Gateley confident after strong first half
Gateley (Holdings)
130.89p
13:04 27/11/24
Professional services firm Gateley Holdings reported a strong first-half performance in a trading update on Wednesday, with both revenue and underlying profit before tax rising by about 5%.
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The AIM-traded company said revenue was expected to top £86m for the six months ended 31 October, up from £82m in the same period last year, while underlying profit before tax was anticipated to be at least £10.5m, compared to £10m a year earlier.
It said its diversified business lines and increased activity levels, particularly in transactional services during the second quarter, underpinned the half-year.
Fee earner utilisation remained above the prior year's levels, contributing to the positive outlook for the remainder of the financial year.
Gateley also strengthened its balance sheet during the period, transitioning from a net debt position of £2.2m in the first half of the 2024 financial year, to net cash of £1.2m by the end of October.
While changes to National Insurance contributions announced in the UK Autumn Budget were expected to increase costs by £1.8m in the 2026 financial year, Gateley said it planned to offset the impacts through pricing adjustments and efficiency measures aimed at enhancing long-term margins.
“I am pleased with the group's performance in the first half and the ongoing improvement in activity levels as the financial year progresses, which means that we have good momentum into the second half,” said chief executive officer Rod Waldie.
“The group continues to benefit from the resilience created by our strategy of investing in a diverse and complementary range of professional services.”
Waldie said the company was “pleased” that its more recent organic investments were beginning to generate positive returns alongside a strong performance from recently-acquired businesses.
“Our balance sheet provides a strong foundation from which to take a long-term view of potential opportunities to further invest in both legal and consultancy services.”
Gateley said it would announce its full half-year results on 15 January, as it reiterated confidence in meeting market expectations for the year.
At 1100 GMT, shares in Gateley Holdings were flat at 132p.
Reporting by Josh White for Sharecast.com.