Gateley Grows, But One-Off Costs Drag Profit Down
Gateley, one of the few listed UK law firms, is still growing—but not without some difficulties.
In its latest results, the firm reported a 1.2 percent rise in underlying pre-tax profit, hitting £23.3 million for the year to April 30. But when you factor in share payments, acquisitions, and other one-offs, actual profit plunged 54 percent to £6.4 million.
Gateley is one just a small number of legal businesses still trading on the stock exchange, after the collapse earlier this year of RBG Holdings and the acquisition last year of DWF by private equity investors. Gately markets itself as a professional services group and says this ability to rely on different strands of income has set it apart from rivals professional services poviders.
The Breakdown
- Revenue: Up 4.1 percent to £179.5 million.
- Net assets: Down 16 percent, now sitting at £67.5 million.
- Net debt: At £6.6 million, mainly from acquisitions and equity buybacks.
- Bonus clawbacks and reduced trade liabilities hit cash reserves.
- Debtor days improved marginally from 111 to 110 days.
So, Is Gateley in Trouble?
CEO Rod Waldie (pictured) called the results another year of “growth against an unpredictable backdrop.” That’s boardroom-speak for “it wasn’t great, but it wasn’t awful either.”
Waldie also highlighted a key move: Gateley bumped up its revolving credit facility to £80 million, which he says is ammo for more acquisitions. So while short-term profit is under pressure, the firm is still playing offense, not defense.
Still, the market didn’t exactly cheer. Shares dipped 1% to 132p on the results.
The Dividend Lives On
Despite the dip in profit, dividends remain unchanged at 6.2p per share—a signal the firm wants to keep shareholders calm while it rides out the bumps.
Gateley remains one of the few UK firms mixing law and the stock exchange. But listed law firms face a tricky balancing act: grow fast, reward shareholders, and keep talent happy while also fending off unpredictable markets, rising costs, and competition from private equity-backed legal operators.
As law firms increasingly look like tech companies with briefcases, Gateley’s strategy of “acquire and expand” is bold. But bold doesn’t always equal profitable, at least not immediately.
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