Ward: Cross-selling opportunities

Gateley, the UK’s first listed law firm, has announced strong first-half results, with revenue up 9.8% to £38.6m.

A significant proportion of the growth (15%) came from the two non-legal businesses it bought last year, surveyors Hamer Associates and tax advisory business Capitus.

Together they delivered £1.3m in turnover, a rise of £500,000 on the same period last year.

Chief executive Michael Ward said: “We are very encouraged by how cross-selling opportunities from these acquisitions are starting to feed through into our pipeline of new work.”

For the six months ended 31 October 2017, Gateley’s adjusted EBITDA was up 6.3% to £5.3m, with profit before tax constant at £4.2m “following further investment in the business through additional staff and service lines”.

Gateley has announced an interim dividend of 2.2p, the same as last year.

The firm’s share price opened up 2% this morning, at 172p. It has been a bit of a rollercoaster in 2017, starting the year at 130p, reaching an all-time high of 195p in June but dipping to 156p in late October.

Gateley listed at 95p in June 2015 and for the first year its share price barely moved, starting 2016 at 102p. But in the wake of good annual results last year, it started climbing. A Legal Futures analysis showed that it was one of the few legal shares to beat the market in 2016.

Today’s announcement said further staff share options were issued during the six months, while, as we reported in October, the sale of £10m worth of shares by a group of internal shareholders increased the free float of the company from 34% to 40.3%; at the time of listing in June 2015, 30% of shares were held outside of internal shareholders.

Mr Ward said the increase in revenue had enabled Gateley “to further invest in the business through additional staff and service lines” – it recently launched a global mobility practice, to help manage employees on international assignments.

“The board remains focused in its search to acquire businesses offering complementary professional and other specialist services which will assist in further expanding and diversifying our income streams.”