Gateley (holdings) Share Discussion Threads

[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.

[this_is_me] 31/12/2019 11:40

Yes, looking good.

[bbluesky] 31/12/2019 10:22

All time high. 200p paid. GLA for 2020.

[bbluesky] 15/12/2019 11:39

Let's hope so!! I think that there is a long, long way to go here, obviously sooner is better!

[saucepan] 15/12/2019 11:21

bbluesky: I took an initial position on Friday to complement my KGH. Thanks for drawing to attention.

Reading the weekend press, so-called expert consensus seems to be that domestic facing businesses and smaller companies are now the areas of the market best placed to outperform in the wake of the election result. That is quite a sentiment shift. It could have a big impact on share prices of less liquid companies if money starts pouring in.

KGH and GTLY are exactly the type of companies that could do well, I suspect, if that kind of scenario pans out.

[jonwig] 13/12/2019 08:10

It does! Details:



All their acquisitions seem to be good fits and earnings-positive from the off. And their top team seems to be mostly women, which I view positively. Website:

[this_is_me] 13/12/2019 08:02

that looks like an excellent acquisition.

[bbluesky] 11/12/2019 19:35

A fellow fan is Ben Hobson of Stockopedia, who has included GTLY in his "10 small cap divi stocks to bounce after the election" Quality ranking 99/100 Forward yield 5.2 % 1 Year growth of divi forecast 8.2 %. Interestingly, several of the others are housing related, though I am loath to put GTLY in this category, as it is longer term related and much more diversified than that, but it certainly is a strength. GLA

[bbluesky] 30/11/2019 13:16

Chart looking interesting.

[jonwig] 25/11/2019 08:30

Positive trading statement. "... confidence that the Group will continue to deliver against market expectations in the second half of the current financial year and beyond".

That could be interpreted as exceeding market expectations. The FY consensus to 30/04 is for

Revenue £111m, PBT £19.3m and eps 14p. H2 is maybe over-weighted.

[thewheeliedealer] 14/11/2019 21:36

Hi Jonwig,

Sorry for the delay in replying - had a lot on !!

Thanks for the comments. Like you I can find nothing on this Stott chap, all I can think is that he is at a lower level than the Directors and presumably the Operations Board is some sort of more day-to-day business kind of gathering. I am not seeing this as a major issue.

As you say the Receivables (Debtors) are rising although I don't see this as being particularly out of line with the growth in Revenues - to an extent I guess they would rise hand in hand. The picture for Payables looks quite variable and the amounts are much smaller than the Receivables side in recent years. I have used the SharePad graphing function on the Balance Sheet and it shows the trends really well.

Cheers, WD

[jonwig] 12/11/2019 07:45

Hi, wheelie - I've been reading your blog entries, thanks. You make a couple of points;

1) The operations Board and Stott: no mention in the prospectus of what the OB is, nor any mention anywhere in RNSs of the name Stott.

2) Most of the excess OCF over profit in earlier years looks like increase in payables. This seems to have unwound, and receivables are increasing faster. (Haven't had a close look at the numbers though.) Also a tax bill incurred not paid.

[thewheeliedealer] 11/11/2019 20:39

Hi all,

I don't hold GTLY (yet) but am quite tempted by it. Anyway, I wrote a blog about it on my website which you can find here. This is Part 2 and there is a link to Part 1 at the top of it. I hope it helps,

cheers, WD
@wheeliedealer