RNS Number : 6664Z
Gateley (Holdings) PLC
14 January 2020
14 January 2020
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
Gateley (Holdings) Plc
("Gateley", the "Group" or the "Company")
Half Year Results for the six months ended 31 October 2019
Increased breadth and depth delivering strong first half performance
Gateley (AIM:GTLY), the legal and professional services group, is pleased to announce its unaudited results for the six months ended 31 October 2019 ("the Period"), demonstrating a strong performance with double digit growth in profitability and revenue.
Financial Highlights
·
Revenue increased by 11.8% (10.5% organic) to £51.8m (H1 19: £46.4m)
·
Revenue derived 93.7% from legal and 6.3% from non-legal services (H1 19: 94.8%, 5.2%)
·
Profit before tax increased by 10.2% to £5.5m (H1 19: £5.0m)
·
Profit after tax increased by 12.0% to £4.4m (H1 19: £3.9m)
·
Basic EPS increased by 10.11% to 3.92p (H1 19: 3.56p), underlying fully diluted EPS increased by 8.75% to 4.60p (H1 19: 4.23p) *
·
Strong cash generation from operations of £6.3m (H1 19: £4.3m)
·
Robust balance sheet, net assets increased £7.9m to £31.0m (H1 19: £23.1m) and net debt down £6m to £2.1m (H1 19: £8.2m)
·
Proposed interim dividend up 11.5% to 2.9p per share (H1 19: 2.6p)
* Underlying fully 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 year (note 5)
Operational Highlights
·
Further investment in driving organic growth with average fee earning staff increasing by 21.9% to 673 (H1 19: 552) and average total staff increasing by 15.2% to 998 (H1 19: 866)
·
Total staff as at the date of this announcement of 1,038 (H1 19: 928)
·
New five-year Orderly Market Agreement in place covering the period from June 2020 to June 2025
·
New staff Long Term Incentive Plan ("LTIP"), replacing the previous Stock Appreciation Rights Scheme ("SARS") and providing both long-term incentives and clarity on potential dilution
·
Two complementary acquisitions completed: -Persona Associates Limited, land referencing consultants, in July 2019 -T-three Group, human capital consultants, in December 2019
·
Awarded UK Law firm of the year 2019 at the British Legal Business Awards
Michael Ward, CEO of Gateley, said:
"The Board is pleased with the Group's first half performance, delivering another strong set of results and reflecting our broad, well-balanced service offering and our ability to both expand and invest for the long-term benefit of the Group's stakeholders. Investment in our staff complement continues, with employee headcount now exceeding 1,000. As we grow, we continue to support our employee aspirations through both exciting career progression opportunities in an expanding business together with the delivery of meaningful shareholdings being achieved via our range of share schemes.
"Exceeding our client's expectations remains at the forefront of our service ethos and true to our culture and beliefs. We believe the Group is well placed to continue to expand. We remain confident that the business is well positioned to deliver in line with 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 Head of Investor Relations
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 700 professional advisers and employ over 1,000 people across offices located in Belfast, Birmingham, Cambridge, Guildford, Leeds, Leicester, London, Manchester, 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/@GateleyPLC.
Chief Executive Officer's Review
Introduction
I am delighted with the performance of our legal and professional services group in the first half of the financial year, where not only has our core legal services business performed well but we have continued to seize opportunities to invest for future growth through further expanding our staff complement and diversifying our income streams through two more strategic acquisitions.
Persona Associates Limited (Persona) and T-three Group Limited (T-three) have joined the Gateley Group since our last year end. I'm confident they have widened our go-to-market options and strengthened two previous non-legal acquisitions, those of Gateley Hamer Limited (Hamer) and Kiddy and Partners (Kiddy). I expect both new businesses to enhance the delivery capabilities of all our previous acquisitions and importantly our legal service lines by offering choice and opportunity to clients through the creation of two very unique business offerings in attractive markets with exciting prospects.
As we approach our fifth year on AIM, having been the first UK commercial law firm to take the bold step of changing our business structure to enhance the opportunities available to the Group I am pleased to be handing the CEO role of the business over to Rod Waldie at a time of exciting opportunity in the legal and professional services market. During our time on AIM clients, investors and staff have all benefitted from our strong performance that has seen us grow turnover and profits by over 70%, double our share price and provide even further diversification away from being just a purely legal services business. The transition to Rod's leadership was announced in July 2019 and I'm pleased to say that the business is on course to effect a smooth transition from 1 May of this year. Succession planning is an important part of Gateley's corporate governance and is key to ensuring that the prosperity and collaborative culture of the business is maintained over the long term.
We pride ourselves on being a forward-thinking business, which provides straight-talking advice to a wide range of clients and delivers sustainable profitable growth and income returns to our shareholders.
Financial Results
Our strategy and cultural advantage continues to deliver growth in revenue, profit and cash generation. Our diverse revenue streams have grown by 11.8% in the Period, predominantly organically, whilst profit before tax increased by 10.2% and profit after tax by 12.0%. Strong cash generation has resulted in net debt at 31 October 2019 of £2.1m, the lowest level since admission to AIM. Our investment in recruitment and branding provides an ever-stronger base from which to move forward as a team. We strengthen and build our national teams carefully, investigating each business and investment case and also ensuring a good cultural fit.
The strength in depth of our core legal business creates appealing opportunities across many business types and sectors. Whilst transactional activity levels across Corporate, Banking and Financial Services and Property segments remain significant, our long-established expertise in Employment and Business Services, such as litigation and dispute resolution work, has produced significant returns against a backdrop of a challenging property market and unprecedented political uncertainty. The strength of our connections nationally, across boardrooms and intermediaries, and our reputation for quality teams with a genuine focus on client service, result in repeat instructions across many sectors.
The Board is committed to maintaining a progressive dividend policy and is pleased to declare a further increase of 11.5% in the level of the interim dividend to 2.9 pence per ordinary share (H1 19: 2.6 pence). The interim dividend will be paid on 31 March 2020 to shareholders on the register at the close of business on 21 February 2020. The ex-dividend date will be 20 February 2020.
Operational Review
It was extremely pleasing to see Gateley win the 2019 UK Law firm of the year at the British Legal Business Awards in November 2019. In addition we once again topped the Experian MarketIQ league tables, as the leading legal deal advisor in the UK based on volume, and received recognition through numerous regional and national corporate awards.
In the Period we saw significant growth in our fee earning staff, ending the period at record levels. We established a Private Wealth team operating nationally out of London, and expanded our regional Housebuilding practice across the UK. We bolstered our Corporate team in London and added strategic Real Estate expertise in growing office locations in Leicester and Leeds. The reach of our litigation and restructuring legal teams was also expanded during the Period with work predominately sourced from overseas, where expertise in the UK legal system is a priority for clients.
We recruited five new partners in the Period and promoted six staff members to partner, demonstrating the ongoing attractiveness of Gateley to partners wishing to develop or establish long term careers with us. Our team approach to sharing clients and opportunities, enhanced by our non-legal complementary businesses, remains a significant draw at the top end of the recruitment market. Whilst growth generated from laterally recruited partners can sometimes create a temporary lag in activity and ultimately fees, due to individual's restrictive covenants or the time it takes for new partners' former clients to change legal service provider, we remain confident of the robustness in our take-on procedures to ensure our recruits are the right long-term cultural fit.
Our existing share schemes are now delivering tangible benefits to staff as reward for their loyalty and performance. Our second Stock Appreciation Rights Scheme ("SARS") vested on 1 October 2019, resulting in over 0.9m additional new shares (net of tax liabilities) being awarded to partner level staff whilst our first SAYE scheme vested on 1 October 2019, delivering a 70% return on staff investments resulting in 0.8m shares being received across all staff levels. Our initial middle management CSOP reward scheme matured on 20 December 2019, this scheme is aimed at beginning the shareholding journey of our dedicated junior lawyers, professionals and management level support staff, which will also provide meaningful returns for the hard work of staff over the last three years.
As announced on 17 October 2019, the Group has also introduced a new five-year Orderly Market Agreement that will commence at the end of the current five-year agreement on 8 June 2020 and expire on 8 June 2025. We remain focused on investing in the right people to join the Gateley team and our plc status supports this by providing an attractive alternative to traditional law firm ownership models. A new Long-Term Incentive Plan ("LTIP") has also been introduced to replace our existing SARS, creating greater alignment to the profit performance of the Group and greater clarity over the impact of dilution going forward.
We have committed to a new ten-year lease on our second largest office, Manchester and will shortly be relocating our 90+ strong Guildford team to larger nearby offices to facilitate further expansion of services across the south of England, also on a ten-year lease. We have taken office space back from a long-standing sub-tenant in Paternoster Square, London due to the continued growth of the office, including the facilitation of London bases for Kiddy, Hamer and Capitus. Our existing London base provides niche service lines and acts as a gateway for our national and international clients.
Acquisitions
Our acquisition strategy focuses on niche businesses which can complement our core legal services offering. All our acquisitions to date have been in growth phase, with their owners seeking the right business partner to enhance the next stage of their growth and provide a platform for integrated expansion. Our established culture and national network help achieve this. Our wide and diverse client base continues to benefit from the added value services provided by our enlarged legal and professional services group. We have this year focused on expanding two of our established acquisitions, Hamer and Kiddy, by acquiring the strategically aligned and established businesses of Persona and T-three.
We were delighted to welcome the Persona team on board at the end of July 2019. Persona and Hamer have worked together on a number of long-term projects in recent years, and there are many synergies that will benefit clients. There is also an opportunity for Persona to develop within our Property group, as Hamer has done in the last three years, and we look forward to supporting its future development in line with our growth plans.
More recently, in December 2019, we were delighted to welcome the T-three team to our growing Group. We see huge potential from the expansion of our Human Capital consultancy services, as T-three and Kiddy complement each other's strengths. Both businesses sit within our Employment, Pensions and Benefits group.
All our acquisitions have been immediately earnings enhancing.
Current trading and outlook
Opportunities for growth continue to present themselves and the Board strongly believes that the potential remains to broaden our proposition for our clients and investors. We continue to strive to enhance our offering for the benefit of all stakeholders and build upon our proven reputation and track record for the delivery of a quality service, and strong revenue and profit growth with high levels of cash generation.
As we approach the end of our first five years on AIM, I am pleased with how the business has performed and delivered on its to commitments to staff, clients and investors. The Board remains confident that Gateley is well positioned to deliver a performance for the full year in line with market expectations.
Michael Ward
CEO
14 January 2020
Finance Director's Review
Financial Highlights
Revenue for the period increased by 11.8% to £51.8m (H1 19: £46.4m) of which organic growth was 10.5%. Revenue from the Group's core legal services was £48.6m (H1 19 £44.0m) and from non-legal services was £3.2m (H1 19 £2.4m). Following the acquisition of T-three in December 2019, non-legal revenues are anticipated to generate not less than £14m in the year to 30 April 2020. The Group continues to demonstrate annual revenue and profit growth, whilst actively seeking opportunities for greater strategic expansion. Headcount once again increased to meet client demand and we continue to attract senior (revenue generating) hires. We have secured a number of good own commercial property deals in Manchester and Guildford that will increase our operational capacity and reduce cash outflow over the medium-term.
Our strong performance in Mergers & Acquisitions and Private Equity have been complemented by growth in our revenues from Employment, Pensions and Benefits and Business Services. Kiddy continues to perform well and will be further complemented following the acquisition of T-three in December 2019. Cross-selling remains a primary focus across all our business lines and our diversification across complementary services continues to create opportunities across the Group. Against the backdrop of a more generally uncertain commercial property market during 2019 our Property group has demonstrated marginal revenue growth of 1.5% during the period which we believe outperforms the wider market and follows a strong performance during the equivalent H1 19 period. Gateley is well placed to take advantage of opportunities at both regional and national level in the UK's construction, property development and housing markets which rely upon long-term specialist legal support. Our acquisition of Persona, which specialises in land referencing consultancy also gives us much earlier visibility on long term infrastructure projects.
Total expenses increased by 10.9% to £45.9m (H1 19: £41.4m) due to continued organic expansion across services lines and geographical locations to meet growing client demand and service delivery aspirations, staying ahead of technology advancements and capitalising on the significant opportunities being created. Growth in expenses has been driven mainly by the expansion in staff numbers. Average numbers of legal and professional staff rose by 21.9% to 673 (H1 19: 552) whilst support staff numbers rose 3.5% to 325 (H1 19: 314). Personnel costs, including increased share-based payment charges, rose by 10.5% from £29.5m to £32.5m. However, personnel costs as a percentage of fees reduced to 62.8% of revenue from 63.5% in H1 19. Excluding share-based payment charges, staff costs also fell to 61.8% of revenue from 62.7% in H1 19.
Other operating expenses increased by 11.6% to £13.5m (H1 19: £12.1m). This increase was predominately due to £0.4m of Kiddy operating costs as H1 20 includes six months of trading compared with four months in H1 19, £0.1m of costs from four months of overheads following the acquisition of Persona, together with planned overhead expenditure on information technology (£0.5m), rebranding (£0.2m), and increased travel and accommodation costs (£0.1m) together with an increase in marketing activity in H1 19 compared to the same period last year (£0.1m).
Profit before tax (PBT) of £5.5m increased by 10.2% from £5.0m resulting in a PBT margin of 10.7% (H1 19: 10.8%).
Earnings Per Share
Basic earnings per share increased by 10.11% to 3.92p (H1 19: 3.56p). Underlying diluted earnings per share increased by 8.75% to 4.60p (HY 19: 4.23p).
Taxation
The effective rate of taxation on profit on ordinary activities was 21.1% (HY 19: 22.4%). The deferred taxation liability carried forward at H1 20 was £0.6m (H1 19: £0.6m). The Group has made payments on account of tax totalling £1.7m in the period (H1 19: £1.4m).
Dividend
The Board's dividend policy reflects the strong long-term cash generation and earnings potential of the Group, distributing up to 70% of profit after tax (PAT) each year to shareholders. The Board proposes an interim dividend of 2.9p (H1 19: 2.6p) per share that will be paid on 31 March 2020 to shareholders on the register at the close of business on 21 February 2020. The shares will go ex-dividend on 20 February 2020. This ensures shareholders' dividend growth is in line with PAT growth of 12.0% (H1 19: 18.0%).
Acquisitions
Persona was acquired for an initial consideration of £0.4m rising to a maximum of £0.45m following the successful relocation of this Horsham based land referencing consultancy and its staff to our new Guildford office. T-three was acquired after the period end for an initial consideration of £3.17m rising to a maximum £4.07m based on performance over the next two full financial years ending April 2021 and 2022.
Net assets and net debt
The Group net asset position has increased by £7.9m to £31.0m (HY 19: 23.1m) due to the following movements:
·
£1.3m increase in non-current assets due to intangible assets
·
£4.9m increase in total current assets resulting from £2.5m more trade and other receivables available for collection and £2.4m of cash at the bank
·
£4.6m decrease in total liabilities, before IFRS 16 lease liabilities, mainly as a result of the repayment of total debt
Total net debt decreased to £2.1m from £8.2m at H1 19 due to strong cash generation, and in contrast to last year, cash was not used to provide short term funding of the Group Employee Benefit Trust during the period.
Debt at the Period end comprises of the following items:
·
Unsecured term loans of £4.4m (H1 19: £7.0m),of which£2.6m is repayable within the next 12 months, followed by a further £1.8m on a quarterly basis to September 2023
·
Loans from former partners of acquired businesses £0.2m (H1 19: £0.9m)
Working capital and cash flow
Trade receivables totalled £32.2m compared to £30.5m at the end of H1 19. The additional £1.7m in trade debtors is proportionate with the growth of the Group. Overall the Group has seen an improvement of 9 debtor days due to a focus on working capital and collection processes. The Board are pleased with the progress made here but believe we can improve further as a result of initiatives being run across the Group.
At the period end unbilled revenue recognised in its statutory accounts from time recorded on non-contingent work totalled £12.2m or 11.2% of revenue recognised over the last 12 months compared to 12.2% for the previous H1 19 and 10.3% at the end of FY19 where the billing cycle is most active ahead of the Group's April year end.
Cash generated during the period from operations was £6.3m (H1 19: £4.3m) which represents 143.8% (H1 19: 110.5%) of profit after taxation. Capital expenditure decreased to £0.9m (H1 19: £1.3m). Cash outflow from financing activities of £5.9m was similar to outflows of £5.7m at H1 19, as higher dividend and loan repayments were offset by the receipt of cash from the sale of shares issued and subsequently sold by various option holders in order to settle options exercised-related personal tax liabilities. The Group continues to operate with a low level of gearing and fixed term debt. This position is reviewed regularly to ensure appropriate funding levels are in place to support the Group's expansion.
Neil Smith
Finance Director
14 January 2020
Gateley (Holdings) Plc
Consolidated income statement and other comprehensive income
For the 6 months ended 31 October 2019
Note
Unaudited 6 months to 31 October 2019
Unaudited 6 months to 31 October 2018
Audited 12 months to 30 April 2019
£'000
£'000
£'000
Revenue
2
51,826
46,370
103,471
Other operating income
127
150
313
Personnel costs
4
(32,543)
(29,454)
(63,412)
Depreciation - Property, plant and equipment
(575)
(548)
(1,122)
Depreciation - Right-of-use asset*
(1,655)
-
-
Amortisation
7
(534)
(645)
(1,406)
Other operating expenses *
(10,750)
(10,912)
(21,974)
Operating profit
5,896
4,961
15,870
Net financing (expense)/income *
(350)
72
75
Profit before tax
5,546
5,033
15,945
Taxation
(1,172)
(1,126)
(2,904)
Profit for the period after tax attributable to equity holders of the parent
4,374
3,907
13,041
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences
- Exchange differences on foreign branch
-
59
(25)
Profit for the financial period and total comprehensive income all attributable to equity holders of the parent
4,374
3,966
13,016
Statutory earnings per share (pence)
Basic earnings per share
5
3.92
3.56
11.83
Diluted earnings per share
5
3.86
3.50
11.61
Dividend per share
6
2.90
2.60
8.00
* The adoption of IFRS 16 in the 6 months to 31 October 2019 resulted in an increase in depreciation of £1.655m and finance costs of £0.385m. Other operating expenses reduced by £2.077m.
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 2019
Note
Unaudited at 31 October 2019 £'000
Unaudited at 31 October 2018 £'000
Audited at 30 April 2019 £'000
Non-current assets
Property, plant and equipment
2,358
2,277
2,017
Right-of-use asset
22,421
-
-
Investment property
164
164
164
Intangible assets & goodwill
7
10,088
9,438
10,430
Other intangible assets
592
35
289
Other investments
55
85
85
Total non-current assets
35,678
11,999
12,985
Current assets
Trade and other receivables
8
45,937
43,529
47,206
Deferred tax asset
49
-
428
Cash and cash equivalents
2,420
-
2,887
Total current assets
48,406
43,529
50,521
Total assets
84,084
55,528
63,506
Non-current liabilities
Other interest-bearing loans and borrowings
9
(1,785)
(4,522)
(3,076)
Other payables
10
(695)
(964)
(983)
Deferred tax liability
(578)
(566)
(388)
Provisions
(339)
(505)
(339)
Lease liability
(21,536)
-
-
Total non-current liabilities
(24,933)
(6,557)
(4,786)
Current liabilities
Bank overdraft
-
(352)
-
Other interest-bearing loans and borrowings
9
(2,766)
(3,280)
(3,044)
Trade and other payables
10
(21,371)
(20,421)
(23,727)
Provisions
(130)
(275)
(291)
Current tax liabilities
(275)
(1,560)
(1,074)
Lease liability
(3,611)
-
-
Total current liabilities
(28,153)
(25,888)
(28,136)
Total liabilities
(53,086)
(32,445)
(32,922)
NET ASSETS
30,998
23,083
30,584
EQUITY
Share capital
11,377
11,086
11,086
Share premium
7,244
4,069
6,755
Merger reserve
(9,950)
(9,950)
(9,950)
Other reserves
2,501
4,296
1,770
Treasury reserve
(99)
(1,729)
(1,057)
Translation reserve
9
82
(2)
Retained earnings
19,916
15,229
21,982
TOTAL EQUITY
30,998
23,083
30,584
Gateley (Holdings) Plc
Consolidated cash flow Statement
for the 6 months ended 31 October 2019
Note
Unaudited 6 months to 31 October 2019
Unaudited 6 months to 31 October 2018
Audited 12 months to 30 April 2019
£'000
£'000
£'000
Cash flows from operating activities
Profit for the period after tax
4,374
3,907
13,041
Adjustments for:
Depreciation and amortisation
2,764
1,193
2,528
Financial income
(248)
(73)
(523)
Financial expense
598
1
448
Exceptional items
-
61
-
Equity settled share-based payments
510
379
655
Profit on disposal of property, plant and equipment
-
-
(3)
Write off of investment
30
-
-
Tax expense
1,172
1,126
2,904
9,200
6,594
19,050
Decrease/(increase) in trade and other receivables
1,318
89
(3,946)
(Decrease)/increase in trade and other payables
(2,433)
(1,095)
37
(Decrease)/increase in provisions
(161)
175
25
Cash generated from operations
7,924
5,763
15,166
Tax paid
(1,663)
(1,445)
(3,075)
Net cash flows from operating activities
6,261
4,318
12,091
Investing activities
Acquisition of property, plant and equipment
(598)
(591)
(1,010)
Acquisition of other intangible assets
(303)
-
(276)
Cash received on disposal of property, plant and equipment
-
-
3
Consideration paid on acquisition of Kiddy & Partners
-
(426)
(426)
Consideration paid on acquisition of GCL Solicitors, net of cash acquired
-
(2,016)
(2,016)
Consideration paid on acquisition of IIS, net of cash acquired
-
-
(84)
Deferred consideration paid - acquisition of subsidiary
-
(235)
(236)
Consideration paid on acquisition of Persona Associates Limited, net of cash acquired
(3)
-
-
Net cash outflow frominvesting activities
(904)
(3,268)
(4,045)
Financing activities
Interest and other financial income received
248
73
523
Interest and other financial income paid
(213)
(1)
(448)
Dividends paid
6
(6,007)
(5,264)
(8,118)
Receipt of new term bank loans
-
2,970
2,970
Repayment of term bank loans
(1,283)
(980)
(2,278)
Repayment of loans from former members of GCL Solicitors & Directors of IIS
(286)
(574)
(904)
Funding by EBT of SARS shares
-
(1,866)
(1,863)
Acquisition of own shares
(486)
-
(109)
Proceeds from sale of own shares
729
-
767
Exceptional items
-
(61)
-
Amounts received for SARS shares issued
1,474
-
-
Net cash outflow from financing activities
(5,824)
(5,703)
(9,460)
Net decrease in cash and cash equivalents
(467)
(4,653)
(1,414)
Cash and cash equivalents at beginning of period
2,887
4,301
4,301
Cash andcash equivalents/(bank overdraft) at end of period
2,420
(352)
2,887
Gateley (Holdings) Plc
Consolidated statement of changes in equity
for the 6 months ended 31 October 2019
Share capital
Share premium
Merger reserve
Other reserve
Treasury reserve
Retained earnings
Foreign currency translation reserve
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 1 May 2018
10,688
4,576
(9,950)
1,547
(15)
16,119
23
22,988
Adjustment from adoption of IFRS 9 (net of tax)
-
-
-
-
-
(353)
-
(353)
Restated balance at 1 May 2018
10,688
4,576
(9,950)
1,547
(15)
15,766
23
22,635
Comprehensive income:
Profit for the year
-
-
-
-
-
13,041
-
13,041
Exchange rate differences
-
-
-
-
-
-
(25)
(25)
Total comprehensive income
-
-
-
-
-
13,041
(25)
13,016
Transaction with owners recognised directly in equity
Issue of share capital
398
2,151
-
223
-
-
-
2,772
Recognition of tax benefit on gain from equity settled share options
-
-
-
-
-
726
-
726
Purchase of own shares at nominal value
-
-
-
-
-
(242)
-
(242)
Reclassification of gain on own shares
-
28
-
-
-
(28)
-
-
Sale of treasury shares
-
-
-
-
791
-
-
791
Purchase of treasury shares
-
-
-
-
(1,833)
-
-
(1,833)
Dividend paid
-
-
-
-
-
(8,118)
-
(8,118)
Share based payment transactions
-
-
-
-
-
655
-
655
Deferred tax on equity settled element of share-based payment charge
-
-
-
-
-
182
-
182
Total equity at 30 April 2019
11,086
6,755
(9,950)
1,770
(1,057)
21,982
(2)
30,584
At 1 May 2018 (unaudited)
Comprehensive income:
10,688
4,576
(9,950)
1,547
(15)
16,119
23
22,988
Profit for the period
-
-
-
-
-
3,907
-
3,907
Exchange rate differences
-
-
-
-
-
-
59
59
Total comprehensive income
-
-
-
-
-
3,907
59
3,966
Transaction with owners recognised directly in equity
Sale of treasury shares
-
-
-
-
(1,714)
88
-
(1,626)
Issue of shares
398
-
-
2,374
-
-
-
2,772
Reclassification of loss on own shares
-
(507)
-
-
-
-
-
(507)
Dividend paid
-
-
-
-
-
(5,264)
-
(5,264)
Share based payment transactions
-
-
-
375
-
379
-
754
Total equity at 31 October 2018
11,086
4,069
(9,950)
4,296
(1,729)
15,229
82
23,083
Gateley (Holdings) Plc
Consolidated statement of changes in equity
for the 6 months ended 31 October 2019
Share capital
Share premium
Merger reserve
Other reserve
Treasury reserve
Retained earnings
Foreign currency translation reserve
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 1 May 2019 (unaudited)
11,086
6,755
(9,950)
1,770
(1,057)
21,982
(2)
30,584
Adjustment from adoption of IFRS 16 (net of tax)
-
-
-
-
-
(702)
-
(702)
Restated balance at 1 May 2019
11,086
6,755
(9,950)
1,770
(1,057)
21,280
(2)
29,882
Comprehensive income:
Profit for the year
-
-
-
-
-
4,374
-
4,374
Exchange rate differences
-
-
-
-
-
-
11
11
Total comprehensive income
-
-
-
-
-
4,374
11
4,385
Transaction with owners recognised directly in equity
Issue of share capital
291
489
-
731
-
-
-
1,511
Recognition of tax benefit on gain from equity settled share options
-
-
-
-
-
228
-
228
Release of deferred tax
-
-
-
-
-
(469)
-
(469)
Sale of treasury shares
-
-
-
-
1,517
-
-
1,517
Purchase of treasury shares
-
-
-
-
(559)
-
-
(559)
Dividend paid
-
-
-
-
-
(6,007)
-
(6,007)
Share based payment transactions
-
-
-
-
-
510
-
510
Total equity at 30 April 2019
11,377
7,244
(9,950)
2,501
(99)
19,916
9
30,998
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 2019
1. Basis of preparation
These interim unaudited financial statements for the six months ended 31 October 2019 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 2019, with the additional application of IFRS 16 Leases.
1.1 Accounting policies
Leases
IFRS 16 replaces the previous guidance on lease accounting, which includes IAS 17 'Leases' and IFRIC 4 'Determining whether an arrangement contains a lease'. The standard is effective for periods beginning on or after 1 January 2019 and has been applied from 1 May 2019. The standard requires lessees to account for most contracts using the on-balance sheet model, with the distinction between operating and finance leases being removed. There is no change to revenue recognition methodology for lessor operating leases. The standard provides certain exemptions from recognising leases on the balance sheet, including where the asset is of low value or the lease term is twelve months or less. In addition, the standard makes changes to the definition of a lease to focus on, amongst other things, which party has the right to direct the use of the asset.
Under IFRS 16 the Group will be required to recognise right-of-use assets and lease liabilities on the balance sheet. The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any re-measurement of the lease liability. Liabilities are measured based on the present value of future lease payment over the lease term discounted at the Group's incremental borrowing rate. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of the lease modifications, amongst others.
The Group has applied the modified retrospective approach and therefore has not restated comparatives for previous reporting periods. On adoption of the standard the Group has elected to use the following practical expedients:
- The Group has elected to recognise those leases identified as an operating lease under IAS 17 without cause to reassess each lease separately
- The Group has elected to treat leases with similar characteristics as a portfolio of leases, applying a single discount rate to them all
- The Group has excluded initial direct costs from the measurement of the right-to-use asset
- The Group has used hindsight in determining the lease term where the contract contains options to extend or terminate the lease
- The Group have elected not to recognise a right-to-use asset or lease liability for leases with a remaining term of 12 months or less
- The Group has elected not to recognise a right-to-use asset or lease liability for leases of low value assets or car leases where these are not considered material to the Group.
Impact on the balance sheet
30 April 2019 £'000
IFRS 16 Impact £'000
1 May 2019 £'000
Non-current assets
Property, plant and equipment
2,017
-
2,017
Right-of-use asset
-
24,360
24,360
Investment property
164
-
164
Intangible assets & goodwill
10,430
-
10,430
Other intangible assets
289
-
289
Other investments
85
-
85
Total non-current assets
12,985
24,360
37,345
Current assets
Trade and other receivables
47,206
(103)
47,103
Deferred tax asset
428
-
428
Cash and cash equivalents
2,887
-
2,887
Total current assets
50,521
(103)
50,418
Non-current liabilities
Other interest-bearing loans & borrowings
(3,076)
-
(3,076)
Other payables
(983)
-
(983)
Deferred tax
(388)
-
(388)
Provisions
(339)
-
(339)
Lease liability
-
(23,481)
(23,481)
Total non-current liabilities
(4,786)
(23,481)
(28,267)
Current liabilities
Other interest-bearing loans & borrowings
(3,044)
-
(3,044)
Trade and other payables
(23,727)
2,251
(21,476)
Provisions
(291)
-
(291)
Current tax
(1,074)
-
(1,074)
Lease liability
-
(3,729)
(3,729)
Total current liabilities
(28,136)
(1,478)
(29,614)
Net assets
30,584
(702)
(29,882)
Operating lease commitments disclosed at 30 April 2019
26,089
Less: short term leases recognised on a straight-line basis as expense
(326)
Add: Additional lease components recognised
3,390
Impact of discounting
(1,943)
Lease liability recognised as at 1 May 2019
27,210
Current lease liability
3,729
Non-current lease liability
23,481
27,210
Under the modified retrospective approach adopted by the Group, comparatives are not restated, the table below shows the impact of IFRS 16 on the Group's income statement for the six-month period to 31 October 2019:
IAS 17
£'000
Impact of IFRS 16 £'000
IFRS 16
£'000
Rental expense
(2,007)
2,007
-
Depreciation
-
(1,655)
(1,655)
Administrative expenses
(2,007)
352
(1,655)
Operating profit
(2,007)
352
(1,655)
Interest payable on leases
-
(385)
(385)
Profit before tax
(2,007)
(33)
(2,040)
1.2 Going concern
These interim accounts are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group remains cash generative, with a strong on-going trading performance. On 1 June 2015 the Group acquired two unsecured term loans for £5m each repayable quarterly over five years. The facilities were extended by a total of £3m in October 2018. These term loan facilities contain financial covenants which the Group is forecast to comply with for the foreseeable future. Additional overdraft facilities of up to £10m (2019: £8m) in total are also available to the Group.
1.3 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.
1.4 Cautionary statement
This document contains certain forward-looking statements in respect of the financial condition, results, operations and business of the Group. Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause the actual results of developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this document should be construed as a profit forecast.
2. Operating segments
The Chief Operating Decision Maker ("CODM") is the Strategic Board. The Group has the following five strategic divisions, which are its reportable segments. These divisions offer different products and services and are managed separately because they report different specialisms from the legal teams in those divisions.
The following summary describes the operations of each reportable segment:
Reportable segment
Operations
Banking and Financial Services
Provision of legal advice in respect of asset finance, banking and restructuring services.
Corporate
Provision of legal advice in respect of corporate, family, private client and taxation services.
Business Services
Provision of legal advice in respect of commercial, commercial dispute resolution, litigation, regulatory, shipping, transport and insurance services.
Employees, Pensions and Benefits
Provision of legal advice in respect of employment and pension services, including Entrust Pension Limited's trustee services and global mobility consultancy. Also includes Kiddy & Partners human capital consultancy, providing assessment, talent management and leadership development and International Investment Services Limited, providing consultancy services to potential UK investors.
Property
Provision of legal advice in respect of construction, planning, real estate and residential development services. Also includes Gateley Capitus Limited's tax incentives services, Gateley Hamer Limited's easement and wayleave and compulsory purchase order services and Persona Associates Limited's land referencing consultancy services.
No other financial information has been disclosed as it is not provided to the CODM on a regular basis.
3. Alternative performance measures
Underlying profit
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' 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 to 31 October 2019
6 months to 31 October 2018
12 Months 30 April 2019
£'000
£'000
£'000
Reported profit before tax
5,546
5,033
15,945
Adjustments for non-underlying items:
- Amortisation of acquired intangible assets
534
645
1,406
- Share-based payment adjustment
510
379
655
- Acquisition-related costs
-
61
61
Underlying profit before tax
6,590
6,118
18,067
6 months to 31 October 2019
6 months to 31 October 2018
12 Months 30 April 2019
£'000
£'000
£'000
Reported profit after tax
4,374
3,907
13,041
Adjustments for non-underlying items:
- Anticipated impact of IFRS 16 if it had been adopted in earlier years
-
(166)
(313)
- Amortisation of acquired intangible assets
534
645
1,406
- Share-based payment adjustment
510
379
655
- Acquisition-related costs
-
61
61
Underlying profit after tax
5,418
4,826
14,850
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.
Acquisition related costs consist of nil (2019: £0.061m) relating to one off costs incurred in making acquisitions are removed by adding to profit these actual costs in the year they are incurred.
Underlying Fully Diluted Earnings Per Share ('EPS')
The Group has introduced a new Long-Term Incentive Plan ('LTIP') share scheme that aligns share option reward distribution with compound annual growth in EPS over a three-year vesting period based on underlying trading profit after tax rather than share price. The LTIP scheme uses EPS growth based on underlying profit after tax as the most appropriately aligned profit measure that staff participating within the scheme can be held accountable against and is referred to as underlying fully diluted EPS. Profits used to calculate underlying EPS are disclosed above.
4. 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 31 October 2019
6 months to 31 October 2018
12 months to 30 April 2019
Legal and professional staff
673
552
610
Administrative staff
325
314
297
998
866
907
The aggregate payroll costs of these persons were as follows:
6 months to 31 October 2019
6 months to 31 October 2018
12 months to 30 April 2019
£'000
£'000
£'000
Wages and salaries
28,055
25,685
54,341
Social security costs
3,250
2,878
7,289
Pension costs
728
512
1,127
Share based payments expenses
510
379
655
32,543
29,454
63,412
5. Earnings per share
6 months to 31 October 2019
6 months to 31 October 2018
12 months to 30 April 2019
Number
Number
Number
Weighted average number of ordinary shares in issue, being weighted average number of shares for calculating basic earnings per share
111,577,259
109,856,888
110,207,707
Shares deemed to be issued for no consideration in respect of share based payments
1,871,872
1,920,871
2,072,862
Weighted average number of ordinary shares for calculating diluted earnings per share
113,449,131
111,777,759
112,280,569
£'000
£'000
£'000
Profit for the period after taxation and basic earnings attributable to ordinary equity shareholders
4,374
3,907
13,041
Non-underlying items
1,044
1,085
2,122
Tax on non-underlying items
(198)
(206)
(403)
Underlying earnings before non-underlying items
5,220
4,786
14,760
Earnings per share is calculated as follows:
Pence
Pence
Pence
Basic earnings per ordinary share
3.92
3.56
11.83
Diluted earnings per ordinary share
3.86
3.50
11.61
Underlying basic earnings per ordinary share
4.68
4.36
13.39
Underlying diluted earnings per ordinary share
4.60
4.23
13.15
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 to 31 October 2019
6 months to 31 October 2018
12 Months 30 April 2019
£'000
£'000
£'000
Equity shares
Final dividend in respect of 2018 (4.8p per share) - Paid 5 October 2018
-
5,264
5,264
Interim dividend in respect of 2019 (2.6p per share) - Paid 15 March 2019
-
-
2,854
Final dividend in respect of 2019 (5.4p per share) - Paid 15 October 2019
6,007
-
-
Dividends paid
6,007
5,264
8,118
The Board has approved an interim dividend of 2.9p (2018: 2.6p) per share. This dividend will be paid on 31 March 2020 to shareholders on the register at the close of business on 21 February 2020. The shares will go ex-dividend on 20 February 2020. This dividend has not been recognised as a liability in these final statements.
7. Intangible assets
Goodwill
Customer list and brand names
Total
£'000
£'000
£'000
Deemed cost
At 1 May 2018
2,676
1,638
4,314
Acquired through business combination
3,958
2,830
6,788
At 31 October 2018
6,634
4,468
11,102
At 1 May 2018
2,676
1,638
4,314
Acquired through business combination
5,729
2,786
8,515
At 30 April 2019
8,405
4,424
12,829
At 1 May 2019
8,405
4,424
12,829
Acquired through business combination
192
-
193
At 31 October 2019
8,597
4,424
13,022
Accumulated amortisation
At 1 May 2018
-
1,019
1,019
Charge for the period
-
645
645
At 31 October 2018
-
1,664
1,664
At 1 May 2018
-
1,019
1,019
Charge for the year
-
1,380
1,380
At 30 April 2019
-
2,399
2,399
At 1 May 2019
-
2,399
2,399
Charge for the period
-
534
534
At 31 October 2019
-
2,933
2,933
Net Book Value
At 31 October 2018
6,634
2,804
9,438
At 30 April 2019
8,405
2,025
10,430
At 31 October 2019
8,597
1,491
10,088
Goodwill
Goodwill is allocated to the following cash generating units
31 October 2019
31 October 2018
30 April 2019
£'000
£'000
£'000
Gateley Capitus Limited
1,515
1,515
1,515
Gateley Hamer Limited
1,161
1,161
1,161
Kiddy & Partners Limited
2,491
1,491
2,491
GCL Solicitors LLP (acquisition of trade and assets)
2,900
2,467
2,900
International Investment Services Limited
338
-
338
Persona Associates Limited
192
-
-
8,597
6,634
8,405
8. Trade and other receivables
31 October 2019
31 October 2018
30 April 2019
£'000
£'000
£'000
Trade receivables
32,238
30,447
33,909
Unbilled revenue
12,153
11,458
10,671
Prepayments
1,546
1,624
2,584
Other receivables
-
-
42
45,937
43,529
47,206
9. 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 2019
31 October 2018
30 April 2019
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
£'000
£'000
£'000
£'000
£'000
£'000
Non-Current liabilities
Unsecured bank loan
1,785
1,785
4,352
4,352
3,076
3,076
Loans from former members of GCL
-
-
170
170
-
-
1,785
1,785
4,522
4,522
3,076
3,076
Current liabilities
Unsecured bank loan
2,582
2,582
2,600
2,600
2,574
2,574
Loans from former members of GCL
156
156
680
680
425
425
Loans from Director of IIS
28
28
-
-
45
45
2,766
2,766
3,280
3,280
3,044
3,044
The unsecured overdraft facilities totalling £10m (31 October 2018 £8m, 30 April 2019 £8m) are repayable on demand.
The unsecured term loans are repayable quarterly over five years commencing on 8 November 2015. Interest is chargeable at 2.25% over LIBOR.
On the acquisition of the trade and assets of GCL Solicitors LLP the amounts due to members of £1.28m were converted into loans from former members repayable over a two-year period from the date of acquisition on 23 May 2018.
10. Trade and other payables
31 October 2019
31 October 2018
30 April 2019
£'000
£'000
£'000
Current
Trade payables
5,041
4,912
4,769
Other taxation and social security payable
5,732
6,088
6,437
Other payables
1,956
392
167
Contingent consideration
1,159
311
1,428
Accruals and deferred income
7,483
8,718
10,926
21,371
20,421
23,727
£'000
£'000
£'000
Non-current
Other payables
134
127
128
Contingent consideration
561
837
855
695
964
983
Contingent consideration
£1.159m of current and £0.4m of non-current contingent consideration represents the earn-out sums payable to the sellers of Kiddy & Partners.
£0.1m of non-current contingent consideration represents the earn-out sums payable to the seller of International Investment Services Limited
£0.1m of non-current contingent consideration represents the earn-out sums payable to the seller of Persona Associates Limited.
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, or in the case of Persona a relocation of staff, 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.
11. 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.
Stock Appreciation Rights Scheme ('SARS')
This SARS is a discretionary executive reward plan which allows the Group to grant conditional share awards or nil cost options to selected executives at the discretion of the Remuneration Committee.
The awards vest after a three-year performance period. On exercise, participants will receive the growth in value of the share options between the date of grant and the date of exercise in excess of the hurdle rate. The hurdle rate is currently set at 115.765% of the market value of the underlying shares on the date of grant.
The SARS awards and resultant number of shares granted is detailed below:
Reference shares in issue at exercise date Number
Price at grant date £
Price at exercise date £
Growth £
Growth value £'000
Number of shares at exercise price Number
SARS 15/16
6,650,000
1.10
1.72
0.62
4,123
2,397,093
SARS 17/18
10,225,000
1.39
1.65
0.26
2,658
1,623,648
The below table shows the estimated number of shares to be issued under the last remaining SARS scheme in issue based on the Company's share price at the balance sheet date of £1.62:
Reference shares in issue at 31 October 2019 Number
Price at grant date £
Price at 31 October 2019 £
Estimated growth £
Estimated growth value £'000
Number of shares at exercise price Number
SARS 17/18
6,750,000
£1.83
£1.62
(£0.21)
-
-
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 annual awards granted under the schemes are summarised below:
Weighted average remaining contractual life
Weighted average exercise price
Originally granted
Lapsed at 30 April 2019
At 1 May 2019
Granted during the period
Lapsed during period
At 31 October 2020
Number
Number
Number
Number
Number
SARS
SARS 17/18 - 3 October 2017
0.9 years
£1.83
7,050,000
(300,000)
6,750,000
-
-
6,750,000
SAYE
SAYE 17/18- 15 September 2017
0.9 years
£1.33
556,296
(60,732)
495,664
-
(70,234)
425.430
SAYE 18/19 - 21 September 2018
1.9 years
£1.35
620,335
(19,874)
600,461
-
(10,245)
590,216
SAYE 19/20 - 1 October 2019
2.9 years
£1.27
-
-
-
821,038
-
821,038
1,176,631
(80,606)
1,096,125
821,038
(80,479)
1,836,684
CSOPS
CSOPS 16/17 - 20 December 2016
0.2 years
£1.31
940,685
(219,943)
720,742
-
(11,495)
709,247
CSOPS 17/18 - 3 October 2017
0.9 years
£1.65
581,162
(92,114)
489,048
-
(21,210)
467,838
CSOPS 18/19 - 24 October 2018
2.0 years
£1.44
812,131
(22,916)
789,215
-
(26,388)
762,827
1,521,847
(191,127)
1,330,720
812,131
(143,845)
1,939,912
During the period 10,225,000 SARS 16/17 options vested resulting in the issue of 1,623,648 new 10p shares with a nominal value of £162,365 where issued on 8 October 2019. The accrued IFRS2 charge of £847,770 has been released against other reserves.
During the period 767,015 SAYE 16/17 options vested out of a potential 853,598 new shares issued via a block listing in order to fully satisfy all possible options. 853,598 new 10p shares with a nominal value of £85,360 where issued on 1 October 2019. The accrued IFRS2 charge of £243,984 has been released against other reserves.
Fair value calculations
The award is accounted for as equity-settled under IFRS 2. The fair value of awards which are subject to non-market-based performance conditions is calculated using the Black Scholes option pricing model. The inputs to this model for awards granted during the financial period are detailed below:
SAYE 19/20
Grant date
1 October 2019
Share price at date of grant
£1.64
Exercise price
£1.27
Volatility
24%
Expected life
3.3 years
Risk free rate
1%
Dividend yield
4%
Fair value per share
Market based performance condition
£0.37
Non-market-based performance condition
-
As the Group measures share-based payment charges at fair value at the date of grant. Fair value is measured using the Black Scholes model. Volatility is measured over the 3 years prior to the date of grant to match the vesting period of the award. Dividend yield is measured using the Group's expected average dividend yield over the vesting period. Expected life has been taken to be between the minimum and maximum exercise period of 3 and 3.5 years, respectively.
12. Business combinations
Acquisition of Persona Associates Limited ("Persona")
On 30 July 2019 Gateley (Holdings) Plc acquired the entire issued share capital of Persona, one of the UK's longest established and leading land referencing consultancies. Persona advises on some of the UK's largest infrastructure and regeneration projects, providing expertise on statutory processes relating to long-term infrastructure projects involving Compulsory Purchase Orders, Development Consent Orders and transport and Works Act Orders.
From the date of acquisition Persona has contributed £0.1m to revenue and £0.03m to Group profit for the period.
13. Post balance sheet events
Gateley (Holdings) Plc acquired the entire share capital of T-three Group Limited ("T-three) on 12 December 2019 for a consideration of £3.4m, including up to £0.9m of which is deferred. T-three complements Kiddy & Partners, which Gateley acquired in July 2018, and together these businesses create one of the largest specialist Human Capital consultancy businesses in the UK. Under the terms of the acquisition Gateley will acquire T-three for a consideration of £3.4m on a debt free, cash free normalised level of working capital basis, settled on a 50% cash and 50% shares basis. 944,855 new Ordinary shares of 10p each were issued on 12 December 2019 as part of the initial share consideration.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR KXLFFBFLLBBF
