Slide 1: Full Year Results
Full Year Results July 2017 Confidential
Slide 2: Presentation team
Presentation team Michael Ward Neil Smith Nick Smith CEO Finance Director Acquisitions Director • Instrumental in the development of Gateley • Joined Gateley in 2008 from Grant Thornton • Over 25 years’ experience in national and • Joined Gateley in 1987 • Fellow of ACCA international corporate fina
Slide 3: Agenda
Agenda Introduction and Highlights Financial Review Market Environment & Acquisitions Summary and Outlook 3
Slide 4: Our strategy remains
Our strategy remains Our Plc strategy is the platform for continued long-term profitable growth: Differentiate Diversify Incentivise 24 months post-Admission we remain the only full-service listed commercial law firm A stable, broad-based & resilient business 4
Slide 5: Gateley Plc
Gateley Plc ESTABLISHED A leading national commercial law and complementary professional services group Growth achieved both organically and by acquisition 16 business lines + 3 complementary professional services Gateley Capitus, Gateley Hamer and Entrust SCALE & DIVERSITY 400+ fee generating staff
Slide 6: Evolution of Gateley
Evolution of Gateley £77.6m £67.1m £58m £53.8m £45.3m £29m Turnover £26.8m 2017 £22.5m 2015 2016 £19.4m 2016 £14.1m 2014 2012 Staff share 2010 2008 Floated on Capitus Ltd schemes 2007 Second law AIM June acquired introduced 2006 Opening of April 2016 2004 Acquisition Leeds office firm to obtain ABS
Slide 7: 2016/17 Highlights
2016/17 Highlights • Continued financial success • On course with long-term strategic plan – Completed transition of LLP liabilities – Gateley’s free float now 34% - Future strategy – Lateral partner hires • Enhanced service offering – Further expansion of Reading – 19 staff/7 partners – Acquisition
Slide 8: Financial Review
*Gateley Plc Financial Review
Slide 9: Financial highlights
Financial highlights Revenue FY17 revenue Organic - £75.6m £77.6m Growth 15.7% Acquisitions - £2.0m PY £67.1m PY 10.2% Same profile of 1st half /2nd half revenue split – 45/55% FY17 Adjusted Growth In line with market expectations EBITDA Continued people and infrastructure investment £14.9m 15.5% Ma
Slide 10: Consolidated income statement
Consolidated income statement FY17 FY16 Full year 30 April (audited) Change % £m £m Revenue 77.6 67.1 15.7% Personnel costs (45.2) (38.8) 16.5% Other operating costs (excluding non-underlying items but (17.5) (15.4) 13.6% including other income) Total cost (62.7) (54.2) 15.7% Adjusted EBITDA 14.9 12
Slide 11: Group Fees £m
Group Fees £m 35 30 25 20 15 10 5 0 Banking and Corporate Business Services Employee, Pensions Property Financial Services and Benefits FY17 Fees £m FY16 Fees £m 11
Slide 12: Organic fee growth %
Organic fee growth % 30 25 20 15 10 5 0 Banking and Financial Corporate Business Services Employee, Pensions Property Services and Benefits -5 FY17 Fee growth % FY16 Fee growth % 12
Slide 13: Acquisitions
Acquisitions Gateley Capitus (Apr 16) £m Jun 2013 Jun 2014 Jun 2015 Apr 2016 Apr 2017 (10 months) • 4.7x PBIT Revenue 1.2 1.2 1.4 1.0 1.2 • Acquired for £2.9m • Cash £1.6m + 0.2m deferred Pro-forma 0.1 0.1 0.4 0.2 0.2 EBITDA • Shares £1.1m @ 1.01p • Acquired assets £0.6m Activity since acquisition •
Slide 14: Balance sheet
Balance sheet FY17 FY16 As at 30 April (audited) £m £m Non-current assets* 6.3 4.2 Current assets 41.8 43.5 Cash 2.7 9.8 Unbilled Revenue (WIP) 10.5 9.9 Trade receivables 26.1 20.8 Other Debtors 2.5 3.0 Non-current liabilities (5.6) (8.1) Current liabilities (25.0) (26.9) Net Assets (before final di
Slide 15: Cash flow statement
Cash flow statement Extracts from Consolidated cash flow FY17 FY16 statement for the year ended 30 April £m £m (audited) Profit for the year 10.1 8.6 Cash generated from operations before taxation (% of profit) 10.5 (104%) 15.3 (178%) Taxation (2.8) (1.0) Investing activities (1.7) (1.9) Financing a
Slide 16: Current share statistics
Current share statistics Market capitalisation/free float Shareholder as at 26 June 2017 % Market capitalisation £195m Liontrust 9.49% Free float 34.3% Miton Asset Management 7.21% Premier Fund Managers 5.71% Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 1st 2nd partner partn
Slide 17: Market Environment & Acquisitions
Market Environment & Acquisitions 17
Slide 18: Market environment
Market environment • Total UK sales of legal services – over £30bn • UK accounts for around 10% of global legal services revenues • UK legal industry is by far the biggest in Europe, second only to US worldwide • English common law adopted 27% of the World’s 320 legal jurisdictions • Over 350,000 pe
Slide 19: An industry in change
An industry in change Mergers continue Post- Total Report Date Firm 1 Main Office Firm 2 Main Office Total Lawyers Merger Lawyers Name 03/07/2017 Fieldfisher London 420 Lucchini Bologna 15 Fieldfisher Gattamorta & SAPSI* Associates 28/06/2017 Kennedys London 975 Berg Manchester 8 partners Kennedys 0
Slide 20: An industry in change (continued)
An industry in change (continued) 20
Slide 21: People
People “What keeps associates happy is that feeling of being part of the business, not just like a work production unit” David Higgins, Freshfields Bruckhaus Deringer “In the first five years I mentored lawyers, one in ten were showing signs of stress. Now 40% to 50% are.” Paul Gilbert, LBC Wise Cou
Slide 22: Competitor analysis
Competitor analysis % % increase/ increase/ Law Firm Revenue decrease PEP decrease Eversheds Sutherland £438.6m 8%8% £742,000 2%8% Fieldfisher £165m 34% £640,000 16% Gateley Watson Farley & Williams £159.8m 22% £600,000 25% 4% Revenue TLT £74.6m CMS £805m 1% 1 £77.6m 11% 8.5% +15.7% Stephenson Harwo
Slide 23: 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 strengthening balance sheet, a focus for product and people development A clear plan, a quality offering, a strategic business Offering all
Slide 24: Market environment
Market environment No EU referendum impact immediately visible in our business Our clients currently telling us the same Gateley has shown itself resilient for the last 10 years+ through good and more challenging times Moving to Plc created the platform for continued growth even anticipating
Slide 25: Market environment (continued)
Market environment (continued) 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 Count
Slide 26: Acquisitions
Acquisitions 26 Collective Strength & Growth - king together to generate @2@0@ Comparate, - Sruplovenaat . ‘esl Estate sonore *Gateley Plc
Slide 27: Collective Strength & Growth: Acquisition Criteria
27 Collective Strength & Growth ° Ga te ley Plc Acquisition Criteria '¢ Our goat Goal over tine is to dtterertia our oftereg ‘and diversity our reveeue streams to develop Gotmley ito a law-od business services group ® Profitable ‘The target must be a proftatie ard estabtsted business © Meaningtu Dut
Slide 28: Acquisitions update
Acquisitions update • Plenty of opportunities, across all 5 operating segments • Seven sub-sectors under active, detailed consideration • Multiple potential targets identified • Capitus & Hamer integration on-going • Broader visibility and focus improving Integration Investment Stabilisation/ Cross-
Slide 29: Summary and outlook
Summary and outlook 29 *Gateley Plc
Slide 30: Summary and outlook
Summary and outlook Plc status continues to raise our profile – Group is well balanced and resilient Continue to provide a platform for the continued growth and enhancement of the business New and exciting opportunities in each area of our Strategic Plan Build a full service office in Reading Ta
Slide 31: Appendices
Appendices 31 *Gateley Plc
Slide 32: Gateley's core values are:
Gateley’s core values are: Collaborative Our business is all about building and maintaining relationships and working in a collaborative way across our teams and offices and with our clients to achieve the right result. Pioneering Being the first commercial law firm to go public highlights our pione
Slide 33: Net Promoter Score
Net Promoter Score Clients were asked how likely they would be to recommend Gateley Pic to peers and colleagues. Clients were asked to provide a rating on a scale from zero to 10, with zero equating to not being at all likely to recommend through to 10 being very likely to recommend. Promoters 3 13%
Slide 34: Progress
Progress First dividend 1/3 Full year results ended Second dividend 2/3 1st partner lock-in sales 21 Jan 2016 30 April 2016 28 September 2016 Oct 2016 19 July 2016 Acquisition of Gateley Acquisition of Half year results ended Full year results ended Capitus Gateley Hamer 31 October 2016 30 April 201
Slide 35: 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 April 2017. The Slides have been prepared by and are the sole responsibility of the Company. Although all reasonable care has been