Portfolio

Gateley updates on trading as it scoops up property law specialist GCL

By Duncan Ferris

Date: Monday 21 May 2018

Gateley updates on trading as it scoops up property law specialist GCL

(Sharecast News) - Commercial law and complementary professional services provider Gateley reported improved sales and profits for the past year and announced the acquisition of GCL Solicitors for a total consideration of £4.15m.
In a trading update on Monday, the firm said it expects revenue to be not less than £84m, which would be up 9% from £77m in the previous financial year, while EBITDA is projected to be at least £16m, up 7.4% from £14.9m the year before.

The company said it has recorded growth across all of its segmental reporting lines and will seek further expansion opportunities through complementary professional services.

"I am delighted with the strong performance of the business this year and the growth we have achieved in both fees and profitability. The board recognises how hard our teams have worked again this year and wishes to thank everyone involved in Gateley's continued success," said chief executive Michael Ward.

The company expects to recommend a final dividend in line with its stated dividend policy of distributing up to 70% of its after-tax profits.

The new year's earnings are expected to be immediately enhanced by the addition of GCL, which specialises in legal advice for land and property clients, and will trade under the Gateley name once the acquisition goes through.

GCL generated revenues of £6m and EBITDA of approximately £0.6m in the year ended 31 March.

Ward said: "The acquisition will further strengthen our leading position in the residential development sector nationally and provide us with a substantial presence in the southern market, which we see as critical in developing a full service offering for our clients. There is a structural under supply of new housing in the UK and we see this as a market that will remain strong."

The acquisition will see the integration of all 79 of GCL's staff into Gateley's existing residential development team which already comprises 119 staff and sits within its property group.

The AIM-traded company said the newly enlarged sales team would oversee £2.5bn worth of plot sales annually and benefit from GCL's existing technology platform.

Tony Inkin, managing partner of GCL, said: "We have a great opportunity with our combined areas of expertise to build an unrivalled offering for clients in the south of the UK and to strengthen further the private property investment part of our business. We are looking forward to integrating with the team and also benefitting from being part of a wider professional services group that will open up many new opportunities for our existing team and clients."

As of 1012 BST, Gateley's shares were up 6.06% at 170.75p.

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