Information  X 
Enter a valid email address

Gateley (Holdings) (GTLY)

  Print      Mail a friend

Tuesday 08 January, 2019

Gateley (Holdings)

Half Year Results

RNS Number : 4369M
Gateley (Holdings) PLC
08 January 2019
 

8 January 2019

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

 

Gateley (Holdings) Plc

("Gateley" or the "Group")

AIM:GTLY

 

Half Year Results for the six months ended 31 October 2018

 

Strong results from an established, resilient and progressive business

 

Gateley, the law-led professional services group, is pleased to announce its unaudited results for the six months ended 31 October 2018 ("the Period").

 

Financial Highlights

 

Revenue up 20.1% to £46.4m (H1 18: £38.6m), 10.2% from organic growth

 

Adjusted EBITDA* up 24.8% to £6.6m (H1 18: £5.3m)

 

Profit before tax up 18.6% to £5.0m (H1 18: £4.2m)

 

Robust balance sheet with net assets up 40.8% to £23.1m (H1 18: £16.4m), with net debt increased to £8.2m (H1 18: £7.1m)

 

Strong cash generation** as cash conversion up 2.5ppts to 87.4% (H1 18: 85.3%)

 

Basic EPS up 13.5% to 3.52p (H1 18: 3.10p)

 

Profit after tax up 18.0%, supporting increase in interim dividend of 18.2% to 2.6p per ordinary share (H1 18: 2.2p)

 

Operational Highlights

 

Strong performance across the business demonstrating the success of our strategy, the strength and sustainability of our business model and further enhancing Gateley's reputation for delivering growth from its established, resilient and progressive business

 

Double-digit growth across all financial indicators driven by the Group's on-going investment in people and delivered across its expanded client base, its broader service offering and its wider geographical base

 

Successful acquisition and integration of GCL Solicitors and Kiddy & Partners expands the Group to sixteen legal and five non-legal business lines

 

Total headcount up by 17.3% from 30 April 2018 to 928 (FY 18: 791), including eight new lateral legal partner hires and seven internal promotions to partner, proving the appeal of the Group's offering to internal and external candidates

 

* Adjusted EBITDA excludes income or expenses that relate to non-underlying items and non-cash charges relating to share-based payments

** Cash conversion (Operating cash flow / Adjusted EBITDA)

 

Michael Ward, CEO of Gateley, said:

 

"I am delighted with the performance of the business in the first half of the financial year. Our proven strong and resilient business model and our focused diversification strategy has continued to drive growth across our business: our core legal business has grown strongly; our acquired complementary businesses are all fully integrated and are performing very well; our acquisition pipeline is strong with regular approaches from companies who view Gateley as an ideal choice to help them grow their businesses successfully.

 

The Group now operates from ten offices with a team now comprising over 900 people, who support the mid-market with all of its legal and other professional service requirements.  Since our admission to AIM three and a half years ago, our core legal team has grown by 47% from 384 to 565. We have also expanded our non-legal service lines such that our legal team now works alongside 38 other professionals including chartered surveyors, tax consultants, clinical psychologists and chartered accountants. We remain committed to our strategy of investing in the business and its people and expanding the Group's offering, whilst maintaining our focus on sustainable improving performance.

 

In the first three years post Admission to AIM, the Group has delivered turnover growth of 37%, adjusted EBITDA growth of 46% and, including the dividend from this set of results, has provided shareholders with dividend income of 21.84 pence per share. The Group is on track to deliver full year earnings in line with market forecasts, which were raised following the positive Trading Update announced on 23 November 2018, with revenues of not less than £102m and EBITDA margins in H2 19 not less than those achieved previously.

 

With our strong trading and investment for the future both continuing, the Board looks forward to the second half of the financial year with confidence."

 

Enquiries:

 

Gateley (Holdings) Plc

 

Neil Smith, Finance Director

Tel: +44 (0) 121 234 0196

Nick Smith, Acquisitions Director and Head of Investor Relations

Tel +44 (0) 20 7653 1665

Cara Zachariou, Head of Corporate Communications

Tel +44 (0) 121 234 0074

Mob: +44 (0) 7703 684 946

 

 

finnCap - Nominated adviser and broker

Tel +44 20 7220 0575

Matt Goode / James Thompson (Corporate Finance)

 

Andrew Burdis (ECM)

 

 

 

N+1 Singer - Joint broker

Tel +44 20 7496 3000

Richard Lindley / Peter Steel (Corporate Finance)

 

Rachel Hayes (Corporate Broking)

 

 

 

Belvedere Communications Limited - Financial PR

 

Cat Valentine ([email protected])

Mob: +44 (0) 7715 769 078

Llew Angus ([email protected])

Mob: +44 (0) 7407 023 147

Keeley Clarke ([email protected])

Mob: +44 (0) 7967 816 525

 

 

CEO OPERATIONAL REVIEW

 

Introduction

 

I am delighted with the performance of the business in the first half of the financial year and feel confident that our proven track record and focused diversification strategy will continue to enable us to deliver on our promises.  The Group has undertaken an intense but highly productive journey, since the decision was made to IPO in 2015.  During this time, we have navigated our way successfully through cultural change, whilst, at the same time delivering transformational revenue and profit growth, significantly increasing headcount, acquiring and integrating many new businesses and establishing new complementary service lines.  Our people, our strategy and the solid platform of our established and well-invested business, together with our loyal client base, have enabled the Group to deliver another set of excellent results for the Period. As we enter the second half of the financial year, the Group's activity levels remain robust and we are generating greater opportunities to attract talent or act for clients, new and old, than ever before.

remove

Our strategy, laid out at IPO, created the opportunity and platform for both organic and acquisitive growth. We have made significant progress in the last three years and see only greater opportunity in the future (even acknowledging political and economic uncertainty) as our broad-based, national business continues to strengthen and grow.  Our progress to-date can be summarised below:

 

Revenue - FY 15 £60.9m = CAGR 11% or 37% increase to £83.4m FY 18

 

Adjusted EBITDA - FY 15 £11.3m = CAGR of 13.4% or 46% increase to £16.5m FY 18

 

Net Asset value - FY 15 £nil to £23m H1 19

 

Headcount - 52% growth from FY 15 610 to 928 H1 19

 

Service lines - FY 15: 15 to 21 H1 19

 

Financial Results

 

Trading in the Period has been strong with increases in activity levels across the Group generating revenue up 20.1% to £46.4m and adjusted EBITDA up 24.8% to £6.6m.  Organic (Legal) sales growth (excluding acquisitions) of 10.2% was supported by a similar level of growth from acquisitions.  Strong cash generation continues to be generated from profit after tax which has grown by 18.0% enabling us to propose an 18.2% increase in our interim dividend of 2.6p per share (H1 18: 2.2p).  We continue to seize growth opportunities as they arise and invest in the long-term future of the business via strategic recruitment and investment in new, complementary service lines.

 

Operational Review

 

In line with our overall growth strategy, we continue to invest in strategic recruitment, in complementary service lines (both organic and via acquisition) and we maintain a strong focus on the delivery of excellent levels of client service.  During the Period, we have invested in a broad range of service lines, most notably in our Residential Development practice which has grown from three to seven locations across the UK in the last six months, welcoming more than 100 additional members of staff to the team. Including the acquisition of GCL Solicitors, these appointments bring Gateley's National Residential Development team to nearly 200 people, making it the largest Residential Development team within any legal business in the UK.

 

We are proud to note that, in addition to being recognised by Experian as the most active mid-market legal advisor nationally, our success has also been recognised through a number of awards including Law Firm of the Year at Thames Valley Deal Awards 2018, Midlands Corporate Law Firm of the Year 2018, together with International Deal of the Year and SME Deal of the Year 2018. The depth, strength and quality of our business has been recognised not only by our clients but also by our industry as evidenced by our recent commendation in The Times 200 Best Law Firms 2019.  In a survey conducted by international market research firm Statista, more than 20,000 solicitors in England & Wales were asked to recommend the UK's best law firms in a range of categories.  Supporting our Experian No1 ranking, we were commended for 'Company & Commercial, Mergers & Acquisitions (Business Law)' in The Times' 200 Best Law Firms 2019.

 

We continue to invest in our people through the grant, and more recently, the vesting of share options and I am delighted that participation in the equity of the business remains strong across professional and support staff alike.  We believe it is this differentiated model that enables us to attract the best talent from across the industry.  We remain successful in securing exceptional professionals who are looking for a strong business with a defined and distinctive strategic plan, supported by a strong balance sheet and ongoing investment.  Since 1 May 2018 we have welcomed a further eight new lateral legal partner hires to the Group.  In addition, we have also promoted seven legal directors/senior associates to partner.  The total number of partners is now 146.  Our overall staff numbers are increasing, as our measured expansion across legal and complementary non-legal business services enhances our offering to new and existing clients.  Since April 2018, total staff numbers have increased by 17.3% to 928.

 

Acquisitions

 

The Board remains focused in its search to acquire complementary professional and other specialist services businesses to expand and diversify our income streams further.  We are pleased with how all four acquisitions have integrated with our existing legal business.  As these acquisitions continue to bed-in we are encouraged by the numerous cross-selling opportunities which are feeding through into our pipeline of new work. Our acquisition pipeline is strong with regular approaches from companies seeing Gateley as an ideal choice to help them grow their businesses successfully.

 

Current trading and outlook

 

The Group's first half performance has been strong, with all key metrics increasing significantly, driven by broad-based organic growth, the continued enhancement of our delivery to clients through diversification, and our proven ability to attract and retain key talent.

 

Trading in the second half has started well with the business generating further strong growth.  We are on track to deliver full year earnings in line with market forecasts, which were raised following the positive Trading Update announced on 23 November 2018 with revenues of not less than £102m and EBITDA margins in H2 19 not less than those achieved previously.

 

Given the quality of our people, our track record of delivery and the considerable new business opportunities the Group is creating, we are confident that Gateley is well positioned to deliver further growth and the Board looks to the future with confidence.

 

Michael Ward

CEO

8 January 2019

 

 

FINANCE DIRECTOR'S REVIEW

 

The ongoing strong financial performance of the Group, including our increased profitability and enhanced dividend returns, endorse our strategy of investing in people and diversifying our service offering for the benefit of all stakeholders. During the Period, the Group has generated strong organic and acquisitive sales growth, efficiently managed its cost base, whilst at the same time completing two strategic acquisitions and expanded revenue and profit by more than 20%.

 

Activity levels remain strong across the Group, enabling management to invest further and strengthen our already diversified professional services offering. Total Group revenue for the Period increased by 20.1% to £46.4m (H1 18: £38.6m).   Organic revenue growth (excluding acquisitions) was 10.2%, which was supported by a similar level of growth from acquisitions during an active six months for our acquisitions and integration team.  Whilst revenue mix remained similar to previous years, strong organic growth in the Group's Employment, Pensions and Benefits Group of 10% (FY 18: 5%) and Property Group of 10% (FY 18: 7%) were complemented by a number of excellent results for clients across our highly ranked litigation business.  Our litigation offering, comprising litigators sitting across four of our five segmental reporting Groups, has generated over £10m of fees in H1 19 (representing 32% growth in the Period).  Our strong track record, referral sources and strong balance sheet allow the Group to invest in long term (>1 year) projects: litigation fees now represent c25% of our total annual revenues.

 

Whilst transactional advisory activity levels across our Corporate Group led to a reduction in revenue of 6% (H1 18:  increase of 24%), against a very strong comparable period in the first six months in H1 18, we remain the leading deal advisor in UK M&A and our private equity work remains particularly strong.  We were extremely pleased with the 21% additional growth produced from acquisitions in our Property Group, driven by a notable contribution of £2.9m of fees in five months by GCL Solicitors, which was only acquired in May 2018.  The Guildford office was a strategic acquisition for Gateley, which is enabling us to expand in the South East Housebuilding sector.  Gateley is currently involved in a significant number of larger housing schemes with 1,000 units or more on each site.  We expect these schemes, plus many others between 500-1000 units which we are involved in, to continue to move forward despite any external economic influences in the market which may arise as they are expected to straddle one, if not two, market cycles.  We also remain pleased with overall revenue growth delivered by our complementary professional services businesses, Gateley Capitus and Gateley Hamer (acquired in April 16 and September 16), which have grown to £1.5m (H1 18: £1.3m).

 

Kiddy & Partners has also generated a pleasing return of £0.8m of revenue since its acquisition in July 2018, which represents 24% of the Employment, Pensions and Benefits Group's 34% growth during the period as revenue grew to £4.8m (H1 18 £3.6m).

 

Organic/acquisitive fees and H1 19 growth split

 

 

H1 18

£m

H1 19

£m

HY1

YOY Growth

H2 18

£m

FY 18

£m

Organic - Gateley plc

37.3

41.2

10.2%

45.5

82.8

Capitus

0.5

0.5

-

0.9

1.4

Hamer

0.8

1.0

25%

1.1

1.9

GCL

0

2.9

n/a

0.0

0.0

Kiddy

0

0.8

n/a

0.0

0.0

Acquisitive total

1.3

5.2

9.9%

2.0

3.3

Revenue total

38.6

46.4

20.1%

47.5

86.1

 

As stated in our trading update announced on 23 November 2018, the Board expects annual revenues to exceed £100m for the first time in the Group's history in FY 19 and reach not less than £102m.  Acquired businesses should contribute £13m towards this total.

 

Operating costs rose by £7.2m in the Period, including a £5.2m increase in personnel costs, the majority of which arose from recruitment of new staff (including acquired businesses), which contributed towards the delivery of growth in profit before tax for the Period of 18.6% to £5.0m (H1 18: £4.2m).  Adjusted EBITDA increased by 24.8% from £5.3m to £6.6m for the Period.  This has been achieved through tight control of Group operating expenses, as the business continues to expand, and our steadfast approach to growth organically and via acquisitions.

 

The financial bedrock of our business model and the resulting KPI's are as follows:

 

-

Staff costs to remain within a range of 60-65% of revenue;

-

To maintain or enhance adjusted EBITDA margins at or above 19%; and

-

Focus on cash flow whilst targeting cash generation between 85% and 95% of adjusted EBITDA.

 

The Group strives to deliver value both to investors and clients alike, as we invest in the expansion of professional and support staff across the business that is critical to meeting client demands.  Our average number of legal and professional staff numbers rose by 12.7% to 552 during the Period (H1 18: 7.2% to 490).  Personnel costs rose by 21.3% to £29.5m (H1 18: £24.3m).  The higher rise in costs as against staff numbers reflects our ability to attract senior partner and director level appointments. As these appointments generate higher fee levels, it is noteworthy that in the first six months of the financial year, personnel costs as a percentage of revenue rose just 0.6% from 62.9% to 63.5%.  Pay rises averaging at 5% to existing staff also contributed significantly towards the H1 19 personnel cost increase.  Share based payment charges also increased from £0.2m to £0.4m for the Period.  The Group's share schemes remain popular with over 55% of all staff currently participating in one of our three equity schemes.

 

We expect the percentage of staff costs to revenue to fall back down closer to the lower end of our target KPI as new partners taken on over the last few years come fully up to speed with their own fee generation and second half fee weighting profile works through.  Partner recruitment since IPO remains significantly ahead of pre-IPO levels, as demonstrated by the net partner numbers below:

 

 

Post-IPO

Pre-IPO

 

H1 19

FY 18

FY 17

FY 16

FY 15

FY 14

FY 13

FY 12

FY 11

Joiners

8

9

8

13

3

4

2

4

1

Promotions

7

6

3

2

1

3

1

-

-

Leavers

-

(5)

(1)

(4)

(8)

(4)

(9)

(2)

(4)

Net new Partners

15

10

10

11

(4)

3

(6)

2

(3)

 

The Group is adept at meeting the challenge common within legal service businesses, whereby performance is second half weighted and we remain on track to show a strong second half to the financial year, in keeping with previous years.  Utilisation (actual hours vs budgeted hours) of fee generating staff remains within our target range of +80%.  We expect utilisation to increase as a result of headcount investment in H2 19.  As we attract and bed-in new staff to meet existing demand all business lines around the Group are reporting increasing opportunities from our well-balanced client base, especially in large specialist areas in which we have a proven track record of delivery. 

 

An increased interim dividend slightly above Profit After Tax for the Period rewards both internal and external investors.  When considering the increased investment in staff during the Period we are pleased to have delivered an increase in adjusted EPS at 3.52p (H1 18: 3.10p) at the half year end.

 

Balance sheet, cash flow and financing

 

The Group's net asset position is broadly unchanged from the closing FY 18 position at £23.1m (FY 18: £23.0m), as acquisitions have been financed via modest additional bank debt, and £1.9m of working capital resources have been used to support a strategy to finance the purchase, by our Employee Benefit Trust, of certain vesting SAR options.

 

Total net debt has increased to £8.2m since the FY18 year end (FY 18: £0.7m), as a result of the following movements:

 

-

existing term loan facilities were restructured to accommodate the borrowing of a further £3m in October 2018 to fund acquisitions made during the Period; £1m of repayments to original term loans were made prior to the additional borrowing;

-

loans from former partners of GCL Solicitors totalling £1.3m were acquired on the acquisition of GCL Solicitors.  £0.6m of loans were repaid during H1 19; and

-

cash at bank reduced from £4.3m to (£0.3m), partly as a result of funding given to the Employee Benefit Trust in order for it to purchase some shares from vesting option holders and partly due to FY 18 dividend funding of £5.3m.  The strong contribution generation from working capital net cash inflows across the Group helped to partly settle these cash outgoings.

 

By FY 19 net debt is expected to be £3m, comprising approximately £5.7m of remaining term bank debt and £0.4m of loans to former partners of GCL.

 

Working capital at H1 19 totalled £21.3m compared to £18.8m at FY 18.  The growth of £2m in trade debtors was partially due to the expansion of services following acquisitions of GCL and Kiddy.  However collection of debts remains a continued focus of management across the Group. The Group expects timing of collections in the second half of the year to enhance cash resources further. The Group is adept at benefiting from greater operating cash generation in the second half of the year with inflows of working capital following utilisation of unbilled time built at the half year.

 

Earnings per share and dividend

 

Basic earnings per share increased by 13.5% to 3.52p (H1 18: 3.10p).  Diluted earnings per share increased by 16.6% to 3.44p (H1 18: 2.95p).  The Board today declares an interim dividend of 2.6 pence per share which will be paid on 15 March 2019 to shareholders on the register at the close of business on 15 February 2019.  The shares will go ex-dividend on 14 February 2019.

 

Neil Smith

Finance Director

8 January 2019

 

 

CONSOLIDATED INCOME STATEMENT AND OTHER COMPREHENSIVE INCOME

for the six months ended 31 October 2018

 

 

Note

Unaudited

6 months to

31 October 2018

Unaudited

6 months to

31 October 2017

Audited

12 months to

30 April 2018

 

 

£'000

£'000

£'000

 

 

 

 

 

Revenue

2

46,370

38,605

     86,090

 

 

 

 

 

Other operating income

 

150

143

357

Personnel costs

3

(29,454)

(24,276)

(52,621)

Depreciation and amortisation

 

(1,193)

(751)

(1,517)

Other operating expenses

 

(10,912)

(9,352)

(17,484)

 

 

 

 

 

Operating profit

 

4,961

4,369

14,825

 

 

 

 

 

 Adjusted EBITDA

 

6,594

5,282

16,517

 Depreciation

 

(548)

(478)

(970)

 Non-underlying items

 

 

 

 

 Share based payment charges

 

(379)

(162)

(719)

 Amortisation

6

(645)

(273)

(547)

 Exceptional items

 

 

 

 

 Release of lease incentive

 

-

-

182

 Release of contingent consideration

 

-

-

362

 Recruitment costs

 

(61)

-

-

 

 

 

 

 

Net financing income/(expense)

 

72

(125)

(179)

 

 

 

 

 

Profit before tax

 

5,033

4,244

14,646

 

 

 

 

 

Taxation

 

(1,126)

(932)

(2,853)

 

 

 

 

 

Profit for the period after tax attributable to equity holders of the parent

 

3,907

3,312

11,793

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that are or may be reclassified subsequently to profit or loss

 

 

 

 

Foreign exchange translation differences

 

 

 

 

- Exchange differences on foreign branch

 

59

-

(58)

Profit for the financial period and total comprehensive income all attributable to equity holders of the parent     

 

3,966

3,312

11,735

 

Statutory earnings per share (pence)
 

Basic earnings per share

4

3.52

3.10

11.03

Diluted earnings per share

4

3.44

2.95

10.46

Proposed interim dividend per share

5

2.60

2.20

-

 

The results for the periods presented above are derived from continuing operations. There were no other items of comprehensive income to report.

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 October 2018
 

 

 

Unaudited at

31 October

2018

Unaudited at

31 October

2017

Audited at

30 April

2018

 

Note

£'000

£'000

£'000

 

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

2,277

2,125

1,935

Investment property

 

164

164

164

Intangible assets & goodwill

6

9,438

3,568

3,295

Other intangible assets

 

35

-

39

Other investments

 

85

85

85

 

 

 

 

 

Total non-current assets

 

11,999

5,942

5,518

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

7

43,529

38,429

41,417

Cash and cash equivalents

 

-

-

4,301

 

 

 

 

 

Total current assets

 

43,529

38,429

45,718

 

 

 

 

 

Total assets

 

55,528

44,371

51,236

 

 

 

 

 

Non-current liabilities

 

 

 

 

Other interest-bearing loans and borrowings

8

(4,522)

(3,970)

(2,982)

Other payables

9

(964)

(126)

(121)

Deferred tax liability

 

(566)

(184)

(128)

Provisions

 

(505)

(339)

(405)

 

 

 

 

 

Total non-current liabilities

 

(6,557)

(4,619)

(3,636)

 

 

 

 

 

Current liabilities

 

 

 

 

Bank overdraft

 

(352)

(1,164)

-

Other interest-bearing loans  

and borrowings

8

(3,280)

(1,975)

(1,977)

Trade and other payables

9

(20,421)

(18,983)

(20,978)

Provisions

 

(275)

(266)

(200)

Current tax liabilities

 

(1,560)

(964)

(1,457)

 

 

 

 

 

Total current liabilities

 

(25,888)

(23,352)

(24,612)

 

 

 

 

 

(32,445)

(27,971)

(28,248)

 

 

 

 

 

 

23,083

16,400

22,988

 

 

 

 

 

EQUITY

 

 

 

 

  Share capital

 

11,086

10,688

10,688

  Share premium

 

4,069

4,332

4,576

  Merger reserve

 

(9,950)

(9,950)

(9,950)

  Other reserves

 

4,296

1,547

1,547

  Treasury reserve

 

(1,729)

(53)

(15)

  Translation reserve

 

82

81

23

  Retained earnings

 

15,229

9,755

16,119

 

 

 

 

 

 

23,083

16,400

22,988

 

 

CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 31 October 2018

 

 

 

Unaudited

6 months to

31 October

2018

Unaudited

6 months to

31 October

2017

Audited

12 months to

30 April

2018

 

 

£'000

£'000

£'000

Cash flows from operating activities

 

Note

 

 

 

 Profit for the period after tax

 

3,907

3,312

11,793

 Adjustments for:

 

 

 

 

 Depreciation

 

548

477

970

 Amortisation of intangible assets

6

645

274

547

 Financial income

 

(73)

(62)

(233)

 Financial expense

 

1

187

412

 Release of contingent consideration

 

-

-

(362)

 Exceptional items

 

61

-

-

 Equity settled share-based payments

 

379

162

719

 Tax expense

 

1,126

932

2,853

 

 

6,594

5,282

16,699

 Decrease/(increase) in trade and other receivables

 

89

657

(2,330)

 (Decrease)/increase in trade and other payables

 

(1,095)

(1,449)

851

 Increase in provisions

 

175

14

14

 Cash generated from operations

 

5,763

4,504

15,234

 Tax paid

 

(1,445)

(1,623)

(3,051)

 Net cash flows from operating activities

 

4,318

2,881

12,183

 

 

 

 

 

 Investing activities

 

 

 

 

 Acquisition of property, plant and equipment

 

(601)

(442)

(745)

 Acquisition of other intangible assets

 

-

-

(46)

 Consideration paid on acquisition of subsidiary

 

(2,698)

(125)

(179)

 Contingent consideration payments

 

(235)

-

-

 Cash received on acquisition of subsidiary

 

266

-

-

 Net cash outflow from investing activities

 

(3,268)

(567)

(970)

 

 

 

 

 

Financing activities

 

 

 

 

 Interest and other financial income received

 

73

62

233

 Interest and other financial income paid

 

(1)

(187)

(412)

 Dividends paid

5

(5,264)

(4,690)

(7,042)

Receipt of new term bank loans

 

2,970

-

-

 Repayment of term bank loans

 

(980)

(993)

(1,980)

Repayment of loans from former members of GCL Solicitors

 

(574)

-

-

 Repayment of loans from former members of Gateley

 Heritage LLP

 

-

(551)

(551)

 Transactions in own shares - Gateley EBT Limited

 

(1,866)

236

(144)

 Exceptional items

 

(61)

-

-

 Other transactions with Gateley EBT Limited

 

-

(51)

-

 Net cash outflow from financing activities

 

(5,703)

(6,174)

(9,608)

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(4,653)

(3,860)

1,605

 Cash and cash equivalents at beginning of period

 

4,301

2,696

2,696

 Cash and cash equivalents/(bank overdraft) at end   

 of period

 

(352)  

(1,164)

4,301

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 31 October 2018

 

 

Share

capital

Share

premium

Merger

reserve

Other

reserve

Treasury

reserve

Retained

earnings

Foreign currency translation reserve

Total

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

At 1 May 2017

10,688

4,332

(9,950)

1,547

(132)

10,864

81

17,430

Comprehensive income:

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

11,793

-

11,793

Exchange rate differences

-

-

-

-

-

-

(58)

(58)

Total comprehensive income

-

-

-

-

-

11,793

(58)

11,735

Transaction with owners recognised directly in equity

 

 

 

 

 

 

 

 

Purchase of treasury shares

-

-

-

-

(38)

-

-

(38)

EBT reserve adjustment

-

-

-

-

-

29

-

29

Reclassification of gain on own shares

-

244

-

-

-

(244)

-

-

Sale of treasury shares

-

-

-

-

155

-

-

155

Dividend paid

-

-

-

-

-

(7,042)

-

(7,042)

Share based payment transactions

-

-

-

-

-

719

-

719

Total equity at 30 April 2018

10,688

4,576

(9,950)

1,547

(15)

16,119

23

22,988

 

 

 

 

 

 

 

 

 

At 1 May 2017 (unaudited)

10,688

4,332

(9,950)

1,547

(132)

10,864

81

17,430

Comprehensive income:

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

3,312

-

3,312

Total comprehensive income

-

-

-

-

-

3,312

-

3,312

Transaction with owners recognised directly in equity

 

 

 

 

 

 

 

 

Sale of treasury shares

-

-

-

-

79

107

-

186

Dividend paid

-

-

-

-

-

(4,690)

-

(4,690)

Share based payment transactions

-

-

-

-

-

162

-

162

Total equity at 31 October 2017

10,688

4,332

(9,950)

1,547

(53)

9,755

81

16,400

 

 

 

 

 

 

 

 

 

At 1 May 2018 (unaudited)

 

 

 

 

 

 

 

 

Comprehensive income:

10,688

4,576

(9,950)

1,547

(15)

16,119

23

22,988

Profit for the period

-

-

-

-

-

3,907

-

3,907

Exchange rate differences

-

-

-

-

-

-

59

59

Total comprehensive income

-

-

-

-

-

3,907

59

3,966

Transaction with owners recognised directly in equity

 

 

 

 

 

 

 

 

Sale of treasury shares

-

-

-

-

(1,714)

88

-

(1,626)

Issue of shares

398

-

-

2,374

-

-

-

2,772

Reclassification of loss on own shares

-

(507)

-

-

-

-

-

(507)

Dividend paid

-

-

-

-

-

(5,264)

-

(5,264)

Share based payment transactions

-

-

-

375

-

379

-

754

Total equity at 31 October 2018

11,086

4,069

(9,950)

4,296

(1,729)

15,229

82

23,083

 

The following describes the nature and purpose of each reserve within equity:

 

Share premium - Amount subscribed for share capital in excess of nominal value together with gains and losses on sale of own shares.

Merger reserve - Represents the difference between the nominal value of shares acquired by the company in the share for share exchange with the former Gateley Heritage LLP members and the nominal value of shares issued to acquire them.

Other reserve - Represents the difference between the actual and nominal value of shares issued by the company in the acquisition of subsidiaries.

Treasury reserve - Represents the repurchase of shares for future distribution by the Group's Employee Benefit Trust.

Retained earnings - All other net gains and losses and transactions with owners not recognised anywhere else.

Foreign currency translation reserve - Represents the movement in exchange rates back to the Group's functional currency of profits and losses generated in foreign currencies.

 

 

NOTES

for the year ended 30 April 2018

 

1. Basis of preparation and significant accounting policies

 

These interim unaudited financial statements for the six months ended 31 October 2018 have been prepared in accordance with the accounting policies set out in the Annual Report and Financial statements of the Group for the year ended 30 April 2018, with the additional application of IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments.

 

The application of IFRS 15 has not had a material impact on the interim results or the comparative values presented in these accounts due to the nature of the Group's existing billing and income recognition practices.  Fees relating to contingent contracts are billed only when the contingent event has been satisfied. On non-contingent contracts work in progress is billed over time in line with the provision of services to the client. As this billing approach is compliant with the requirements of IFRS 15 no significant changes in revenue recognition have been necessary.

 

IFRS 9 introduces the new expected credit loss that is to be recognised for each applicable financial asset. These losses, applied to trade receivables and WIP balances, have been modelled based on historically observed loss rates across each operating segment, adjusted for any relevant forward-looking information available. The Group has rebutted the presumption that debts being more than 30 days past due are an indicator of a significant increase in credit risk. This is on the basis that historic observations support that the losses on debts 30 days or more past due are not significantly greater than those less than 30 days past due. As a result of the model applied the overall doubtful debt balance recognised is marginally higher than in comparative periods. An election has been made not to restate the prior period comparatives in the interim statements as the impact is not considered to be material.

 

The recognition and measurement requirements of all International Financial Reporting Standards ('IFRSs'), International Accounting Standards ('IAS') and interpretations currently endorsed by the International Accounting Standards Board ('IASB') and its committees as adopted by the EU and as required to be adopted by AIM listed companies have been applied.  AIM-listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.

 

The condensed unaudited financial statements for the six months to 31 October 2018 have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. The financial information contained in this interim report does not constitute statutory accounts for the six months ended 31 October 2018 or 31 October 2017 and should be read in conjunction with the statutory accounts for the years ended 30 April 2018 and 30 April 2017.  The auditors have reported on those accounts.

 

Going concern

These interim accounts are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.  The Group remains cash generative, with a strong on-going trading performance.  On 1 June 2015 the Group acquired two unsecured term loans for £5m each repayable quarterly over five years. The facilities were extended by a total of £3m in October 2018. These term loan facilities contain financial covenants which the Group is forecast to comply with for the foreseeable future.  Additional overdraft facilities of up to £8m in total are also available to the Group.

 

Statement of Directors' responsibilities

The Directors confirm that, to the best of their knowledge, this condensed set of consolidated financial statements have been prepared in accordance with the AIM Rules.

 

Cautionary statement

This document contains certain forward-looking statements in respect of the financial condition, results, operations and business of the Group.  Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  There are a number of factors that could cause the actual results of developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.  Nothing in this document should be construed as a profit forecast.

 

2. Operating segments

 

The Chief Operating Decision Maker ("CODM") is the Strategic Board. The Group has the following five strategic divisions, which are its reportable segments.  These divisions offer different products and services and are managed separately because they report different specialisms from the legal teams in those divisions.

 

The following summary describes the operations of each reportable segment:

 

Reportable segment

Operations

Banking and Financial Services

Provision of legal advice in respect of asset finance, banking and restructuring services.

Corporate

Provision of legal advice in respect of corporate, family, private client and taxation services.

Business Services

Provision of legal advice in respect of commercial, commercial dispute resolution, litigation, regulatory, shipping, transport and insurance services.

Employees, Pensions and Benefits

Provision of legal advice in respect of employment and pension services, including Entrust Pension Limited's trustee services and global mobility consultancy. Also includes Kiddy & Partners Human Capital consultancy, providing assessment, talent management and leadership development.

Property

Provision of legal advice in respect of construction, planning, real estate and residential development services. Also includes Gateley Capitus Limited's tax incentives services together with Gateley Hamer Limited's easement and wayleave and compulsory purchase order services.

31 October 2018

 

Banking and
Financial
 Services

Corporate

Business
Services

Employee
Pensions

and
Benefits

Property
 

Total
segments

Other expense

and movement

in unbilled

 revenue

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 Segment revenue

8,427

7,300

6,046

4,834

19,502

46,109

261

46,370

 Segment contribution

 (as reported internally)

3,385

1,729

2,580

2,125

9,970

19,789

261

20,050

 Costs not allocated to segments:

 

 

 

 

 

 

 

 

 Other operating income

 

 

 

 

 

 

 

150

 Personnel costs

 

 

 

 

 

 

 

(3,499)

 Depreciation and amortisation

 

 

 

 

 

 

 

(1,193)

 Other operating expenses

 

 

 

 

 

 

 

(10,486)

 Net financial income

 

 

 

 

 

 

 

72

 Exceptional costs

 

 

 

 

 

 

 

(61)

 Profit for the financial period before     

 taxation and non-underlying items

 

 

 

 

 

 

 

5,033

 

31 October 2017

 

Banking and
Financial
 Services

Corporate

Business
Services

Employee

Pensions

and
Benefits

Property
 

Total
segments

Other expenses

 and movement

 in unbilled

 revenue

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 Segment revenue

6,408

7,731

5,283

3,602

14,899

37,923

682

38,605

 Pro-forma segment contribution

 (as reported internally)

2,015

2,380

2,278

1,233

7,368

15,274

682

15,956

 Costs not allocated to segments:

 

 

 

 

 

 

 

 

 Other operating income

 

 

 

 

 

 

 

143

 Personnel costs

 

 

 

 

 

 

 

(3,263)

 Depreciation and amortisation

 

 

 

 

 

 

 

(750)

 Other operating expenses

 

 

 

 

 

 

 

(7,717)

 Net financial expense

 

 

 

 

 

 

 

(125)

 Profit for the financial period before 

 

 

 

 

 

 

 

 

 taxation and non-underlying items

 

 

 

 

 

 

 

4,244

30 April 2018

 

Banking and
Financial
 Services

Corporate

Business
Services

Employee

Pensions

and
Benefits

Property
 

Total
segments

Other expenses

 and movement

 in unbilled

 revenue

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 Segment revenue

15,489

16,019

12,225

7,516

33,694

84,943

1,147

86,090

 Pro-forma segment contribution

 (as reported internally)

5,755

4,338

5,062

2,819

15,769

33,743

1,147

34,890

 Costs not allocated to segments:

 

 

 

 

 

 

 

 

 Other operating income

 

 

 

 

 

 

 

719

 Personnel costs

 

 

 

 

 

 

 

(5,209)

 Depreciation and amortisation

 

 

 

 

 

 

 

(1,517)

 Other operating expenses

 

 

 

 

 

 

 

(14,058)

 Net financial expense

 

 

 

 

 

 

 

(179)

 Profit for the financial year before  

 

 

 

 

 

 

 

 

 taxation and non-underlying items  

 

 

 

 

 

 

 

14,646

 

 

 

 

 

 

 

 

 

No other financial information has been disclosed as it is not provided to the CODM on a regular basis.

 

3. Employees

 

The average number of persons employed by the Group during the period, analysed by category, was as follows:
 

 

           Number of employees

 

6 months to

31 October 2018

6 months to

31 October 2017

12 months to

30 April 2018

 

 

 

 

Legal and professional staff

552

490

509

Administrative staff

314

244

248

 

866

734

757

 

 

 

 

 

The aggregate payroll costs of these persons were as follows:

6 months to

31 October 2018

6 months to

31 October 2017

12 months to

30 April 2018

 

£'000

£'000

£'000

 

 

 

 

Wages and salaries

25,685

21,242

45,825

Social security costs

2,878

2,487

5,283

Pension costs

512

385

794

Share based payments expenses

379

162

719

 

29,454

24,276

52,621

 

4. Earnings per share

 

 

6 months to

31 October 2018

6 months to

31 October 2017

12 months

to 30 April 2018

 

Number

Number

Number

 

 

 

 

Weighted average number of ordinary shares in issue, being weighted

average number of shares for calculating basic earnings per share

 

110,864,180

 

106,881,953

 

106,881,953

Shares deemed to be issued for no consideration in respect of share

based payments

 

2,816,317

 

5,248,775

 

3,948,441

Weighted average number of ordinary shares for calculating diluted

earnings per share

113,680,497

112,130,728

110,830,394

 

 

 

 

 

£'000

£'000

£'000

Profit for the period and basic earnings attributable to ordinary

equity shareholders

3,907

3,312

11,793

Exceptional items

 

 

 

Operating expenses and finance costs

61

-

(544)

Tax on non-underlying items 

(12)

-

103

Underlying earnings before non-underlying items

3,956

3,312

11,352

 

Earnings per share is calculated as follows:

 

Pence

 

Pence

 

Pence

 

 

 

 

Basic earnings per ordinary share

3.52

3.10

11.03

Diluted earnings per ordinary share

3.44

2.95

10.64

 

 

 

 

Adjusted basic earnings per ordinary share

3.57

3.10

10.62

Adjusted diluted earnings per ordinary share

3.48

2.95

10.24

 

Underlying earnings per share have been shown because the Directors consider that this provides valuable additional information about the underlying performance of the Group.

 

5. Dividends

 

 

6 months to

31 October 2018

6 months to

31 October 2017

12 Months

30 April 2018

 

£'000

£'000

£'000

Equity shares

 

 

 

Final dividend in respect of 2017 (4.4p per share) - Paid 4 October 2017

-

4,690

4,691

Interim dividend in respect of 2018 (2.2p per share) - Paid 16 March 2018

-

-

2,351

Final dividend in respect of 2018 (4.8p per share) - Paid 5 October  2018

5,264

-

-

Dividends paid

5,264

4,690

7,042

 

 

 

 

 

The Board has approved an interim dividend of 2.6p (2017: 2.2p) per share. This dividend will be paid on 15 March 2018 to shareholders on the register at the close of business on 15 February 2018.  The shares will go ex-dividend on 14 February 2018.  This dividend has not been recognised as a liability in these final statements.

 

6. Intangible assets

 

 

 

Goodwill

 

Customer list

 and brand

 names

Total

 

 

£'000

£'000

£'000

Deemed cost

 

 

 

 

At 1 May 2017

 

1,515

1,000

2,515

Acquired through business combination

 

1,161

638

1,799

At 31 October 2017

 

2,676

1,638

4,314

 

 

 

 

 

At 1 May 2017

 

2,676

1,638

4,314

Acquired through business combination

 

-

-

-

At 30 April 2018

 

2,676

1,638

4,314

 

 

 

 

 

At 1 May 2018

 

2,676

1,638

4,314

Acquired through business combination

 

3,958

2,830

6,788

At 31 October 2018

 

6,634

4,468

11,102

 

 

 

 

 

Accumulated amortisation

 

 

 

 

At 1 May 2017

 

-

472

472

Charge for the period

 

-

274

274

At 31 October 2017

 

-

746

746

 

 

 

 

 

At 1 May 2017

 

-

472

472

Charge for the year

 

-

547

547

At 30 April 2018

 

-

1,019

1,019

 

 

 

 

 

At 1 May 2018

 

-

1,019

1,019

Charge for the period

 

-

645

645

At 31 October 2018

 

-

1,664

1,664

 

 

 

 

 

Net Book Value

 

 

 

 

At 31 October 2017

 

2,676

892

3,568

 

 

 

 

 

At 30 April 2018

 

2,676

619

3,295

 

 

 

 

 

At 31 October 2018

 

6,634

2,804

9,438

 

Goodwill

 

Goodwill is allocated to the following cash generating units

 

31 October

2018

31 October

2017

30 April

2018

 

£'000 

£'000

£'000

 

 

 

 

Gateley Capitus Limited

1,515

1,515

1,515

Gateley Hamer Limited

1,161

1,161

1,161

Kiddy & Partners Limited

1,491

-

-

GCL Solicitors LLP (acquisition of trade and assets)

2,467

-

-

 

6,634

2,676

2,676

 

7. Trade and other receivables

 

 

31 October

2018

31 October

2017

30 April

2018

 

£'000

£'000

£'000

 

 

 

 

Trade receivables

30,447

25,486

28,512

Unbilled revenue

11,458

10,892

10,672

Prepayments and accrued income

1,624

2,051

2,233

 

43,529

38,429

41,417

8. Other interest-bearing loans and borrowings

The contractual terms of the Group's interest-bearing loans and borrowings, which are measured at amortised cost, are described below.

 

 

31 October 2018

31 October 2017

30 April 2018

 

Fair

value

Carrying
amount

Fair

value

Carrying
amount

Fair

value

Carrying
amount

 

£'000

£'000

£'000

£'000

£'000

£'000

Non-Current liabilities

 

 

 

 

 

 

Unsecured bank loan

4,352

4,352

3,970

3,970

2,982

2,982

Loans from former members of GCL

170

170

-

-

-

 

4,522

4,522

-

-

-

-

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Unsecured bank loan

2,600

2,600

1,975

1,975

1,977

1,977

Loans from former members of GCL

680

680

-

-

-

 

3,280

3,280

1,975

1,975

1,977

1,977

 

The unsecured overdraft facilities totalling £8m (31 October 2017 £8m, 30 April 2018 £8m) are repayable on demand.

 

The unsecured term loans are repayable quarterly over five years commencing on 8 November 2015.  Interest is chargeable at 2.25% over LIBOR.

 

On the acquisition of the trade and assets of GCL Solicitors LLP the amounts due to members of £1.28m were converted into loans from former members repayable quarterly over up to two years from acquisition.

 

9. Trade and other payables

 

 

31 October

2018

31 October

2017

30 April

2018

 

£'000

£'000

£'000

Current

 

 

 

Trade payables

4,912

5,013

5,204

Other taxation and social security payable

6,088

6,591

6,355

Other payables

703

1,182

658

Accruals and deferred income

8,718

6,197

8,761

 

20,421

18,983

20,978

 

 

 

 

 

£'000

£'000

£'000

Non-current

 

 

 

Other payables

964

126

121

 

Other payables

£1.2m of contingent consideration represents the earn-out sums payable to the sellers of Kiddy & Partners. It has been calculated based on the Groups expectation of what it will pay in relation to the earn-out clause of the sale and purchase agreement. The earn-out targets are based on the annual results of the acquired business. The fair value of the earn-out consideration is calculated based on the forecasted results to give an estimate of the final obligation. In accordance with the terms of the sale and purchase agreement the total earn-out cannot exceed £2.15m.

 

10. Share based payments

 

Group

 

At the period end the Group has three share-based payment schemes in operation.

 

Stock Appreciation Rights Scheme (SARS)

This SARS is a discretionary executive reward plan which allows the Group to grant conditional share awards or nil cost options to selected executives at the discretion of the Remuneration Committee. 

 

The awards vest after a three-year performance period.  On exercise, participants will receive the growth in value of the share options between the date of grant and the date of exercise in excess of the hurdle rate.  The hurdle rate is currently set at 115.765% of the market value of the underlying shares on the date of grant.

 

Save As You Earn Scheme (SAYE)

The Group operates a HMRC approved SAYE scheme for all staff.  Options under this scheme will vest if the participant remains employed for the agreed vesting period of three years.  Upon vesting, each option allows the holder to purchase the allocated ordinary shares at a discount of 20% of the market price determined at the grant date.

 

Company Share Option Plan (CSOP)

The Group operates a HMRC approved CSOP scheme for associates, senior associates, legal directors, equivalent positions in Gateley Group subsidiary companies and senior management positions in our support teams. Options under this scheme will vest if the participant remains employed for the agreed vesting period of three years. Upon vesting, each option allows the holder to purchase the allocated ordinary shares at the price on the date of the grant.

 

The annual awards granted under the schemes are summarised below:

 

 

Weighted average remaining contractual life

Weighted

average

exercise

price

At 1 May

2018

Granted

during

the period

At 31 October 2018

 

 

 

Number

Number

Number

SARS

 

 

 

 

 

SARS 16/17 - 7 October 2016

0.9 years

£1.39

10,425,000

-

10,425,000

SARS 17/18 - 3 October 2017

1.9 years

£1.83

6,875,000

-

6,875,000

 

 

 

17,300,000

-

17,300,000

SAYE

 

 

 

 

 

SAYE 16/17- 1 September 2016

0.9 years

£0.95

949,832

-

949,822

SAYE 17/18- 15 September 2017

1.9 years

£1.33

531,935

-

537,935

SAYE 18/19 - 21 September 2018

2.9 years

£1.35

-

620,335

620,335

 

 

 

1,481,767

620,335

2,102,092

 

 

 

 

 

 

CSOPS

 

 

 

 

 

CSOPS 16/17 - 20 December 2016

1.5 years

 £1.31

788,948

-

788,948

CSOPS 17/18 - 3 October 2017

2.9 years

£1.65

541,772

-

541,772

CSOPS 18/19 - 24 October 2018

3.0 years

£1.44

-

812,131

812,131

 

 

 

1,330,720

812,131

2,142,851

 

During the period 6,650,000 of the brought forward 6,700,000 as at 1 May 2018 SARS 15/16 vested resulting in the issue of 2,425,024 new 10p shares with a nominal value of £242,502. The accrued IFRS2 charge of £375,000 has been released against other reserves.

 

Fair value calculations

 

The award is accounted for as equity-settled under IFRS 2. The fair value of awards which are subject to non-market-based performance conditions is calculated using the Black Scholes option pricing model.  The inputs to this model for awards granted during the financial period are detailed below:
 

 

 

CSOP 18/19

SAYE 18/19

Grant date

 

24 October 2018

 

21 September 2018

 

 

 

 

Share price at date of grant

 

£1.44

£1.69

Exercise price

 

£1.44

£1.35

Volatility

 

18%

18%

Expected life

 

3.3 years

3.3 years

Risk free rate

 

1%

1%

Dividend yield

 

5%

4%

 

 

 

 

Fair value per share

 

 

 

Market based performance condition

 

£0.16

£0.27

Non-market-based performance condition

 

-

-

 

As the Group had only limited share price history at the date of grant, expected volatility was based on a proxy volatility determined from the median volatility of a Group of appropriate comparator companies. For the same reason, a similar approach was followed to derive the dividend yield. Expected life has been taken to be between the minimum and maximum exercise period of 3 and 3.5 years, respectively.

 

11. Business combinations

 

Acquisition of GCL Solicitors LLP

 

On 23 May 2018 Gateley Plc acquired the business and assets of GCL Solicitors LLP, a specialist in legal advice on residential developments and works with some of the UK's top housebuilders as well as promotors and land owners. GCL is also one of the leading law firms who act for overseas private investors buying new build residential properties in the UK, primarily in and around London:
 

 

Pre-acquisition

carrying amount

Policy alignment and fair value adjustments

Total

 

£'000

£'000

£000

 

 

 

 

Property, plant and equipment

278

-

278

Work in progress

522

-

522

Intangible asset relating to customer list and brand

-

2,164

2,164

Cash and short term deposits

266

-

266

Trade receivables

981

-

981

Prepayments and accrued income

284

-

284

Total assets

2,331

2,164

4,495

 

 

 

 

Loans from former Partners - Partners current and tax liabilities

(1,280)

-

(1,280)

Trade payables

(534)

-

(534)

Accruals and other payables

(517)

-

(517)

Deferred tax

-

(433)

(433)

Total liabilities

(2,331)

(433)

(2,764)

 

 

 

 

Total identifiable net assets at fair value

-

1,731

1,731

Goodwill arising on acquisition

 

 

2,467

Total acquisition cost

 

 

4,198

 

 

 

 

Analysed as follows:

 

 

 

Initial cash consideration paid

 

 

2,272

Issue of new 10p ordinary shares in Gateley (Holdings) Plc

 

 

1,926

 

 

 

4,198

 

 

 

 

Cash outflow on acquisition

 

 

 

Cash paid

 

 

(2,272)

Acquisition costs

 

 

-

Net cash acquired with subsidiary (Included in cash flows from investing activities)

 

 

266

Net cash outflow

 

 

(2,006)

 

From the date of acquisition GCL, has contributed £2.9m to revenue and £0.7m to Group profit for the period. 

 

Acquisition of Kiddy & Partners Limited ("Kiddy")

 

On 9 July 2018 the Company acquired the business and assets of Kiddy, a leader in its field delivering a comprehensive set of Human Capital consultancy services to businesses looking to improve the performance of their leaders and senior managers:
 

 

Pre-acquisition

carrying amount

Policy alignment and fair value adjustments

Total

 

£'000

£'000

£000

 

 

 

 

Property, plant and equipment

15

(8)

7

Other assets

21

(21)

-

Intangible asset relating to customer list and brand

-

666

666

Cash and short term deposits

409

(409)

-

Trade receivables

421

(81)

340

Prepayments and accrued income

181

(107)

74

Total assets

1,047

40

1,087

 

 

 

 

Trade payables

(104)

38

(66)

Other taxation & social security payable

(22)

-

(22)

Accruals and other payables

(431)

67

(364)

Deferred tax

-

(126)

(126)

Total liabilities

(557)

(21)

(578)

 

 

 

 

Total identifiable net assets at fair value

490

19

509

Goodwill arising on acquisition

 

 

1,491

Total acquisition cost

 

 

2,000

 

 

 

 

Analysed as follows:

 

 

 

Initial cash consideration paid

 

 

426

Issue of new 10p ordinary shares in Gateley (Holdings) Plc

 

 

424

Deferred share consideration payable

 

 

575

Deferred cash consideration payable

 

 

575

 

 

 

2,000

 

 

 

 

Cash outflow on acquisition

 

 

 

Cash paid

 

 

(426)

Acquisition costs

 

 

-

Net cash acquired with subsidiary (Included in cash flows from investing activities)

 

 

-

Net cash outflow

 

 

(426)

 

From the date of acquisition Kiddy, has contributed £0.8m to revenue and £0.2m to Group profit for the period.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
IR LDLLBKFFBBBL

a d v e r t i s e m e n t