In an update ahead of its half-year results for the six months ended October 31, the AIM-listed firm said it has demonstrated “considerable resilience” in the period generating revenue of “not less” than GBP50mln compared to GBP51.8mln last year.
The company also said its activity levels and revenue generation were continuing to follow an improving trend, with monthly activity during September and October above the comparable period last year.
As a result of what it said was a “resilient revenue performance” and cost-reduction initiatives during the early stages of the pandemic, Gateley said it has achieved an underlying adjusted pre-tax profit of at least GBP7mln, up from GBP6.6mln in 2019.
The company said it has also entered the second half of its current year “with a strong sense of optimism, tempered only by possible further impacts from the global pandemic and Brexit”.
“I am delighted with the group’s operational and financial performance in the first six months of the financial year. Our loyal and dedicated staff have continued to serve our clients to the highest standard whilst working even more closely together across our Platforms to attract new work, in what has become a “new normal” trading environment”, chief executive Rod Waldie said in a statement.
“The group is successfully leveraging its breadth of diversified service lines that are increasingly important to our clients. Our revenue pipeline continues to strengthen and this, combined with the many operational efficiencies and cost reduction measures that we have introduced in 2020, leads me to be confident that, despite the circumstances, the group is well positioned to deliver, to all of its stakeholders, a strong performance for the financial year”, he added.
In a note, analysts at Liberum reiterated their ‘buy’ rating and 220p target price on the stock, saying the company is “well placed to continue to take market share as activity recovers and the top 100 [law firms] continue to consolidate the market” and said Gateley is their top pick in the legal services sector.
Meanwhile, Gateley’s house broker finnCap reiterated their view that the company’s model “provides good growth prospects, supported by the addition of high-quality staff and acquisitions, strengthening the range of services offered” and retained their 188p target price.
Gateley shares jumped 3.5% to 161p in early deals.