff increased by 23.6% from 767 to 948
  • New Revolving Credit Facility of £30m agreed in April 2022, providing increased funding flexibility to support the Group's growth strategy

Current Trading and Outlook

  • Good pipeline of new work and current year activity levels are in-line with the board's expectations
  • Encouraging pipeline of acquisition growth opportunities
  • Platform strategy progressing and delivering to plan with on-going integration of all acquired businesses and consequent widening and enhancement of client engagement in FY23 and beyond positively
  • The board maintains its expectations for growth in FY23

 

Rod Waldie, CEO of Gateley, said:

"I am delighted with the Group's performance in FY22. We have delivered another set of strong revenue and profit growth figures whilst continuing to strengthen our balance sheet. Legal services generated solid organic revenue growth, comparing favourably with reported UK legal industry performance. Our consultancy service lines delivered impressive organic growth of 26.7% resulting in overall consolidated Group organic revenue growth of 10.9%.

"I am particularly pleased that we completed three exciting consultancy acquisitions in the Period and achieved annualised consultancy revenue of over c.£32m as we continue to grow our complementary services, diversifying our offering and deepening our connections with our clients.

"I thank our ever-expanding client base for their trust and support throughout FY22 and for giving us the opportunity to work with them on high quality mandates.  We remain committed to our purpose of delivering results that delight our clients, inspire our people and support our communities.  We have a good pipeline of work and maintain our expectations for growth in FY23, despite the well-reported inflationary pressures. We look forward to continuing to grow the Group, both organically and via acquisition."

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