Birmingham-based law company Gateley’s (GTLY:AIM) release of a strong set of pre-close results has pleased the market, driving up its share price by 5.3% to 169.5p.
The firm has announced its third acquisition since listing in 2015, buying land and property experts GCL Solicitors. The deal will cost £4.15m, its biggest yet and one that will be immediately earnings accretive.
The deal is structured as £2.28m in cash and £1.87m in shares priced at 160p. It is expected to complete by 23 May.
SOLID RESULTS
According to the statement issued by Gateley, full year results are expected to be in line with market expectations.
The first listed law firm says its revenues for the year ending 30 April will be no less than £84m, up from the £77m the prior year. Adjusted earnings before interest tax depreciation and amortisation (EBTIDA) will be at least £16m. Last year it came in at £14.9m.
Keith Baird, analyst at house broker Cantor Fitzgerald, has raised earnings forecasts by 4% for 2019 to 12p and by 5% for 2020 to 13.2p respectively.
The company’s two previous acquisitions have taken the Gateley name and have successfully integrated.
These are Gateley Hamer and Gateley Capitus, both involved with providing land services such as surveying and a tax incentives consultancy for land owners respectively.
Gateley trades on 15.8-times 2018’s earnings based on Cantor Fitzgerald’s forecasts. It also has a prospective dividend yield of 3.6%.
