Half Year Results for the six months ended 31 October 2020
Gateley (AIM:GTLY), the legal and professional services group, is pleased to announce its unaudited results for the six months ended 31 October 2020 (the "Period" or "H1 21"), which show strong growth in profitability demonstrating the resilience of Gateley's business model, and the success of our acquisition strategy.
|Financial Results||H1 21||H1 20||Change|
|Underlying operating profit before tax||£8.1m||
|Underlying adjusted profit before tax*||£7.5m||£6.6m||+13.2%|
|Profit before tax||£6.1m||£5.5m||+9.8%|
|Profit after tax||
|Basic earnings per share ("EPS")||4.04p||3.93p||+2.8%|
|Underlying diluted EPS**||4.92p||4.60p||+7.0%|
*Underlying adjusted profit before tax excludes share based payment charges, amortisation and exceptional items - See note 1.2
**Underlying 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 period
***Net cash/(debt) excludes IFRS 16 lease liabilities
- Diversified and resilient business model coupled with a strong pipeline of work support the board's confidence in the future performance of the business
- Sharp reduction in activity levels during the early months of the Period mitigated by a continuing upward trend. H1 21 activity levels were within 2% of the prior year
- Significant benefits now being realised from agile working, leveraging off investment in technology and operational gearing from new ways of working. The Group has traded profitably and was cash positive throughout H1 21
- The Group has a strong balance sheet with disciplined working capital management and substantial liquidity that underpins FY 21 outturn
- Clustering of complementary legal and consultancy services ("Platform Strategy") has further enhanced the Group's market appeal
- Fee earning headcount of 785 (FY 20: 706) enhanced by FY 20 acquisitions and strategic legal hires
- Record internal take-up of Group wide SAYE option scheme in November 2020
Current trading and outlook
Following a strong first half performance, the business has entered the second half of the financial year with a sense of optimism and confidence. Trading in the second half has maintained momentum despite macro-economic uncertainty resulting from the ongoing pandemic.
Whilst remaining cautious, the Group's well-diversified and resilient business model gives the board confidence for the future. So long as trading remains robust for the remainder of the financial year, the board will be in a position to, and intends to, award bonus payments to staff and make dividend payments to shareholders for the current financial year.
Rod Waldie, Chief Executive Officer of Gateley, said:
"I am delighted with the Group's excellent operational and financial performance during H1 21. The wellbeing of all our people remains our priority. In the meantime, despite the personal challenges of working through the pandemic, our loyal and dedicated teams continue to serve our clients to the highest standard. This affirms the strength of Gateley's "one team" culture and the adaptation of our systems to ensure the delivery of an excellent service to our clients.
"Gateley's business model and its mix of service lines, which has been supplemented by our successful M&A strategy, was deliberately designed to provide resilience, the value of which is demonstrated in the Group's H1 21 performance.
"Our Platform Strategy is developing across the Group. Legal and consultancy businesses are working closely together to attract new work, in a manner that differentiates Gateley and which is becoming increasingly attractive to clients. The acquisition pipeline is positive. Our strategy remains to continue to acquire complementary legal and consultancy services, to expand our diversified business and to reach deeper into our chosen markets, further enhancing the Group's resilience.
"The FY 21 revenue pipeline is robust and this, combined with the many operational efficiencies that we have so far realised in the current year, means I am confident that, despite general uncertainty arising from the pandemic, the Group is positioned well to deliver a strong performance for the remainder of the financial year."