A listed law firm has said it took a profit hit last year in order to restore bonus payments for its staff.
In a trading update to the London Stock Exchange yesterday, Gateley revealed it had made a provision of £4.5m for employee bonuses in the year ended 30 April. This was in contrast to the previous financial year, when performance fell below the threshold for triggering discretionary bonuses.
The full results for 2023/24 are set to be published in July, but the trading update stated that underlying profit before tax is likely to have fallen by 9% to £22.8m. This fall was directly attributable to the bonus payments, the firm said.
Revenue for the period grew by 5.7% to £172m. Gateley said it remained committed to a long-term strategic plan and continued investment in the business. Cash reserves have fallen from £4.3m to £3.3m during the last year.
Rod Waldie, chief executive officer of Gateley, said: ‘I am pleased with the outturn for FY24 which was helped by strong activity levels in Q4. This positions us well as we enter FY25.
‘The group continues to benefit from the resilience created by our strategy of investing in an increasingly diverse but complementary range of professional services. Our strong balance sheet also provides a solid foundation from which to take a long-term view of potential growth opportunities, as well as providing the bandwidth to deliver a strong dividend yield for our shareholders.’
The company is going through continued change at the top level: David Wilton was appointed to the board as non-executive director and chairman designate in February, but yesterday it was announced he would stand down with immediate effect.
The nomination committee has begun a process to recruit a new chairman and in the meantime Nigel Payne has agreed to continue to chair the group until a successor is appointed.
Gateley, the first commercial law firm to list on the stock exchange back in 2015, is now one of a handful of public legal businesses. Its share price rose marginally yesterday but overall in the last year has dropped 34% in value to 113p.
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