Gateley (holdings) Plc · LSE:GTLY
Gateley (holdings) — FY2018 Earnings Presentation
39 slides from Gateley (holdings)'s earnings presentation, July 2018
Slide 1: Full year results for year ending 30th April 2018
Full year results for year ending 30th April 2018 JULY 18
Slide 2: Presentation team
Presentation team Michael Ward Neil Smith FCCA Nick Smith CEO Finance Director Acquisitions Director • Instrumental in the development • 14 years audit experience with Grant • Over 25 years’ experience in of Gateley Thornton national and international corporate • Joined Gateley in 1987 • Joined Gate
Slide 3: Agenda
Agenda • Introduction & 2017/18 Highlights • Financial Review • Market Environment & Acquisitions • What’s next? 3
Slide 4: Introduction and Highlights
Introduction and Highlights Michael Ward
Slide 5: Our strategy
Our strategy We are confident our strategy remains the right one for the continued, profitable growth of the Group Differentiate Diversify Incentivise An established investment choice, profitable, proven track record 5
Slide 6: Gateley Plc
Gateley Plc Established Scale & Diversity • A leading national commercial law and complementary • 500+ fee generating staff and 5,500 clients professional services group • Attractive employer proposition in FY18; we made • Growth achieved both organically and by acquisition 21 lateral hires, includi
Slide 7: Evolution of Gateley
Evolution of Gateley TURNOVER TURNOVER TURNOVER TURNOVER £14.1m £22.5m £26.8m £29m 2004 2007 2008 2010 One of the first London office opens with Acquisition of Acquisition of majority partnerships to acquisition of specialist leading London of Manchester based become an LLP shipping solicitors trans
Slide 8: 2017/18 Highlights
2017/18 Highlights • Continued financial success • Ongoing investment to deliver future growth ─ 101 Partners at IPO (81 IPO shareholders) now 131 ─ Further Partner hires and promotions (FY 16 - 11, FY 17 - 10, FY 18 - 9) ─ Expansion of service lines: International Arbitration - London Private Wealt
Slide 9: Financial Review
*Gateley Plc Financial Review Neil Smith
Slide 10: Continued investment since IPO
Continued investment since IPO Banking & Employment, Business Financial Corporate Pensions & Property Services Services Benefits FEE EARNER GROWTH At IPO (June 15) 72 55 48 40 134 FY18 78 85 57 42 226 (increase %) (8%) (55%) (19%) (5%) (69%) REVENUE GROWTH CAGR since IPO 8.0% 17.0% 11.1% 1.8% 18.8%
Slide 11: Gateley Plc
Gateley Plc Revenue & Profit People FY18 • Total average staff number increase since IPO from • 11% Revenue growth (2017: 15.7%) 599 to 757 (pre GCL and Kiddy) • 11.7% PBT growth (2017 18.8%) • Including GCL and Kiddy currently 574 legal staff and 35 professional staff in complementary service lines
Slide 12: Revenue growth since IPO by Group (%)
Revenue growth since IPO by Group (%) 30.0% 25.0% 20.0% 15.0% FY16 FY17 FY18 10.0% 5.0% 0.0% -5.0% PROPERTY EMPLOYMENT, BUSINESS CORPORATE BANKING AND PENSIONS AND SERVICES FINANCIAL BENEFITS SERVICES 12
Slide 13: Consolidated income statement
Consolidated income statement FY18 FY17 FY16 ANNUAL RESULTS - APRIL 2018 £m £m £m Revenue 86.1 77.6 67.1 Personnel costs (52.6) (45.6) (39.0) Other operating costs (17.0) (17.1) (15.2) (excluding non-underlying items but including other income) Total cost (69.6) (62.7) (54.2) Adjusted EBITDA 16.5 14
Slide 14: Balance sheet
Balance sheet FY18 FY17 FY16 AS AT 30 APRIL 2018 £m £m £m Non-current assets* 5.5 6.2 4.2 Current assets 45.7 41.8 43.5 Cash 4.3 2.7 9.8 Unbilled Revenue (WIP) 10.7 10.5 9.9 Trade receivables 28.5 26.1 20.8 Other Debtors 2.2 2.5 3.0 Non-current liabilities (including £3.0m (2017 £5.0m of debt) (3.6)
Slide 15: Incentivisation
Incentivisation Three option schemes in existence: OPTION TYPE % AWARD FOCUS DATE OF ISSUES SARS (Growth shares) 50% June 15, Oct 16, Oct 17 • Directed at senior level appointments that are driving growth and service delivery within the group CSOPs 25% Oct 16, Oct 17 • Discretionary award to associa
Slide 16: Market Environment & Acquisitions
Market Environment & Acquisitions Nick Smith
Slide 17: The pace of change is quickening!
The pace of change is quickening! 17
Slide 18: Law firm leader predictions 2018
Law firm leader predictions 2018 “My view of 2018 is a positive one. In any period of disruption there is always work for “The drive for differentiation between lawyers to do.” firms will get stronger and stronger. I think we’ll see more mid-market firms looking for combinations to position SIMON LE
Slide 19: "Cobotics" - The first step to AI
“Cobotics”* - The first step to AI “Initially focus on developing the full potential of your employees by applying automation to routine work; then you can proceed to concentrate on human - machine collaboration.” PAUL DAUGHERTY, CO-AUTHOR OF HUMAN + MACHINE, CTO ACCENTURE *See appendices for full d
Slide 20: The emergence of the quoted law sector
The emergence of the quoted law sector 20
Slide 21: With others to come?
With others to come? Others? 21
Slide 22: Our flotation plan progresses
Our flotation plan progresses Global Mobility
Slide 23: Acquisition summary
Acquisition summary 4 Acquisitions since IPO • Capitus and Hamer acquisitions integrated well • GCL and Kiddy integration focus in 18/19 Focus: Our criteria: • Immediately earnings enhancing • Strategic and cultural fit • Positively contributing to financial • Complementary client base result • Deal
Slide 24: What next?
*Gateley Plc What next? Michael Ward
Slide 25: What next?
What next? • Plc status continues to raise our profile, creating opportunities • Seek further growth in a well-balanced and resilient business • Continued execution of strategic plan - Deliver 100% client satisfaction - Consider further lateral hire opportunities - Continue to develop national offer
Slide 26: Appendices
*Gateley Plc Appendices
Slide 27: Gateley office locations
Gateley office locations = opened / acquired since IPO 27
Slide 28: An opportunity in the market
An opportunity in the market Gateley is well positioned to ride out any storm and to continue to win market share: • A track record of profitable growth • A clear plan, a quality offering, a strategic business • Offering all the services mid-market clients are likely to need • Gateley <1% of overall
Slide 29: Gateley's market position
Gateley’s market position • No EU referendum impact immediately visible in our business • Our clients currently telling us the same • Gateley has shown itself resilient for the last 15 years+ through good and more challenging times • Moving to Plc created the platform for continued growth even antic
Slide 30: Gateley's market position
Gateley’s market position Broad-based, with no significant dependencies: • No sector dependency • No client dependency • No legal discipline dependency • No geographic dependency • No London markets dependency • No overseas capital commitments or FX exposure • No governmental dependency • Counter-cy
Slide 31: Acquisitions: Collective Strength & Growth
Acquisitions Collective Strength & Growth Working together to generate sales info and out of Gateley’s existing business Investors Developers Occupiers onstruction operates Corporates Policies & nds {) Procedures PLO TUPE § Dutsourcing MBA Property ee QYe@® ane Business Corporate Employment RealEsta
Slide 32: Collective Strength & Growth
32 Collective Strength & Growth Acquisition Criteria time is to Giferentéate our offering our revenue streams to develop Gatley ino a iaw-led business services group Goal aver and ye Legal and non-iegal Legal and comptementary noo egal businesses .-e Standalone growth plans Growth potertsal in the t
Slide 33: Net Promoter Score
Net Promoter Score *Gateley Plc Clients were asked how Detractors Passives Promoters likely they would be to recommend Gateley Plc to peers and colleagues. a zor to 10, with 200 oguaing to not bone at alikolyto—~=«WN Promoter Score = - recommend through to 10 being very likely to recommend. 33 Promo
Slide 34: Kiddy & Partners
Kiddy & Partners A leading firm of Human Capital consultants specialising in assessment, talent management and leadership development. “Kiddy have helped our senior team make a significant shift in performance and capability.” TEA COLAIANNI, GROUP HR DIRECTOR, MERLIN ENTERTAINMENTS “Kiddy’s work wit
Slide 35: Gateley Hamer case study
Gateley Hamer case study Gateley Hamer is a specialist property consultancy providing expert advice relating to easements & wayleaves for utilities infrastructure, and compulsory purchase & compensation. Expertise in valuation and negotiation, also offering: • Utilities compensation • Compulsory Pur
Slide 36: Gateley Capitus services
Gateley Capitus services Whether you acquire and manage commercial properties, develop new schemes or occupy and refurbish, capital allowances on a property purchase could yield a cash benefit of up to 20% of the total purchase price or a refurbishment return 40% of the total expenditure. Energy and
Slide 37: Specifically, what is cobotics?
Specifically, what is cobotics? Tasks that are arduous, difficult, or to which people add little value are transferred to machines. The operator works in direct contact with the robot or in its immediate environment. With such proximity the operator can decide whether to interact or not with the mac
Slide 38: Financial calendar
Financial calendar Half year Full year results results ended ended 31 October 2017 30 April 2018 December 2017 17 July 2018 Final dividend Full year results ended Ex-div 30 April 2017 September July 2017 2018 Interim dividend AGM Admission to AIM Ex div 26 September 2018 June 2015 15 Feb 2018 2015 2
Slide 39: Disclaimer
Disclaimer These presentation slides (the “Slides”) have been issued by Gateley (Holdings) Plc (the “Company”) in relation to its full year results for the 12 months to 30 April The Slides have been prepared by and are the sole responsibility of the Company. Although all reasonable care has been tak