Gateley on the acquisition trail as firm enjoys strong first half
BIRMINGHAM law firm Gateley has seen a strong half year with revenues up almost 20% compared with the same period last year – fuelling optimism about a further expansion of the business.
In the six months to October 31, 2016 revenues grew by 18.9% (2015: 10.9%) to £35.2m (2015: £29.6m), which the firm said reflected a well-balanced and resilient mix of work types.
Adjusted EBITDA increased by 11.1% to £5m (2015 £4.5m) despite the group making a net investment in its new Reading office of more than £0.6m during the period. Pre-tax profit increased to £4.2m (2015: £2.9m).
Total operating costs rose by 16.4% to £30.5m (2015: £26.2m) as it continued to invest in the new full service operation in Reading and group-wide, increase its number of professional and support staff.
Average legal staff numbers rose by 6.2% to 410 during the period (2015: 386). Personnel costs rose accordingly by 18.9% to 21.4m (2015: £18.0m). Personnel costs as a percentage of revenue were maintained at a similar rate to last year.
The number of new-starters, especially in Reading, has seen fee generating staff reduced to 83% (2015: 85%).
Mike Ward, CEO of Gateley, said: “Trading for the first half of the year has been good, with growth in revenue and operating profit supported by strong cash generation in line with the board’s expectations.
“I am pleased to report continued expansion of service lines and the successful acquisition of our second complementary business services company, Gateley Hamer. Significant progress is being made with recruitment in our new Reading office, whilst careful and considered expansion of existing services lines continues to position us well for the second half of the year.”
He said the broad client base had started to benefit from the firm’s new complementary business service lines and staff were showing long term commitment to the growth strategy, evidenced by a 43% take up in the staff share scheme.
Given the progress made by the business, the board has announced an increase in interim dividend to 2.2p per share.
“Opportunities for organic growth continue as our market share remains small relative to the overall size of the UK commercial legal sector,” added Mr Ward.
“Trading is robust and we anticipate this will continue into the second half of the current financial year. 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 and exploiting synergies between all group companies whilst looking to continue to enhance our offering to clients through further acquisitions.”
