Shareholders in Gateley – the first UK law firm to float – are to see the first fruits of their investment after the company announced an initial dividend on the back of strong first-half results.
Gateley’s revenue for the six months to 31 October was up 10.9% to £29.6m, with profit before tax rising 11.5% to £2.9m, and earnings before interest, tax, depreciation and amortisation jumping 40% to £4.5m. The company declared an initial interim dividend of 1.895p per share.
In its announcement to the stock exchange, Gateley said: “The board intends to adopt a progressive dividend policy to reflect the expectation of future cash flow generation and long-term earnings potential of the group, paying up to 70% of after-tax profits each year.”
Staff should also benefit from this soon, as Gateley said it was consulting with all employees about the shape and form of an all-staff share ownership scheme, “which we are committed to delivering before the end of this financial year”.
Investors were told that all of the firm’s business groups had increased their turnover since May, during which time it advised on 123 corporate deals with an aggregate value in excess of £970m and made eight lateral partner hires, with overall staff numbers increasing from 604 to 622. Gateley also opened an office in Reading.
“[A] strong balance sheet, strong cash generation and new long-term bank facilities provide a robust platform for growth and a smooth transition from the previous LLP to the new Plc corporate structure,” the announcement added.
“The net position of the group balance sheet has transformed from nil, as is typical with a law firm LLP structure, to £7m (before dividend), positioning the business well for future expansion.”
CEO Michael Ward said: “I am delighted with the performance of the business during the six month period to 31 October 2015, a period in which we have achieved and in some cases over-achieved against the targets we set ourselves at the time of our IPO in June 2015.
“The group’s ability to deliver a strong first-half performance, in an improving but challenging market, whilst at the same time transitioning the business from an LLP to a Plc not only highlights the capabilities of the senior management team but also reconfirms our strategy of using our more flexible Plc status to enhance shareholder value through organic growth and strategic acquisitions.
“These results represent a very solid start to our life as a Plc and I believe will serve to further raise our profile, differentiate us from our direct competitors and attract quality staff. As such, the Board looks forward to the remainder of its first year as a Plc with confidence.”