Gordon Dadds Group PLC
(“Gordon Dadds” or the “Company” or the “Group”)
Completion of acquisition of Ince UK
Half year results for the six months ended 30 September 2018
Expected restoration of trading on AIM
Gordon Dadds Group PLC (AIM: GOR), the London-based legal and professional services group announces:
- Completion of the acquisition of the members’ interests in Ince & Co LLP (“Ince UK”)
- Unaudited results for the six months ended 30 September 2018
- Trading in Gordon Dadds ordinary shares is expected to resume at 7:30 on Wednesday 2 January 2019
- Gordon Dadds has acquired control of the assets of Ince UK, a well-known and respected London-headquartered international law firm
- The legal practice of Ince UK is being merged with Gordon Dadds LLP to trade as Ince Gordon Dadds
- The assets coming under Gordon Dadds control generated fees of £30.5m in the year ended 30 April 2018
- Total consideration is estimated at £27.3m payable in cash over four years and a grant of options over up to 3m new shares
- £12.5m of new borrowing facilities have been arranged
- The international offices of Ince International are not being acquired but have agreed to enter into new network arrangements and will continue to trade as Ince & Co
- The deal is expected to be earnings enhancing in the current year before exceptional costs and significantly earnings enhancing for Gordon Dadds from 1 April 2019 as duplicated costs are eliminated
Financial highlights from first half results
- Revenue up by 56% to £20.11m (H1 2017 £12.89m)
- Operating profits increased by 23% to £4.27m (H1 2017 £3.47m)
- Adjusted profit before tax* increased by 91% to £1.10m (H1 2017 £0.58m)
- Interim dividend of 2p (H1 2017: nil) for payment on 10 April 2019 to shareholders on the register at 1 March 2019
- Adjusted earnings per share* 1.91p (H1 2017 2.26p)
- Strong balance sheet with gross assets of £50.4m (30 September 2017 £40.8 m)
*Adjusted profit before tax represents the profit before income tax of £3.54m after adding back exceptional items of £0.72m and deducting partners’ profit shares of £3.16m. Adjusted earnings per share represents earnings per share based on the Adjusted profit before tax less taxation and remaining non-controlling interests as shown in note 4.
Adrian Biles, Chief Executive of Gordon Dadds Group PLC, commented:
On the Ince deal:
“We are very pleased to have completed the Ince deal. It is a landmark in our development and I’m delighted to welcome our new colleagues. It increases our capacity hugely and we expect it to boost revenue significantly in the coming years.
“We will foster the close working relationships under the Ince Gordon Dadds International Network, ensuring that the enlarged business and the affiliate network will offer our clients breadth of service both by practice area and by geography.”
On the results:
“The deal is underpinned by the strong performance of Gordon Dadds, with first half revenues up by over a half and adjusted profit (before tax) up by over 90%. We have focussed on interoffice collaboration and cross-selling to deliver organic growth. These activities are beginning to bear fruit and there is much more to come.
“The Group has traded to our expectations and the second half of the year should again produce the greater proportion of revenue and profits which gives us confidence that we will meet market expectations for the full year.”
“The quality of this deal reflects the attractiveness of our business model. We have had many approaches from other firms that are similarly interested.
“We have refined our acquisition strategy into three categories: UK firms with over £10 million of annual fee income, international acquisitions which will add to the depth of our core business and smaller acquisitions which can be absorbed into existing offices, increasing the intellectual capital of the Group through niche specialisms and promoting cross-selling.”