Gateley (GTLY) H2 2024 earnings summary

Executive summary

• Revenue increased 6.0% year-over-year to £172.5m, maintaining an unbroken growth record since IPO in 2015 despite a challenging market environment.

• Strategic focus on diversification beyond legal services, with consultancy now 28.9% of total revenues and balanced investments in service lines, systems, and people.

• Investments have been self-funded, preserving a strong balance sheet and consistent net cash position.

• Underlying profit before tax reached £23 million, down 8.1% year-over-year, with a like-for-like decrease in profit metrics due to ongoing strategic investments.

• Maintained a strong cash position and proposed a final dividend of 6.2p, totaling 9.5p for the year.

Financial highlights

• Group revenue grew by 6% year-over-year to £172.5m, with consultancy revenue nearing £50 million and now 28.9% of group revenue.

• Business services platform revenue increased by 14% like-for-like; property platform revenue grew by 11.4%.

• Contribution margin on the business services platform improved from 24.4% to 30.2% in one year.

• Free cash flow exceeded 170% of PAT in one report and 92.5% of adjusted profit after tax in another.

• People costs were 62.9% of fees (including bonus), up from 59.5% last year.

Outlook and guidance

• Stronger organic growth expected in FY 2025, with H2 weighted due to anticipated election-led changes.

• Optimism for margin improvement as recent investments begin to deliver returns.

• Confident in strategy and optimistic on outlook, with a strong start to the new year.

• Strengthening activity in transactional services and robust non-transactional/consultancy demand.

• Good M&A pipeline and continued investment expected to drive long-term margin improvement.