Record revenues for law firm after strong year
Birmingham law firm Gateley has announced a strong set of full year results, declaring the 2016/17 financial year a record for the business.
It said record revenue generation had been accompanied by increased profitability and trading in the first two months of the current year had mirrored the strong performance in the second half of the prior year.
Total reported revenues for the year increased by 15.7% to £77.6m (2016: £67.1m). Adjusting for revenues from acquisitions since its IPO of £2m (2016: £nil), organic growth of 12.7% was achieved from its traditional core legal services.
Profit before tax increased 18.8% to £13.1m (2016: 12.2%), while basic earnings per share rose 15.3% to 9.43p (2016: 8.18p). The group has proposed a final dividend of 4.4p resulting in an increased total year dividend of 6.6p (2016: 5.639p).
Accompanying the revenue growth, the firm said it had also accelerated its investment into further expansion of staffing levels in order to meet rising client demand.
Despite the costs incurred by recruitment, the group said both EBITDA and pre-tax profit margins had been maintained as it continued to capitalise on growth opportunities.
Group revenue was spread across a record number of clients as the firm said it had again advised on more M&A transactions than other advisers in the market.
“Whilst pleased with the performance of all of our UK business lines we have seen our largest service lines continue to perform well in a market that remains competitive, but with healthy levels of activity for regionally focused service delivery,” it said.
“Our expertise in mergers & acquisitions, corporate finance, private equity and equity capital markets propelled our Corporate Group into generating revenue growth of 24% (2016: 14%). Our Property Group has performed strongly and generated revenue growth of 28% as our mix of both litigation and transactional property development work streams serviced client requirements well.”
It said the UK’s construction, property development and housing markets continued to be profitable areas.
Twin acquisitions, Gateley Capitus (acquired April 2016) and Gateley Hamer (formerly Hamer Associates – acquired September 2016), were both said to have performed well.
However, it said while UK operations had performed well, an additional investment into its Dubai office had failed to generate expected returns. Whilst fees in Dubai increased by 10% to £1.2m, the office made a loss of £0.4m (2016 loss £0.1m). The group said it had already taken steps to restructure the Dubai operation and the subsidiary remained under review.
Michael Ward, CEO of Gateley, said: “This represents another year of continued expansion for us where we have both grown the business and invested further in it to support our future expansion. This has been possible due to the strength of our service offering, the depth of our client relationships and the growth in our teams of skilled professionals.
“Trading in the second half of the financial year ended 30 April 2017 was excellent and we are pleased to report that trading in the first two months of the current financial year has continued well. We are confident that our business is well balanced and resilient and we remain focused on delivering another year of growth in our core services, whilst continuing to look for complementary acquisitions.”
