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Gateley (Holdings) PLC Correction: Half Year Results to 31 October 2021

18/01/2022 11:11am

UK Regulatory (RNS & others)


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TIDMGTLY

RNS Number : 8369Y

Gateley (Holdings) PLC

18 January 2022

 
 18 January 2022 
 

The following amendment has been made to the 'Half Year Results for the six months ended 31 October 2021' announcement released on 12 January 2022 at 07:00 under RNS No 1364Y.

Aggregate payroll costs in Note 3 for the 12 months to 30 April 2021 should have read as below:

 
                            12 months to 
                           30 April 2021 
                                 GBP'000 
 
Wages and salaries                68,020 
Social security costs              7,736 
Pension costs                      1,704 
                          -------------- 
                                  77,460 
                          ============== 
 
 

All other details remain unchanged.

The full amended text is shown below.

Gateley (Holdings) Plc

("Gateley", the "Group" or the "Company")

(AIM:GTLY)

Half Year Results for the six months ended 31 October 2021

Strong growth and continued trading momentum

Gateley, the legal and professional services group, is pleased to announce its unaudited results for the six months ended 31 October 2021 (the "Period" or "H1 22"), which show strong growth and continued trading momentum placing the Group in a strong position to deliver market expectations for the full year.

Financial Highlights

 
 --   Strong financial performance with revenue and profit before 
       tax up 23.5% and 19.5% respectively 
 --   Organic growth of 23.0% 
 --   Revenue from consultancy (non-legal revenue services) grew 
       substantially, increasing 33.9% to GBP8.3m (H1 21: GBP6.2m) 
 --   Trading margins ahead of pre-pandemic levels with adjusted 
       underlying profit margin of 13.7% (H1 20: 13.3%, H1 19: 13.2%) 
 --   Strong activity levels across the Group with utilisation up 
       5ppts to 84% (H1 21 79%) 
 --   Operating costs remain lower than pre-pandemic levels 
 --   Interim dividend of 3.0p per share, in line with progressive 
       dividend policy (H1 21: 2.5p) 
 
 
                                          H1 22      H1 21   Change 
 
 Revenue                               GBP62.3m   GBP50.5m   +23.5% 
 Underlying operating profit before 
  tax                                   GBP9.0m    GBP8.1m   +10.8% 
 Underlying adjusted profit before 
  tax(1)                                GBP8.5m    GBP7.5m   +14.1% 
 Profit before tax                      GBP7.3m    GBP6.1m   +19.5% 
 Profit after tax                       GBP5.9m    GBP4.8m   +24.7% 
 Basic earnings per share ("EPS")         5.00p      4.04p   +23.7% 
 Underlying diluted EPS(2)                5.76p      4.92p   +17.1% 
 Net assets                            GBP58.0m   GBP49.7m   +16.6% 
 Net cash(3)                            GBP8.8m    GBP9.3m    -4.9% 
 Dividend                                  3.0p    2.5p(4)     +20% 
 
 
 (1)   Underlying adjusted profit before tax excludes share based 
        payment charges, amortisation and exceptional items - See note 
        1.2 
 (2)   Underlying diluted EPS excludes share based payment charges, 
        amortisation and exceptional items. It also adjusts for the 
        future weighted average number of expected unissued shares 
        from granted but unexercised share option schemes in issue 
        based on a share price at the end of the financial period 
 (3)   Net cash/(debt) excludes IFRS 16 lease liabilities 
 (4)   Declared as an interim dividend in June 2021 
 

Operational and post-Period highlights

 
 --                                   M&A strategy recommenced, following a pause resulting from 
                                       the COVID-19 pandemic, with the acquisitions of: 
                                       - Tozer Gallagher - adding quantity surveyors to our Property 
                                       Platform; and 
                                       - Adamson Jones - adding patent and trade mark attorneys to 
                                       our Business Services Platform 
 --                Average fee earner headcount stable at 794 in H1 22 (H1 21: 
                    785), in line with our FY21 strategic decision to maintain 
                    capacity to service returning demand. Now further enhancing 
                    capacity with 75 new roles at all levels mandated for H2 22 
 --                Platforms established as the growth vectors of the business 
                    and our financial reporting is now aligned to these . Each 
                    Platform delivering in excess of 20% like-for-like growth 
                    in the Period 
 --                Growth of staff ownership continues to strengthen with 72% 
                    of staff either share or option holders 
 

Current trading and outlook

 
 --                Strong trading in H1 22 is expected to continue in H2 22, 
                    as demand for our combined legal and consultancy services 
                    remains high. H2 22 is also expected to reflect the normal 
                    second-half weighting of revenues 
 --                On track to meet market expectations for the year ending 30 
                    April 2022 ("FY22") 
 --                The Group's well-diversified and resilient business model, 
                    combined with considerable opportunities (both organic and 
                    acquisitive) to develop our Platforms further, gives the Board 
                    confidence in the continued future growth of the business 
 

Rod Waldie, Chief Executive Officer of Gateley, said:

"I would like to thank all of my colleagues for this excellent performance in H1 22. We have delivered strong, predominately organic, revenue and profit growth on a like-for-like basis and have returned the Group to pre-pandemic profit margins.

"The aggregation of complementary legal and consultancy services on our four market-facing Platforms of Corporate, Business Services, People and Property continues to differentiate Gateley, strengthen our appeal to clients and enhance our resilience. Our first segmental reporting on this basis shows strong like-for-like revenue growth in each Platform.

"Our balance sheet remains strong, and we are committed to investing in our Platform strategy, to seize attractive growth opportunities. Our post period end acquisition of Adamson Jones is very recent evidence of this. Our acquisition pipeline is strong, and we are actively engaging with opportunities for further growth across each of the Platforms.

"Current levels of activity are expected to continue throughout H2 22. We are therefore well positioned to deliver market expectations for the full year."

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 
 
 Liberum - Nominated adviser and Broker 
 Richard Lindley / Ben Cryer / Cara Murphy               Tel: +44 (0) 20 3100 
                                                                         2000 
 
 
 Belvedere Communications Limited - Financial 
  PR 
 Cat Valentine                                          Mob: +44 (0) 7715 769 
                                                                          078 
 Keeley Clarke                                          Mob: +44 (0) 7967 816 
                                                                          525 
 Llew Angus                                             Mob: +44 (0) 7407 023 
                                                                          147 
                                                    gateleypr@belvederepr.com 
 

About us

Gateley is a legal and professional services group. Founded in Birmingham in 1808, we have provided commercial legal services to individuals and businesses for over 200 years. We have over 750 professional advisers and employ over 1,100 people across offices located in Belfast, Birmingham, Bolton, Guildford, Leeds, Leicester, London, Manchester, Newcastle, Nottingham, Reading and Dubai.

In 2015, we were the first commercial UK law firm to list on the London Stock Exchange's AIM Market. Our strategy is to differentiate ourselves in a crowded marketplace, incentivise our people to retain and attract the best talent in the industry and diversify our income streams by acquiring complementary business services.

For further details on Gateley Plc please visit www.gateleyplc.com or follow us on Twitter www.twitter.com/@GateleyGroup

CHIEF EXECUTIVE OFFICER'S REVIEW

Continued momentum

I am delighted with the Group's performance during H1 22. It is now evident that there is a permanent change to our traditional ways of working. Our staff have adapted incredibly well to the agile working environment, whilst maintaining excellent levels of service to our clients. I remain grateful to all of our people for their energy and commitment. Like me, they are delighted to see that the outcome of their hard work is like-for-like growth in revenue (+23.5%) and profit before tax (+19.5%).

Market conditions have been supportive, particularly when viewed against the same period last year. However, we are consistent in our belief that the balance in our business model and the diversity of services on our Platforms means that we remain resilient in all markets.

We have declared an interim dividend of 3.0p (H1 21: 2.5p).

Activity review

Property Platform

This Platform is focused on clients' activities in real estate development and investment, and in the built environment in the widest sense.

Transactional activity has been strong across our legal services, commercial property, residential development and construction teams. Our core markets remain busy (house building, warehousing & distribution and supported living). In our property consultancy businesses, the Q1 22 acquisition of Tozer Gallagher has added capacity to our built environment team in Gateley Vinden and further enhanced our credentials in guarantee bond claims. We have added a service line to Gateley Hamer by investing in specialist advisors to the telecoms sector. Gateley Capitus is seeing improved levels of activity as businesses seek to maximise fiscal incentive opportunities. H1 22 like-for-like revenue growth in the Property Platform is 24.3%.

People Platform

This Platform supports businesses dealing with and developing human capital, and private clients in dealing with their personal affairs.

H1 22 activity in our legal services employment, pensions and private client teams was good. Our people focused consultancy businesses had a strong H1 22 and are carrying a good pipeline of work derived from our innovative offering. Revenue was significantly ahead of the prior year as clients return to investing in leadership assessment and development and cultural change projects. The People Platform delivered like-for-like revenue growth of 21.5%.

Corporate Platform

This Platform is focused upon the corporate, financial services and restructuring markets in both transactional and business support services.

Our legal services teams in corporate, banking and tax were extremely busy throughout H1 22. Like-for-like growth on this Platform is an impressive 47.4%, being a reflection of a buoyant post-pandemic corporate market. The team is a leading legal services provider in corporate M&A and has been recognised as such during H1 21 with numerous awards, including Insider Dealmakers Awards 2021 (Midlands) - International Deal of the Year (Gymshark, minority Investment by General Atlantic) and SME Deal of the Year (sale of Correla by Xoserve), Insider Dealmakers Awards 2021 (East Midlands) - Corporate Law Firm of the Year and Insider Dealmakers Awards (Thames Valley) - Deal of the Year GBP20m+ (advising Babble on MBO of Graphite Capital). Our International Investment Services consultancy has grown both headcount and revenue as workflows escalate, particularly from the previously reported long term contract with Cambridge and Peterborough Combined Authority.

Business Services Platform

This Platform supports clients in dealing with their commercial agreements, managing risk, protecting assets and resolving disputes.

Our current revenues on this Platform are predominantly through legal services. Our litigation teams remain busy on long-term mandates for both UK and overseas clients, where our pipeline is strong. To assist further in winning additional work, we have very recently committed to a new GBP50m litigation funding facility for long term complex projects. Our regulatory and business defence team had a good H1 22 with both direct mandates and in support of our corporate services team. Like-for-like revenue growth on this Platform was 20.2%. The acquisition of Adamson Jones to this Platform, announced on 10 January 2022, is directly complementary to our legal services intellectual property offer and is an exciting development for us. We expect to see further growth in this space.

Platforms - Drivers for growth

We worked hard during FY21 and throughout H1 22 to embed our Platform strategy with all of our stakeholders. Our four Platforms are now the established growth vectors of our business and our financial reporting is now aligned with these. Each Platform is becoming increasingly integrated and we have amalgamated some complementary businesses to realise operational advantage. During H1 22, this has included conflating management of t-three and Kiddy & Partners on our People Platform and amalgamating Tozer Gallagher with the Gateley Vinden business on our Property Platform.

There is clear evidence that the diversity of service lines across the lifecycle of clients' operations on our Property and People Platforms is helping us to win work from new and existing clients. I am delighted that we have expanded our Business Services Platform with the very recent acquisition of Adamson Jones, a team of experienced and highly regarded patent and trademark attorneys. This is our eleventh acquisition since 2015 and becomes our ninth non-legal services business.

Our strong balance sheet gives us a good foundation for further investment in Platform growth, which we are actively pursuing.

Operational review

We have spent many years building and growing our physical footprint across the UK, matching our office locations with opportunities that we see available to the Group. As a result, we currently provide our services from most of the major commercial centres in the UK. Our office network remains an important asset to us but, as a result of the success of agile working which was accelerated by the pandemic, we have been able to create operational efficiencies through the reduction in office space, without compromising services or growth. To date we have realised efficiencies in Reading, Leeds, the North West and Belfast. Further opportunities to maximise the utilisation of the Group's office network will arise as the Group continues to grow.

Since our Admission to AIM, the Group has established a number of share-based schemes that variously offer all staff the ability to participate in early ownership of Gateley and share in the rewards of that ownership as they contribute to the success of the Group. I am delighted that 72% of current staff are now existing share or option holders in the Group. Our ability to incentivise people through plc share ownership provides an attractive alternative to traditional professional services ownership models. During the period staff exercised SAYE and CSOP options to further widen our staff shareholder base.

Finally, during this half year period, we have been preparing for the roll out of our new, Group-wide, financial accounting system which is planned to "go live" at the start of June 2022. The project team continues to work hard on the delivery of this significant project that I have no doubt will aid future acquisitive growth and facilitate quick system integrations across the Group.

Purpose and ESG

During the Period, we launched our Purpose Statement: "to delight our clients, inspire our people and support our communities."

In tandem, we also produced our maiden Responsible Business report.

I am really pleased that our Purpose Statement and Responsible Business strategy have been so well received internally, with over 800 people attending our internal virtual launch event.

Our Responsible Business report, which was launched in September 2021, concluded that in terms of ESG, Gateley can make the most positive impact with our people and in our communities by aligning ourselves to the UK's levelling-up goals. To help us achieve this we have partnered with the leading ESG consultancy, This is Purpose. I am delighted with the positive traction that we have already made since setting our long-term objectives during H1 22. Rt. Hon Justine Greening of "This is Purpose" described our first 'Responsible Gateley' report as

"an excellent piece of work".    Responsible Gateley . 

Succession and Board Changes

I am pleased to announce that, subject to the completion of customary regulatory due diligence, on 1 May 2022, Victoria Garrad (Group HR Director) will join the Gateley (Holdings) Plc Board. Peter Davies, our Chief Operating Officer ("COO"), will step down from that Board as part of a planned succession which will see Victoria take on the role of COO on 1 May 2023. Victoria has been with Gateley since 1996. Before taking the Group HR Director role, she was a Partner in our legal services employment team. She has been a member of our Operations and Strategic Boards since 2011. Peter Davies will remain on the Strategic Board and will continue to chair our Operations Board until 30 April 2023.

Current trading and outlook

I am delighted that our decision to maintain full operating capacity throughout FY21 has enabled us to deliver exceptional service to clients and an excellent trading performance in what was a busy H1 22. Activity levels and the pipeline remain robust in both our transactional and non-transactional service lines and across both legal and consultancy services. The Group is well positioned to deliver further growth in the second half and achieve results in line with market expectations for FY22.

The plan for the long-term development of our business is now clearly characterised in our Platform Strategy. This is rooted in understanding clients' needs and outcomes in the context of legal and professional services. Our increasingly diverse range of services is demonstrably enhancing opportunities and revenues. We continue to position ourselves to invest in and grow our Platforms to provide an increasing breadth of services to our clients, deliver strong growth, and, therefore, maintain significant levels of returns to our people and investors.

We strive to achieve in line with our Purpose statement.

Rod Waldie

CEO

12 January 2022

FINANCE DIRECTOR'S REVIEW

Financial overview

With activity levels remaining strong, the underlying adjusted profit margin of 13.7% was ahead of pre-pandemic levels, which in H1 20 was 13.3%. This has been achieved despite necessary increases in payroll costs, that have been offset by strong growth in fees and lower operating overhead costs, which have not yet returned to pre-pandemic levels, and may not do so in the short to medium term.

Our track record of delivering profit, supported by strong cash generation and attractive investment returns, is based on a responsible business model with a strong focus on social and governance objectives and making sustainable decisions for the long term.

During H2 22, as we prepare for the release of our new financial accounting system that is scheduled to go live in June 2022, our year end reporting period and annual audit timetable will be disrupted. We have agreed with our auditors to delay the performance of our annual audit from June to August for 2022 only, which will have a knock-on effect with our usual market announcement timetable of mid-July. To accommodate this important phase of our expansion and technological advancement, we have decided to delay our Final Results announcement until September 2022. The Group expects to announce its usual, full year trading update in May 2022.

Revenue

Group revenue grew by 23.5% to GBP62.3m for the first half of the year from GBP50.5m in H1 21. Revenue from the Group's core legal services grew by 21.9% to GBP54.0m (H1 21 GBP44.3m) whilst revenue from consultancy non-legal services grew by 33.9% to GBP8.3m (H1 21 GBP6.2m). Acquired revenue during the period totalled just GBP0.2m from the consultancy Tozer Gallagher meaning overall organic growth was 23.0%. The Group has grown all Platforms organically during the period and continues to diversify further its client base and revenue mix.

Transactional activity has remained strong during the first half of H1 22 as our Banking and Corporate teams (within our Corporate Platform) have demonstrated 47.4% growth on H1 21 from GBP10.3m to GBP15.2m. Whilst transactional activity was paused during the onset of the pandemic, activity returned strongly around September 2020 and has been very busy ever since.

Within its Property Platform, Gateley's Housebuilding, Construction and Commercial Property teams showed significant levels of client activity as lucrative long-term projects across its client base helped it deliver 24.3% growth from GBP21.7m to GBP27.0m. The strength of its combined consultancy and legal service offerings continues to benefit Gateley's ability to win and deliver long-term infrastructure and housebuilding related projects. These projects often span multiple years that require professional input alongside client expertise in order to help our clients deliver successfully. Gateley also continues to benefit significantly from its clients' investment in warehousing and distribution projects. Consultancy services represented GBP5.4m (H1 21 GBP4.2m) or 20% of Property Platform revenue.

The Businesses Services Group has doubled its revenue returns from Complex Dispute Litigation work as it attracts mandates through its established, market leading expertise. Revenues have also increased in commercial service lines that provide ongoing support to the Corporate Platform.

Our People Platform in H1 22 has delivered consultancy revenue of GBP2.5m (H1 21: GBP1.7m) or 27% of total People Platform revenue. Growth has also been delivered by the Employment and Private Wealth legal service lines together with a strong return of growth for the specialist change management services of t-three and Kiddy & Partners. Their move to an agile delivery model and change management expertise are increasing the demand for services they can provide to clients in times of constant change for UK and international businesses.

 
                                        Business 
                       Corporate        Services           People         Property 
 Revenue                Platform        Platform         Platform         Platform   Total Segments     Other    Total 
 
 Oct 21                   15,160           9,658            9,386           26,987           61,191     1,118   62,309 
 Growth from 
  Oct 20                   47.4%           20.2%            21.5%            24.3%            28.1%   (58.6%)    23.5% 
 Oct 20                   10,285           8,035            7,725           21,716           47,761     2,699   50,460 
 

Total expenses

Personnel costs have increased as a percentage of revenue to 64.1% (H1 21: 60.9%) but are expected to return closer to historic levels in H2 22. Average numbers of legal and professional staff rose by 1% to 794 (H1 21: 785) whilst support staff numbers decreased by 2.6% to 338 (H1 20: 347). We retained fee earning capacity throughout the pandemic in order to satisfy the higher than previously seen client demand during FY21 and into H1 22, and now move into H2 22 with a significant list of 75 additional recruitment requests across the Group.

The last two half year periods do not display like for like costs as a result of the decisions the Board took on pay to address pandemic led concerns. In April 2020 the Group cut pay by up to 20% and froze all existing salaries until activity levels returned in the second half of FY21. However, in H2 21 all previously deducted pay was returned to staff and in H1 22 a comprehensive review of salary rates was implemented to address wider market trends in, what has now become a challenging recruitment market.

Other operating expenses, excluding non-underlying items, decreased by 15.1% to GBP10.6m (H1 21: GBP12.5m) as expenses remained below pre-pandemic levels due to staff and clients continuing to work predominately from home.

Profit before tax and earnings per share

The Group has recorded strong underlying adjusted profit before tax of GBP8.5m which has increased by 14.1% from GBP7.5m in H1 21. This has resulted in an excellent trading margin performance of 13.7% (H1 20: 13.3%) reflecting the improving activity levels in the business and the control of costs despite the market pressures the sector is experiencing. We enter the second half of the financial year having maintained fee earner headcount in order to service the now visible increases in client activity, and whilst government guidance currently to advise staff to work from home, we now expect certain overhead savings to be maintained during H2.

The table below highlights the significant change we experienced in both halves of last year and the impact of the key decisions we took throughout that period.

 
                              H1 20   H2 20    FY20   H1 21   H2 21    FY21   H1 22 
                               GBPm    GBPm    GBPm    GBPm    GBPm    GBPm    GBPm 
 
Revenue                        51.8    58.0   109.8    50.5    70.9   121.4    62.3 
Other income                    0.1     0.6     0.7     1.9     0.6     2.5       0 
Personnel costs              (32.0)  (31.5)  (63.5)  (30.7)  (46.8)  (77.5)  (39.9) 
Overheads and depreciation   (13.0)  (15.3)  (28.3)  (13.6)  (12.3)  (25.9)  (13.4) 
                             ------  ------  ------  ------  ------  ------  ------ 
Underlying operating 
 profit before tax              6.9    11.8    18.7     8.1    12.4    20.5     9.0 
 
Margin (%)                    13.3%   20.3%   17.0%   16.0%   17.5%   16.8%   13.7% 
Utilisation (%)                 81%     79%     80%     79%     98%     88%     84% 
Growth (%)                    10.5%    2.8%    3.5%  (9.5)%   20.0%    4.7%   23.5% 
                             ------  ------  ------  ------  ------  ------  ------ 
 

Profit before tax of GBP7.3m increased by 19.5% from GBP6.1m with profit after tax of GBP5.9m increasing by 24.7% from GBP4.8m.

Basic earnings per share increased by 23.8% to 5.00p (H1 21: 4.04p). Underlying diluted earnings per share increased by 17.1% to 5.76p (HY 21: 4.92p).

Dividend

The Board has approved an interim dividend of 3.0p (H1 21: 2.5p declared in June 2021) per share. This dividend will be paid on 31 March 2022 to shareholders on the register at the close of business on 18 February 2022. The shares will go ex-dividend on 17 February 2022. This dividend has not been recognised as a liability in these final statements.

Net assets and cash

The Group's net asset position has increased by GBP8.3m to GBP58.0m (H1 21: GBP49.7m).

There was a GBP4.6m increase in total current assets, resulting from GBP8.3m additional trade and other receivables available for collection, a GBP0.6m increase in contract assets ("unbilled revenue") together with a GBP4.3m decrease in cash at bank. Cash has decreased due to the reinstatement of bonuses and dividends after the outcome of the FY21 year was known.

Non-current assets decreased by GBP4.9m due to reductions in right-of-use assets and amortisation of intangible assets in line with contractual commitments and Group accounting policies.

Total liabilities decreased by GBP8.5m to GBP50.2m (H1 21: 58.7), mainly as a result of the decrease in corporate tax liabilities of GBP3.3m and the reduction in lease liabilities through scheduled repayments and crystallisation of certain operational gearing opportunities. In addition, the repayment of all outstanding debt before the end of FY21 has also reduced liabilities compared to H1 21. At the Period-end, debt comprised unsecured term loans of GBPnil (H1 21: GBP3.5m), whilst loans to former partners of acquired businesses totalled GBPnil (H1 21: GBP0.3m).

The Board continues to carefully monitor the impact of COVID-19 on the future forecasts used in assessing the value in use of the cash generating units to which the goodwill and intangibles relate and determined that despite short term reductions such forecasts are more than sufficient to justify the carrying value of goodwill. Therefore, as at 31 October 2021, the Board concluded that the goodwill and intangible assets do not require impairment.

Working capital and cash generation

Total lock-up decreased from 149 to 143 days as a result of WIP days reducing from 55 to 46 days and debtor days increasing from 94 to 97 days. Both movements are as a result of heightened billing activity towards the end of the half year. Contract assets (unbilled revenue) increased to GBP14.7m (H1 21: GBP14.2m) whilst trade receivables, including unbilled disbursements, increased to GBP38.1m (H1 21: GBP31.1m).

Cash generated from operations during the Period was GBP2.4m (H1 21: GBP12.9m) which represents 40.0% (H1 21: 271.1%) of profit after taxation. Free cash flow decreased from GBP10.6m in H1 21 to GBP(1.9)m as the Group used existing cash resources to satisfy the payment of returning bonus and corporate tax outflows that were paused during H1 21. The Group has returned to its usual profile of annual cash outgoings as capital expenditure returned. The Group remains debt free at present. However, this position is reviewed regularly to ensure appropriate funding levels are in place to support the Group's expansion as we move forward into H2 22 with our three year GBP30m revolving credit facility.

Conclusion

The Group has delivered a strong performance in HY22 against the backdrop of an uncertain macro environment, with activity levels, revenue and profitability all showing improvement. Demand for services, and capacity to deliver those services, has steadily improved over the course of H1 22. The Group has a strong pipeline of work coming into the second half of the financial year and expects to maintain profit margins in the short term but use its acquisition strategy to seek further margin enhancing acquisitions in the medium to long term as our Platform strategy resonates wider with existing and potential clients.

Our next two six-month periods will yield significant change for the business, as we finalise the installation of our new Group-wide financial accounting system and seek further opportunities to expand the growth through sustainable organic growth and acquisition.

Neil Smith

Finance Director

12 January 2022

Gateley (Holdings) Plc

Consolidated income statement and other comprehensive income

For the 6 months ended 31 October 2021

 
                                          Note    Unaudited    Unaudited        Audited 
                                                   6 months     6 months      12 months 
                                                         to           to             to 
                                                 31 October   31 October       30 April 
                                                       2021         2020           2021 
                                                    GBP'000      GBP'000        GBP'000 
 
 Revenue                                     2       62,309       50,460        121,375 
 
 Other operating income                                   -        1,871          2,451 
 Personnel costs                             3     (39,935)     (30,743)       (77,460) 
 Depreciation - Property, plant 
  and equipment                              4        (421)        (599)        (1,045) 
 Depreciation - Right-to-use asset           4      (1,942)      (1,801)        (3,751) 
 Impairment of trade receivables 
  and contract assets                                 (475)         (17)        (1,834) 
 Other operating expenses                          (10,585)     (12,462)       (19,202) 
                                                -----------  -----------  ------------- 
 
 Operating profit before non-underlying 
  operating and exceptional items                     8,951        8,076         20,534 
 Total non-underlying operating 
  items                                      4      (1,236)      (1,367)        (3,029) 
                                                -----------  -----------  ------------- 
 Operating profit                                     7,715        6,709         17,505 
 
 
 Investing income received                                -            -              - 
 Financing income                                        70            4            176 
 Financing expense                                    (509)        (623)        (1,373) 
                                                -----------  -----------  ------------- 
 Profit before tax                                    7,276        6,090         16,308 
 
 Taxation                                           (1,353)      (1,339)        (3,151) 
                                                ===========  ===========  ============= 
 Profit for the period after tax 
  attributable to equity holders 
  of the parent                                       5,923        4,751         13,157 
                                                ===========  ===========  ============= 
 
 Other comprehensive income 
 Items that are or may be reclassified 
  subsequently to profit or loss 
 Foreign exchange translation 
  differences 
 - Exchange differences on foreign 
  branch                                                (5)           41           (87) 
                                                -----------  -----------  ------------- 
 Profit for the financial period 
  and total comprehensive income 
  all attributable to equity holders 
  of the parent                                       5,918        4,792         13,070 
                                                ===========  ===========  ============= 
 

Statutory earnings per share (pence)

 
 Basic earnings per share     55.00p  4.04p  11.18p 
 Diluted earnings per share   54.94p  3.99p  11.10p 
 

The results for the periods presented above are derived from continuing operations. There were no other items of comprehensive income to report.

Gateley (Holdings) Plc

Consolidated statement of financial position

at 31 October 2021

 
                                                Note  Unaudited at  Unaudited at  Audited at 
                                                        31 October    31 October    30 April 
                                                              2021          2020        2021 
                                                           GBP'000       GBP'000     GBP'000 
  Non-current assets 
  Property, plant and equipment                              1,343         1,373       1,323 
  Right-of-use asset                                        25,268        28,161      27,007 
  Investment property                                          164           164         164 
  Intangible assets & goodwill                     7        15,763        17,696      15,765 
  Other intangible assets                                      245           303         282 
  Other investments                                            367           363         363 
  Deferred tax asset                                             2             -         138 
                                                      ------------  ------------  ---------- 
 
  Total non-current assets                                  43,152        48,060      45,042 
                                                      ------------  ------------  ---------- 
 
  Current assets 
  Contract assets                                  8        14,723        14,154      13,900 
  Trade and other receivables                      9        41,390        33,114      43,093 
  Cash and cash equivalents                                  8,842        13,072      19,605 
                                                      ------------  ------------  ---------- 
 
  Total current assets                                      64,955        60,340      76,598 
                                                      ------------  ------------  ---------- 
 
Total assets                                               108,107       108,400     121,640 
                                                      ============  ============  ========== 
 
  Non-current liabilities 
  Other interest-bearing loans and borrowings     10             -       (1,895)           - 
  Lease liability                                         (26,465)      (28,077)    (27,702) 
  Other payables                                  11         (120)         (942)       (120) 
  Deferred tax liability                                     (591)         (965)       (772) 
  Provisions                                                 (724)         (339)       (763) 
 
  Total non-current liabilities                           (27,900)      (32,218)    (29,357) 
                                                      ------------  ------------  ---------- 
 
  Current liabilities 
  Other interest-bearing loans and borrowings     10             -       (1,878)           - 
  Lease liability                                          (3,197)       (3,304)     (2,743) 
  Trade and other payables                        11      (19,303)      (18,086)    (29,032) 
  Provisions                                                 (176)         (359)       (176) 
  Current tax liabilities                                      420       (2,840)     (1,066) 
 
  Total current liabilities                               (22,256)      (26,467)    (33,017) 
                                                      ------------  ------------  ---------- 
 
  Total liabilities                                       (50,156)      (58,685)    (62,374) 
                                                      ============  ============  ========== 
 
  NET ASSETS                                                57,951        49,715      59,266 
                                                      ============  ============  ========== 
 
  EQUITY 
 Share capital                                              11,899        11,761      11,792 
 Share premium                                              10,430         9,153       9,421 
 Merger reserve                                            (9,950)       (9,950)     (9,950) 
 Other reserves                                              7,097         6,815       6,815 
 Treasury reserve                                            (629)         (670)       (312) 
 Translation reserve                                          (65)            68        (60) 
 Retained earnings                                          39,169        32,538      41,560 
                                                      ------------  ------------  ---------- 
 
  TOTAL EQUITY                                              57,951        49,715      59,266 
                                                      ============  ============  ========== 
 

Gateley (Holdings) Plc

Consolidated cash flow Statement

for the 6 months ended 31 October 2021

 
                                                                       Note     Unaudited     Unaudited        Audited 
                                                                              6 months to   6 months to   12 months to 
                                                                               31 October    31 October       30 April 
                                                                                     2021          2020           2020 
                                                                                  GBP'000       GBP'000        GBP'000 
Cash flows from operating activities 
 Profit for the period after tax                                                    5,923         4,751         13,157 
 Adjustments for: 
 Depreciation and amortisation                                                      3,102         3,424          6,869 
 Financial income                                                                    (70)           (4)          (176) 
 Financial expense                                                                      7           623            416 
 Interest charge on capitalised leases                                                502             -            957 
 Equity settled share-based payments                                                  534           343            956 
 Tax expense                                                                        1,353         1,339          3,151 
                                                                             ------------  ------------  ------------- 
                                                                                   11,351        10,476         25,327 
 Decrease/(increase) in trade and other receivables                                   930         4,413        (5,312) 
 (Decrease)/increase in trade and other payables                                  (9,870)       (1,994)          9,216 
 (Decrease)/increase in provisions                                                   (39)          (15)            226 
                                                                             ------------  ------------  ------------- 
 Cash generated from operations                                                     2,372        12,880         29,457 
 Tax paid                                                                         (2,960)         (373)        (4,039) 
                                                                             ------------  ------------  ------------- 
 Net cash flows from operating activities                                           (588)        12,507         25,418 
                                                                             ------------  ------------  ------------- 
 
 Investing activities 
 Acquisition of property, plant and equipment                                       (434)          (99)          (503) 
 Acquisition of other intangible assets                                                 -             -           (10) 
 Cash received on sale of investment                                                    -             -             11 
 Acquisition of other investments                                                       -         (134)          (134) 
 Contingent consideration paid - acquisition of subsidiary                          (617)          (62)          (363) 
 Net cash outflow from investing activities                                       (1,051)         (295)          (999) 
                                                                             ------------  ------------  ------------- 
 
Financing activities 
 Interest and other financial income received                                          70             4            176 
 Interest and other financial income paid                                             (7)         (623)          (416) 
 Interest charge on capitalised leases                                              (502)             -          (957) 
 Lease payments                                                                     (986)       (1,158)        (2,890) 
 Short term bank loan proceeds                                                          -         1,697              - 
 Repayment of short-term bank loans                                                     -       (1,032)              - 
 Repayment of term bank loans                                                           -         (235)        (3,077) 
 Repayment of loans from former members of GCL Solicitors & Directors 
  of International Investment 
  Services                                                                              -          (68)          (729) 
 Funds to former members of Gateley Tweed                                               -         (395)              - 
 Acquisition of own shares                                                           (60)         (253)          (288) 
 Proceeds of sale of own shares                                                       330             -            145 
 Cash received for shares issued on exercise of share options                         879             -              - 
 Dividends paid                                                           6       (8,848)             -              - 
 Net cash outflow from f inancing activities                                      (9,124)       (2,063)        (7,737) 
                                                                             ------------  ------------  ------------- 
 
Net (decrease)/increase in cash and cash equivalents                             (10,763)        10,149         16,682 
 Cash and cash equivalents at beginning of period                                  19,605         2,923          2,923 
                                                                             ------------  ------------  ------------- 
 Cash and cash equivalents at end of period                                         8,842        13,072         19,605 
                                                                             ============  ============  ============= 
 

Gateley (Holdings) Plc

Consolidated statement of changes in equity

for the 6 months ended 31 October 2021

 
                               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 2020                 11,761     9,153   (9,950)     6,815     (417)     27,447            27   44,836 
Restated balance 
 at 1 May 2020 
Comprehensive income: 
Profit for the year                -         -         -         -         -     13,157             -   13,157 
Exchange rate differences          -         -         -         -         -          -          (87)     (87) 
                            --------  --------  --------  --------  --------  ---------  ------------  ------- 
Total comprehensive 
 income                            -         -         -         -         -     13,157          (87)   13,070 
Transaction with 
 owners recognised 
 directly in equity 
Issue of share capital            31       550         -         -         -          -             -      581 
Sale of treasury 
 shares                            -     (282)         -         -       400          -             -      118 
Purchase of treasury 
 shares                            -         -         -         -     (295)          -             -    (295) 
Dividend paid                      -         -         -         -         -          -             -        - 
Share based payment 
 transactions                      -         -         -         -         -        956             -      956 
Total equity at 30 
 April 2021                   11,792     9,421   (9,950)     6,815     (312)     41,560          (60)   59,266 
                            ========  ========  ========  ========  ========  =========  ============  ======= 
 
 
At 1 May 2020 (unaudited)     11,761     9,153   (9,950)     6,815     (417)     27,447            27   44,836 
                            --------  --------  --------  --------  --------  ---------  ------------  ------- 
Comprehensive income: 
Profit for the period              -         -         -         -         -      4,751                  4,751 
Exchange rate differences          -         -         -         -         -                       41       41 
                            --------  --------  --------  --------  --------  ---------  ------------  ------- 
Total comprehensive 
 income                            -         -         -         -         -      4,751            68    4,792 
Transaction with 
 owners recognised 
 directly in equity 
Purchase of treasury 
 shares                            -         -         -         -     (253)          -             -    (253) 
Dividend paid                      -         -         -         -         -          -             -        - 
Share based payment 
 transactions                      -         -         -         -         -        340             -      340 
                            --------  --------  --------  --------  --------  ---------  ------------  ------- 
Total equity at 31 
 October 2020                 11,761     9,153   (9,950)     6,815     (670)     32,538            68   49,715 
                            ========  ========  ========  ========  ========  =========  ============  ======= 
 
 

Gateley (Holdings) Plc

Consolidated statement of changes in equity

for the 6 months ended 31 October 2021

 
                               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 2021 (unaudited)     11,792     9,421   (9,950)     6,815     (312)     41,560          (60)   59,266 
Comprehensive income: 
Profit for the year                -         -         -         -         -      5,923             -    5,923 
Exchange rate differences          -         -         -         -         -          -           (5)      (5) 
                            --------  --------  --------  --------  --------  ---------  ------------  ------- 
Total comprehensive 
 income                            -         -         -         -         -      5,923           (5)    5,918 
Transaction with 
 owners recognised 
 directly in equity 
Share issue                      107     1,009         -       282         -          -             -    1,398 
Sale of treasury 
 shares                            -         -         -         -        33          -             -       33 
Purchase of treasury 
 shares                            -         -         -         -     (350)          -             -    (350) 
Dividend paid                      -         -         -         -         -    (8,848)             -  (8,848) 
Share based payment 
 transactions                      -         -         -         -         -        534             -      534 
Total equity at 31 
 October 2021                 11,899    10,430   (9,950)     7,097     (629)     39,169          (65)   57,951 
                            ========  ========  ========  ========  ========  =========  ============  ======= 
 
 

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.

Gateley (Holdings) Plc

Notes

for the period ended 31 October 2021

   1.            Basis of preparation 

These interim unaudited financial statements for the six months ended 31 October 2021 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 2021 using the recognition and measurement principles of IFRS as applied under the Companies Act 2006 and the AIM rules.

The comparative figures for the financial year ended 30 April 2021 are not the company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

   1.1          Accounting policies 

Accounting policies remain unchanged from those accompanying the 30 April 2021 financial statements.

Non-underlying items

Non-underlying items are non-trading and or non-cash items disclosed separately in the Consolidated Income Statement where the quantum, nature or volatility of such items would otherwise distort the underlying trading performance of the Group. The following are included by the Group in its assessment of non-underlying items:

-- Share based payment charges: such charges are treated as non-underlying as the gain realised on the options granted is settled in shares not cash and therefore does not impact the income statement. The IFRS 2 charge is taken to the income statement, these expenses are treated as non-underlying items as they are either non-cash or non-recurring in nature.

-- Amortisation in respect of intangible fixed assets: these costs are treated as non-underlying as they are non-cash items.

The tax effect of the above is also included if considered significant.

Exceptional items

Exceptional items are one off transactions, unrelated to the underlying trading performance of the Group disclosed separately in the Consolidated Income Statement where the quantum, nature or volatility of such items would otherwise distort the underlying trading performance of the Group.

The following are included by the Group in its assessment of exceptional items:

-- Gains or losses arising on disposal, closure, restructuring or reorganisation of businesses that do not meet the definition of discontinued operations.

-- Impairment charges in respect of intangible fixed assets: these costs are treated as exceptional due to their one-off nature.

   --      Non-typical expenses associated with acquisitions. 
   --      Costs incurred as part of significant refinancing activities. 

The tax effect of the above is also included if considered significant.

Intangible assets and goodwill

Goodwill

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee.

Other intangible assets

Other intangible assets, including software licences, expenditure on internally generated goodwill, brands and software, customer contracts and relationships are capitalised at cost and amortised on a straight-line basis over their estimated useful economic lives through operating expenses.

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated impairment losses.

Customer lists

Customer lists that are acquired by the Group as part of a business combination are stated at cost less accumulated amortisation and impairment losses (see accounting policy 'Impairment of assets'). Cost reflects management's judgement of the fair value of the individual intangible asset calculated by reference to the net present value of future benefits accruing to the Group from the utilisation of the asset, discounted at an appropriate discount rate.

Brand value

Certain acquisitions have retained their trading name due to the value of the brand in their specific market place.

Brand value is amortised over a period of three or five years based on the Directors assessment of the future life of the brand, supported by trading history.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of consolidated financial statements under IFRS requires management to make estimates and assumptions which affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on Management's best judgement at the date of preparation of the financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. The key areas where a higher degree of judgement or complexity arises, or where estimates and assumptions are significant to the consolidated financial statements are discussed below.

Management does not consider there to have been and critical accounting judgements made in the financial period.

Unbilled revenue on client assignments

The valuation of unbilled revenue (on non-contingent matters) involves detailed understanding of contractual terms with clients. The valuation is based on an estimate of the amount expected to be recoverable from clients on unbilled items based on such factors as time spent, the expertise and skills provided and the stage of completion of the assignment. The principal uncertainty over this estimation is a result of the amounts not yet being billed to, or recognised by the client. Provision is made for such factors as historical recoverability rates, agreements with clients, external expert's opinion and the potential credit risks, following interactions between legal staff, finance and clients. Where entitlement to revenue is certain it is recognised as recoverable selling price. Where a matter is contingent at the statement of financial position date, no revenue is recognised.

Valuation of intangibles

Measurement of intangible assets relating to acquisitions: In attributing value to intangible assets arising on acquisition, management has made certain assumptions in terms of cash flows attributable to intellectual property and customer relationships. The key assumptions made relate to the valuation of the brand, where the acquired brand is retained by the entity, and the customer list. The value of such intangibles has been estimated based on the amount of revenue expected to be generated by them. The revenue estimations rely on annual growth rates. Management have selected the appropriate rates based on a combination of observed historical growth, industry norms and forecasted influencing factors. Management have also performed sensitivity analysis to assess the impact of any variation to the growth rate used. The rates applied reflect previous growth rates, with sensitivities indicating that variations in the actual rate achieved are unlikely to materially impact the valuation of the intangible assets.

   1.2          Alternative performance measures 

Underlying adjusted profit before tax

The Directors seek to present a measure of underlying profit performance which is not impacted by exceptional items or items considered non-operational in nature. These include non-trading, non-cash and one-off items disclosed separately in the consolidated income statement where the quantum, nature or volatility of such items are considered by management to otherwise distort the underlying performance of the Group. This measure is described as 'underlying adjusted' and is used by management to assess and monitor profit performance only at the before and after tax level. In line with the board's wish to simplify reporting of profits, the board have moved away from reporting adjusted Earnings Before Interest Tax Depreciation and Amortisation ("EBITDA"), following the introduction of IFRS 16 'Leases'.

 
                                                    6 months     6 months  12 Months 
                                                          to           to   30 April 
                                                  31 October   31 October       2021 
                                                        2021         2020 
                                                     GBP'000      GBP'000    GBP'000 
 
Reported profit before tax                             7,276        6,090     16,308 
Adjustments for non-underlying and exceptional 
 items: 
- Amortisation of acquired intangible 
 assets                                                  702        1,024      2,073 
- Share-based payment adjustment                         534          343        956 
Underlying adjusted profit before tax                  8,512        7,457     19,337 
                                                 ===========  ===========  ========= 
 

Amortisation of acquired intangible assets is identified as a non-cash item released to the income statement therefore such cost is removed when considering the underlying trading performance of the Group by adding to profit the annual amortisation charge.

The adjustment for share-based payments relates to the impact of the accounting standard for share-based compensation. The cost of all share-based schemes are settled entirely by the issue of shares where the proportions can vary from one year to another based on events outside of the businesses control e.g., share price. Under IFRS the anticipated future share cost is expensed to the income statement over the vesting period. The adjustment above addresses this by adding to profit the IFRS 2 charge in relation to outstanding share awards. This adjustment is made so that non-cash expenses are removed from profit.

Cash generated from operations

a) Free cash flows

 
                                               6 months     6 months  12 Months 
                                                     to           to   30 April 
                                             31 October   31 October       2021 
                                                   2021         2020 
                                                GBP'000      GBP'000    GBP'000 
 
Operating cash flows before movements 
 in working capital                              11,351       10,476     25,327 
Net working capital movement                    (8,979)        2,404      4,130 
                                            -----------  -----------  --------- 
Cash generated from operations                    2,372       12,880     29,457 
Repayment of lease liabilities                    (986)      (1,158)    (2,890) 
Net interest paid                                    63        (619)      (240) 
Tax paid                                        (2,960)        (373)    (4,039) 
Purchase of property, plant and equipment         (434)         (99)      (503) 
Purchase of other intangible assets                   -            -       (10) 
                                            -----------  -----------  --------- 
Free cash flows                                 (1,945)       10,631     21,775 
                                            ===========  ===========  ========= 
 

b) Working capital measures

 
                                           6 months     6 months  12 Months 
                                                 to           to   30 April 
                                         31 October   31 October       2021 
                                               2021         2020 
                                            GBP'000      GBP'000    GBP'000 
WIP days 
Amounts recoverable from clients in 
 respect of contract assets (unbilled 
 revenue)                                    14,723       14,154     13,900 
Unbilled disbursements                        2,240        2,391      2,247 
                                        -----------  -----------  --------- 
Total WIP                                    16,963       17,545     16,147 
                                        -----------  -----------  --------- 
Annualised revenue                          135,266      110,797    121,375 
                                        -----------  -----------  --------- 
WIP days                                         46           55         49 
                                        ===========  ===========  ========= 
 
 
                                           6 months     6 months  12 Months 
                                                 to           to   30 April 
                                         31 October   31 October       2021 
                                               2021         2020 
                                            GBP'000      GBP'000    GBP'000 
Debtor days 
Amounts recoverable from clients in 
 respect of contract assets (unbilled 
 revenue)                                    38,059       31,065     36,680 
Less unbilled disbursements                 (2,240)      (2,391)    (2,247) 
                                        -----------  -----------  --------- 
Total debtors                                35,819       28,674     34,433 
                                        -----------  -----------  --------- 
Annualised revenue                          135,266      110,797    121,375 
                                        -----------  -----------  --------- 
Debtor days                                      97           94        104 
                                        ===========  ===========  ========= 
 
 
                         6 months     6 months  12 Months 
                               to           to   30 April 
                       31 October   31 October       2021 
                             2021         2020 
                          GBP'000      GBP'000    GBP'000 
Gross lock-up days 
Total WIP                  16,963       16,545     16,147 
Total debtors              35,819       28,674     36,380 
                      -----------  -----------  --------- 
Total gross lock-up        52,782       45,219     52,827 
                      -----------  -----------  --------- 
Annualised revenue        135,266      110,797    121,375 
                      -----------  -----------  --------- 
Gross lock-up days            143          149        153 
                      ===========  ===========  ========= 
 

Annualised revenue reflects the total revenue for the previous 12-month period inclusive of pro-forma adjustments for acquisitions.

   1.3          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.

   1.4          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.

   1.5          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 strategic Platforms, which are its reportable segments. These divisions offer a mixture of legal and consultancy services to clients. With effect from 1 May 2021 all service lines are managed through four Platforms.

The Group has restated the segmental reporting for the comparative periods to reflect the current operating segments in place

The following summary describes the operations of each reportable segment as reported up to 31 October 2021:

 
 Reportable segment     Legal service lines                        Consultancy service 
                         (Gateley Legal)                            lines 
                                                                    (Gateley Consultancy) 
 Corporate              Banking                                    International Investment 
                         Corporate                                  Services 
                         IP, Commercial & Technology                GEG Services 
                         Restructuring Advisory 
                         Taxation 
                       -----------------------------------------  ------------------------- 
 Business Services      Commercial Dispute Resolution/Litigation   Gateley Omega 
                         Complex & International 
                         Recovery Work 
                         Regulatory & Business 
                         Defence 
                         Tweed (reputation, media 
                         and privacy law) 
                       -----------------------------------------  ------------------------- 
 Employment, Pensions   Employment                                 Entrust Pension 
  and Benefits           Pensions                                   Kiddy & Partners 
                         Private Client                             T-three 
                       -----------------------------------------  ------------------------- 
 Property               Construction                               Gateley Capitus 
                         Planning                                   Gateley Hamer (inc. 
                         Real Estate                                Persona Associates) 
                         Real Estate Dispute                        Gateley Vinden (inc. 
                         Resolution                                 Tozer Gallagher) 
                         Residential Development 
                       -----------------------------------------  ------------------------- 
 

.

6 months to 31 October 2021

 
                                             Corporate   Business     People  Property      Total      Other*    Total 
                                                         Services                        segments 
                                               GBP'000    GBP'000    GBP'000   GBP'000    GBP'000     GBP'000  GBP'000 
 Segment revenue                                15,160      9,658      9,386    26,987     61,191       1,118   62,309 
                                           -----------  ---------  ---------  --------  ---------  ----------  ------- 
 Segment contribution 
  (as reported internally)                       5,895      3,349      3,490    10,717     23,451       1,118   24,569 
 Costs not allocated to segments: 
 Other operating income                                                                                              - 
 Personnel costs                                                                                               (5,824) 
 Share based payment costs                                                                                       (534) 
 Depreciation and amortisation                                                                                 (3,065) 
 Other operating expenses                                                                                      (7,431) 
 Net financial income                                                                                            (439) 
 
                                                                                                                 7,276 
                                                                                                               ======= 
 
 

6 months to 31 October 2020

 
                                          Corporate     Business   People  Property     Total      Other*      Total 
                                                        Services                     segments 
                                            GBP'000      GBP'000  GBP'000   GBP'000   GBP'000     GBP'000    GBP'000 
 Segment revenue                             10,285        8,035    7,725    21,716    47,761       2,699     50,460 
                                        -----------  -----------  -------  --------  --------  ----------  --------- 
 Segment contribution 
  (as reported internally)                    2,411        3,358    1,872     6,672    14,313       2,699     17,012 
 Costs not allocated to segments: 
 Other operating income                                                                                        1,871 
 Personnel costs                                                                                             (3,654) 
 Share based payment charge                                                                                    (343) 
 Depreciation and amortisation                                                                               (3,424) 
 Other operating expenses                                                                                    (4,753) 
 Net financial expense                                                                                         (619) 
 
                                                                                                             6,090 
                                                                                                           ======= 
 
 

12 months to 30 April 2021

 
                                    Corporate   Business   People  Property      Total   Other*     Total 
                                                Services                      segments 
                                      GBP'000    GBP'000  GBP'000   GBP'000    GBP'000  GBP'000   GBP'000 
 Segment revenue                       32,869     18,338   14,252    52,989    118,448    2,927   121,375 
                                    ---------  ---------  -------  --------  ---------  -------  -------- 
 Segment contribution 
  (as reported internally)             10,729      7,335    4,597    24,421     47,082    2,927    50,009 
 Costs not allocated to segments: 
 Other operating income                                                                             2,448 
 Personnel costs                                                                                  (8,240) 
 Share based payment charge                                                                         (956) 
 Depreciation and amortisation                                                                    (6,869) 
 Other operating expenses                                                                        (18,887) 
 Net financial expense                                                                            (1,197) 
 
                                                                                                   16,308 
                                                                                                 ======== 
 
 

*Other includes expense income and movement in unbilled revenue

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 2021   31 October 2020   30 April 2021 
 
Legal and professional staff                                                   794               785             770 
Administrative staff                                                           338               347             343 
                                                                  ----------------  ----------------  -------------- 
                                                                             1,132             1,132           1,113 
                                                                  ================  ================  ============== 
 
  The aggregate payroll costs of these persons were as follows: 
                                                                       6 months to       6 months to    12 months to 
                                                                   31 October 2021   31 October 2020   30 April 2021 
                                                                           GBP'000           GBP'000         GBP'000 
 
Wages and salaries                                                          35,369            27,763          68,020 
Social security costs                                                        3,664             2,330           7,736 
Pension costs                                                                  902               650           1,704 
                                                                  ----------------  ----------------  -------------- 
                                                                            39,935            30,743          77,460 
                                                                  ================  ================  ============== 
 
 
 
   4.            Expenses 

Included in operating profit are the following:

 
                                         6 months      6 months     12 months 
                                               to            to         to 30 
                                       31 October    31 October    April 2021 
                                             2021          2020 
                                          GBP'000       GBP'000       GBP'000 
 
 Depreciation on tangible assets              421           599         1,045 
 Depreciation on right-of-use 
  assets                                    1,942         1,801         3,751 
 Other operating income - rent 
  income                                        -             -           (2) 
 Short term and low value leases              117            54            40 
 Operating lease costs on property              -             -            26 
 Foreign exchange                               5          (45)            87 
 Profit on sale of fixed assets                 -             -           (3) 
                                     ============  ============  ============ 
 

Non-underlying items

 
                                         6 months      6 months      12 months 
                                               to            to    to 30 April 
                                       31 October    31 October           2021 
                                             2021          2020 
 Amortisation of intangible assets            702         1,024          2,073 
 Share based payment charges                  534           343            956 
                                     ------------  ------------  ------------- 
 Total non-underlying items                 1,236         1,367          3,029 
                                     ============  ============  ============= 
 
 
   5.            Earnings per share 
 
                                                                    6 months to       6 months to            12 months 
                                                                     31 October   31 October 2020     to 30 April 2021 
                                                                           2021 
                                                                         Number            Number               Number 
 
Weighted average number of ordinary shares in issue, being 
 weighted 
 average number of shares for calculating basic earnings per share  118,253,989       117,609,094        117,685,265 
Shares deemed to be issued for no consideration in respect of 
 share 
 based payments                                                       1,754,023         1,508,903            823,568 
                                                                    -----------  ----------------  ----------------- 
Weighted average number of ordinary shares for calculating diluted 
 earnings per share                                                 120,008,012       119,117,997        118,508,833 
                                                                    ===========  ================  ================= 
 
 
 
                                                                                 GBP'000      GBP'000      GBP'000 
Profit for the period after taxation and basic earnings attributable to 
 ordinary equity shareholders                                                      5,923        4,751       13,157 
Non-underlying items                                                               1,236        1,367        3,029 
Tax on non-underlying items                                                        (247)        (260)        (576) 
                                                                              ----------  -----------  ----------- 
Underlying earnings before non-underlying items                                    6,912        5,858       15,604 
                                                                              ==========  ===========  =========== 
 
Earnings per share is calculated as follows:                                       Pence        Pence          Pence 
Basic earnings per ordinary share                                                   5.00         4.04          11.18 
Diluted earnings per ordinary share                                                 4.94         3.99          11.10 
 
Underlying basic earnings per ordinary share                                        5.85         4.98          13.26 
Underlying diluted earnings per ordinary share                                      5.76         4.92          13.17 
 
 

Underlying earnings per share have been shown because the Directors consider that this provides valuable additional information about the underlying performance of the Group.

   6.            Dividends 
 
                                             6 months     6 months  12 Months 
                                                   to           to   30 April 
                                           31 October   31 October       2021 
                                                 2021         2020 
                                              GBP'000      GBP'000    GBP'000 
Equity shares 
Interim dividend in respect of 2021 
 (2.5p per share) - paid 28 June 2021       2,939,731            -          - 
Final dividend in respect of 2021 (5.0p 
 per share) - paid 8 October 2021           5,907,839            -          - 
                                          -----------  -----------  --------- 
Dividends paid                              8,847,570            -          - 
                                          ===========  ===========  ========= 
 
 

The Board has approved an interim dividend of 3.0p (H1 21: nil) per share. This dividend will be paid on 31 March 2022 to shareholders on the register at the close of business on 18 February 2022. The shares will go ex-dividend on 17 February 2022. This dividend has not been recognised as a liability in these final statements.

   7          Intangible assets 
 
                                                                    Goodwill  Customer list and brand names    Total 
                                                                     GBP'000                        GBP'000  GBP'000 
Deemed cost 
At 1 May 2020                                                         12,329                          9,850   22,179 
Adjustment to expected contingent consideration - Gateley Vinden 
 Limited                                                                 282                              -      282 
                                                                    --------  -----------------------------  ------- 
At 31 October 2020                                                    12,611                          9,850   22,461 
                                                                    ========  =============================  ======= 
 
At 1 May 2020                                                         12,329                          9,850   22,179 
Adjustment                                                             (631)                              -    (631) 
                                                                    --------  -----------------------------  ------- 
At 30 April 2021                                                      11,698                          9,850   21,548 
                                                                    ========  =============================  ======= 
 
At 1 May 2021                                                         11,698                          9,850   21,548 
Acquired through business combination                                    307                            393      700 
At 31 October 2021                                                    12,005                         10,243   22,248 
                                                                    ======== 
 
Accumulated amortisation 
At 1 May 2020                                                              -                          3,741    3,741 
Charge for the period                                                      -                          1,024    1,024 
                                                                    --------  -----------------------------  ------- 
At 31 October 2020                                                         -                          4,765    4,765 
                                                                    ========  =============================  ======= 
 
At 1 May 2020                                                              -                          3,741    3,741 
Charge for the year                                                        -                          2,042    2,042 
                                                                    --------  -----------------------------  ------- 
At 30 April 2021                                                           -                          5,783    5,783 
                                                                    ========  =============================  ======= 
 
At 1 May 2021                                                              -                          5,783    5,783 
Charge for the period                                                      -                            702      702 
                                                                    -------- 
At 31 October 2021                                                         -                          6,485    6,485 
                                                                    ========  =============================  ======= 
 
Net Book Value 
At 31 October 2020                                                    12,611                          5,085   17,696 
                                                                    ========  =============================  ======= 
 
At 30 April 2021                                                      11,698                          4,067   15,765 
                                                                    ========  =============================  ======= 
 
At 31 October 2021                                                    12,005                          3,758   15,763 
                                                                    ========  =============================  ======= 
 

Goodwill

Goodwill is allocated to the following cash generating units

 
                                                       31 October  31 October  30 April 
                                                             2021        2020      2021 
                                                          GBP'000     GBP'000   GBP'000 
Property Platform 
Gateley Capitus Limited                                     1,515       1,515     1,515 
Gateley Hamer Limited                                       1,161       1,161     1,161 
GCL Solicitors LLP (acquisition of trade and assets)        2,900       2,900     2,900 
Persona Associates Limited                                     40          40        40 
Gateley Vinden Limited                                      2,259       2,254     2,259 
Tozer Gallagher Limited                                       307           -         - 
                                                       ----------  ----------  -------- 
                                                            8,182       7,870     7,875 
People Platform 
Kiddy & Partners Limited                                    1,600       1,872     1,600 
International Investment Services Limited                     338         338       338 
t-three Consulting Limited                                    309         955       309 
                                                       ----------  ----------  -------- 
                                                            2,247       3,165     2,247 
Business Services Platform 
Gateley Tweed (acquisition of goodwill)                     1,576       1,576     1,576 
                                                       ----------  ----------  -------- 
                                                           12,005      12,611    11,698 
                                                       ==========  ==========  ======== 
 

Acquisition of Tozer Gallagher LLP (Tozer)

On 22 July 2021 Gateley Vinden Limited acquired the business and assets of Tozer Gallagher LLP, a leading practice of chartered quantity surveys and construction consultants based in Manchester and London. The business specialises in built environment consultancy, fund monitoring services and surety advisory.

The amounts recognised in respect of identifiable assets acquired and liabilities assumed are as set out in the table below:

 
                                    Pre-acquisition   Policy alignment 
                                           carrying     and fair value 
                                             amount        adjustments      Total 
                                            GBP'000            GBP'000    GBP'000 
---------------------------------  ----------------  -----------------  --------- 
 Property, plant and equipment                    7                  -          7 
 Intangible asset relating 
  to customer list and brand                      -                392        392 
 Contract assets                                101                  -        101 
 Prepayments and accrued income                  19                  -         19 
 Total assets                                   127                392        519 
---------------------------------  ----------------  -----------------  --------- 
 Accruals and other payables                    (8)                  -        (8) 
 Deferred tax                                     -               (75)       (75) 
---------------------------------  ----------------  -----------------  --------- 
 Total liabilities                              (8)               (75)       (83) 
---------------------------------  ----------------  -----------------  --------- 
 Total identifiable net assets 
  at fair value                                 119                317        436 
 Goodwill arising on acquisition                                              281 
---------------------------------  ----------------  -----------------  --------- 
 Total consideration                                                          717 
---------------------------------  ----------------  -----------------  --------- 
 Satisfied by: 
 Initial cash consideration 
  paid                                                                        617 
 Contingent cash consideration 
  payable                                                                     100 
 Total consideration                                                          717 
---------------------------------  ----------------  -----------------  --------- 
 Net cash outflow arising 
  on acquisition 
 Cash paid                                                                  (717) 
 Net cash outflow arising 
  on acquisition                                                            (717) 
---------------------------------  ----------------  -----------------  --------- 
 

The goodwill of GBP308,000 arising from the acquisition represents the assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

A contingent consideration arrangement was entered into as part of the acquisition. This is payable based on the business' financial performance in the 12-month period following completion of the acquisition. The contingent consideration will be settled in cash, with each recipient applying 50% of their contingent consideration in subscribing for Ordinary Shares, valued at the average 30-day closing price on the last practicable date as the deferred consideration falls due.

   8          Contract Assets and liabilities 
 
                        Contract      Contract 
                          assets   liabilities 
                         GBP'000       GBP'000 
 
As at 31 October 2021     14,723         (282) 
                        ========  ============ 
 
As at 31 October 2020     14,154         (160) 
                        ========  ============ 
 
As at 30 April 2021       13,900       (1,243) 
                        ========  ============ 
 

Contract assets

Contract assets consist of unbilled revenue in respect of professional services performed to date.

Contract assets in relation to non-contingent work are billed at appropriate intervals, normally on a monthly basis in arrears, in line with the performance of the services and engagement obligations. Where such matters remain unbilled at the period end the asset is valued on a contract-by-contract basis at its expected recoverable amount.

Contract assets in relation to contingent work are billed at a point in time once the uncertainty over the contingent event has been satisfied and all performance obligations satisfied, such that it is no longer contingent, these matters are valued based on the expected recoverable amount. Due to the complex nature of these matters, they can take a considerable time to be finalised therefore performance obligations may be settled in one period but the matter not billed until a later financial period. Until the performance obligations have been performed the Group does not recognise any contract asset value at the year end.

Contract liabilities

When matters are billed in advance or on a basis of a monthly retainer, this is recognised in contract liabilities and released over time when the services are performed.

   9             Trade and other receivables 
 
                    31 October  31 October  30 April 
                          2021        2020      2021 
                       GBP'000     GBP'000   GBP'000 
 
Trade receivables       38,059      31,065    36,680 
Prepayments              3,121       1,916     5,699 
Other receivables          210         133       714 
                    ----------  ----------  -------- 
                        41,390      33,114    43,093 
                    ==========  ==========  ======== 
 
   10         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 2021    31 October 2020      30 April 2021 
                                                       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 long-term bank loan                             -         -    1,895     1,895        -         - 
                                                          -         -    1,895     1,895        -         - 
                                                    =======  ========  =======  ========  =======  ======== 
 
Current liabilities 
Unsecured long-term bank loan                             -         -      947       947        -         - 
Unsecured short-term bank loan                            -         -      665       665        -         - 
Loans due to former partners of Gateley Tweed LLP         -         -      266       266        -         - 
                                                    -------  --------  -------  --------  -------  -------- 
                                                          -         -    1,878     1,878        -         - 
                                                    =======  ========  =======  ========  =======  ======== 
 

On 8 June 2015, Gateley Plc entered into two new loan agreements of GBP5m each, GBP10m in total. On 28 October 2018 these existing loans were re-negotiated and additional loans totalling GBP3 million were entered into. The balance of these loans were repaid in full by the Company in April 2021.

   11         Trade and other payables 
 
                                             31 October  31 October  30 April 
                                                   2021        2020      2021 
                                                GBP'000     GBP'000   GBP'000 
Current 
Trade payables                                    5,878       4,988     6,086 
Other taxation and social security payable        8,667      10,071     9,641 
Other payables                                      889         184       582 
Contingent consideration                            235         579       135 
Accruals and deferred income                      3,634       2,529    12,588 
                                             ----------  ----------  -------- 
                                                 19,303      18,351    29,032 
                                             ==========  ==========  ======== 
 
                                                GBP'000     GBP'000   GBP'000 
Non-current 
Other payables                                      120         130       120 
Contingent consideration                              -         812         - 
                                             ----------  ----------  -------- 
                                                    120         942       120 
                                             ==========  ==========  ======== 
 

Contingent consideration

GBP0.1m of current contingent consideration represents the earn-out sums due to the sellers of Tozer Gallagher LLP.

All contingent consideration amounts have been calculated based on the Groups expectation of what it will pay in relation to the earn-out clause of the relevant 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 capped at the maximum earn-out amount stated in the purchase agreement.

   12         Share based payments 

Group

At the period end the Group has three share-based payment schemes in operation and approved a new Long-Term Incentive Plan (LTIP) to replace our existing SARS's scheme in January 2020.

Long Term Incentive Plan ('LTIP')

The Group has introduced an LTIP for the benefit of Executive Directors and Senior management. Awards under the LTIP may be in the form of an option granted to the participant to receive ordinary shares on exercise dependent upon the achievement of profit related performance conditions.

Performance conditions

Options granted under the LTIP are only exercisable subject to the satisfaction of the following performance conditions which will determine the proportion of the option that will vest at the end of the three-year performance period. The awards will be subject to an adjusted fully diluted earnings per share performance measure as described in the table below:

 
              Adjusted, fully diluted earnings per                       Amount Vesting % 
               Share Compound Annual Growth Rate (CAGR) 
               over the three year period ending 30 
               April 2023 
              Below 5%                                                          0% 
                                                         ----------------------------------- 
              5%                                                                25% 
                                                         ----------------------------------- 
              Between 5% and 10%                                       Straight line vesting 
                                                         ----------------------------------- 
              Above 10%                                                        100% 
                                                         ----------------------------------- 
 

The options will generally be exercisable after approval of the financial statements during the year of exercise. The performance period for any future awards under the LTIP will be a three-year period from the date of grant. Vested and unvested LTIP awards are subject to a formal malus and clawback mechanism.

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 share at the price on the date of the grant.

The Groups final Stock Appreciation Rights Scheme ('SARS') options lapsed in the year ending 30 April 2021.

The annual awards granted under the schemes are summarised below:

 
               Weighted  Weighted  Originally  Lapsed at  Exercised   At 1 May  Granted     Lapsed  Exercised      At 31 
                average   average     granted   30 April      at 30       2021   during     during     during    October 
              remaining  exercise                   2021      April                 the     period     period       2021 
            contractual     price                              2021              period 
                   life 
                  Years       GBP      Number     Number     Number     Number   Number     Number     Number     Number 
LTIPS 
LTIPS 
 20/21 - 
 22 July 
 2020               1.6   GBP1.43   1,405,766   (38,339)          -  1,367,427        -   (67,094)         --  1,300,333 
                                   ----------  ---------  ---------  ---------  -------  ---------  ---------  --------- 
 
 SAYE 
SAYE 18/19 
 - 21 
 September 
 2018                 0   GBP1.33     620,335  (168,366)               451,969        -  (159,169)          -    292,800 
SAYE 19/20 
 - 1 
 October 
 2019               0.8   GBP1.28     770,787   (73,964)               696,823        -          -          -    696,823 
SAYE 20/21 
 - 6 
 November 
 2020               1.9   GBP1.02   2,337,353   (72,700)             2,264,653        -   (45,099)          -  2,219,554 
SAYE 21/22 
 - 17 
 September 
 2021               2.9   GBP1.70           -          -                     -  673,077      (105)          -    672,972 
                                    3,728,475    315,030             3,413,445  673,077  (204,373)          -  3,882,149 
                                   ----------  ---------  ---------  ---------  -------  ---------  ---------  --------- 
CSOPS 
CSOPS 
 17/18 - 3 
 October 
 2017                 0   GBP1.65     581,162  (153,017)          -    428,145        -   (26,603)  (401,542)          - 
CSOPS 
 18/19 - 
 24 
 October 
 2018                 0   GBP1.44     812,131  (141,663)          -    670,468        -   (12,500)          -    657,968 
CSOPS 
 20/21 - 7 
 July 2020          1.6   GBP1.35     976,797   (57,411)          -    919,386        -   (97,469)          -    821,917 
                                    2,370,090    352,091             2,017,999        -  (136,572)  (401,542)  1,479,885 
                                   ----------  ---------  ---------  ---------  -------  ---------  ---------  --------- 
 

During the prior half-year period to 31 October 2020, 451,173 CSOP options became eligible to exercise once the share price exceeds GBP1.65. At 31 October 2020 no CSOP options had been exercised. During the period to 31 October 2021 401,542 CSOP options were exercised. The total accrued IFRS2 charge was GBP95,780.

During the prior half-year period to 31 October 2020, 358,865 SAYE 16/17 options became eligible to exercise once the share price exceeded GBP1.33. At the 31 October 2020 no SAYE options had been exercised. 358,865 new 10p shares with a nominal value of GBP35,865 were issued on 6 January 2021 following which 172,292 options were exercised with the remaining 186,573 options being cancelled. The total accrued IFRS2 charge was GBP155,381.

During the period 292,800 SAYE 17/18 options became eligible to exercise once the share price exceeded GBP1.27. At the 31 October 2021 no SAYE options had been exercised of a potential 292,800 new shares issued via a block listing in order to fully satisfy all possible options. 292,800 new 10p shares with a nominal value of GBP29,280 were issued on 22 October 2021. The total accrued IFRS2 charge was GBP135,000.

On 17 September 2021 a total of 673,077 options were granted under the 21/22 SAYE scheme using an exercise price of GBP1.70.

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 year are detailed below:

 
                                          CSOP      CSOP      SAYE      SAYE      SAYE    LTIP 
 
Grant date                              7/7/20  24/10/18   17/9/21   6/11/20   30/9/19   22/7/20 
Share price at date of grant          GBP1.42p  GBP1.44p  GBP2.12p  GBP1.27p  GBP1.64p   GBP1.44 
Exercise price                        GBP1.42p  GBP1.44p  GBP1.70p  GBP1.02p  GBP1.27p   GBP1.44 
Volatility                                 35%       24%       35%       35%       35%       35% 
Expected life (years)                      3.3       3.3       3.3       3.3       3.3       3.3 
Risk free rate                              1%        1%        1%        1%        1%        1% 
Dividend yield                              4%      4.5%        3%        4%        4%        4% 
 
Fair value per share 
Market based performance condition    GBP0.24p  GBP0.16p  GBP0.35p  GBP0.33p  GBP0.37p  GBP1.19p 
Non-market-based performance 
 condition/no performance condition                    -         -         -         -      100% 
 

Expected volatility was determined by using historical share price data of the Company since it listed on 8 June 2015. The expected life used in the model has been based of managements expectation of the minimum and maximum exercise period of three and three and a half years, respectively.

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.

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END

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