MIDAS SHARE TIPS UPDATE: A chance to get rich with the lawyers as Gateley doubles in six years
Law firm Gateley is one company that expects to move to hybrid working in the months ahead.
With 1,100 employees in offices across the country, the group switched to home-working last spring, along with almost every other professional services firm.
Now staff want a blend of home and office, and chief executive Rod Waldie is inclined to agree with them. He took the helm on May 1 last year, when Gateley had cancelled its dividend and was struggling to work out what coronavirus would mean for business.
Based in Birmingham, Gateley floated in 2015, the first law firm to list on the stock market
The group specialises in helping companies with mergers, acquisitions and property deals, so prospects did not seem bright in the early days of the pandemic – and the share price tumbled, hitting a low of £1.19 in March last year.
But Gateley has consistently done better than expected. Customers started to regain confidence from late summer onwards and last week, Waldie said that annual turnover to April 30 would be almost 10 per cent higher than the previous financial year, with profits some 8 per cent ahead.
Significantly too, Gateley is paying dividends again, starting with a 2.5p special dividend and moving to normal distributions in the months ahead. The news pleased investors and Gateley ended the week at £1.99, almost 70 per cent up from its low point in 2020.
Based in Birmingham, Gateley floated in 2015, the first law firm to list on the stock market.
The business said then that it intended to grow organically and through acquisitions, and Waldie is determined to do just that, focusing not just on other law firms but related businesses too, such as consultancies specialising in infrastructure, regeneration or regulation work.
Brokers forecast turnover of £120million for the year just ended, rising to £132million in 2022, with profits climbing from £19million to £21.1million. A dividend of 7.5p is pencilled in for 2021, moving to 8.6p next year.
Midas verdict: Midas recommended Gateley in 2015, when the shares were 98p. Today, they are £1.99 and should increase materially over time. Once considered primarily an income stock, Waldie wants to make Gateley a company that delivers share price growth as well as attractive dividends.
He seems well positioned to do so. Existing stock owners should hold. New investors could grab a few of these shares too.
Traded on: Aim / Ticker: GTLY / Contact: gateleyplc.com or 0121 234 0000