It looks like staff layoffs aren’t the only way law firms are dealing with the financial ramifications of the global pandemic. U.K.-based law firm Gateley, which is a publicly traded entity, announced that they would not be giving its shareholders their interim dividend due to the economic fallout from the coronavirus.
As reported by Law.com, the move is designed to maximize liquidity:
A dividend of 2.9 pence per share was due to shareholders on March 31. However, in a protective move, the firm announced via the London Stock Exchange on Tuesday that it was now “prudent” to cancel the payout in order to “maximize the group’s short-term liquidity.”
It also said that it would “suspend financial guidance going forward until both the impact and duration of the COVID-19 pandemic becomes clearer.”
Michael Ward, the firm’s CEO, said the firm’s financials are poised to weather the financial turbulence:
“As a board, we consider these measures to be in the best interests of all our stakeholders. Gateley is a resilient and well-balanced business and our economic and geographically diversified business model is well-placed to withstand difficult economic conditions.”
And despite the firm’s stock prices taking a COVID-19 related hit — 20+ percent of the firm’s value was depleted over a two-week period — the financials seem solid. In the firm’s statement on the suspension of dividend payments they also touted their low levels of debt and “a solid first half performance.” This past year saw Gateley’s revenue climb an impressive 19 percent, breaking the 100 million mark — revenue was £102 million — for the first time.
Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).