Gateley sees income rise to £179.5m but profits plunge due to exceptional costs
Gateley, one of the UK’s last remaining listed law firms, reported mixed results this morning—revenue and underlying profits edged up, but exceptional costs slashed reported profit by more than half.
In its annual update to the London Stock Exchange, the professional services group revealed that underlying pre-tax profits rose 1.2% to £23.3 million in the year ending 30 April 2025. That figure excludes share-based payments, acquisition expenses, and other exceptional charges.
However, once those items were factored in, reported group profit tumbled 54.4%, landing at just £6.4 million, a sharp fall from last year. The firm’s net assets also dropped 16% to £67.5 million, while it ended the financial year with net debt of £6.6 million—a reversal attributed to equity recirculation efforts and group expansion.
Revenues were more positive, rising 4.1% to £179.5 million. Gateley said the drop in cash flow was due to bonus payments returned to staff in 2024/25 and a fall in trade and other payables. Debtor days improved slightly, easing from 111 to 110, helping to support working capital management.
Embed from Getty ImagesDespite the dip in bottom-line profit, the board insisted the firm was performing in line with market expectations, noting the resilience of its model during turbulent market conditions.
Chief executive Rod Waldie highlighted several positives, including an increase in the firm’s revolving credit facility to £80 million, enabling continued acquisition-driven growth.
“FY25 represents another year of revenue and underlying profit growth for Gateley, set against an unpredictable economic backdrop,” Waldie said. “We are particularly pleased that this growth was driven by the combination of positive returns on our recent investments, an increase in activity levels, and active management of cost inflation.”
Despite the profit slide, the firm is proposing to maintain its final dividend at 6.2p per share, consistent with last year.
Gateley shares dipped 1% to 132p following the update, reflecting investor caution amid softening margins and rising debt.
Gateley has been one of the more stable performers among listed legal entities in recent years, though the challenging economic climate and the costs of scaling are clearly taking a toll on profitability—even as top-line growth continues.
The group remains on the lookout for acquisition opportunities, signalling that its expansion strategy will continue despite current headwinds.