Gateley Holdings

Website: Gateley Holdings
Index: AIM
EPIC: GTLY
Supersector: Industrial Goods and Services
Sector: Support Services
Subsector: Business Support Services
Market Cap: £98.57M
Payout Frequency: Semi-Annual

Gateley Holdings Dividend Analysis and Summary

Declared Dividend

Type: Interim dividend
Amount: 3.3p per share (unchanged vs H1 25)
Ex-dividend date: 19/02/2026
Record date: 20/02/2026
Payment date: 31/03/2026
Coverage (H1 basis): Underlying EPS 5.67p vs DPS 3.3p ? c.1.7x covered by underlying earnings

Context and Key Financials

Revenue: £94.3m (+9.3%; organic +8.6%)
Underlying PBT: £9.5m (-10.8%); underlying operating margin: 9.2% (vs 10.5%)
Underlying diluted EPS: 5.65p (-14.8%)
Free cash flow (H1): -£5.0m; cash from operations: -£4.0m (working-capital drag)
Net debt: £19.6m (from £6.6m at FY25); RCF headroom: £49.5m
Working-capital lock-up: 170 days (from 162); debtor days: 97
Guidance: Management confident of meeting FY26 consensus (Revenue £189.4m, Underlying PBT £23.8m)

Dividend Sustainability and Outlook

Earnings cover: Interim DPS is covered c. 1.7x by H1 underlying EPS, indicating acceptable coverage at the half-year stage despite lower margins.
Cash conversion: H1 free cash flow was negative due to increased debtor days and higher lock-up; dividend is therefore currently supported more by earnings and balance sheet/RCF headroom than by H1 cash generation.
H2 rebound potential: Management expects Q2 transactional inertia to unwind in H2, plus benefits from pricing/WIP initiatives and a full-period contribution from GWW. If delivered, this should improve cash generation and sustain the payout.
Policy stance: Board reiterates priority to return regular dividends; interim held flat at 3.3p, consistent with a stable policy while investing for margin expansion (near-term margin target: =13.5% underlying operating margin).
Growth trajectory: Flat interim suggests a pause in dividend growth pending H2 delivery; scope for resumed growth depends on margin recovery, improved cash conversion, and delivery against consensus.

Support from Financial Performance and Capital Allocation

Revenue growth is solid and diversified; legal services organic growth +10.9% offsets consultancy softness.
Capital allocation remains balanced across selective M&A, systems/people investment, and shareholder returns. H1 cash deployment included ~£4.8m M&A (GWW), £2.0m service-line investments, and £3.3m EBT share purchases to support the RSA plan.
Liquidity: Net debt rose, but with £49.5m undrawn RCF and confidence in H2 trading, dividend affordability appears manageable near term.

Structural Changes and Potential Dividend Impacts

Acquisition: Groom Wilkes & Wright (September) — performing ahead of expectations; described as margin enhancing relative to Group margins. Positive for medium-term dividend support if integration continues smoothly.
Operational: Relocation and expansion of Middle East capability (Dubai DIFC) and ongoing systems investments (pricing/revenue management software; 3E rollout) aimed at margin and cash conversion improvement.
Share capital/EBT: EBT purchases to fund RSA awards (non-dilutive recirculation) increase cash outflow but should not structurally impede dividend policy if H2 cash improves.

Risks and Flags for Dividend Stability

Cash conversion risk: Elevated lock-up (170 days) and debtor days (97) drove negative H1 FCF; sustained slippage would pressure dividend funding.
Cyclical exposure: Transactional services slowdown impacted H1 margins; recovery depends on budget-related inertia unwinding as guided.
Net debt trend: Net debt rose to £19.6m; while headroom is ample, further M&A/EBT funding without cash recovery could tighten flexibility.
Non-underlying effects: Reported profit benefited from a bargain purchase gain; underlying profitability and cash remain the key determinants for dividend capacity.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
20/02/2025	31/03/2025	Interim	3.30p	GBX
09/10/2025	14/11/2025	Final	6.20p	GBX

Total (Annual Dividends Per Share): 9.50p

Dividend Yield = Annual Dividends Per Share (9.50p) ÷ Share Price (72.5p) = 13.1%

Ex Dividend Date	Payment Date	Type	Amount	Currency
19/02/2026	31/03/2026	Interim	3.3000p	GBX
09/10/2025	14/11/2025	Final	6.20p	GBX
20/02/2025	31/03/2025	Interim	3.30p	GBX
10/10/2024	08/11/2024	Final	6.20p	GBX
22/02/2024	28/03/2024	Interim	3.30p	GBX
28/09/2023	27/10/2023	Final	6.20p	GBX
23/02/2023	31/03/2023	Interim	3.30p	GBX
22/09/2022	21/10/2022	Final	5.50p	GBX
17/02/2022	31/03/2022	Interim	3.00p	GBX
26/08/2021	08/10/2021	Final	5.00p	GBX
03/06/2021	28/06/2021	Interim	2.50p	GBX
20/02/2020	31/03/2020	Interim	2.90p	GBX
19/09/2019	16/10/2019	Final	5.40p	GBX
14/02/2019	15/03/2019	Interim	2.60p	GBX
13/09/2018	05/10/2018	Final	4.80p	GBX
15/02/2018	16/03/2018	Interim	2.20p	GBX
07/09/2017	04/10/2017	Final	4.40p	GBX
09/02/2017	31/03/2017	Interim	2.20p	GBX
01/09/2016	28/09/2016	Final	3.76p	GBX
24/12/2015	22/01/2016	Interim	1.89p	GBX

Year	Interim	Final	Currency	Total	Change
2024	3.300	6.200	GBX	9.500	0.000
2023	3.300	6.200	GBX	9.500	11.760
2022	3.000	5.500	GBX	8.500	13.330
2021	2.500	5.000	GBX	7.500	158.620
2020	2.900		GBX	2.900	-63.750
2019	2.600	5.400	GBX	8.000	14.280
2018	2.200	4.800	GBX	7.000	6.060
2017	2.200	4.400	GBX	6.600	75.530
2016		3.760	GBX	3.760	98.940
2015	1.890		GBX	1.890

Number of Shares:

Payment	Paid	Amount
Next	–	–
Previous	–	–