Gateley (holdings) Share Discussion Threads

[bbluesky] 15/2/2020 11:56

SauceP, I came across it in "The Week", so yesterday's news. What I omitted from the clip was that GTLY "provides services to 18 of UK's largest housebuilders", as I think it is broader than that and for me it is a growth rather than cyclical play. I said on the KGT site that buying other solicitors is a pretty simple and effective business model, but seeing the market strength of UK housebuilders, maybe not such a bad thing for it to be highlighted!

The fat ex - divi date was Valentine's Day. Payment Ides of March. Enjoy!

[saucepan] 15/2/2020 11:17

Thanks, for that info., bbluesky. Perhaps a good day on Monday?

[bbluesky] 15/2/2020 09:11

"The Times" likes it as well: "..is performing well. Revenues and profits are rising at "healthy levels". Yields an attractive 4.2 %. Buy 214p.

[jonwig] 06/2/2020 09:21

On forecast earnings for 2020, PER is 15.7x, and for 2021 it's 14.6x. Still reasonably good value.

[petewy] 06/2/2020 09:06

Will it level off? I want to top slice but it just keeps going up. Healthy firm good divi didn't expect the rise.
Lot of buying this morning.

[bbluesky] 27/1/2020 18:33

Jonwig, GTLY are certainly in on the big picture of housing and well placed for the structural growth necessity, reading the week-end press, though one would think much had been done, the Northern part still seems very uncertain in planning and is one reason for such a wide range of cost estimates. GFranlky, a disgraceful fiasco. Having seen him as London Mayor, Boris does not give two hoots for spending money: Boris bus, garden bridge, Thames Estuary airport etc. Doubt he has ever had to live to a budget!

[jonwig] 23/1/2020 20:00

bbluesky - I think a lot of the legals on HS2 will have been done. But the government's aspiration on housebuilding will mean an overhaul of planning rules and quite a lot of legal work.

[bbluesky] 23/1/2020 19:51

Musings:should HS2 move North, with 30% in construction/building/planning related, GTLY has to be a prime play for years! Currently, speculation of course.

[petewy] 17/1/2020 15:07

pays a far bigger div than Knights group which reported this week.

[saucepan] 17/1/2020 15:04

Thanks, jonwig.

[jonwig] 17/1/2020 14:42

IC says BUY again:

Despite increasing competition in the listed legal sector, Gateley’s growth is likely to continue, with strong organic growth complemented by further acquisitions. A potential Brexit boost for the construction industry could also drive demand for Gateley’s property services which currently account for over a third of revenue. Buy.

And "The house broker expects adjusted pre-tax profit of £20.3m and EPS of 14.2p for the full year, rising to £22.2m and 15.4p in 2021."

Of all the UK-quoted law firms, this is the most cautious and least risky. One (INCE, or GOR as was) is decidedly dodgy, others are either getting into litigation finance (Rosenblatt) or expanding like mad. Maybe DWF is one I'd buy, it's the largest.

[saucepan] 17/1/2020 13:35

. . . and new highs :-)

[saucepan] 16/1/2020 14:59

With the "sell on news" brigade presumably out of the way, this looks set to climb quietly higher I think.

[bbluesky] 14/1/2020 09:17

The madness of markets!! What I liked is that they are clearly making loads of dosh:

"Robust balance sheet, NET ASSETS increased GBP7.9m to GBP31.0m
(H1 19: GBP23.1m)

and NET DEBT down GBP6m to GBP2.1m (H1 19:
GBP8.2m)". That is slashing it!!


"Proposed interim dividend up 11.5% to 2.9p per share (H1 19:
2.6p), which using jonwig's figures is a forward yield of 4.3%. Fabuloso and still under the radar. Opportunity knocks, imo still.

[jonwig] 14/1/2020 08:06

Robsy - yes, that was me. (It's a general problem with law firms.) The improvement here is pretty good.

Also good to see healthy profit-cashflow conversion. Looks like FY eps of est. 12p and a PER est. of 17.5x at 210p. If FY dividend is 9p that's a forward yield of 4.3%.

Odd that non-legal revenues are still only 6% of total. Their acquisitions seem to be mostly non-legal.

How much more steam is there behind the share price? Maybe the run-up since mid-Dec was leakage hence profit-taking. Strong hold, at least!

[this_is_me] 14/1/2020 07:57

Yes, everything going well and steady progress. The systems in place are all working well and focus on delivering quality services to clients will ensure continued progress. I am even more pleased with the current re-rating of the share price.

[robsy2] 14/1/2020 07:16

All running smoothly. I think someone flagged up slow payments from debtors as a problem once(?) the following indicates that this is under control.

Working capital and cash flow

Trade receivables totalled GBP32.2m compared to GBP30.5m at the end of H1 19. The additional GBP1.7m in trade debtors is proportionate with the growth of the Group. Overall the Group has seen an improvement of 9 debtor days due to a focus on working capital and collection processes. The Board are pleased with the progress made here but believe we can improve further as a result of initiatives being run across the Group.

At the period end unbilled revenue recognised in its statutory accounts from time recorded on non-contingent work totalled GBP12.2m or 11.2% of revenue recognised over the last 12 months compared to 12.2% for the previous H1 19 and 10.3% at the end of FY19 where the billing cycle is most active ahead of the Group's April year end.

Cash generated during the period from operations was GBP6.3m (H1 19: GBP4.3m) which represents 143.8% (H1 19: 110.5%) of profit after taxation. Capital expenditure decreased to GBP0.9m (H1 19: GBP1.3m). Cash outflow from financing activities of GBP5.9m was similar to outflows of GBP5.7m at H1 19, as higher dividend and loan repayments were offset by the receipt of cash from the sale of shares issued and subsequently sold by various option holders in order to settle options exercised-related personal tax liabilities. The Group continues to operate with a low level of gearing and fixed term debt. This position is reviewed regularly to ensure appropriate funding levels are in place to support the Group's expansion.

[saucepan] 13/1/2020 14:26

Tomorrow should be an interesting day. Fingers crossed.

Your numbers are a useful reference, jonwig, thanks.

[jonwig] 13/1/2020 13:54

Ahead of tomorrow's half-year results, it's worth pointing out that their year is strongly H2-weighted: thus eps for H1 is generally about 30% of FY. Consensus forecast is for FY eps of 11.83, so we might expect 3.6p at H1.

In November they said "the Group will continue to deliver against market expectations in the second half of the current financial year", suggesting current FY expectations will be exceeded. It's what the market is saying, anyway!

[saucepan] 09/1/2020 21:17

Worth saying three times :-)

[petewy] 09/1/2020 16:17

Sorry Saucepan. The system went down when I was writing the note.Must be infuriating

[petewy] 09/1/2020 16:16

I got in a while back and didn't expect such a rise.

[saucepan] 09/1/2020 11:40

Pleasing to see the follow-through. Interims on 14 January. Interest starting to pick up, I suspect.