Gateley (Holdings) PLC FY22 Trading Update - Ahead of Expectations (6048O)
13 June 2022 - 4:00PM
UK Regulatory
TIDMGTLY
RNS Number : 6048O
Gateley (Holdings) PLC
13 June 2022
13 June 2022
GATELEY (HOLDINGS) PLC
("Gateley" or the "Group")
FY22 Trading Update
Strong performance ahead of market expectations
The Board of Gateley (AIM: GTLY), the legal and professional
services group, is pleased to announce details of the Group's
trading for the year ended 30 April 2022 ("FY22"), ahead of the
publication of its audited results, which will be announced in
September 2022, showing strong growth in revenue and adjusted
profit before tax ahead of consensus market expectations(1) .
Trading at the start of the new financial year is in line with
the Board's expectations, with the Group continuing to meet the
challenges of the well-reported and ongoing inflationary headwinds.
The considerable organic and acquisitive opportunities to develop
the Group's Platforms further, combined with Gateley's diversified
and resilient business model, underpin the Board's confidence in
the prospects and the continuing growth of the business in line
with current market expectations.
Financial highlights
-- Revenue increased to not less than GBP137m (FY21: GBP121.4m)
- up c.13%
-- Organic revenue growth of c.10% (FY21 6.5%)
-- Consultancy revenue not less than GBP20m (FY21 GBP14m) -
up c.43%
-- Underlying adjusted profit before tax(2) of not less than
GBP21.5m (FY21 GBP19.3m) - up c.11%
-- Profit before tax ("PBT") of not less than GBP18m (FY21
GBP16.3m) - up c.10%
-- Adjusted weighted average EPS of not less than c14.10p (FY21
13.17p) - up c.7%
-- Strong operating cashflow with GBP16.1m of cash at bank
and GBP10.4m of net cash (FY21 net cash GBP19.6m)
-- Net assets of not less than c.GBP70m (FY21 GBP59.3m)
-- Proposed final ordinary dividend of 5.5p (FY21: 5.0p) taking
annual dividend to 8.5p (FY21: 7.5p)
Strategic highlights
-- Three earnings-enhancing acquisitions, Tozer Gallagher in
July 2021, Adamson Jones in January 2022 and Smithers Purslow
in April 2022, enhancing the Group's core Platforms
-- New Revolving Credit Facility of GBP30m agreed in April
2022, providing increased funding flexibility to support
the Group's acquisition strategy
-- Total headcount at 30 April 2022 of 1,368. Average number
of professional staff increased by 3.8% from 770 to 799.
(1) Consensus market expectations/estimates per FactSet - Revenue
GBP133.5m; Adjusted PBT GBP20.9m
(2) Underlying adjusted profit before tax excludes share based
payment charges, amortisation and exceptional items
Business review
The Group enjoyed strong activity levels during FY22, with
revenue expected to be not less than GBP137m. This represents
growth of c.13% on the prior year. Organic revenue growth from
legal service lines was c.9% alongside exceptional organic growth
of c.24% from consultancy service lines, which including
acquisitions made during the year are expected to represent GBP20m
of fees in FY22. Following the three acquisitions completed during
the year, which are integrating well, annualised consultancy fees
now total c.GBP32m.
Compared to the very strong second half of FY21, activity levels
remained strong across the Corporate Platform, which grew by c.18%,
buoyed by the continuing strength of the UK M&A and Private
Equity markets. The Property Platform grew by c.15%, enhanced by
greater market share and larger transactions. The People Platform
saw a return to significant growth across both its legal and
consultancy service lines, where combined revenue grew by c.40%.
The Business Services Platform contracted by c.10%, as some
long-term litigation projects stalled alongside new instructions
not yet reaching billing thresholds. This reflects the timing of
ongoing and new projects and the Group remains appropriately
staffed for an improved FY23.
Underlying adjusted profit before tax(2) is ahead of market
expectations(1) and c.11% ahead of a strong prior year. This
represents an underlying adjusted PBT margin of c.15.7%, broadly in
line with FY21.
FY22 saw a return to more familiar recruitment levels as
headcount increased by 100 during the year, together with a further
150 new colleagues joining as a result of the three completed
acquisitions. After a pause in recruitment in the initial stages of
the Covid 19 pandemic, the market has hardened with many factors
now influencing peoples' decisions. The Gateley offering remains
differentiated and attractive across a growing range of companies
within the Group. As the Group continues to expand, it is able to
offer numerous career opportunities across the professional service
Platforms, which are underpinned by a unique identity and strong
team culture.
Announcement of FY22 Audited Results
As previously announced, the Group has delayed the audit process
to accommodate the implementation of a new financial accounting
system and expects to announce its audited results for FY22 in
September 2022.
The Board is pleased to report that the transfer to the new
financial accounting system is progressing to plan and is on track
to complete later this month.
Rod Waldie, Chief Executive Officer of Gateley, said:
"We have delivered another year of strong revenue and profit
growth and I am delighted with our overall performance. Our
successful return to recruitment generated strong organic revenue
growth of over 10%, which, allied to the completion of three
exciting acquisitions, is delivering annualised consultancy revenue
of over c.GBP32m.
"I thank our ever-expanding client base for their trust and
support throughout FY22 and for giving us the opportunity to work
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 strong pipeline of work and
leave our financial performance guidance unchanged, despite the
inflationary challenges, as we look forward to continuing to grow
the Group, both organically and via acquisition."
Enquiries:
Gateley (Holdings) Plc
Neil Smith, Finance Director Tel: +44 (0) 121 234
0196
Nick Smith, Acquisitions Director and Tel: +44 (0) 20 7653
Head of Investor Relations 1665
Cara Zachariou, Head of Corporate Communications Tel: +44 (0) 121 234
0074 Mob: +44 (0) 7703
684 946
Liberum - Nominated Adviser and Broker
Richard Lindley/Ben Cryer/Cara Murphy Tel: +44 (0) 20 3100
2000
Belvedere Communications Limited - Financial
PR
Cat Valentine Mob: +44 (0) 7715 769
078
Keeley Clarke Mob: +44 (0) 7967 816
525
Llew Angus Mob: +44 (0) 7407 023
147
gateleypr@belvederepr.com
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