Half-year Results

Gateley, the professional services group, is pleased to announce its unaudited results for the six months ended 31 October 2024 (the "Period" or "H1 25").

Financial Highlights

Rod Waldie, Chief Executive Officer of Gateley, said:

"I am pleased with the Group's performance in H1 25.

"The Group continues to benefit from the resilience created by our strategy of investing in a diverse and complementary range of professional services. We are pleased that our more recent organic investments are beginning to generate positive returns alongside the strong performance from our recently acquired businesses. Our balance sheet provides a strong foundation from which to take a long-term view of potential opportunities to further invest in both legal and consultancy services.

"Finally, as always, I would like to thank our clients for their support and our dedicated people for their ongoing hard work, commitment and can-do attitude."

We are pleased with the Group's performance in H1 25, which included two erratic periods in the build-up to the UK General Election and then post-Election to the Autumn Budget. Once again, we are reporting organic growth in both Group revenue and underlying profit before tax. In addition, like-for-like activity levels across the Group increased in the Period and our outlook is more positive than at this stage in the prior year, including in our transactional service areas, as pre-Budget uncertainty moderates and sentiment stabilises.

This outturn is the product of the hard work and commitment of our people to deliver the best possible outcomes for our clients. As always, we are grateful to our colleagues across the Group.

We continue to believe in, and execute, our strategy of investing for growth in both legal services and consultancy services, the latter now accounting for 29.8% of revenue in our uniquely diverse business model. This diversity has been, and remains, the cornerstone of our resilient, year-on-year growth since listing in 2015.

The professional services sector remains fragmented, and we continue to see significant opportunities for further organic growth and selective acquisitions, aided by the Group's strong balance sheet, and undrawn headroom of £17m in the Group's RCF (where cash typically accounts for fifty percent of the consideration we pay). In the Period, we made 10 lateral hires at partner level in our legal services business and fully integrated RJA, which is performing very well. Disciplined capital allocation remains a key priority for us whilst maintaining a robust balance sheet.

In the near-term, our key operational focus is on driving organic revenues and improving margin. Key components in the Group's margin improvement bridge include pricing, WIP management and conversion into fees. All our Platforms have been challenged with positive re-sets, against market data which indicates that we can make improvements against each of these metrics. This operational focus sits alongside an ongoing focus on the basics in our business; consistent delivery of excellent service, enhancing cross-selling opportunities and winning quality, profitable new business on each of our Platforms.

In the Period, we published our fourth annual Responsible Business Report. Having achieved all 15 responsible business targets set out in our prior report, our 2024/25 report sets 15 new objectives in-line with our purpose-led agenda. We have a clear recognition that business is a key engine for change and our responsible business journey progresses with conviction.

The board proposes an interim dividend of 3.3p per share (H1 24: 3.3p).

Current trading and outlook

The strength of our H1 performance, including improved activity levels across the Group and the growing contribution from our recent investments, leaves us looking forward with greater confidence.

Whilst the macro-economic position is difficult to predict, we are encouraged by current activity levels in our transactional services teams allied to ongoing good momentum in those of our counter-cyclical and economically agnostic services. The benefit of the increasingly diversified business model was seen in H1 and we expect a similar effect in H2 and we therefore expect to deliver results for the full year in line with consensus expectations.

Platform review

Group revenue grew by 5.3% to £86.3m for H1 25 (H1 24: £82.0m). Revenue growth in the Group's core legal services was entirely organic at 2.1%, growing to £60.6m (H1 24 £59.3m) whilst revenue from consultancy services grew by 13.6% overall to £25.7m (H1 24 £22.6m). Acquired consultancy revenue totalled £2.9m (H1 24: £1.1m) following the acquisition of RJA (in July 2023) with organic consultancy revenue growth of 6.1% to £22.8m (H1 24: £21.5m).

This generated an increase of 5.8% in underlying operating profit to £9.1m (H1 24: £8.6m) and a 5.9% increase in underlying profit before tax to £10.6m (H1 24: £10.0m). This outturn reflects the quality and breadth of the complementary legal and consultancy advice that we deliver via our four Platforms focused on Business Services, Corporate Services, People Services and Property Services.

Activity levels increased throughout the course of H1 and fee earner utilisation was ahead of the prior year as we progress into H2. Our transactional services saw an increase in activity in Q2, initially stimulated by the lead-in to the Autumn Budget, but continuing into Q3, as demonstrated by 11.1% revenue growth in our Corporate Platform during the Period. Activity in our more counter cyclical businesses remained strong, as demonstrated by 10% growth in revenue in Gateley Smithers Purslow, delivering specialist advice to UK property insurers, in our Property Platform.

In segmental reporting, the Group grew revenue on each of its Platforms, other than the People Platform. In contribution margin, the Group delivered growth on each of its Platforms, other than the Property Platform, resulting in an overall increase of 3.3%. The reduction on the Property Platform is due to in Period people investment in our construction, real estate dispute resolution and house building teams at a time when activity slowed in anticipation of the Budget but will benefit from the positive tail-winds of already made government decisions to speed up planning and supply for building homes in the UK.

Business Services Platform

Platform revenue grew by 8.5%.

In legal services, our commercial dispute resolution team, which accounted for 37% of Platform revenue for H1 25, performed in-line with its target and carries good momentum into H2. The commercial dispute resolution team's work is counter-cyclical or agnostic in nature, as is work undertaken by our regulatory and business defence team.

Previously reported significant investment in our complex international recovery ("CIR") team and class actions team continued in Period, including a laterally hired partner, bringing total headcount in these workstreams to 28. In CIR, we are beginning to see a positive return on this investment, where revenue is significantly ahead of prior year and the team is carrying a number of complex, long-term mandates into H2. These have been sourced from multiple jurisdictions, including Africa and the Middle East. We expect to see a gradual enhancement in returns and view this team as an important part of our strategy to generate further revenues from jurisdictions beyond the UK. In parallel, our class actions team continues its book-build and we look forward to attractive long-term returns from this area.

In consultancy services, both of our patent and trademark attorney businesses, Adamson Jones and Symbiosis IP, were in-line with budgeted revenue and ahead of their prior year positions, with Symbiosis benefitting from our prior year investment in experts in IP valuation and commercialisation. Both have a positive outlook. We continue to appraise opportunities to invest in broadening our intellectual property offering.

In aggregate, consultancy revenue represented 22.9% (HY 24: 24.5%) of this Platform's revenue.

Corporate Platform

Revenue grew by 11.1%, all of which is organic growth. Each of the five units on the Platform were ahead of their prior year position at the end of the Period.

The corporate, banking and tax transactional teams benefitted from a spike in activity during the post-Election, pre-Autumn Budget period. Deal volumes and deal quality was impressive, across multiple sectors, and we acted for a wide range of clients, dominated by private equity and acquisitive corporates. This also cascaded work to other Platforms. Whilst initial indications are that the Autumn Budget has done little to encourage UK growth, currently it has not stifled our transactional services activity. In the meantime, challenging macro-economic conditions during the Period resulted in good activity in our restructuring advisory unit. Indications are that this will continue throughout H2.

We saw in Period lateral partner hires to our corporate, tax and restructuring teams, each of which is London-based and reflective of our commitment to further enhance the quality of our offer.

This Platform is dominated by legal services and will likely remain so, with teams drawing support from services on other Platforms. The Platform's sole consultancy business, Gateley Global, continues to be a good cross-referrer of opportunities across the Group whilst it significantly increased its like-for-like revenue in Period. This predominantly resulted from being appointed by the West Midlands Combined Authority (WMCA) to support its High Growth Accelerator Programme, through which selected businesses access support from Gateley Global to help overcome barriers to growth and manage sustainability. The Group's broad range of professional services was a key factor in WMCA appointing Gateley Global as both provider of expert support and a conduit to wider Group services.

People Platform

This Platform supports clients dealing with and developing people and in administering individuals' personal affairs.

Revenue on this Platform declined by 3.9%, due to significant contraction in our private client team, where we are reducing scale and focusing on core services to high-net-worth clients supported by the appointment of a private client Chartered Tax Advisor with a Big Four background and high net worth focus. Our re-cast private client offer will be stable as we enter FY 26.

Each of the other three units on this Platform delivered like-for-like growth. Under new leadership, our legal services employment team benefitted from strong corporate transactional activity alongside new strategic employment work, including a bespoke service to support public and private sector clients with internal investigations. The team is carrying strong momentum into H2 and will benefit from legislative changes, including the Employment Rights Bill, which is likely to be the most significant change in employment law in a generation.

In pension services, once again, the team's performance was strong. Our pension trustee business, Entrust, is relatively economically agnostic and continues to deliver growth as it realises opportunities from the increase in the number of pension schemes looking to complete full liability buy-outs, with Entrust's technical support.

The combined revenue of our talent assessment, development and cultural change businesses, t-three and Kiddy & Partners is up by 2% versus H1 24. Whilst there seems to be less assessment and development work available in the current economic climate, these businesses are winning increasing share and mandated work is strong moving into H2. These businesses are also working closely with our legal services employment team to maximise opportunities arising from changing legislation in relation to diversity, inclusion and employment rights generally.

In aggregate, consultancy revenue represented 28.8% (HY 24: 27.2%) of this Platform's revenue.

Property Platform

This remains our largest, most diverse, and most mature Platform. Against the backdrop of challenging market conditions in UK commercial and residential real estate, we are pleased to report resilient revenue growth of 4.1%, which is evidence of the benefit of the deliberate mix of services on this Platform.

In legal services, our residential development team remains the largest segment on this Platform. Rolling data from Savills plc indicates that housing transactions were circa 12% below pre-pandemic levels in the first half of 2024, improving to 7% below in the three months to November 2024. Against this data, we experienced 6% like-for-like drop in our residential development team's revenue in Period. However, the team has been consistently busy and is a significant referrer of work to other teams on this and other Platforms. We anticipate a tailwind from government policy to speed up planning for residential development and encourage housebuilders to address supply shortfall. Our market-leading credentials and commitment to best-in-class service in this sector are reflected in the two in Period laterally hired partners to the team.

In commercial real estate, most sectors were and remain cautious, against which we are very pleased with a 6% like-for-like revenue increase from this team. We maintain a focus on both investment and development work and supplemented the team with two lateral partner hires, one of whom brings new environmental expertise to our offer.

Our planning and non-contentious construction teams continue to benefit from self-generated and cross-referred opportunities, as do our real estate dispute resolution and contentious construction teams, both counter-cyclical in nature and both of which generated revenue growth consistent with H1 24. In Period, we laterally hired a partner to our real estate dispute team with particular expertise in the telecoms sector to supplement existing telecoms services in our real estate and Gateley Hamer teams.

Taken as a whole, consultancy business revenue on this Platform grew by 15.6% to £18.9m, of which 5.2% was organic growth. This represented 43.0% of this Platform's revenue.

We saw particularly encouraging H1 performances by Gateley RJA and Gateley Smithers Purslow (GSP). RJA was acquired in July 2023 and has integrated very well. It specialises in the provision of quantity surveying and project management services to organisations in the affordable housing sector, which is likely to continue to benefit from government Housing Policy. It also has expertise to support those teams in Gateley Vinden and GSP, who provide specialist advice to UK property insurers in relation to major loss claims, a busy and economically agnostic market.

People and operations

Our people remain our most valuable asset. We continue to adopt a measured approach to resource whilst seeking to attract the best possible talent to develop and enhance our services. Our average headcount grew to 1,565 as at H1 25, representing year-on-year growth of 4.5%.

Our employee value proposition is constantly evolving, with a consistent focus on employee engagement and inclusion to ensure that we attract and retain the best talent. Our broad range of career opportunities is attractive and our employee offer remains differentiated, including the ability for all of our people to participate in share ownership. In Period we further progressed our internal equity re-circulation plan by funding our EBT to acquire 2,026,490 shares, mainly from employee IPO beneficiaries, to warehouse in order to satisfy future Restricted Share Award Plan issuance to partner and partner equivalents in Group.

Operationally, our focus is on driving organic revenue and realising efficiencies with a singular objective to improve margin, which is our key near-term priority. Each of our Platforms is tasked with improving pricing, WIP management and conversion into fees. We believe that there is a significant opportunity to be captured as we make progress in these areas, alongside the additional opportunity in optimising cross-selling across the Group. In the meantime, the primary focuses of capital allocation remains (1) investment in people and internal capabilities, including in Generative AI, where we are making some good progress, (2) in selective M&A with businesses that align with our culture and values whilst being additive in both existing and new service lines, and (3) in returns to shareholders.

On-going integration of recently acquired businesses is proceeding as planned, including positive enhancements to our Group integration processes. In parallel, phase two of adoption of our new, market-leading business management, productivity, and financial management system (3E) is proceeding throughout FY 25 and into FY 26.

Board changes

On 22 August 2024, the board announced the appointment of Edward Knapp as an Independent Non-Executive Director and Chair Designate. Edward subsequently became Chair following Nigel Payne's retirement from the board on 1 November 2024.

Edward is a global business leader with extensive experience in growth strategy design and delivery, technology, risk management and transformation with a particular focus on professional and financial services. He has held executive and senior leadership roles at McKinsey & Company, Barclays, HSBC, Revolut and M&G, where he has most recently brought a particular focus on advisory, wealth management and talent.

Responsible Business

Being a Responsible Business remains an integral part of our Purpose Statement;

We were delighted to achieve all 15 of our internally set responsible business targets in 2023/2024 and, in Period, we published our fourth annual Responsible Business Report outlining actions taken and setting targets for 2024/2025.

Highlights from the report include:

• A carbon reduction plan including a commitment to achieve net zero emissions by 2040, with interim targets set by 2030;
• The launch of the Purpose Pod - Gateley's Responsible Business podcast; and
• A new strategic partnership with environmental charity the Heart of England Forest.

We are proud of the progress that we have made since publishing our first Responsible Business Strategy in October 2021. We will continue to evaluate where we are effecting change and how we can improve and progress over time. Our journey continues with conviction.

Total expenses

Personnel costs (excluding the IFRS 2 charge) remain in line with H1 24 as a percentage of revenue at 63.4% (H1 24: 63.4%), despite continued wage inflation and an increased headcount as a result of targeted recruitment, including in senior lateral hires. Average numbers of legal and professional staff rose by 4.4% to 1,081 (H1 24: 1,035). Support staff numbers also increased by 4.5% to 484 (H1 24: 463) as we continue to invest in our support functions and operations to enable the Group to deliver the best possible service to our clients.

In line with all businesses in the UK, the changes to National Insurance contributions announced in the Autumn Budget will impact the Group's costs, by c£1.8m in FY26. The Group is well positioned to mitigate these costs through pricing and efficiencies in its ongoing drive for longer term margin enhancement.

Other operating expenses, excluding non-underlying items, increased to £19.1m (H1 24: £18.2m) as the effect of investment and the full year impact of past acquisitions was absorbed. Overall, operating costs as a percentage of revenue have decreased from 22.2% (in H1 24) to 22.1%. Our use of agile working, the new business management system and extensive review of premises usage will generate further medium-term cost savings, where appropriate, without damaging the resources available to clients and staff. In particular, our new business management system will enhance centralised control, support operational efficiencies and drive a level of consistency across the processing of all client and Group data.

Profit before tax and earnings per share

Underlying adjusted profit before tax of £10.6m increased by 5.9% from £10.0m in H1 24. The board recognises this improvement but sees opportunities for further growth alongside continuing investment for future growth.

Reported profit before tax decreased by 54.8% to £3.3m (H1 24: £7.4m) due to H1 24 benefitting from the bargain purchase gain created on acquisition of RJA of £3.6m. Underlying operating profit before tax increased by 5.8% to £9.1m (H1 2: £8.6m). Profit after tax of £1.9m decreased by 68.7%, again due mainly to the bargain purchase gain in H1 24. As a result, basic earnings per share decreased similarly by 70.2% to 1.92p (H1 24: 4.83p). Underlying diluted earnings per share increased by 3.6% to 6.63p (H1 24: 6.40p) after a full Period impact from new shares issued for acquisitions and after further awards made under the Group's share option reward schemes.

Net assets and working capital

The Group's net asset position has decreased by £2.5m to £80.8m (H1 24: £83.3m) as total assets decreased by £1.5m from reductions in non-current assets, mainly through the amortisation of intangible assets, whilst there was an increase in current assets, mainly being cash (£2.5m). Total liabilities increased by £1m as increases in trade and other payables was partially offset by a reduction in non-current assets lease liabilities.

Net cash increased in H1 25 to £1.2m from net debt of £2.2m in H1 24. Cash generation from operating activities was £0.5m (H1 24: cash outflow of £0.3m). Net cash outflows from financing activities increased to £5.2m (H1 24: £2.5m) due to further acquisition of own shares (of £2.8m) to support the strategic re-circulation of equity through the Group's employee benefit trust. Free cash flows for the Period totalled £0.5m (H1 24: £1.5m) but reduced in H1 25 due mainly to increased corporation tax outflows.

Management continues to focus on ways of reducing working capital lock-up. Total lock-up decreased from 164 to 163 days as a result of debtor days improving from 98 to 91, as collection initiatives began to benefit performance. This was mainly offset by strong organic and acquired growth increasing WIP days from 66 to 72 days.

Dividend

The board has proposed an interim dividend of 3.3p per eligible ordinary share (H1 24 3.3p). This dividend will be paid on 31 March 2025 to shareholders on the Company's register on 21 February 2025, with an ex-dividend date of 20 February 2025.

Rod Waldie Neil Smith

Chief Executive Officer Chief Financial Officer

Gateley (Holdings) Plc

Consolidated income statement and other comprehensive income

For the 6 months ended 31 October 2024

Other comprehensive income

Items that are or may be reclassified subsequently to profit or loss

Foreign exchange translation differences

The results for the periods presented above are derived from continuing operations. There were no other items of comprehensive income to report.

Gateley (Holdings) Plc

Consolidated statement of financial position

at 31 October 2024

The following describes the nature and purpose of each reserve within equity:

Share premium - Amount subscribed for share capital in excess of nominal value together with gains and losses on sale of own shares.

Treasury reserve - Represents the repurchase of shares for future distribution by the Group's Employee Benefit Trust.

Gateley (Holdings) Plc

Notes

for the period ended 31 October 2024

Basis of preparation

These interim unaudited financial statements for the six months ended 31 October 2024 have been prepared in accordance with the accounting policies set out in the Annual Report and Financial statements of the Group for the year ended 30 April 2024 using the recognition and measurement principles of IFRS as applied under the Companies Act 2006 and the AIM rules.

The comparative figures for the financial year ended 30 April 2024 are not the company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

1.1 Accounting policies

Accounting policies remain unchanged from those accompanying the 30 April 2024 financial statements.

Non-underlying items

Non-underlying items are non-trading and or non-cash items disclosed separately in the Consolidated Income Statement where the quantum, nature or volatility of such items would otherwise distort the underlying trading performance of the Group. The following are included by the Group in its assessment of non-underlying items:

• Share based payment charges: such charges are treated as non-underlying as the gain realised on the options granted is settled in shares not cash and therefore does not impact the income statement. The IFRS 2 charge is taken to the income statement, these expenses are treated as non-underlying items as they are either non-cash or non-recurring in nature.
• Amortisation in respect of intangible fixed assets: these costs are treated as non-underlying as they are non-cash items.

The tax effect of the above is also included if considered significant.

Exceptional items

Exceptional items are one off transactions, unrelated to the underlying trading performance of the Group disclosed separately in the Consolidated Income Statement where the quantum, nature or volatility of such items would otherwise distort the underlying trading performance of the Group.

The following are included by the Group in its assessment of exceptional items:

• Impairment charges in respect of intangible fixed assets: these costs are treated as exceptional due to their one-off nature.
• Non-typical expenses associated with acquisitions.
• Costs incurred as part of significant refinancing activities.

The tax effect of the above is also included if considered significant.

Intangible assets and goodwill

Goodwill

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee.

Other intangible assets

Other intangible assets, including software licences, expenditure on internally generated goodwill, brands and software, customer contracts and relationships are capitalised at cost and amortised on a straight-line basis over their estimated useful economic lives through operating expenses.

Customer lists

Customer lists that are acquired by the Group as part of a business combination are stated at cost less accumulated amortisation and impairment losses (see accounting policy 'Impairment of assets'). Cost reflects management's judgement of the fair value of the individual intangible asset calculated by reference to the net present value of future benefits accruing to the Group from the utilisation of the asset, discounted at an appropriate discount rate.

Brand value

Certain acquisitions have retained their trading name due to the value of the brand in their specific marketplace.

Brand value is amortised over a period of three or five years based on the Directors' assessment of the future life of the brand, supported by trading history.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of consolidated financial statements under IFRS requires management to make estimates and assumptions which affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on Management's best judgement at the date of preparation of the financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. The key areas where a higher degree of judgement or complexity arises, or where estimates and assumptions are significant to the consolidated financial statements are discussed below.

Management does not consider there to have been any critical accounting judgements made in the financial period.

Unbilled revenue on client assignments

The valuation of unbilled revenue (on non-contingent matters) involves detailed understanding of contractual terms with clients. The valuation is based on an estimate of the amount expected to be recoverable from clients on unbilled items based on such factors as time spent, the expertise and skills provided and the stage of completion of the assignment. The principal uncertainty over this estimation is a result of the amounts not yet being billed to, or recognised by the client. Provision is made for such factors as historical recoverability rates, agreements with clients, external expert's opinion and the potential credit risks, following interactions between legal staff, finance and clients. Where entitlement to revenue is certain it is recognised as recoverable selling price. Where a matter is contingent at the statement of financial position date, no revenue is recognised.

Valuation of intangibles

Measurement of intangible assets relating to acquisitions: In attributing value to intangible assets arising on acquisition, management has made certain assumptions in terms of cash flows attributable to intellectual property and customer relationships. The key assumptions made relate to the valuation of the brand, where the acquired brand is retained by the entity, and the customer list. The value of such intangibles has been estimated based on the amount of revenue expected to be generated by them. The revenue estimations rely on annual growth rates. Management have selected the appropriate rates based on a combination of observed historical growth, industry norms and forecasted influencing factors. Management have also performed sensitivity analysis to assess the impact of any variation to the growth rate used. The rates applied reflect previous growth rates, with sensitivities indicating that variations in the actual rate achieved are unlikely to materially impact the valuation of the intangible assets.

1.2 Alternative performance measures

Underlying operating profit and underlying profit before tax

The Directors seek to present a measure of underlying profit performance which is not impacted by exceptional items or items considered non-operational in nature. These include non-trading, non-cash and one-off items disclosed separately in the consolidated income statement where the quantum, nature or volatility of such items are considered by management to otherwise distort the underlying performance of the Group. This measure is described as 'underlying' and is used by management to assess and monitor profit performance only at the operating, before tax and after tax level. In line with the board's wish to simplify reporting of profits, the board have moved away from reporting adjusted Earnings Before Interest Tax Depreciation and Amortisation ("EBITDA"), following the introduction of IFRS 16 'Leases'.

The adjustment for share-based payments relates to the impact of the accounting standard for share-based compensation. The cost of all share-based schemes are settled entirely by the issue of shares where the proportions can vary from one year to another based on events outside of the businesses control e.g., share price. Under IFRS the anticipated future share cost is expensed to the income statement over the vesting period. The adjustment above addresses this by adding to profit the IFRS 2 charge in relation to outstanding share awards. This adjustment is made so that non-cash expenses are removed from profit.

Cash generated from operations

Free cash flows

1.3 Going concern

These interim accounts are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group remains cash generative, with a strong on-going trading performance.

1.4 Statement of Directors' responsibilities

1.5 Cautionary statement

This document contains certain forward-looking statements in respect of the financial condition, results, operations and business of the Group. Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause the actual results of developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this document should be construed as a profit forecast.

Operating segments

The Chief Operating Decision Maker ("CODM") is the Strategic Board. The Group has the following strategic Platforms, which are its reportable segments. These divisions offer a mixture of legal and consultancy services to clients. With effect from 1 May 2022 all service lines are managed through four Platforms.

The Group has restated the segmental reporting for the comparative periods to reflect the current operating segments in place.

The following summary describes the operations of each reportable segment as reported up to 31 October 2024:

.

6 months to 31 October 2024

*Restated due to internal reclassification of the Commercial legal team from the Corporate Platform into the Business Services Platform with effect from 1 May 2024.

12 months to 30 April 2024

Employees

The average number of persons employed by the Group during the period, analysed by category, was as follows:

Number of employees

The aggregate payroll costs of these persons were as follows:

Underlying earnings per share have been shown because the Directors consider that this provides valuable additional information about the underlying performance of the Group.

Dividends

The board intends to approve an interim dividend of 3.3p (H1 24: 3.3p) per share. This dividend will be paid on 31 March 2025 to shareholders on the register at the close of business on 21 February 2025. The shares will go ex-dividend on 20 February 2025. This dividend has not been recognised as a liability in these final statements.

The Group paid a final dividend in respect of 2024 of 6.2p after the Period end on 8 November 2024.

7 Intangible assets

A contingent consideration arrangement was entered into as part of the acquisition of RJA Associates Limited. A further £2.1 million could be payable with any payment subject to RJA achieving at least £4 million of revenue over the first 12 months post-acquisition, and not less than £5 million of revenue for the following 12 months. Such payment is to be split in shares and cash as agreed between the Sellers and the Company, providing no Seller is entitled to receive more than 50% of their total consideration in cash.

On 5 August 2024 £0.8m was paid to the vendors of RJA following achievement of the first tranche earn-out hurdle.

8 Contract Assets and liabilities

Contract assets

Contract assets consist of unbilled revenue in respect of professional services performed to date.

Contract assets in relation to non-contingent work are billed at appropriate intervals, normally on a monthly basis in arrears, in line with the performance of the services and engagement obligations. Where such matters remain unbilled at the period end the asset is valued on a contract-by-contract basis at its expected recoverable amount.

Contract assets in relation to contingent work are billed at a point in time once the uncertainty over the contingent event has been satisfied and all performance obligations satisfied, such that it is no longer contingent, these matters are valued based on the expected recoverable amount. Due to the complex nature of these matters, they can take a considerable time to be finalised therefore performance obligations may be settled in one period but the matter not billed until a later financial period. Until the performance obligations have been performed the Group does not recognise any contract asset value at the year end.

Contract liabilities

9 Trade and other receivables

10 Other interest-bearing loans and borrowings

The contractual terms of the Group's interest-bearing loans and borrowings, which are measured at amortised cost, are described below.

On 18 April 2022, the Company entered into a revolving credit facility which provides total committed funding of £30m until April 2025. Interest is payable at a margin of 1.95% above the SONIA reference rate.

11 Trade and other payables

12 Share based payments

Group

At the period end the Group has four share-based payment schemes in operation.

Long Term Incentive Plan ('LTIP')

Performance conditions

Restricted Share Award Plan ('RSA')

Save As You Earn Scheme (SAYE)

Company Share Option Plan (CSOP)

The Group operates a HMRC approved CSOP scheme for senior associates, legal directors, equivalent positions in Gateley Group subsidiary companies and senior management positions in our support teams. Options under this scheme will vest if the participant remains employed for the agreed vesting period of three years. Upon vesting, each option allows the holder to purchase the allocated ordinary share at the price on the date of the grant.

The annual awards granted under the schemes are summarised below:

During the period 163,703 CSOP options and 191,813 SAYE options were exercised.

On 25 July 2024 3,198,327 Restricted Share Awards were granted.

On 18 September 2024 938,984 SAYE options were granted.

Fair value calculations