Gateley CEO, Michael Ward

Publicly-listed U.K. law firm Gateley has canceled its interim dividend—an amount payable to shareholders—in a bid to hedge against the short-term economic fallout caused by the COVID-19 pandemic. 

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."

Gateley, like all six U.K. listed firms, has been weathering torrid market conditions in the wake of the coronavirus outbreak, and saw more than 20% of its value wiped in the space of two weeks. The firm currently sits on a 122 pence share price, while before the pandemic it climbed as high as 222 pence in February.

In a statement, the firm said it was "impossible to predict the group's likely trading performance in the short-term, but also set out the firm's credentials, clarifying that its long-term future was secure, adding that it had only "low levels of debt" on the back of "a solid first half performance."  

The statement continues that activity has reduced since March 1 as a result of the disruption "caused by the COVID-19 pandemic to our clients and to our staff," and that it will provide a further trading update once the situation becomes clearer. 

The firm's CEO, Michael Ward, said in the statement: "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."

In May, Gateley's revenue soared by nearly 19% to hit £102 million in its unaudited accounts for the most recent financial year. The firm's acquisitive stride has gathered momentum, with the firm last year making its third law firm acquisition when it took over Guildford property firm GCL Solicitors.