This morning’s follow up to the brief statement released on 6 May confirms an excellent second half to the year, with revenue growth of at least 20% H2 21 vs H2 20. Management guides to underlying PBT of at least £19m and a return to the pre-COVID dividend policy. We now increase our FY 21 and FY 22 EPS by 36% and 24%, having left our numbers unchanged at the previous update. Net cash excluding leases of £20m indicates very strong cash flows, despite the unwind of a £5m VAT creditor in H2, and was much better than our estimate of £7.5m. We increase net cash from £7.5m to £20m for FY 21, but leave our FY 22 net cash flat yoy given three dividend payments. The UK M&A sector has seen a recovery in the number of deals and deal value after deals were paused in Q2 20, which is clearly positive for Gateley. BUY, TP increased from 220p to 300p.
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