Gateley (holdings) Share Discussion Threads

[speedsgh] 15/2/2016 10:25

Dividend Policy -

Gateley, (AIM:GTLY) a national commercial law firm, announces that the Board has formalised its dividend policy and is adopting a traditional twice yearly approach, paying in aggregate, up to 70 per cent. of profits after tax.

Having paid an interim dividend on 22 January 2016, the next opportunity for the Board to declare a dividend will be at the time of its preliminary results for the year ending 30 April 2016, which the Board expects to announce in July.

[speedsgh] 02/2/2016 15:33

Likewise, will not be increasing due to AIM + the fact it is a fairly recent IPO.

[jonwig] 02/2/2016 14:45

Agreed - he comes across as level-headed and has a long-term outlook.

I've a moderate holding, and would be adding at this price but for a slight worry that they have a big exposure to housebuilders' accounts.

[speedsgh] 02/2/2016 10:08

Great spot, jonwig. Thanks.

Some decent titbits to like in there: 5yr post-IPO lock-in for selling partners, company's attitude towards debt + CEO's comment that "We need to … make it a priority to deliver in accordance with expectations”.

[jonwig] 02/2/2016 06:34

Interview with CEO Michael Ward. The planning for the IPO is an interesting part:

[jonwig] 15/12/2015 08:24

Thanks for replies - I should have checked seasonality and exceptional costs. These make £11.8m for the FY pretty realistic.

[wjccghcc] 15/12/2015 08:20

The PBT of 2.9mm is after admission costs and one off professional costs of 926k. So actual PBT is 3.9mm.

[imranawan] 15/12/2015 08:03

Agree Jonwig, that its not cheap, but I bought in largely because of the divi which looks decent based on projections.

[eezymunny] 15/12/2015 07:47

There's been a significant H2 bias last couple of years jonwig (see admission doc). Don't know why.

[jonwig] 15/12/2015 07:20

Half-year results:



Balance sheet looks very healthy, and profits are moving in the right direction, but is it cheap at over 100p?

The fact that the H1 dividend almost covers eps suggests that H2 will be a lot more profitable if it's to pay out a conventional 2:1 dividend split on H2:H1.
Forecast is for a 6p or so payout for the full year, I seem to remember.

EDIT: an earlier post suggests 2016, T/O £65.0m, PBT £11.8m with 6p dividend.
With £2.1m PBT booked in H1 there must be some seasonal factors - unless the £11.8m number is EBITDA?

[jonwig] 02/12/2015 19:02

True, and until they produce a full set of results, no more analysts will join in.

First in the field, so some reluctance to comment.

[speedsgh] 02/12/2015 16:11

Worth bearing in mind of course that Cantor Fitzgerald are the company's Nomad/broker.

[jonwig] 02/12/2015 09:05

Cantor Fitzgerald currently has a GBX 122.00 price target on the 111.20M GBP market cap company or 17.31 % upside potential. In a report issued to investors and clients on 1 December, Gateley Hldgs Plc (LON:GTLY) stock had its Buy Rating reaffirmed by stock research analysts at Cantor Fitzgerald.

[jonwig] 19/11/2015 20:21

In an analyst note revealed on Monday morning, Cantor Fitzgerald reconfirmed their Buy rating on shares of Gateley Hldgs Plc (LON:GTLY). They currently have a GBX 122.00 target price per share on the company. Cantor Fitzgerald’s target suggests a potential upside of 16.75 % from the company’s current stock price.

[jonwig] 19/11/2015 10:05

Thanks dell, but it won't let me in as I'm not a subscriber.

(I'm not asking you to break copyright!)

[dell1234] 19/11/2015 08:16

Two-page article on Gateley in new issue of SHARES magazine.

[jonwig] 16/11/2015 08:05

Trading statement, in full:

The Group has made a solid start to the financial year and is trading in-line with management expectations. Revenues for the first six months are expected to be not less than £29.5 million, being not less than 10 per cent ahead of the corresponding pro-forma period last year.

The Board expects to announce the Group's audited half year results in December 2015.

Very satisfactory.

[jonwig] 09/11/2015 15:13

Gateley plc and the Sport and Recreation Alliance have announced a new corporate partnership:



[Does international sport need lots of lawyers? Just asking.]

... expanding in Dubai:



GTLY share price expanding, too.

[speedsgh] 30/10/2015 13:41

Ditto. Have a lot of time for Gervais Williams but he is not immune to dropping a few clangers (SID springs to mind). Main difference is that he only drops 1 clanger for every 20 of mine!

[jonwig] 30/10/2015 13:25

Thanks - I'm quite a fan of Gervais Williams through his Miton Microcap Trust.

[speedsgh] 30/10/2015 12:13

Mentioned in latest issue of Citywire Income Investor.

High Yield or Dividend Growth -

Last, and certainly least in yield terms, is Gateley (GTLY). The law firm listed only in June, so has yet to pay a dividend and would therefore be ignored by any yield screen. ‘Although it isn’t as well known as some of the very largest legal names, in our view that means that they have more opportunity for growth,’ Williams remarked. ‘The company recently reported that the momentum in the business was going well, and they are upbeat about the prospects for the coming years. We also take comfort in the £4.2 million of cash in their balance sheet after the float, since it means they are well placed to finance new offices and add on acquisitions.’ Cantor Fitzgerald forecasts a dividend yield for the coming year of over 6%.

[jonwig] 30/10/2015 07:06

maiken - we just have the same good tastes!

You may remember Chris Bogart, in one of the Burford videos, saying that the six (?) largest UK law firms would be FTSE 100 companies if they were PLCs. So the precedent is potentially very significant if it works, and the lengthy lock-ins here will ensure that all the participants make sure it works.

I agree very much with your summary of the investment case; IC is being cautious for the same reason the share price is apparently cheap. BUR spent most of its early life until this year in a similar position.

[maiken] 29/10/2015 10:46

Hello again Jonwig.I promise this is pure coincidence.i'm not stalking.I stumbled across this stock yesterday and,having concluded initial analysis,I made my 1st investment today at 95.7p.then decided to look at this thread.
FWIW here are a few general thoughts....
Contrary to comments from the likes of IC I think PLC status may prove very helpful.Share incentives unavailable elsewhere in the profession will be a valuable tool to attract and keep good employees,far more flexible than partnerships.

The valuation looks attractive at this price obviously.This leads onto sustainability of eps.I have to say I think this may be lumpy over an economic cycle,especially M+A,also construction.I have little doubt this cos t/o will wax and wane with the fortunes of the UK economy.this is my major concern.nevertheless I hope the secular trend will be up and i've taken the view that below £1 is a reasonable starting point.There is also the possibility of a rerating as the market gets used to Law firms listing.Unsurprisingly the market has been conservative with it's valuation of a new firm in a new sector.

Cash conversion is excellent..Very important IMO.

All in all it's early days.One to keep an eye on and.hopefully,add to as we learn more over time.

[jonwig] 01/10/2015 06:41

Another irrelevant RNS. OK for the PR section of the website, I suppose:

[jonwig] 22/9/2015 05:54

IC reviews results and cautiously suggests "hold", owing to uncertainty about how the PLC status will turn out.

Gateley's share price is likely to be fairly stable given all 81 partners have signed five-year lock-in agreements, while management's plans to pay shareholders 70 per cent of post-tax profits should provide a strong, reliable forward yield of 6.3 per cent. But given the importance of the firm's transition to the stock market, we are happy to wait for more revealing post-IPO trading updates. Hold.