Gateley Holdings (AIM:GTLY) reported revenue up 8.2% to £194.3m for the year ended 30 April, an all-time high and the eleventh consecutive year of growth since its stock market listing.
The AIM-listed legal and professional services group, spanning corporate, property, business services and people advisory work, grew organic revenue by 6.2%, with the remainder driven by September's acquisition of Groom Wilkes & Wright, which is trading ahead of initial expectations.
Adjusted operating profit rose 2.7% to £21.5m, but the margin slipped to 11.1% from 11.7% as the company invested in administrative support teams and systems.
Statutory operating profit almost doubled to £7.5m from £4m, while adjusted earnings per share fell to 11.48p from 12.77p, driven mainly by lower net interest income.
Chief executive Rod Waldie, who is stepping down on 1 August for personal, health-related reasons after six years in the role, said "some Q4 deferment and increased targeted contentious workstreams in year have masked the real progress we have made in moving towards our margin improvement ambition."
Martin Pike, currently a non-executive director and audit committee chair, will take over as interim chief executive from 1 August while a permanent search continues.
Fee-earner headcount fell 4% to 983, even as the group added 13 lateral partner hires.
Trading in the early weeks of the new financial year is in line with the board's expectations, and Gateley reiterated its ambition to lift adjusted operating profit margin to at least 13.5%.
News Intelligence what this means for the company
Gateley posted record revenue of £194.3m (up 8.2%) for its eleventh consecutive year of growth, but adjusted operating margin contracted to 11.1% from 11.7% as the firm invested in support infrastructure. The headline growth masks a margin miss that CEO Rod Waldie attributed partly to Q4 deferment and contentious work timing—a signal that top-line momentum has not yet translated to the 13.5% margin target the company is pursuing.
Revenue growth remains intact and the Groom Wilkes & Wright acquisition is outperforming, but the margin squeeze—despite 8.2% revenue growth yielding only 2.7% profit growth—underscores execution risk on the path to the stated 13.5% margin ambition. CEO transition to an interim leader adds near-term uncertainty.
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Panmure Liberum repeats Buy rating
Panmure Liberum analyst Sanjay Vidyarthi described Gateley's FY26 results as in line with expectations, and added that the update was reassuring, emphasising the CEO transition alongside ongoing EBIT margin and working capital initiatives.
The broker repeated a Buy rating, and 210p price target, whilst highlighting the rebased dividend, which still offers an attractive 10.3% yield. Vidyarthi adds that a CY26E PE of 4.5x leaves the stock looking too cheap for its longer-term potential, supporting the maintained positive stance.
