Gateley (holdings) Share Discussion Threads

[km18] 18/2/2022 14:11

...from last year...

Company overview:
Gateley was among the first companies to adopt the Alternative Business Structure, which allows non-lawyers to own and invest in law firms. The company provides commercial legal services together with complementary non-legal services. They could also act as trustees in pension scheme and provide specialist tax incentive advice. The company operate through four main platforms – property, people, corporate and business services. GTLY has more than 580 professional advisers and more than 1000 people across 11 offices in the UK. They have a rich portfolio of clients and part of their strategy is to grow by acquisitions. The resulting goodwill should not raise any red flags as it stands at less than 10% of total assets.
The financial of the company look solid. Revenue growth is at 12.6% CAGR however, EPS is only growing at 0.361%. ROCE for FY21 reached nearly 20% and Return on Capital is in the top quartile of the industry. Gearing is reasonable at 18.3% (excluding the IFRS 16) and divis have been rising continuously, reaching 7.5p in FY21.
We’ll keep today’s report short, while we wait for the interim results, that should be coming any day now. The Group’s primary business is legal, generating the majority of revenue, unlike other companies in the sector like RBGP. The yearly performance was very strong, with revenue increasing by 10.5% and Net CFO was £25.4m (nearly triple the Profit after tax). Outlook was also very positive with first months of the current period showing good pipelines of new work and even acquisition opportunities....

...from WealthOracleAM

[tradertrev] 08/2/2022 08:46

I've never come across a law-firm yet that was reticent about increasing their charge-out rates! The current situation in the stockmarket is all about pricing power relative to cost pressures and on that score Gateley should be fine.

[yf23_1] 08/2/2022 07:52

"stories of newly qualified people on big salaries"

I'd hazard a guess there may be cost pressures affecting margins.

[2vdm] 08/2/2022 07:33

I'm surprised that the share price seems to be so down, given the good news. I know it's not an "exciting share", but will consider adding at this level. Views appreciated.

[woodyjmw] 12/1/2022 19:11

Yes, law firms appear very busy, stories of newly qualified people on big salaries in the press, all seems to point to increasing revenues.

[jonwig] 12/1/2022 08:14

H1 results:



good, and well signalled in advance, so no surprises. Could make 15p in the full year, so forward PER is about 15x. Good value I think.

[tradertrev] 30/11/2021 10:19

Interesting article today:

I doubt hardly any of these firms will make it to a listing - unlike Gateley their models require most of the revenue to end up in partners' pockets. It will be extremely difficult to transform their business models to accommodate a sufficient share of profits and dividends being allocated both to longer term investment and to outside capital.
If any of them do make it, I'd be surprised if they are successful investments for outsiders.

[2vdm] 24/11/2021 07:55

Yes an excellent update

[jonwig] 24/11/2021 07:13

Trading update, all good:

[tradertrev] 20/10/2021 17:41

Most of them probably were already snapped up by the time the announcement was made. They only make the announcement when they know it's going to go smoothly.

[jonwig] 20/10/2021 16:12

Proposed placing of 5m existing shares at 220p shouldn't arouse any concern. They did the same in Feb 2020 (4.75m at 200p). I'd be surprised if the shares weren't snapped up.

[jonwig] 01/10/2021 06:15

AGM statement;

"The Board is pleased to report that trading in the first five months of the financial year is in line with management's expectations and the Group is well placed at this stage of the current financial year. The Board remains excited by a wide range of growth opportunities and is looking forward to continuing to grow the Group, both organically and via acquisition, in line with our stated strategy."

[jonwig] 28/9/2021 06:19

NOMAD changed from Finncap to Liberum. I don't know much about relative rankings of brokers, but I'd guess this is from Ford to Ferrari?

[robsy2] 26/9/2021 18:02

I have sold out. Should do fine but job done as far as i’m concerned.

[jonwig] 26/9/2021 17:28

Thanks Jeff - more detail there, and released on the 23rd.

[jeff h] 26/9/2021 16:45

Some more on the LitFin partnership:-

[jonwig] 18/9/2021 10:25

Why the share price rise?

It might just possibly have something to do with a sentence in yesterday's Investors Chronicle:

Gateley will be partnering with Bench Walk Advisers to create a £20m funding ...

So it's entering the litigation finance area in a small way. BWA seems to be an international firm with offices in the USA and UK.

But why haven't we been informed of this by the company?

[this_is_me] 09/9/2021 19:36

That was a huge rise today, on large volume, and on a down day for the market as a whole, too.

[robsy2] 09/9/2021 12:03

Looks like they are trading well.

[dicktrade] 09/9/2021 11:54

I was thinking todays movement was TIP induced but couldnt find anything or any
news.
You could sell at the offer price earlier so someone wants some stock !!

[greggphilips88] 09/9/2021 11:29

This has stealthily become my 4th largest portfolio holding. Nice share price movement recently! :-)

[jonwig] 20/7/2021 10:29

Clear that earlier pre-announcements meant the market already knew the situation - nothing left to go for.

[this_is_me] 20/7/2021 06:52

The increase in cash is particularly impressive. After the small virus dip we are on the up again.