Gateley Holdings cancels dividend, suspends guidance

(Sharecast News) - Legal and professional services provider Gateley Holdings updated shareholders on its current and future trading, and the impact of the Covid-19 coronavirus pandemic on Tuesday.
The AIM-traded firm described itself as "prudently managed" for organic and diversified growth, with low levels of debt and a focus on long-term success for its stakeholders.

It said that, after a "solid" first half performance and further diversification by completing four earnings-enhancing acquisitions, the improvements in the economic backdrop and Brexit clarity following the general election, it had seen growing demand for its services in the second half of the financial year ending 30 April.

Trading until the end of February was in line with its expectations.

However, it said that activity had understandably reduced since 1 March, as a result of the disruption caused by the pandemic to its clients and staff.

The board said that once it had visibility on the impact of the virus on its full-year performance, it would provide a further trading update.

Gateley said it remained "highly resilient", with a "strong" client base and a "well-balanced and diversified" service offering.

The directors said the company had successfully mobilised staff to work from home in line with all government guidelines, with many parts of the business currently assisting clients with Covid-19 related issues as well as other ongoing matters.

It said it had still given "careful consideration" to the evolving government guidance over the pandemic, and had concluded that it was currently impossible to predict its likely trading performance in the short-term.

The board was thus taking what it called "the prudent step" to suspend financial guidance going forward until both the impact and duration of the Covid-19 pandemic became clearer.

It also said it believed it would be prudent and in the best interests of all stakeholders to maximise its short-term liquidity.

With that in mind, it had decided to cancel its interim dividend of 2.9p per share, which was due for payment on 31 March.

"As a board, we consider these measures to be in the best interests of all our stakeholders," said chief executive officer Michael Ward.

"Gateley is a resilient and well-balanced business and our economic and geographically diversified business model is well-placed to withstand difficult economic conditions.

"On behalf of the board, I thank all of our people for their continued dedication and hard work under these extremely challenging circumstances and for ensuring that our clients continue to receive the outstanding level of service which they have come to expect from Gateley."

At 1247 GMT, shares in Gateley Holdings were up 0.33% at 122.9p.