Revenue rises, profits set to shrink for Gateley

14th May 2024 13:02

(Sharecast News) - Professional services group Gateley said in an update on Tuesday that it expected robust revenue growth of 5.7% for the financial year just ended, surpassing £172m, compared to £162.7m in the prior year.

The AIM-traded firm said despite the revenue growth, its underlying profit before tax was set to be at least £22.8m, slightly lower than the prior year's figure of £25.1m.

It put that down to the board's decision to allocate £4.5m towards employee bonuses, unlike the prior year.

Gateley said it maintained a sturdy balance sheet, with a net cash position of £3.3m at year-end on 30 April, compared to £4.3m a year earlier.

That accounted for investments made during the period in both acquired and organic opportunities aimed at fostering future growth.

Additionally, the firm said it had supported its employee benefit trust through the recent purchase of shares.

In terms of corporate governance, David Wilton, who was appointed as a non-executive director and chairman-designate on 1 February, had mutually agreed with the board to step down from his appointment as chairman, effective immediately.

As a result, the nomination committee had started the process to recruit a new chairman.

In the interim, Nigel Payne would continue to chair the group until a suitable successor was appointed.

"I am pleased with the outturn for 2024, which was helped by strong activity levels in the fourth quarter," said chief executive officer Rod Waldie, adding that it positioned the firm well as it entered the 2025 financial year.

"The group continues to benefit from the resilience created by our strategy of investing in an increasingly diverse but complementary range of professional services."

Waldie said the company's strong balance sheet also provided a "solid foundation" from which to take a long-term view of potential growth opportunities, as well as providing the bandwidth to deliver a strong dividend yield for shareholders.

"The board remains confident in its strategy and we continue to invest in both legal and consultancy services to further grow the group and we look forward to the future with confidence."

At 1243 BST, shares in Gateley Holdings were flat at 115p.

Reporting by Josh White for Sharecast.com.