Gateley eyes acqusitions as it says listing will give “first-mover advantage”


Ward: opportunities for growth

Ward: opportunities for growth

National law firm Gateley has today formally announced its intention to float on AIM, saying the “first mover advantage” it will gain by being the first listed law firm will provide “a platform to expand and diversify”.

In a statement to the stock exchange, the firm said this would include buying law firms “which offer geographical expansion or specialist services”, and other businesses “offering complementary professional and other business services, enabling cross-selling to existing clients and representing a stronger sales proposition for potential new clients”.

Gateley, which is already an alternative business structure, will introduce an employee share scheme to align “employees’ goals with those of the business, aiding retention of staff and adding to Gateley’s recruitment appeal”.

Listing will also facilitate “a more flexible career structure, further widening Gateley’s appeal in the employment market” and enhance “the visibility of Gateley generally”, the statement said.

Gateley has over 380 fee-earners across six offices in England and an office in Dubai serving over 4,000 corporate and 1,500 private clients. Its core practice areas are banking and financial services, corporate, business services, employment and pensions, and property.

It emphasised that the firm is not dependent on any individual client, with 30 clients representing approximately 31% of gross billings.

All 81 selling partners would be locked in for five years, “demonstrating long-term commitment and alignment to the group’s performance”. The float is likely to value the firm at around £140m.

Gateley told investors that it has “a track record of sustained growth supporting an attractive dividend policy”.

Over the last decade, it has recorded a compound annual growth rate of 14.3% in revenue and 14.8% in operating profit, compared to what it said was the industry CAGR in turnover of 4.1% over the last five years.

For the year ending 30 April 2014, Gateley reported revenues of £54.6m (up from £51.4m in 2013) and adjusted profit before tax of £7.4m (up from £5.1m). For the six months to 31 October 2014, revenues were £26.7m (compared to £23.1m in the same period a year earlier) and adjusted profit before tax of £2.6m (£1m in 2013)

It has a “progressive dividend policy to pay an interim and final dividend of up to 70% of adjusted profit after tax”.

Chief executive Michael Ward said: “Gateley is a successful, fast-growing and entrepreneurial legal services group which operates in a rapidly changing marketplace. We believe the catalysts for value creation are now to acquire, incentivise, differentiate and where sensible diversify. These opportunities for growth will undoubtedly be most accessible as a PLC and we want to be the first to be able to take advantage of them.

“Our growth and reputation over the last 10 years has been driven by the quality of our people and the level of service we offer to clients. Our future as a PLC will help ensure these crucial strengths remain at the core of our development.”

The firm’s non-executive chairman, Nigel Payne, added: “I have been very impressed with the ambition and vision of the senior Gateley team. The dynamic growth prospects, strong cash generation, and desire to look after its upcoming talent make the business a compelling investment proposition. I am very excited about the future.”

Cantor Fitzgerald Europe is acting as financial adviser, nominated adviser and broker to Gateley.





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