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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gateley (holdings) Plc | LSE:GTLY | London | Ordinary Share | GB00BXB07J71 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 120.50 | 120.00 | 121.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Legal Services | 162.73M | 12.24M | 0.0930 | 12.96 | 158.63M |
From Apr 2019 to Apr 2024
TIDMGTLY
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
Hot Features
Premium
-- Revenue up 20.1% to GBP46.4m (H1 18: GBP38.6m), 10.2% from organic
growth
-- Adjusted EBITDA* up 24.8% to GBP6.6m (H1 18: GBP5.3m)
-- Profit before tax up 18.6% to GBP5.0m (H1 18: GBP4.2m)
-- Robust balance sheet with net assets up 40.8% to GBP23.1m (H1
18: GBP16.4m), with net debt increased to GBP8.2m (H1 18: GBP7.1m)
-- 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 GBP102m 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 Tel +44 (0) 20 7653
Head of Investor Relations 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 (cvalentine@belvederepr.com) Mob: +44 (0) 7715 769
078
Llew Angus (langus@belvederepr.com) Mob: +44 (0) 7407 023
147
Keeley Clarke (kclarke@belvederepr.com) 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 GBP60.9m = CAGR 11% or 37% increase to GBP83.4m
FY 18
-- Adjusted EBITDA - FY 15 GBP11.3m = CAGR of 13.4% or 46% increase
to GBP16.5m FY 18
-- Net Asset value - FY 15 GBPnil to GBP23m 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 GBP46.4m and adjusted EBITDA up 24.8% to GBP6.6m. 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 GBP102m 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 GBP46.4m (H1 18: GBP38.6m). 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 GBP10m 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 GBP2.9m 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 GBP1.5m (H1 18: GBP1.3m).
Kiddy & Partners has also generated a pleasing return of GBP0.8m 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 GBP4.8m (H1 18 GBP3.6m).
Organic/acquisitive fees and H1 19 growth split
H1 18 H1 19 HY1 H2 18 FY 18
GBPm GBPm YOY Growth GBPm GBPm
-----------------------
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 GBP100m for the first time in the Group's history in FY 19 and reach not less than GBP102m. Acquired businesses should contribute GBP13m towards this total.
Operating costs rose by GBP7.2m in the Period, including a GBP5.2m 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 GBP5.0m (H1 18: GBP4.2m). Adjusted EBITDA increased by 24.8% from GBP5.3m to GBP6.6m 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 GBP29.5m (H1 18: GBP24.3m). 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 GBP0.2m to GBP0.4m 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 FY FY FY FY FY FY FY FY
19 18 17 16 15 14 13 12 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 GBP23.1m (FY 18: GBP23.0m), as acquisitions have been financed via modest additional bank debt, and GBP1.9m 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 GBP8.2m since the FY18 year end (FY 18: GBP0.7m), as a result of the following movements:
- existing term loan facilities were restructured to accommodate
the borrowing of a further GBP3m in October 2018 to fund acquisitions
made during the Period; GBP1m of repayments to original term
loans were made prior to the additional borrowing;
- loans from former partners of GCL Solicitors totalling GBP1.3m
were acquired on the acquisition of GCL Solicitors. GBP0.6m
of loans were repaid during H1 19; and
- cash at bank reduced from GBP4.3m to (GBP0.3m), 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 GBP5.3m. 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 GBP3m, comprising approximately GBP5.7m of remaining term bank debt and GBP0.4m of loans to former partners of GCL.
Working capital at H1 19 totalled GBP21.3m compared to GBP18.8m at FY 18. The growth of GBP2m 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 Unaudited Audited
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2018 2017 2018
GBP'000 GBP'000 GBP'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 Unaudited at Audited at
31 October 31 October 30 April
2018 2017 2018
Note GBP'000 GBP'000 GBP'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)
------------ ------------ ----------
Total liabilities (32,445) (27,971) (28,248)
============ ============ ==========
NET ASSETS 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
------------ ------------ ----------
TOTAL EQUITY 23,083 16,400 22,988
============ ============ ==========
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 October 2018
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 October 31 October 30 April
2018 2017 2018
GBP'000 GBP'000 GBP'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 Share Merger Other Treasury Retained Foreign Total
capital premium reserve reserve reserve earnings currency equity
translation
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 GBP5m each repayable quarterly over five years. The facilities were extended by a total of GBP3m 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 GBP8m 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 Provision of legal advice in respect of asset
Services 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 Provision of legal advice in respect of employment
and Benefits 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 Corporate Business Employee Property Total Other expense Total
Financial Services Pensions segments and movement
Services and in unbilled
Benefits revenue
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 Corporate Business Employee Property Total Other expenses Total
Financial Services Pensions segments and movement
Services and in unbilled
Benefits revenue
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 Corporate Business Employee Property Total Other Total
Financial Services Pensions segments expenses
Services and and movement
Benefits in unbilled
revenue
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 6 months to 12 months to
31 October 2018 31 October 2017 30 April 2018
Legal and professional staff 552 490 509
Administrative staff 314 244 248
---------------- ---------------- --------------
866 734 757
================ ================ ==============
6 months to 6 months to 12 months to
The aggregate payroll costs of these persons were as follows: 31 October 2018 31 October 2017 30 April 2018
GBP'000 GBP'000 GBP'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 6 months to 12 months
31 October 2018 31 October 2017 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
================ ================ =================
GBP'000 GBP'000 GBP'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 6 months 12 Months
to to 30 April
31 October 31 October 2018
2018 2017
GBP'000 GBP'000 GBP'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 Total
and brand
names
GBP'000 GBP'000 GBP'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 31 October 30 April
2018 2017 2018
GBP'000 GBP'000 GBP'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 31 October 30 April
2018 2017 2018
GBP'000 GBP'000 GBP'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 Carrying Fair Carrying Fair Carrying
value amount value amount value amount
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 GBP8m (31 October 2017 GBP8m, 30 April 2018 GBP8m) 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 GBP1.28m were converted into loans from former members repayable quarterly over up to two years from acquisition.
9. Trade and other payables
31 October 31 October 30 April
2018 2017 2018
GBP'000 GBP'000 GBP'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
========== ========== ========
GBP'000 GBP'000 GBP'000
Non-current
Other payables 964 126 121
========== ========== ========
Other payables
GBP1.2m 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 GBP2.15m.
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 Weighted At 1 May Granted At 31 October 2018
contractual life average 2018 during
exercise the period
price
Number Number Number
SARS
SARS 16/17 - 7 October 2016 0.9 years GBP1.39 10,425,000 - 10,425,000
SARS 17/18 - 3 October 2017 1.9 years GBP1.83 6,875,000 - 6,875,000
---------- ----------- ------------------
17,300,000 - 17,300,000
---------- ----------- ------------------
SAYE
SAYE 16/17- 1 September 2016 0.9 years GBP0.95 949,832 - 949,822
SAYE 17/18- 15 September 2017 1.9 years GBP1.33 531,935 - 537,935
SAYE 18/19 - 21 September 2018 2.9 years GBP1.35 - 620,335 620,335
---------- ----------- ------------------
1,481,767 620,335 2,102,092
---------- ----------- ------------------
CSOPS
CSOPS 16/17 - 20 December 2016 1.5 years GBP1.31 788,948 - 788,948
CSOPS 17/18 - 3 October 2017 2.9 years GBP1.65 541,772 - 541,772
CSOPS 18/19 - 24 October 2018 3.0 years GBP1.44 - 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 GBP242,502. The accrued IFRS2 charge of GBP375,000 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 GBP1.44 GBP1.69
Exercise price GBP1.44 GBP1.35
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 GBP0.16 GBP0.27
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
GBP'000 GBP'000 GBP000
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 GBP2.9m to revenue and GBP0.7m 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
GBP'000 GBP'000 GBP000
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 GBP0.8m to revenue and GBP0.2m 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 rns@lseg.com or visit www.rns.com.
END
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