Gateley revenue rises, underlying profits narrow slightly

16th Jul 2024 15:29

(Sharecast News) - Professional services firm Gateley Holdings reported continued growth and investment in line with its strategic objectives in its full-year audited results on Tuesday.

The AIM-traded company reported a 6% increase in revenue, reaching £172.5m, extending its unbroken record of revenue growth since its initial public offering in 2015.

After the reinstatement of employee bonuses, which amounted to £4.5m, the group delivered an underlying profit before tax of £23m, compared to £25.1m in the 2023 financial year.

The group said it maintained a robust balance sheet, with net assets increasing 2.8% to £80.3m and a net cash position of £3.8m.

Its 2.8% organic revenue growth was driven by 0.8% in legal services and 9.1% in consultancy services.

Consultancy revenues now constituted 28.9% of the group's total revenue, up from 25.7% in 2023.

Despite salary and cost inflation, the group said its pre-bonus operating profit margin was 14.4%, slightly down from 15.4% in 2023, while the underlying operating profit margin was 11.7%, reflecting the bonus payments.

Operationally, Gateley increased its headcount by 6.7% to 1,536, including a 6.8% rise in fee-earning professional staff to 1,068.

The group said it continued to execute its merger and acquisition strategy with the acquisition of Richard Julian and Associates in July last year, and made strategic hires to bolster its business services platform.

Looking ahead, Gateley said it was performing well against its strategic goals set out at its IPO, focusing on growth and resilience through diversification and delivering strong returns for stakeholders.

The group had started the 2025 financial year in line with expectations, supported by a strong pipeline of work and improving activity in transactional services.

With a proposed final dividend of 6.2p per share, maintaining total dividends for the period at 9.5p per share, Gateley said it was continuing to prioritise delivering value to shareholders while investing for future growth.

"I am pleased with our 2024 outturn given our cautious view of market conditions during the Period, particularly around the turn of the calendar year in the second half," said chief executive officer Rod Waldie.

"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."

Waldie noted that RJA Consultants was acquired onto the company's property platform in July 2023, adding further expertise and capacity to its quantity surveying and project management offering.

"Looking forward, we are encouraged by strengthening transactional activity levels, which began in the fourth quarter of the 2024 financial year.

"Our immediate outlook is best characterised as cautiously optimistic."

At 1504 BST, shares in Gateley Holdings were down 0.73% at 136p.

Reporting by Josh White for Sharecast.com.