Non-legal professional services now account for 30% of the revenue of pioneering listed law firm Gateley, it revealed yesterday alongside good first-half results.
Group income was up 5.3% to £86m for the six months to 31 October 2024 – with organic revenue from consultancy services growing three times as fast as from legal services, while Gateley also benefited from the July 2023 acquisition of East Midlands chartered surveyors practice RJA Consultants, which cost of £6m.
This led to increases of nearly 6% in underlying operating profit to £9.1m and underlying profit before tax to £10.6m.
Investors were told: “We continue to believe in, and execute, our strategy of investing for growth in both legal services and consultancy services, the latter now accounting for 29.8% of revenue in our uniquely diverse business model.
“This diversity has been, and remains, the cornerstone of our resilient, year-on-year growth since listing in 2015.”
RJA was the 14th acquisition Gateley has made since becoming the first law firm to list in London, back in 2015, of which 11 have been non-legal businesses.
The announcement said Gateley saw “significant opportunities for further organic growth and selective acquisitions, aided by the group’s strong balance sheet, and undrawn headroom of £17m in the group’s revolving credit facility (where cash typically accounts for 50% of the consideration we pay)”.
Gateley operates off four ‘platforms’ – property, business services, people and corporate. All grew except for the people platform, which declined by 3.9% “due to significant contraction in our private client team, where we are reducing scale and focusing on core services to high-net-worth clients”.
Like-for-like activity levels across the group also increased during the six months “and our outlook is more positive than at this stage in the prior year, including in our transactional service areas, as pre-Budget uncertainty moderates and sentiment stabilises”.
Gateley’s board has proposed the same interim dividend of 3.3p per share as last year.
Chief executive Rod Waldie said: “The group continues to benefit from the resilience created by our strategy of investing in a diverse and complementary range of professional services. We are pleased that our more recent organic investments are beginning to generate positive returns alongside the strong performance from our 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.”
Our recent review of listed legal businesses’ performance in 2024 showed that Gateley’s shares have been slipping over the past three years, down another 10% in 2024 to 139p, but there’s been no obvious reason for this as it has continued to perform well. The shares closed yesterday at 129.5p.
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