Law firm’s profitable momentum continues as revenues up 20%

Gateley chief executive Michael Ward

Listed law firm Gateley has increased revenues by 20%, half of which is from organic growth, as it continues to deliver strong growth.

Pre-tax profits at the Birmingham-based group kept pace, up 19% to £5.0m in the six months to October.

Growth has come from the recent acquisitions of GCL Solicitors and Kiddy & Partners although Gateley emphasised its “strong performance across the business”.

It added that it “remains focused in its search” to acquire complementary professional and other specialist services businesses, to add to the four acquisitions it has made since the business floated.

Gateley chief executive Michael Ward said: “Our proven strong and resilient business model and our focused diversification strategy has continued to drive growth across our business: our core legal business has grown strongly; our acquired complementary businesses are all fully integrated and are performing very well; our acquisition pipeline is strong with regular approaches from companies who view Gateley as an ideal choice to help them grow their businesses successfully.”

The business employed 928 people at the end of October, with 565 part of its core legal team. They include eight new lateral legal partner hires and seven internal promotions to partner, which is said was “proving the appeal of the group’s offering to internal and external candidates” – a nod to criticism of its decision to go public in 2015.

Ward highlighted the progress made since then, with the group delivering “turnover growth of 37%, adjusted EBITDA growth of 46% and, including the dividend from this set of results, has provided shareholders with dividend income of 21.84 pence per share.”

He expects to meet expectations for full-year earnings, which were raised in November, of revenues of not less than £102m while maintaining margins.

Gateley’s share price closed last night at 132p, having hit a two-year low last week and more than 30% below levels reached in January 2018. Its shares were up 5% in early trading on Tuesday, in response to its trading update.

Gateley has also appointed finnCap as its nominated adviser and joint broker, with Nplus1 Singer Advisory also appointed as joint adviser.

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