Gateley says a £3m slowdown in pre-Budget transactions knocked profits down 10.8% even as group revenue rose to £94.3m.
Gateley has reported that a marked slowdown in transactional activity ahead of the government’s budget wiped around £3 million from expected revenue in the first half of its financial year. The listed law firm said “pre-budget transactional inertia” stalled work in its corporate division and ultimately offset gains made elsewhere in the business.
Despite the disruption, Gateley recorded overall revenue of £94 million for the six months to October, representing growth of over 9% compared with the same period last year. Profits, however, fell from £10.6 million to £9.5 million. The firm emphasised that the half-year results extended its run of profitable revenue growth since joining AIM more than a decade ago and said it expected activity levels to normalise as delayed work pipelines begin to move post-budget.
Corporate work was the exception to an otherwise positive performance across Gateley’s platforms, with the division posting a small revenue decline of 0.5%. The firm described a growing reluctance among clients to complete transactions during the second quarter of 2025, noting that the behaviour was almost the reverse of the surge in pre-budget activity experienced the previous year.
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By contrast, property work delivered “exceptional” growth of more than 14%. The residential development team remained the largest revenue generator, while the real estate team increased its income by over 23%. Gateley said demand in the industrial, logistics, data centre and build-to-rent markets had helped counter the subdued conditions across the broader commercial property landscape. Consultancy services grew more modestly at 5.5%, contributing £27 million.
The integration of intellectual property specialists Groom Wilkes & Wright, acquired in September for an initial £5.7 million, was described as progressing well and performing ahead of expectations. The deal marked the firm’s fifteenth acquisition since flotation. Gateley said the wider professional services market remained fragmented and continued to present opportunities for organic expansion and selective purchases. The group retains close to £50 million of undrawn capacity within its £80 million revolving credit facility.
Net debt rose to nearly £20 million, reflecting the Groom Wilkes acquisition, compared with a £1.2 million surplus at the same point last year. Average headcount fell by 1.8% to 1,062, which the firm attributed to managing turnover while still investing in growth, including the recruitment of nine lateral partners.
Chief executive Rod Waldie said organic revenue growth of 8.6% stemmed from a focus on higher-value work, new pricing and conversion-to-fees measures and returns on recent investments. He said these factors supported confidence in margin expansion despite the temporary impact of the slowdown in corporate transactions.
Market expectations for the full year stand at revenue of £189 million and underlying profit before tax of £24 million. Gateley announced an interim dividend of 3.3p, unchanged from last year. Shares closed at 108p, up 5% following the results, but below the 139p recorded a year ago.