Half Year Results

Gateley (Holdings) PLC

15 January 2025

 

15 January 2025

Gateley (Holdings) Plc

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

(AIM:GTLY)

Half Year results for the six months ended 31 October 2024

Strong activity in H1; full year results expected to be in line with market consensus

Gateley, the professional services group, is pleased to announce its unaudited results for the six months ended 31 October 2024 (the "Period" or "H1 25"). 

Financial Highlights

·	Strong financial performance with revenue and underlying profit before tax up 5.3% (H1 24: 7.6%) and 5.9% (H1 24: 4.6%) respectively
·	Activity levels across the Group increased with fee earner utilisation at 88% (H1 24: 83%)
·	Group organic revenue growth of 3.2% (H1 24: 5.1%)
·	Legal services revenue grew entirely organically by 2.1% (H1 24: 2.4%)
·	Revenue from consultancy services grew 13.6% to £25.7m (H1 24: £22.6m), of which organic growth was 6.1% (H1 24: 13.5%)
·	Consultancy services now 29.8% of total revenue (H1 24: 27.6%)
·	Underlying operating profit margin maintained at 10.5% (H1 24: 10.5%)
·	Underlying profit before tax margin increased to 12.3% (H1 24: 12.2%)
·	Strong balance sheet with net cash of £1.2m at the Period end (H1 24: net debt £2.2m)
·	Proposed interim dividend of 3.3p (H1 24: 3.3p) per share

Headline and underlying	H1 25	H1 24	Change
Group revenue	£86.3m	£82.0m	5.3%
Group underlying operating profit	£9.1m	£8.6m	5.8%
Group underlying profit before tax1	£10.6m	£10.0m	5.9%
Underlying diluted EPS2	6.63p	6.40p	3.6%
Net assets	£80.8m	£83.3m	(3.0)%
Net cash/(debt)3	£1.2m	£(2.2)m	154.5%
Dividend	3.3p	3.3p	-

Reported	H1 25	H1 24	Change
Group profit before tax	£3.3m	£7.4m	(54.8)%
Group profit after tax	£1.9m	£6.1m	(68.7)%
Basic earnings per share ("EPS")	1.44p	4.83p	(70.2)%

1	Underlying operating profit and underlying profit before tax excludes remuneration for post-combination services, gain on bargain purchase, share-based payment charges, acquisition related amortisation and exceptional items
2	Underlying diluted EPS excludes remuneration for post-combination services, gain on bargain purchase, share-based payment charges, acquisition related amortisation and exceptional items. It also adjusts for the future weighted average number of expected unissued shares from granted but unexercised share options in issue based on a share price at the end of the financial year
3	Net cash/(debt) excludes IFRS 16 lease liabilities

Strategic and post-Period highlights

·	Prior year acquisition of Richard Julian and Associates Limited ("RJA") has been integrated and is performing well-ahead of initial expectations
·	Ongoing investment in capacity with an increase in average fee earner headcount of 4.4% to 1,081 in H1 25 (H1 24: 1,035)
·	Continuation of strategic hiring with 10 new legal services partners joining during H1 25
·	Continued focus on alignment of stakeholders including through 70% of staff either owning shares or currently participating in the Group's key Restricted Share Awards Plan and Save As You Earn scheme
·	Achieved all 15 responsible business objectives set out in our 2023/24 Responsible Business Report and launched 15 new objectives in our fourth annual Responsible Business Report published on 6 August 2024

Current trading and outlook

·	H1 25 outturn demonstrates the resilience derived from our ongoing investment in a diverse range of professional services
·	Activity levels increased throughout H1 25, particularly in transactional services in Q2
·	Recent organic investments are beginning to generate positive returns alongside strong performances from our most recent acquisitions
·	Promising M&A pipeline entering H2
·	Our strong H1 performance leaves the Group well placed for H2.  The board expects results for the full year to be in line with market consensus

Rod Waldie, Chief Executive Officer of Gateley, said:

"I am pleased with the Group's performance in H1 25.

"The Group continues to benefit from the resilience created by our strategy of investing in a diverse and complementary range of professional services. We are pleased that our more recent organic investments are beginning to generate positive returns alongside the strong performance from our recently acquired businesses.  Our balance sheet provides a strong foundation from which to take a long-term view of potential opportunities to further invest in both legal and consultancy services.

"Finally, as always, I would like to thank our clients for their support and our dedicated people for their ongoing hard work, commitment and can-do attitude."

Enquiries:

Gateley (Holdings) Plc
Neil Smith, Chief Financial Officer	Tel: [phone]
Nick Smith, Acquisitions Director and Head of Investor Relations	Tel [phone]
Cara Zachariou, Communications Director	Tel [phone] Mob: [phone]
Panmure Liberum - Nominated Adviser and Broker
Richard Lindley / Nikhil Varghese / Tom Scrivens	Tel: [phone]

MANAGEMENT STATEMENT

Summary

We are pleased with the Group's performance in H1 25, which included two erratic periods in the build-up to the UK General Election and then post-Election to the Autumn Budget.  Once again, we are reporting organic growth in both Group revenue and underlying profit before tax.  In addition, like-for-like activity levels across the Group increased in the Period and our outlook is more positive than at this stage in the prior year, including in our transactional service areas, as pre-Budget uncertainty moderates and sentiment stabilises.

This outturn is the product of the hard work and commitment of our people to deliver the best possible outcomes for our clients. As always, we are grateful to our colleagues across the Group.

We continue to believe in, and execute, our strategy of investing for growth in both legal services and consultancy services, the latter now accounting for 29.8% of revenue in our uniquely diverse business model.  This diversity has been, and remains, the cornerstone of our resilient, year-on-year growth since listing in 2015. 

The professional services sector remains fragmented, and we continue to see significant opportunities for further organic growth and selective acquisitions, aided by the Group's strong balance sheet, and undrawn headroom of £17m in the Group's RCF (where cash typically accounts for fifty percent of the consideration we pay).  In the Period, we made 10 lateral hires at partner level in our legal services business and fully integrated RJA, which is performing very well. Disciplined capital allocation remains a key priority for us whilst maintaining a robust balance sheet.

In the near-term, our key operational focus is on driving organic revenues and improving margin.  Key components in the Group's margin improvement bridge include pricing, WIP management and conversion into fees.  All our Platforms have been challenged with positive re-sets, against market data which indicates that we can make improvements against each of these metrics.  This operational focus sits alongside an ongoing focus on the basics in our business; consistent delivery of excellent service, enhancing cross-selling opportunities and winning quality, profitable new business on each of our Platforms. 

In the Period, we published our fourth annual Responsible Business Report.  Having achieved all 15 responsible business targets set out in our prior report, our 2024/25 report sets 15 new objectives in-line with our purpose-led agenda.  We have a clear recognition that business is a key engine for change and our responsible business journey progresses with conviction. 

The board proposes an interim dividend of 3.3p per share (H1 24: 3.3p).

Current trading and outlook

The strength of our H1 performance, including improved activity levels across the Group and the growing contribution from our recent investments, leaves us looking forward with greater confidence.

Whilst the macro-economic position is difficult to predict, we are encouraged by current activity levels in our transactional services teams allied to ongoing good momentum in those of our counter-cyclical and economically agnostic services.  The benefit of the increasingly diversified business model was seen in H1 and we expect a similar effect in H2 and we therefore expect to deliver results for the full year in line with consensus expectations. 

Platform review

Group revenue grew by 5.3% to £86.3m for H1 25 (H1 24: £82.0m).  Revenue growth in the Group's core legal services was entirely organic at 2.1%, growing to £60.6m (H1 24 £59.3m) whilst revenue from consultancy services grew by 13.6% overall to £25.7m (H1 24 £22.6m).  Acquired consultancy revenue totalled £2.9m (H1 24: £1.1m) following the acquisition of RJA (in July 2023) with organic consultancy revenue growth of 6.1% to £22.8m (H1 24: £21.5m). 

This generated an increase of 5.8% in underlying operating profit to £9.1m (H1 24: £8.6m) and a 5.9% increase in underlying profit before tax to £10.6m (H1 24: £10.0m).  This outturn reflects the quality and breadth of the complementary legal and consultancy advice that we deliver via our four Platforms focused on Business Services, Corporate Services, People Services and Property Services. 

Activity levels increased throughout the course of H1 and fee earner utilisation was ahead of the prior year as we progress into H2.  Our transactional services saw an increase in activity in Q2, initially stimulated by the lead-in to the Autumn Budget, but continuing into Q3, as demonstrated by 11.1% revenue growth in our Corporate Platform during the Period.   Activity in our more counter cyclical businesses remained strong, as demonstrated by 10% growth in revenue in Gateley Smithers Purslow, delivering specialist advice to UK property insurers, in our Property Platform.

In segmental reporting, the Group grew revenue on each of its Platforms, other than the People Platform. In contribution margin, the Group delivered growth on each of its Platforms, other than the Property Platform, resulting in an overall increase of 3.3%.  The reduction on the Property Platform is due to in Period people investment in our construction, real estate dispute resolution and house building teams at a time when activity slowed in anticipation of the Budget but will benefit from the positive tail-winds of already made government decisions to speed up planning and supply for building homes in the UK.

Results	Business Services Platform	Corporate Platform	People Platform	Property Platform	Total
H1 25 Revenue (£m)	14.3	18.7	9.3	44.0	86.3
Revenue growth H1 25	8.5%	11.1%	(3.9)%	4.1%	5.3%
H1 24 Revenue (£m)	13.2	16.8	9.7	42.3	82.0
H1 25 contribution margin	36.8%	42.9%	37.2%	31.6%	35.5%
H1 24 contribution margin	25.0%	31.3%	29.2%	35.4%	32.2%

Business Services Platform

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

Platform revenue grew by 8.5%. 

In legal services, our commercial dispute resolution team, which accounted for 37% of Platform revenue for H1 25, performed in-line with its target and carries good momentum into H2.  The commercial dispute resolution team's work is counter-cyclical or agnostic in nature, as is work undertaken by our regulatory and business defence team.

Previously reported significant investment in our complex international recovery ("CIR") team and class actions team continued in Period, including a laterally hired partner, bringing total headcount in these workstreams to 28.  In CIR, we are beginning to see a positive return on this investment, where revenue is significantly ahead of prior year and the team is carrying a number of complex, long-term mandates into H2.  These have been sourced from multiple jurisdictions, including Africa and the Middle East.  We expect to see a gradual enhancement in returns and view this team as an important part of our strategy to generate further revenues from jurisdictions beyond the UK.  In parallel, our class actions team continues its book-build and we look forward to attractive long-term returns from this area. 

In consultancy services, both of our patent and trademark attorney businesses, Adamson Jones and Symbiosis IP, were in-line with budgeted revenue and ahead of their prior year positions, with Symbiosis benefitting from our prior year investment in experts in IP valuation and commercialisation.  Both have a positive outlook.  We continue to appraise opportunities to invest in broadening our intellectual property offering.

In aggregate, consultancy revenue represented 22.9% (HY 24: 24.5%) of this Platform's revenue. 

Corporate Platform

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

Revenue grew by 11.1%, all of which is organic growth.  Each of the five units on the Platform were ahead of their prior year position at the end of the Period. 

The corporate, banking and tax transactional teams benefitted from a spike in activity during the post-Election, pre-Autumn Budget period.  Deal volumes and deal quality was impressive, across multiple sectors, and we acted for a wide range of clients, dominated by private equity and acquisitive corporates.  This also cascaded work to other Platforms.  Whilst initial indications are that the Autumn Budget has done little to encourage UK growth, currently it has not stifled our transactional services activity.  In the meantime, challenging macro-economic conditions during the Period resulted in good activity in our restructuring advisory unit.  Indications are that this will continue throughout H2. 

We saw in Period lateral partner hires to our corporate, tax and restructuring teams, each of which is London-based and reflective of our commitment to further enhance the quality of our offer.

This Platform is dominated by legal services and will likely remain so, with teams drawing support from services on other Platforms.  The Platform's sole consultancy business, Gateley Global, continues to be a good cross-referrer of opportunities across the Group whilst it significantly increased its like-for-like revenue in Period.  This predominantly resulted from being appointed by the West Midlands Combined Authority (WMCA) to support its High Growth Accelerator Programme, through which selected businesses access support from Gateley Global to help overcome barriers to growth and manage sustainability.  The Group's broad range of professional services was a key factor in WMCA appointing Gateley Global as both provider of expert support and a conduit to wider Group services. 

People Platform

This Platform supports clients dealing with and developing people and in administering individuals' personal affairs. 

Revenue on this Platform declined by 3.9%, due to significant contraction in our private client team, where we are reducing scale and focusing on core services to high-net-worth clients supported by the appointment of a private client Chartered Tax Advisor with a Big Four background and high net worth focus.  Our re-cast private client offer will be stable as we enter FY 26. 

Each of the other three units on this Platform delivered like-for-like growth.  Under new leadership, our legal services employment team benefitted from strong corporate transactional activity alongside new strategic employment work, including a bespoke service to support public and private sector clients with internal investigations.  The team is carrying strong momentum into H2 and will benefit from legislative changes, including the Employment Rights Bill, which is likely to be the most significant change in employment law in a generation. 

In pension services, once again, the team's performance was strong.  Our pension trustee business, Entrust, is relatively economically agnostic and continues to deliver growth as it realises opportunities from the increase in the number of pension schemes looking to complete full liability buy-outs, with Entrust's technical support.

The combined revenue of our talent assessment, development and cultural change businesses, t-three and Kiddy & Partners is up by 2% versus H1 24.  Whilst there seems to be less assessment and development work available in the current economic climate, these businesses are winning increasing share and mandated work is strong moving into H2.   These businesses are also working closely with our legal services employment team to maximise opportunities arising from changing legislation in relation to diversity, inclusion and employment rights generally.

In aggregate, consultancy revenue represented 28.8% (HY 24: 27.2%) of this Platform's revenue.

Property Platform

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

This remains our largest, most diverse, and most mature Platform.  Against the backdrop of challenging market conditions in UK commercial and residential real estate, we are pleased to report resilient revenue growth of 4.1%, which is evidence of the benefit of the deliberate mix of services on this Platform. 

In legal services, our residential development team remains the largest segment on this Platform.  Rolling data from Savills plc indicates that housing transactions were circa 12% below pre-pandemic levels in the first half of 2024, improving to 7% below in the three months to November 2024.  Against this data, we experienced 6% like-for-like drop in our residential development team's revenue in Period.  However, the team has been consistently busy and is a significant referrer of work to other teams on this and other Platforms.  We anticipate a tailwind from government policy to speed up planning for residential development and encourage housebuilders to address supply shortfall.  Our market-leading credentials and commitment to best-in-class service in this sector are reflected in the two in Period laterally hired partners to the team.

In commercial real estate, most sectors were and remain cautious, against which we are very pleased with a 6% like-for-like revenue increase from this team.  We maintain a focus on both investment and development work and supplemented the team with two lateral partner hires, one of whom brings new environmental expertise to our offer. 

Our planning and non-contentious construction teams continue to benefit from self-generated and cross-referred opportunities, as do our real estate dispute resolution and contentious construction teams, both counter-cyclical in nature and both of which generated revenue growth consistent with H1 24.  In Period, we laterally hired a partner to our real estate dispute team with particular expertise in the telecoms sector to supplement existing telecoms services in our real estate and Gateley Hamer teams.

Taken as a whole, consultancy business revenue on this Platform grew by 15.6% to £18.9m, of which 5.2% was organic growth.  This represented 43.0% of this Platform's revenue.

We saw particularly encouraging H1 performances by Gateley RJA and Gateley Smithers Purslow (GSP).  RJA was acquired in July 2023 and has integrated very well.  It specialises in the provision of quantity surveying and project management services to organisations in the affordable housing sector, which is likely to continue to benefit from government Housing Policy.  It also has expertise to support those teams in Gateley Vinden and GSP, who provide specialist advice to UK property insurers in relation to major loss claims, a busy and economically agnostic market. 

People and operations

Our people remain our most valuable asset.  We continue to adopt a measured approach to resource whilst seeking to attract the best possible talent to develop and enhance our services.  Our average headcount grew to 1,565 as at H1 25, representing year-on-year growth of 4.5%.

Our employee value proposition is constantly evolving, with a consistent focus on employee engagement and inclusion to ensure that we attract and retain the best talent.  Our broad range of career opportunities is attractive and our employee offer remains differentiated, including the ability for all of our people to participate in share ownership.  In Period we further progressed our internal equity re-circulation plan by funding our EBT to acquire 2,026,490 shares, mainly from employee IPO beneficiaries, to warehouse in order to satisfy future Restricted Share Award Plan issuance to partner and partner equivalents in Group.

Operationally, our focus is on driving organic revenue and realising efficiencies with a singular objective to improve margin, which is our key near-term priority.  Each of our Platforms is tasked with improving pricing, WIP management and conversion into fees.  We believe that there is a significant opportunity to be captured as we make progress in these areas, alongside the additional opportunity in optimising cross-selling across the Group.  In the meantime, the primary focuses of capital allocation remains (1) investment in people and internal capabilities, including in Generative AI, where we are making some good progress, (2) in selective M&A with businesses that align with our culture and values whilst being additive in both existing and new service lines, and (3) in returns to shareholders. 

On-going integration of recently acquired businesses is proceeding as planned, including positive enhancements to our Group integration processes.  In parallel, phase two of adoption of our new, market-leading business management, productivity, and financial management system (3E) is proceeding throughout FY 25 and into FY 26.

Board changes

On 22 August 2024, the board announced the appointment of Edward Knapp as an Independent Non-Executive Director and Chair Designate.  Edward subsequently became Chair following Nigel Payne's retirement from the board on 1 November 2024.

Edward is a global business leader with extensive experience in growth strategy design and delivery, technology, risk management and transformation with a particular focus on professional and financial services. He has held executive and senior leadership roles at McKinsey & Company, Barclays, HSBC, Revolut and M&G, where he has most recently brought a particular focus on advisory, wealth management and talent.

Responsible Business

Being a Responsible Business remains an integral part of our Purpose Statement;

"Our purpose is to deliver results that delight our clients, inspire our people and support our communities." 

We were delighted to achieve all 15 of our internally set responsible business targets in 2023/2024 and, in Period, we published our fourth annual Responsible Business Report outlining actions taken and setting targets for 2024/2025.

Highlights from the report include:

·	A carbon reduction plan including a commitment to achieve net zero emissions by 2040, with interim targets set by 2030;
·	The launch of the Purpose Pod - Gateley's Responsible Business podcast; and
·	A new strategic partnership with environmental charity the Heart of England Forest.

We are proud of the progress that we have made since publishing our first Responsible Business Strategy in October 2021.  We will continue to evaluate where we are effecting change and how we can improve and progress over time.  Our journey continues with conviction.

Total expenses

Personnel costs (excluding the IFRS 2 charge) remain in line with H1 24 as a percentage of revenue at 63.4% (H1 24: 63.4%), despite continued wage inflation and an increased headcount as a result of targeted recruitment, including in senior lateral hires.  Average numbers of legal and professional staff rose by 4.4% to 1,081 (H1 24: 1,035).   Support staff numbers also increased by 4.5% to 484 (H1 24: 463) as we continue to invest in our support functions and operations to enable the Group to deliver the best possible service to our clients.

In line with all businesses in the UK, the changes to National Insurance contributions announced in the Autumn Budget will impact the Group's costs, by c£1.8m in FY26. The Group is well positioned to mitigate these costs through pricing and efficiencies in its ongoing drive for longer term margin enhancement.

Other operating expenses, excluding non-underlying items, increased to £19.1m (H1 24: £18.2m) as the effect of investment and the full year impact of past acquisitions was absorbed.  Overall, operating costs as a percentage of revenue have decreased from 22.2% (in H1 24) to 22.1%.  Our use of agile working, the new business management system and extensive review of premises usage will generate further medium-term cost savings, where appropriate, without damaging the resources available to clients and staff.  In particular, our new business management system will enhance centralised control, support operational efficiencies and drive a level of consistency across the processing of all client and Group data.

Profit before tax and earnings per share

Underlying adjusted profit before tax of £10.6m increased by 5.9% from £10.0m in H1 24.  The board recognises this improvement but sees opportunities for further growth alongside continuing investment for future growth.

Reported profit before tax decreased by 54.8% to £3.3m (H1 24: £7.4m) due to H1 24 benefitting from the bargain purchase gain created on acquisition of RJA of £3.6m.  Underlying operating profit before tax increased by 5.8% to £9.1m (H1 2: £8.6m). Profit after tax of £1.9m decreased by 68.7%, again due mainly to the bargain purchase gain in H1 24.  As a result, basic earnings per share decreased similarly by 70.2% to 1.92p (H1 24: 4.83p).  Underlying diluted earnings per share increased by 3.6% to 6.63p (H1 24: 6.40p) after a full Period impact from new shares issued for acquisitions and after further awards made under the Group's share option reward schemes.

Net assets and working capital

The Group's net asset position has decreased by £2.5m to £80.8m (H1 24: £83.3m) as total assets decreased by £1.5m from reductions in non-current assets, mainly through the amortisation of intangible assets, whilst there was an increase in current assets, mainly being cash (£2.5m).  Total liabilities increased by £1m as increases in trade and other payables was partially offset by a reduction in non-current assets lease liabilities.

Net cash increased in H1 25 to £1.2m from net debt of £2.2m in H1 24. Cash generation from operating activities was £0.5m (H1 24: cash outflow of £0.3m). Net cash outflows from financing activities increased to £5.2m (H1 24: £2.5m) due to further acquisition of own shares (of £2.8m) to support the strategic re-circulation of equity through the Group's employee benefit trust. Free cash flows for the Period totalled £0.5m (H1 24: £1.5m) but reduced in H1 25 due mainly to increased corporation tax outflows.

Management continues to focus on ways of reducing working capital lock-up.  Total lock-up decreased from 164 to 163 days as a result of debtor days improving from 98 to 91, as collection initiatives began to benefit performance.  This was mainly offset by strong organic and acquired growth increasing WIP days from 66 to 72 days. 

Dividend

The board has proposed an interim dividend of 3.3p per eligible ordinary share (H1 24 3.3p). This dividend will be paid on 31 March 2025 to shareholders on the Company's register on 21 February 2025, with an ex-dividend date of 20 February 2025.

Rod Waldie                                                                        Neil Smith

Chief Executive Officer                                                 Chief Financial Officer

15 January 2025

Gateley (Holdings) Plc

Consolidated income statement and other comprehensive income

For the 6 months ended 31 October 2024

	Note	Unaudited 6 months to 31 October 2024	Unaudited 6 months to 31 October 2023	Audited 12 months to 30 April 2024
		£'000	£'000	£'000
Revenue	2	86,299	81,957	172,492
Other operating income		7	20	153
Personnel costs, excluding IFRS 2 charge	3	(54,686)	(51,956)	(108,490)
Depreciation - Property, plant and equipment	4	(552)	(566)	(1,140)
Depreciation - Right-to-use asset	4	(2,131)	(1,955)	(3,949)
Impairment of trade receivables and contract assets		(781)	(718)	(591)
Other operating expenses		(19,079)	(18,199)	(38,219)
Operating profit before non-underlying operating and exceptional items		9,077	8,583	20,256
Non-underlying operating items	4	(5,895)	(2,628)	(7,516)
Exceptional items	4	(1,371)	-	(1,563)
		(7,266)	(2,628)	(9,079)
Operating profit		1,811	5,955	11,177
Financing income		2,666	2,379	4,999
Financing expense		(1,144)	(958)	(2,221)
Profit before tax		3,333	7,376	13,955
Taxation		(1,413)	(1,236)	(3,881)
Profit for the period after tax attributable to equity holders of the parent		1,920	6,140	10,074
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences
- Revaluation of other investments			-	129
- Exchange differences on foreign branch		(181)	97	(20)
Profit for the financial period and total comprehensive income all attributable to equity holders of the parent		1,739	6,237	10,183

Statutory earnings per share (pence)

Basic earnings per share	5	1.44p	4.83p	7.74
Diluted earnings per share	5	1.44p	4.68p	7.63

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 2024

	Note	Unaudited at 31 October 2024 £'000	Unaudited at 31 October 2023 £'000	Audited at 30 April 2024 £'000
Non-current assets
Property, plant and equipment		1,534	1,429	1,583
Right-of-use asset		22,113	25,143	23,621
Investment property		164	164	164
Intangible assets & goodwill	7	12,314	14,650	13,768
Other intangible assets		423	803	647
Other investments		275	147	275
Deferred tax asset		373	1,230	373
Total non-current assets		37,196	43,566	40,431
Current assets
Contract assets	8	29,865	26,148	23,543
Trade and other receivables	9	72,285	73,630	82,473
Cash and cash equivalents		14,162	11,646	16,674
Total current assets		116,312	111,424	122,690
Total assets		153,508	154,990	163,121
Non-current liabilities
Other interest-bearing loans and borrowings	10	-	(13,859)	-
Lease liability		(22,604)	(26,843)	(24,178)
Other payables	11	-	-	-
Deferred tax liability		(2,628)	(3,432)	(2,968)
Provisions		(3,725)	(1,290)	(3,725)
Total non-current liabilities		(28,957)	(45,424)	(30,871)
Current liabilities
Other interest-bearing loans and borrowings		(12,956)	-	(12,908)
Lease liability		(5,083)	(3,714)	(4,346)
Trade and other payables	11	(25,509)	(21,731)	(33,112)
Provisions		(175)	(107)	(175)
Current tax liabilities		-	(685)	(1,378)
Total current liabilities		(43,723)	(26,237)	(51,919)
Total liabilities		(72,680)	(71,661)	(82,790)
NET ASSETS		80,828	83,329	80,331
EQUITY
Share capital		13,353	13,165	13,304
Share premium		211	12,479	35
Merger reserve		(9,950)	(9,950)	(9,950)
Other reserves		19,754	19,383	19,383
Treasury reserve		(2,781)	(628)	(4,012)
Translation reserve		(252)	46	(71)
Retained earnings		60,493	48,834	61,642
TOTAL EQUITY		80,828	83,329	80,331

Gateley (Holdings) Plc

Consolidated cash flow Statement

for the 6 months ended 31 October 2024

	Note	Unaudited 6 months to 31 October 2024	Unaudited 6 months to 31 October 2023	Audited 12 months to 30 April 2024
		£'000	£'000	£'000
Cash flows from operating activities
Profit for the period after tax		1,920	6,140	10,074
Adjustments for:
Depreciation and amortisation		4,361	4,087	8,015
Financial income		(2,666)	(2,379)	(4,999)
Financial expense		575	380	1,051
Interest charge on capitalised leases		569	578	1,170
Equity settled share-based payments		961	1,500	1,686
Gain on bargain purchase		-	(3,509)	(3,609)
Acquisition related earn-out remuneration charge		3,480	3,358	6,956
Earn-out consideration paid - acquisitions of subsidiary		(401)	-	(3,790)
Initial consideration paid on acquisitions		-	(2,035)	(2,035)
Loss on disposal of property, plant and equipment		39	-	-
Tax expense		1,413	1,236	3,881
		10,251	9,356	18,400
Decrease/(Increase) in trade and other receivables		3,594	(4,956)	(10,658)
(Decrease)/increase in trade and other payables		(9,889)	(2,204)	8,642
Increase in provisions		-	-	2,503
Cash generated from operations		3,956	2,196	18,887
Tax paid		(3,431)	(2,521)	(4,902)
Net cash flows from operating activities		525	(325)	13,985
Investing activities
Acquisition of property, plant and equipment		(517)	(286)	(1,045)
Cash acquired on business combinations		-	1,239	1,239
Interest received		2,666	2,379	4,999
Net cash flows from investing activities		2,149	3,332	5,193
Financing activities
Interest and other financial income paid		(527)	(297)	(956)
Lease payments		(2,055)	(1,994)	(5,091)
Receipt of new revolving credit facility, net of refinancing costs		-	7,000	6,000
Acquisition of own shares		(2,799)	(350)	(3,339)
Proceeds of sale of own shares		-	399	4
Cash received for shares issued on exercise of share options		195	773	2,108
Dividends paid	6	-	(7,997)	(12,335)
Net cash outflow from financing activities		(5,186)	(2,466)	(13,609)
Net (decrease)/increase in cash and cash equivalents		(2,512)	541	5,569
Cash and cash equivalents at beginning of period		16,674	11,105	11,105
Cash and cash equivalents at end of period		14,162	11,646	16,674

Gateley (Holdings) Plc

Consolidated statement of changes in equity

for the 6 months ended 31 October 2024

	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 2023	12,664	11,846	(9,950)	15,413	(677)	48,867	(51)	78,112
Comprehensive income:
Profit for the year	-	-	-	-	-	10,074	-	10,074
Revaluation of other investments	-	-	-	-	-	129	-	129
Exchange rate differences	-	-	-	-	-		(20)	(20)
Total comprehensive income	-	-	-	-	-	10,203	(20)	10,183
Transaction with owners recognised directly in equity
Issue of share capital	640	1,919	-	3,970	-	-		6,529
Cancellation of share premium account	-	(13,730)	-	-	-	13,730	-	-
Purchase of own shares at nominal value						(166)	-	(166)
Sale of treasury shares	-	-	-	-	4	-	-	4
Purchase of treasury shares	-	-	-	-	(3,339)	-	-	(3,339)
Recognition of tax benefit on gain from equity settled share options	-	-	-	-	-	(343)	-	(343)
Dividend paid	-	-	-	-	-	(12,335)	-	(12,335)
Share based payment transactions	-	-	-	-	-	1,686	-	1,686
Total equity at 30 April 2024	13,304	35	(9,950)	19,383	(4,012)	61,642	(71)	80,331
At 1 May 2023	12,664	11,846	(9,950)	15,413	(677)	48,867	(51)	78,112
Comprehensive income:
Profit for the period	-	-	-	-	-	6,140	-	6,140
Exchange rate differences	-	-	-	-	-	-	97	97
Total comprehensive income	-	-	-	-	-	6,140	97	6,237
Transaction with owners recognised directly in equity
Share issue	501	633	-	3,970	-	-	-	5,104
Sale of treasury shares	-	-	-	-	399	-	-	399
Purchase of own shares at nominal value	-	-	-	-	-	(76)	-	(76)
Purchase of treasury shares	-	-	-	-	(350)	-	-	(350)
Dividend paid	-	-	-	-	-	(7,997)	-	(7,997)
Recognition of tax benefit on gain from equity settled share options	-	-	-	-	-	400	-	400
Share based payment transactions	-	-	-	-	-	1,500	-	1,500
Total equity at 31 October 2023	13,165	12,479	(9,950)	19,383	(628)	48,834	46	83,329

Gateley (Holdings) Plc

Consolidated statement of changes in equity

for the 6 months ended 31 October 2024

	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 2024 (unaudited)	13,304	35	(9,950)	19,383	(4,012)	61,642	(71)	80,331
Comprehensive income:
Profit for the year	-	-	-	-	-	1,920	-	1,920
Exchange rate differences	-	-	-	-	-	-	(181)	(181)
Total comprehensive income	-	-	-	-	-	1,920	(181)	1,739
Transaction with owners recognised directly in equity
Share issue	49	176	-	371	-	-	-	596
Sale of treasury shares	-	-	-	-	-	-	-	-
Purchase of treasury shares	-	-	-	-	(2,799)	-	-	(2,799)
Dividend paid	-	-	-	-	-	-	-	-
Share options exercised by employees	-	-	-	-	4,030	(4,030)	-	-
Share based payment transactions	-	-	-	-	-	961	-	961
Total equity at 31 October 2024	13,353	211	(9,950)	19,754	(2,781)	60,493	(252)	80,828

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 2024

1. Basis of preparation

These interim unaudited financial statements for the six months ended 31 October 2024 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 2024 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 2024 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 2024 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:

·	Consideration treated as remuneration: such charges are treated as non-underlying in order to reflect the commercial substance of the transaction. All former vendors who remain employed by the Group are paid at market rates and the earnout remuneration is a function of the interpretation of IFRS, and related emerging guidance only.
·	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 marketplace.

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 any 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 operating profit and underlying 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' and is used by management to assess and monitor profit performance only at the operating, before tax 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 2024	6 months to 31 October 2023	12 Months 30 April 2023
	£'000	£'000	£'000
Reported profit before tax	3,333	7,376	13,955
Adjustments for non-underlying and exceptional items:
- Amortisation of acquired intangible assets	1,454	1,279	2,483
- Share-based payment adjustment	961	1,500	1,686
- Gain on bargain purchase	-	(3,509)	(3,609)
- Consideration treated as remuneration	3,480	3,358	6,956
- Exceptional items	1,371	-	1,563
Underlying profit before tax	10,599	10,004	23,034

	6 months to 31 October 2024	6 months to 31 October 2023	12 Months 30 April 2023
	£'000	£'000	£'000
Reported operating profit	1,811	5,955	11,177
Adjustments for non-underlying and exceptional items:
- Amortisation of acquired intangible assets	1,454	1,279	2,483
- Share-based payment adjustment	961	1,500	1,686
- Gain on bargain purchase	-	(3,509)	(3,609)
- Consideration treated as remuneration	3,480	3,358	6,956
- Exceptional items	1,371	-	1,563
Underlying operating profit	9,077	8,583	20,256

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.

Consideration treated as remuneration: such charges are treated as non-underlying in order to reflect the commercial substance of the transaction. All former vendors who remain employed by the Group are paid at market rates and the earnout remuneration is a function of the interpretation of IFRS, and related emerging guidance only.

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 to 31 October 2024	6 months to 31 October 2023	12 Months 30 April 2024
	£'000	£'000	£'000
Operating cash flows before movements in working capital	10,251	9,356	18,400
Net working capital movement	(6,295)	(7,160)	487
Cash generated from operations	3,956	2,196	18,887
Repayment of lease liabilities	(2,055)	(1,994)	(5,091)
Net interest received	2,139	2,082	4,043
Tax paid	(3,431)	(2,521)	(4,902)
Cash outflow paid on acquisitions	401	2,035	5,825
Purchase of property, plant and equipment	(517)	(276)	(1,045)
Free cash flows	493	1,522	17,717

b)  Working capital measures

	6 months to 31 October 2024	6 months to 31 October 2023	12 Months 30 April 2024
	£'000	£'000	£'000
WIP days
Amounts recoverable from clients in respect of contract assets (unbilled revenue)	29,865	26,148	23,543
Unbilled disbursements	5,772	5,816	5,389
Total WIP	35,637	31,964	28,932
Annualised revenue	181,683	177,732	173,312
WIP days	72	65	61

	6 months to 31 October 2024	6 months to 31 October 2023	12 Months 30 April 2024
	£'000	£'000	£'000
Debtor days
Trade receivables	50,847	53,369	58,056
Less unbilled disbursements	(5,772)	(5,816)	(5,389)
Total debtors	45,075	47,553	52,667
Annualised revenue	181,683	177,732	173,312
Debtor days	91	98	111

	6 months to 31 October 2024	6 months to 31 October 2023	12 Months 30 April 2024
	£'000	£'000	£'000
Gross lock-up days
Total WIP	35,637	31,964	28,932
Total debtors	45,075	47,553	52,667
Total gross lock-up	80,712	79,517	81,599
Annualised revenue	181,683	177,732	173,312
Gross lock-up days	162	163	172

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 2022 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 2024:

Reportable segment	Legal service lines	Consultancy service lines
Corporate	Banking Corporate Restructuring Advisory Taxation	Gateley Global GEG Services
Business Services	Austen Hays Complex International Litigation Commercial Dispute Resolution Intellectual Property, Commercial and Technology Regulatory and Business Defence Reputation, media and privacy law	Adamson Jones Symbiosis IP
People	Employment Pensions Private Client	Entrust Pension Kiddy & Partners t-three
Property	Construction Planning Real Estate Real Estate Dispute Resolution Residential Development	Gateley Capitus Gateley Hamer (inc. Persona Associates) Gateley RJA Gateley Smithers Purslow Gateley Vinden (inc. Tozer Gallagher)

.

6 months to 31 October 2024

	Business Services	Corporate	People	Property	Total
	£'000	£'000	£'000	£'000	£'000
Segment revenue	14,325	18,701	9,253	44,020	86,299
Segment contribution  (as reported internally)	5,278	8,023	3,439	13,928	30,668
Costs not allocated to segments:
Other operating income					7
Personnel costs					(8,991)
Share based payment costs					(961)
Depreciation and amortisation					(4,361)
Other operating expenses					(9,727)
Gain on bargain purchase					-
Contingent consideration treated as remuneration					(3,480)
Exceptional costs					(1,344)
Net financial income					1,522
Profit before tax					3,333

6 months to 31 October 2023

	Business Services	Corporate	People	Property	Total
	£'000	£'000	£'000	£'000	£'000
Segment revenue *	13,205	16,835	9,633	42,284	81,957
Segment contribution *  (as reported internally)	3,296	5,267	2,811	14,985	26,359
Costs not allocated to segments:
Other operating income					20
Personnel costs					(6,232)
Share based payment charge					(1,500)
Depreciation and amortisation					(4,087)
Other operating expenses					(8,756)
Gain on bargain purchase					3,509
Contingent consideration treated as  remuneration					(3,358)
Net financial expense					1,421
Profit before tax					7,376
*Restated due to internal reclassification of the Commercial legal team from the Corporate Platform into the Business Services Platform with effect from 1 May 2024.

12 months to 30 April 2024

	Business Services	Corporate	People	Property	Total
	£'000	£'000	£'000	£'000	£'000
Segment revenue	24,889	37,064	19,554	90,985	172,492
Segment contribution  (as reported internally)	7,523	13,975	5,772	33,240	60,510
Costs not allocated to segments:
Other operating income					153
Personnel costs					(18,087)
Share based payment charge					(1,686)
Depreciation and amortisation					(8,015)
Other operating expenses					(16,788)
Gain on bargain purchase					3,609
Contingent consideration treated as remuneration					(6,956)
Exceptional costs					(1,563)
Net financial expense					2,778
Profit before tax					13,955

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 31 October 2024	6 months to 31 October 2023	12 months to 30 April 2024
Legal and professional staff	1,081	1,035	1,068
Administrative staff	484	463	468
	1,565	1,498	1,536
The aggregate payroll costs of these persons were as follows:
	6 months to 31 October 2024	6 months to 31 October 2023	12 months to 30 April 2024
	£'000	£'000	£'000
Wages and salaries	47,696	45,203	94,402
Social security costs	5,398	5,136	10,928
Pension costs	1,592	1,617	3,160
	54,686	51,956	108,490

4. Expenses

Included in operating profit are the following:

	6 months to 31 October 2024	6 months to 31 October 2023	12 months to 30 April 2024
	£'000	£'000	£'000
Depreciation on tangible assets	552	566	1,140
Depreciation on right-of-use assets	2,131	1,955	3,949
Other operating income - rent income	7	20	153
Short term and low value leases	39	38	76
Operating lease costs on property	61	89	116

Non-underlying items

	6 months to 31 October 2024	6 months to 31 October 2023	12 months to 30 April 2024
Amortisation of acquisition related intangible assets	1,454	1,279	2,483
Share based payment charges	961	1,500	1,686
Gain on bargain purchase	-	(3,509)	(3,609)
Consideration treated as remuneration	3,480	3,358	6,956
Total non-underlying items	5,895	2,628	7,516
Exceptional items
Acquisition costs	-	-	37
Redundancy costs	702	-	1,159
One-off remuneration charge	669	-	367
Total non-underlying and exceptional items	7,266	2,628	9,079

5. Earnings per share

	6 months to 31 October 2024	6 months to 31 October 2023	12 months to 30 April 2024
	Number	Number	Number
Weighted average number of ordinary shares in issue, being weighted average number of shares for calculating basic earnings per share	133,185,559	127,230,567	130,127,316
Shares deemed to be issued for no consideration in respect of share-based payments	175,796	3,985,103	1,980,638
Weighted average number of ordinary shares for calculating diluted earnings per share	133,361,355	131,215,670	132,107,954

	£'000		£'000	£'000
Profit for the period after taxation and basic earnings attributable to ordinary equity shareholders	1,920		6,140	10,074
Non-underlying and exceptional items (see note 4)	7,266		2,628	9,079
Tax on non-underlying items	(343)		(375)	(391)
Underlying earnings before non-underlying items	8,843		8,393	18,762
Earnings per share is calculated as follows:		Pence	Pence	Pence
Basic earnings per ordinary share		1.44	4.83	7.74
Diluted earnings per ordinary share		1.44	4,68	7.63
Underlying basic earnings per ordinary share		6.64	6.60	14.42
Underlying diluted earnings per ordinary share		6.63	6.40	14.20

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 2024	6 months to 31 October 2023	12 Months 30 April 2024
	£'000	£'000	£'000
Equity shares
Final dividend in respect of 2023 (6.2p per share) - paid 11 October 2023	-	7,997	-
Interim dividend in respect of 2023 (3.3p per share) - paid 21 March 2024	-	-	4,338
Final dividend in respect of 2023 (6.2p per share) - paid 21 October 2023	-	-	7,997
Dividends paid	-	7,997	12,335

The board intends to approve an interim dividend of 3.3p (H1 24: 3.3p) per share. This dividend will be paid on 31 March 2025 to shareholders on the register at the close of business on 21 February 2025.  The shares will go ex-dividend on 20 February 2025.  This dividend has not been recognised as a liability in these final statements.

The Group paid a final dividend in respect of 2024 of 6.2p after the Period end on 8 November 2024.

7 Intangible assets

	Goodwill	Customer list	Brand names	Total
	£'000	£'000	£'000	£'000
Deemed cost
At 1 May 2023	1,550	17,261	3,518	22,329
Acquired through business combination	-	3,000	-	3,000
At 31 October 2023	1,550	20,261	3,518	25,329
At 1 May 2023	1,550	17,261	3,518	22,329
Acquired through business combination	-	3,322	-	3,322
At 30 April 2024	1,550	20,583	3,518	25,651
At 1 May 2024	1,550	20,583	3,518	25,651
Acquired through business combination	-	-	-	-
At 31 October 2024	1,550	20,583	3,518	25,651
Accumulated amortisation
At 1 May 2023	-	9,155	245	9,400
Charge for the period	-	1,044	235	1,279
At 31 October 2023	-	10,199	480	10,679
At 1 May 2023	-	9,155	245	9,400
Charge for the year	-	2,248	235	2,483
At 30 April 2024	-	11,403	480	11,883
At 1 May 2024	-	11,403	480	11,883
Charge for the period	-	1,336	118	1,454
At 31 October 2024	-	12,739	598	13,337
Net Book Value
At 31 October 2023	1,550	10,062	3,038	14,650
At 30 April 2024	1,550	9,180	3,038	13,768
At 31 October 2024	1,550	7,844	2,920	12,314

Goodwill

Goodwill is allocated to the following cash generating units

	31 October 2024	31 October 2023	30 April 2024
	£'000	£'000	£'000
Property Platform
Persona Associates Limited	40	40	40
Gateley Vinden Limited	934	934	934
	974	974	974
Business Services Platform
Gateley Tweed (acquisition of goodwill)	576	576	576
	576	576	576
	1,550	1,550	1,550

A contingent consideration arrangement was entered into as part of the acquisition of RJA Associates Limited.  A further £2.1 million could be payable with any payment subject to RJA achieving at least £4 million of revenue over the first 12 months post-acquisition, and not less than £5 million of revenue for the following 12 months. Such payment is to be split in shares and cash as agreed between the Sellers and the Company, providing no Seller is entitled to receive more than 50% of their total consideration in cash.

On 5 August 2024 £0.8m was paid to the vendors of RJA following achievement of the first tranche earn-out hurdle.

8 Contract Assets and liabilities

	Contract assets	Trade receivables	Contract liabilities
	£'000	£'000	£'000
As at 31 October 2024	29,865	50,847	(345)
As at 31 October 2023	26,148	53,369	(341)
As at 30 April 2024	23,543	58,056	(409)

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 2024	31 October 2023	30 April 2024
	£'000	£'000	£'000
Trade receivables	50,847	53,369	58,056
Prepaid consideration subject to earn-out service conditions	6,201	7,149	6,717
Prepayments	7,342	4,622	7,249
Other receivables	2,491	233	2,083
	66,881	65,373	74,105
	31 October 2024	31 October 2023	30 April 2024
	£'000	£'000	£'000
Amounts falling due after more than one year:
Prepaid consideration subject to earn-out service conditions	5,404	8,257	8,368

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 2024		31 October 2023		30 April 2024
	Fair value	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount
	£'000	£'000	£'000	£'000	£'000	£'000
Current liabilities
Bank borrowings	12,956	12,956	-	-	12,908	12,908
Non-Current liabilities
Bank borrowings	-	-	13,859	13,859	-	-

On 18 April 2022, the Company entered into a revolving credit facility which provides total committed funding of £30m until April 2025. Interest is payable at a margin of 1.95% above the SONIA reference rate.

11 Trade and other payables

	31 October 2024	31 October 2023	30 April 2024
	£'000	£'000	£'000
Current
Trade payables	11,478	9,956	12,839
Other taxation and social security payable	7,717	9,347	8,143
Contingent consideration treated as remuneration	-	118	324
Accruals	5,969	1,969	11,397
Deferred income	345	341	409
	25,509	21,731	33,112

12 Share based payments

Group

At the period end the Group has four share-based payment schemes in operation.

Long Term Incentive Plan ('LTIP')

The Group operates 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 Share Compound Annual Growth Rate (CAGR) over the three-year period ending 30 April 2024/25/26	Amount Vesting %
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.

Restricted Share Award Plan ('RSA')

The Group operates an RSA for the benefit of Senior Management. Awards under the RSA entitle the option holder to participate in dividends however, the shares are restricted for a period of 5 years from issue, such that they cannot be traded.

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 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	At 1 May 2024	Granted during the period	Lapsed during period	Exercised during period	At 31 October 2024
	Years	£	Number	Number	Number	Number	Number	Number
RSA
RSA 21/22 - 27/4/2022	2.5	0.00	1,422,560	1,185,060	-	(12,500)	-	1,172,560
RSA 22/23 - 23/2/2023	3.3	0.00	1,175,000	937,500	-	(37,500)	-	900,000
RSA 23/24 - 21/9/2023	3.9	0.00	790,131	790,131	-	(29,155)	-	760,976
RSA 24/25 - 24/7/2024	4.7	0.00	-	-	3,198,327	-	-	3,198,327
			3,387,691	2,912,691	3,198,327	(79,155)	-	6,031,863
LTIPS
LTIPS 21/22	0.5	0.00	1,115,000	890,000	-	(15,000)	-	875,000
LTIPS 22.23	1.3	0.00	1,320,000	1,130,000	-	(30,000)	-	1,100,000
			2,435,000	2,020,000	-	(45,000)	-	1,975,000
SAYE
SAYE 20/21 - 6/11/2020	0.0	1.02	2,337,197	370,982	-	(179,169)	(191,813)	-
SAYE 21/22 - 25/8/2021	0.0	1.70	673,077	281,264	-	(133,699)	-	147,565
SAYE 22/23 - 22/9/2022	0.9	1.55	1,070,154	604,849	-	(111,604)	-	493,245
SAYE 23/24 - 3/11/2023	2.0	1.14	1,801,308	1,705,640	-	(268,074)	-	1,437,566
SAYE 24/25 - 18/9/2024	2.9	1.12	-	-	938,984	(4,821)	-	934,163
			5,881,736	2,962,735	938,984	(697,367)	(191,813)	3,012,539
CSOPS
CSOPS 20/21 - 7/7/2020	0.0	1.35	976,797	234,702	-	(70,999)	(163,703)	-
CSOPS 22/23 - 14/12/2022	1.1	1.74	300,000	250,000	-	(10,000)	-	240,000
			1,276,797	484,702	-	(80,999)	(163,703)	240,000

During the period 163,703 CSOP options and 191,813 SAYE options were exercised.

On 25 July 2024 3,198,327 Restricted Share Awards were granted.

On 18 September 2024 938,984 SAYE options were granted.

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:

	RSA	SAYE
Grant date	25/7/24	18/9/24
Share price at date of grant	£1.355	£1.36
Exercise price	£nil	£1.12
Volatility	27%	29%
Expected life (years)	5	3.3
Risk free rate	3.945%	3.648%
Dividend yield	-	5.75%
Fair value per share
Market based performance condition	-	-
Non-market-based performance condition/no performance condition	£1.355p	£0.29

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 on Management's expectation of the minimum and maximum exercise period of each of the options granted.

 

END