REG - JTC PLC - Full year results for year ended 31 December 2024
08/04/2025 07:00
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RNS Number : 0128E JTC PLC 08 April 2025
full year RESULTS for the year ended 31 december 2024
8 April 2025
JTC PLC
("the Company" together with its subsidiaries ("the Group" or "JTC")
Full year results for the year ended 31 December 2024
A fast start to our "Cosmos" era from both an organic and inorganic
perspective proving JTC's defensive growth capabilities
As reported Underlying*
2024 2023 Change 2024 2023 % +/-
Revenue (£m) 305.4 257.4 +18.6% 305.4 257.4 +18.6%
EBITDA (£m) 49.1 77.8 -36.9% 101.7 85.9 +18.4%
EBITDA margin* 16.1% 30.2% -14.1pp 33.3% 33.4% -0.1pp
Operating profit/EBIT (£m) 18.9 52.7 -64.0% 71.6 60.8 +17.8%
Profit before tax (£m) -7.4 24.3 -130.5% 47.4 40.5 +17.1%
Earnings per share (p)** -4.44 14.20 -131.3% 41.80 37.30 +12.1%
Cash conversion* 98% 106% -8pp 98% 106% -8pp
Net debt (£m) 206.9 135.1 +71.8 182.3 123.3 +59.0
Dividend per share (p) 12.54 11.17 +12.3% 12.54 11.17 +12.3%
* For further information on our alternative performance measures (APM's)
see the appendix to the CFO Review.
** Average number of shares (thousands) for 2024: 163,308 (2023: 153,659)
STRONG FINANCIAL PERFORMANCE
· Revenue +18.6%, driven by net organic growth of 11.3% (2023:
19.9%)
· Underlying EBITDA +18.4% to £101.7m (2023: £85.9m) with consistent
underlying EBITDA margin of 33.3% (2023: 33.4%)
· New business wins +15.9% to a record £35.7m (2023: £30.8m)
· Excellent underlying cash conversion of 98% (2023: 106%)
· Leverage of 1.79x underlying EBITDA at period end, comfortably
within the guidance range of 1.5x - 2.0x
· Undrawn funds of £125.9m of £400m facility at period end
· Total dividend per share +12.3% to 12.54p (2023: 11.17p)
· Doubling of business in Galaxy era marked by award of c.£50m in
JTC shares to all eligible employees in July 2024, reflected in reported
earnings
CONTINUED SUCCESSFUL EXECUTION OF GROWTH STRATEGY
· Institutional Client Services Division performed well in the
current market environment with net organic growth of +9.9% and revenue of
£180.9m
· Private Client Services Division saw outstanding net organic
growth of +14.0% and revenue for the first time over the £100m barrier at
£124.5m. This was driven by particularly strong growth in the US, Cayman and
Jersey
· Six acquisitions announced or completed in the year. FRTC (PCS
Division) and Blackheath, Hanway, Buck and FFP (ICS Division) are all
integrated. The exciting Citi Trust acquisition (PCS) is due to complete by
the end of Q2 2025. ROIC improved to 12.6% (2023: 12.3%) significantly above
cost of capital.
STRONG GROWTH OUTLOOK
· Good start to the new year, with strong organic growth trends set to
continue, supported by a robust pipeline of new business opportunities across
both Divisions that has grown to £55m at end of Q1.
· Active pipeline of M&A opportunities across both Divisions and key
target markets, supported by existing balance sheet capacity
· Medium term guidance maintained:
o Net organic revenue growth 10%+ per annum
o Underlying EBITDA margin of 33% - 38%
o Cash conversion of 85% - 90%
o Net debt of between 1.5x - 2.0x underlying EBITDA
· On track to deliver on our Cosmos era strategic objective to double
the size of the business again from FY23 by FY27
Nigel Le Quesne, CEO of JTC PLC, said:
"2024 was the first year of our Cosmos era business plan and we have made a
fast start towards our goal of doubling the size of the Group for the third
time since IPO. We delivered record new business wins, organic growth above
our upgraded guidance and a strong margin, even as we continue to invest in
growth.
Alongside the strong organic performance, we announced or completed six
acquisitions during the period, including Citi Trust, the global trust company
business of Citi Bank. This is a significant addition to our PCS Division and
cements JTC's position of the world's leading independent trust company
business.
We have carried strong momentum into 2025, growing our new business enquiry
pipeline, a driver of organic growth, to £55m by the end of Q1 and we
maintain a healthy pipeline of further M&A opportunities across both
Divisions.
Finally, we were delighted to be able to make an award of c. £50m to our
global workforce, in recognition of their collective achievement to double the
size of the Group in just three years by delivering our Galaxy era plan. Our
commitment to ownership for all employees remains our defining characteristic
and I thank our employee-owners for their dedication to our clients and for
bringing the JTC culture to life."
ENQUIRIES
JTC PLC +44 (0) 1534 700 000
Nigel Le Quesne, Chief Executive Officer
Martin Fotheringham, Chief Financial Officer
David Vieira, Chief Communications Officer
Camarco
Geoffrey Pelham-Lane +44 (0) 7733 124 226
Sam Morris +44 (0) 7796 827 008 (tel:++44%207796%20827%20008)
A presentation for analysts will be held at 09:30 BST today via Zoom video
conference. The slides and an audio-cast of the presentation will subsequently
be made available on the JTC website www.jtcgroup.com/investor-relations
(http://www.jtcgroup.com/investor-relations)
FORWARD LOOKING STATEMENTS
This announcement may contain forward looking statements. No forward-looking
statement is a guarantee of future performance and actual results or
performance or other financial condition could differ materially from those
contained in the forward looking statements. These forward-looking statements
can be identified by the fact they do not relate only to historical or current
facts. They may contain words such as "may", "will", "seek", "continue",
"aim", "anticipate", "target", "projected", "expect", "estimate", "intend",
"plan", "goal", "believe", "achieve" or other words with similar meaning. By
their nature forward looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of these influences
and factors are outside of the Company's control. As a result, actual results
may differ materially from the plans, goals and expectations contained in this
announcement. Any forward-looking statements made in this announcement speak
only as of the date they are made. Except as required by the FCA or any
applicable law or regulation, the Company expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this announcement.
ABOUT JTC
JTC is a publicly listed, global professional services business with deep
expertise in fund, corporate and private client services. Every JTC person is
an owner of the business, and this fundamental part of our culture aligns us
with the best interests of all our stakeholders. Our purpose is to maximize
potential and our success is built on service excellence, long-term
relationships and technology capabilities that drive efficiency and add value.
www.jtcgroup.com (http://www.jtcgroup.com/)
Chief Executive Officer's review
A fast start to the Cosmos era
"2024 was the first year of our latest multi-year business plan, the Cosmos
era, where we aim to once again double the size of the business, in terms of
revenue and underlying EBITDA, from where we finished FY23. This means that we
are targeting revenue of £500m+ and underlying EBITDA of over £170m+ by or
before the end of 2027."
Nigel Le Quesne
CEO
Aiming to double in size yet again
2024 was the first year of our latest multi-year business plan, the Cosmos
era, where we aim to once again double the size of the business, in terms of
revenue and underlying EBITDA, from where we finished FY23. This means that we
are targeting revenue of over £500m and underlying EBITDA of £170m+ by or
before the end of 2027.
On the basis that the Cosmos plan is achieved, it will be the third time we
have doubled the size of the business since our IPO in 2018, first through the
Odyssey era (2018 to 2020) and most recently the Galaxy era (2021 to 2023).
A clear strategy driven by a unique culture
JTC is a people business powered by a unique culture of shared ownership for
all employees and our ability to deliver client service excellence and
superior financial performance has been honed over nearly four decades.
At our core, we focus on strong net organic growth, which is achieved by
partnering with our clients for an average of 14 years. These long
relationships allow us to grow alongside our clients, supporting their success
and creating opportunities to provide more and better services over the
lifetime of each mandate. For the Cosmos era we increased our guidance for net
organic revenue growth to 10%+ per annum and in 2024 we met that target with
a result of 11.3%.
Alongside organic growth, our industry continues to consolidate and JTC has
become a preferred buyer of businesses across a wide range of service lines
and geographies, including the high growth US market, where we are now the
largest independent private trust company provider and have established a good
platform in fund and corporate services. We apply a highly disciplined
approach to our M&A activity, always focusing on the long-term value that
each addition to our platform will bring and putting people and culture at the
heart of each transaction.
In 2024 we announced or completed six acquisitions, which further increased
the range of services we offer and strengthened and deepened our business in
key geographies, including the UK and the US.
In addition to these well-defined growth strategies, our global platform is
built around employing top talent, operating in all the locations where our
clients and partners need us and utilising the best technology to ensure that
our services are sophisticated, secure and highly efficient.
Our people and Shared Ownership
No review of 2024 would be complete without specific mention of our people and
the continued success of our Shared Ownership programme. Shared Ownership has
been at the heart of our culture for over 25 years and during the period
was recognised through multiple award wins and featured for the fifth time as
part of the prestigious Harvard Business School MBA programme.
Having 2,300 owners, rather than employees makes an enormous difference to the
working environment, and the organisations culture ensuring that the team are
happy valued empowered and highly motivated to improve our business everyday.
Having achieved our Galaxy era plan in FY23, where we doubled the size of the
business relative to where we finished FY20, in July 2024 we made Galaxy era
EIP awards of c. £50m in JTC shares to all eligible employees globally. The
Galaxy award was the fourth share award event in our history and brings the
total current value of JTC Shared Ownership awards since 1998 to over £450m.
The Galaxy award was celebrated across our global network and it remains a
source of enormous pride and motivation to hear the feedback from our people
as they enjoy sharing in the successful growth of our company.
The Galaxy awards energised the business going into year one of the Cosmos era
and the positive effects for our global team were evidenced by another year of
high employee retention. Our regretted attrition again stood at 4%, which
remains well within our KPI of 10% or less. This is significantly better than
industry norms, with typical attrition rates of c. 20%. In addition, feedback
from our annual employee survey, which had a response rate of 89%,
demonstrated the difference that Shared Ownership makes with it having the
highest scoring average of all survey areas, 86% of respondents said that they
value being an employee owner at JTC and 84% agreed that JTC's Shared
Ownership culture provides the business with a key differentiator in the
market.
We believe that these qualitative and quantitative feedback metrics, when
combined with the consistent financial performance delivered by the Group,
demonstrate the power of our unique culture and underscore our ongoing
commitment to 100% Shared Ownership for all JTC employees. Shared Ownership
also continues to play a positive and significant role in our M&A activity
as well as being the foundation for our talent development, leadership and
succession planning programmes.
Financial performance
Revenue grew 18.6% to £305.4m (2023: £257.4m) and underlying EBITDA
increased 18.4% to £101.7m (2023: £85.9m). Net organic revenue growth was
11.3% (2023: 19.9%), lower than 2023 as anticipated, but in-line with our
upgraded guidance for the Cosmos era of 10%+ per annum and driven by a 15.9%
increase in new business wins to a record £35.7m (2023: £30.8m). Despite the
strong organic growth performance and associated costs of on-boarding new
business, our underlying EBITDA margin remained stable at 33.3% (2023: 33.4%)
and continued within our medium-term guidance for this metric of 33% to 38%.
Cash conversion was once again robust and at the top end of guidance at 98%
(2023: 106%). Following the series of acquisitions made, leverage at the
period end, excluding the Citi Trust transaction, was 1.79x, which is well
within our guidance range of 1.5x to 2.0x. The Citi Trust acquisition remains
on track to complete by the end of Q2 2025.
Consistent growth during macro uncertainty
2024 was another eventful year on the macro front, not least due to elections
in the US, which remains our priority growth market for both Divisions, the
first budget from a new government in the UK and continued conflict and
geopolitical tensions in Europe and the Middle East.
I have written before about the natural 'hedge' that exists within the
business, which allows us to deliver consistent growth throughout the economic
cycle. When markets are buoyant, we win more 'new from new' business as
clients launch new investment vehicles (notably funds) and the propensity to
invest and add to portfolios more generally increases. When conditions are
less favourable, we generate more work from existing clients as they respond
to threats and opportunities in relation to their current holdings and
structures. As a professional services business with client contracts that
span 14 years on average, increased activity levels within the existing client
base is meaningful for the Group.
In addition to this established pattern of demand, which we have observed for
more than 30 years, we have a culture of continuous improvement and innovation
that permeates through the business. Through both M&A and internal
development, we add new services that are complementary to our core fund,
corporate and private client offering. This allows us to grow 'share of
wallet' with existing clients and also helps us to win new mandates. Service
lines added in the Galaxy era now make meaningful contributions to Group
revenue and these include our banking platform (incorporating foreign
exchange, treasury and custody), operational due diligence and strategic
transformation services.
During the period, and aligned with our acquisition of FFP, we announced the
creation of Northpoint Governance Services, a new practice area that will
provide a range of highly specialised and expert services across the full
spectrum of governance. Northpoint will be complementary to our core offering
and also create opportunities for us to work with and provide unbundled
services to a new cohort of businesses.
With a global addressable market for our full range of services that we
believe is at least $15.3bn per annum in size, there remains enormous
opportunity for further long-term growth.
Institutional Client Services Division
Revenue increased 10.8% to £180.9m (2023: £163.3m) with a 7.2% increase in
underlying EBITDA to £55.3m (2023: £51.6m). Underlying EBITDA margin
decreased by 1pp to 30.6% (2023: 31.6%) and despite a challenging environment
with fewer fund launches and IPO's, net organic revenue growth was robust at
9.9% following the exceptional performance in the prior year (2023: 19.4%).
The annualised value of new business wins was £20.5m, matching last year's
record (2023: £20.6m).
Our ability to identify and complete value accretive deals continued with four
acquisitions completed during the period. Blackheath Capital, an established
UK ManCo business which was announced in 2023, completed in March and adds
further scale and strategically important UK coverage to our Global AIFM
Solutions business. Complementary to this was the acquisition of Hanway
Advisory in July. Hanway provides corporate governance, fund administration
and accounting services to UK listed investment companies and as well as
adding scale, supports strategic growth objectives by leveraging the wider JTC
fund services offering to Hanway's existing client base.
JTC's Employer Solutions business delivered a strong performance and was
bolstered by the acquisition of Buck Share Plans, which was announced in
August and completed in November. Buck helps to accelerate the growth of our
share plan trustee and administration service offering, and brings with it an
existing book of high quality, long-standing blue-chip clients, and an
experienced, client-focused and committed team across the UK, Guernsey and
Germany.
The most significant acquisition of the year for the ICS Division was FFP,
which was announced in June and completed in November. FFP is a provider of
specialist fiduciary services to fund, trust and corporate clients with a
leading position in complex engagements including restructurings,
insolvencies and disputes. The business is headquartered in the Cayman
Islands, with further offices in the BVI and Dubai, all of which are
complementary to JTC's existing footprint. The acquisition enhances and
differentiates the range of fiduciary services JTC can offer to existing and
new clients, serving to expand the Group's overall addressable market. The
business sits alongside our new Northpoint Governance Services practice, the
strategic initiative focused on the provision of a suite of specialist
services designed to ensure effective management, oversight and
decision-making within the Group's client base.
Within the core ICS business, the US remained the fastest-growing market, with
excellent performance from SALI Fund Services and the wider US platform, which
continues to go from strength to strength under the direction of the US
leadership team. There were also good performances from Luxembourg and the
Channel Islands.
In September, Kate Beauchamp took over as Group Head of the Division, having
previously been an Independent Non-Executive Director on the JTC Board for two
and a half years. Kate's understanding of the business from her time as a NED,
combined with her proven track record of providing exceptional corporate and
advisory services in the UK and US, make her the perfect choice to lead the
ICS Division through the Cosmos era and beyond. In particular, Kate's skills
as a qualified lawyer with over two decades of experience in both private and
commercial practice are well aligned with the Division's plans to develop and
grow its governance services offering.
At the end of the year, the Division stood at some c. 1,150 people serving
clients from 25 offices and generating 59% of Group revenues (2023: 63.4%).
This scale and reach, combined with our focus on providing client service
excellence enabled by best-in-class technology, stands us in good stead to
succeed in what remains a competitive market.
Overall, the ICS Division made good progress in 2024 despite the macro
environment and as it continues to scale through the development of new
services lines, we anticipate strong organic growth and additional
opportunities for M&A.
Private Client Services Division
Revenue increased 32.3% to £124.5m (2023: £94.1m) with an increase of 35.2%
in underlying EBITDA to £46.4m (2023: £34.3m). The underlying EBITDA margin
was 37.3% (2023: 36.5%). The investments made in the PCS platform continued to
bear fruit, with net organic revenue growth remaining very strong at 14.0%
following the 'purple patch' last year (2023: 20.9%). New business wins
increased by an excellent 49% to £15.2m (2023: £10.2m) driven by strong
performance from the US, Cayman and Jersey in particular.
PCS had an excellent year and I must commend Iain for his contributions to the
ongoing success of the business. Under his leadership over the past 12 years,
the Division has consistently outperformed the market.
The continued strong organic growth of the Division reflects both the quality
and range of our PCS offering as well as our ability to capture value from
acquisitions, in particular those in the US. NYPTC, acquired in 2022, enabled
us to become the first non-US bank to be licensed to provide trust company
services in Delaware. SDTC, a strategic acquisition made in 2023, brought an
established client base of c. 1,700 high net worth and ultra-high net worth
clients and a 22 year track record of consistent growth, high margins and
strong cash conversion.
Our US platform was further enhanced with the acquisition of First Republic
Trust Company Delaware (FRTC-DE) in August, which increased our footprint in
one of the pre-eminent locations for trust work in the US. Then in September,
we announced the transformational purchase from Citi Group of Citi Trust,
their Global Trust company business. In addition to building upon our leading
position in the US market and making JTC arguably the world's leading
independent trust business, it will enhance our capabilities in the Middle
East and Asia regions. Once the US element of Citi Trust is taken into
account, our run rate revenues for the Group will make the US JTC's largest
market by revenue at Group level. The Citi Trust transaction remains subject
to regulatory approval and we anticipate it closing at the end of Q2 2025.
The Division continues to attract top talent from the industry and we are
successfully redefining the parameters of a world-class PCS offering, which
includes both direct services to end clients and indirect services to provide
solutions and support to institutions for their PCS client books, which in
turn, enlarges our addressable global market.
The Division won 10 awards during the period, but the highlight among them was
being named 'Trust Company of the Year (Large Business)' at the Society of
Trust and Estate Practitioners (STEP) Awards in September. The STEP Awards are
recognised as the 'Oscars' of the private client industry and this is the
second time we have won the top award.
These successes, along with continued ambitious growth plans and a clear plan
to fully integrate the Citi Trust business once regulatory approval is
received, form the foundation of the Division's plans as it enters the second
year of the Cosmos era.
Risk
The team worked to further enhance our global Risk & Compliance function
to meet the ever-evolving requirements of international regulation, including
the initiation of a Cosmos era project to update our policy and procedures
frameworks and the deployment of new technology solutions to enhance accuracy
and efficiency across our global platform. While work in this area inevitably
presents challenges, it also creates opportunities for growth and we embrace
these as our clients, especially the larger and more complex organisations,
look to us for expertise and support in this area. Many of our most recently
developed service lines, including tax compliance and regulatory reporting are
driven, in part or in whole, by the regulatory landscape and this connects
commercially to our development of the new Northpoint Governance practice.
We continue to see long-term emerging risks come into greater focus, including
transition risks associated with the world seeking to decarbonise. The war in
Ukraine and conflict between Israel and Palestine continued in 2024 and
despite new approaches in the early part of 2025 following the election of
President Trump in the US, there remains significant uncertainty around the
outcomes in these regions. As a Group, we are acutely aware of our
responsibilities in relation to sanctions compliance and continue to enforce
all such measures rigorously.
Further advances and increasing competition in artificial intelligence (AI)
were seen in 2024, in particular generative AI and large language models. One
of our significant technological advancements we've made in 2024 is the
roll-out of ChatJTC, our own Gen AI tool, across our entire business.
As with almost every technological innovation, we see both opportunity and
risk inherent in these inventions. Given that our services rely extensively on
dealing with large amounts of data in a secure manner and where many of the
outputs we produce to clients are in the form of 'words and numbers', we have
embraced the opportunity to partner with our technology providers and examine
use cases that are of benefit to the growth of the business, as well as those
that present risks. This work has been supplemented with updates to system use
policies and internal training and communications.
Our internal Sustainability Forum, created in 2022, worked to manage and
deliver our sustainability roadmap across the Group. At Board level, the
Governance and Risk Committee has responsibility for oversight of risk at a
Group level, as well as providing guidance on our sustainability journey and
the commercial opportunities the Group might capture through the provision of
sustainability services to clients, more details can be found in the
Committee's report starting on page 93. We were once again a Carbon Neutral+
organisation and made our second public submission to the Carbon Disclosure
Project (CDP). We have enhanced our disclosures further this year, providing
details of our Scope 3 emissions, with 2023 as our baseline year, and
substantially expanding our disclosures under Task Force on Climate-related
Financial Disclosures (TCFD).
Outlook
In 2024 we made a fast start to the Cosmos era, delivering strong net organic
growth in-line with our upgraded guidance and securing six acquisitions at
attractive multiples, including the Citi Trust business, which when completed,
will make JTC the largest independent provider of private trust services in
the US and will drive our revenue profile on a pro-forma basis such that the
US market becomes the Group's largest region.
Despite ongoing macro uncertainty during the period, our ability to grow
consistently is a fundamental feature of the business that has been refined
over 37 years of continuous revenue and profit growth and we remain dedicated
to the culture, approach and discipline that have enabled it. The ability to
continually expand client relationships, as well as to win new clients in
competitive markets, is testament to the quality of service that our people
deliver and the way we add value through the development and introduction of
relevant new services over time.
While we are committed to using the best technology tools available, it is our
people that form and nurture relationships with our clients and it is our
culture of Shared Ownership that binds our team together and gives us shared
vision, purpose and belief in our ability to succeed. Our commitment to a
meritocratic Shared Ownership culture remains unwavering and it was a major
highlight of the year to see c. £50m of value awarded to our employee-owners
in recognition of their achievements in delivering the Galaxy era plan between
2021 and 2023, doubling the size of the Group some two years earlier than
first anticipated.
Our approach to inorganic growth is highly disciplined and always focuses on
the opportunities that we believe will deliver the best long-term benefits for
the Group. Despite a lacklustre market for M&A overall, we were still able
to announce or complete six deals in the year across both Divisions at an
average multiple of c. 6.5x EBITDA. The most notable of course is the
acquisition of Citi Trust, which builds upon our leading position in the US
market. The transaction remains subject to regulatory approval and we
anticipate it closing mid-2025. While our focus in the near term will remain
on the completion and subsequent integration of Citi Trust, we maintain a
healthy pipeline of high quality opportunities in our chosen markets.
The balance and diversification that our two Divisions continue to provide to
the Group was demonstrated in the period. The ICS Division faced market
headwinds, but was still able to deliver impressive organic growth and was the
beneficiary of four of the six acquisitions announced. The PCS Division
continued its run of excellent results, with outstanding organic growth and
record new business wins, cementing its position as one of, if not the,
leading Trust company business in the world. The opportunities and market
positioning delivered by the Citi Trust acquisition give an excellent outlook
for continued strong performance.
Looking ahead, we carry energy and momentum from a successful first year of
the Cosmos era as we work towards our goal of doubling the size of the Group
for the third time in a decade and achieve £500m+ of revenue and £170m+ of
underlying EBITDA before or by the end of 2027. We will continue to ensure
that the JTC platform remains well invested at all times and that our talented
global team are ready and equipped to grow with the business, maximise their
individual potential and exceed the expectations of our clients. The Group
will continue to innovate and shape the markets we serve in a way that
supports long-term value creation for all stakeholders.
In concluding, I once again extend my thanks to every member of the growing
and talented JTC team for their efforts in 2024.
Nigel Le Quesne
Chief Executive Officer
Chief Financial Officer's review
Continuing our revenue growth momentum into the Cosmos era
"Having raised our annual organic growth guidance to at least 10% for the
Cosmos era, we are pleased to deliver 11.3% of organic growth at a consistent
margin. Once again, this demonstrates our ability to invest and deliver on
growth whilst maintaining our profitability."
Martin Fotheringham
Chief Financial Officer
Revenue
2024 revenue was £305.4m, an increase of £48.0m (+18.6%) from 2023. Constant
currency revenue growth was marginally higher at 20.2%, reflecting some
weakening of the US dollar throughout the year (2023: 28.7%).
Net organic growth was 11.3% (2023: 19.9%), delivering on Management's
medium-term guidance range of 10% or higher. The rolling three-year average
increased to 14.4% (2023: 13.8%), remaining consistent with the position
mid-year and reflecting the sustained growth that the business has delivered
over recent years.
Within organic growth, we have continued to see both strong volume and pricing
growth. We were delighted to beat our upgraded net organic growth guidance
target in 2024, noting that, as previously highlighted, volume growth in 2023
was exceptional thanks to the strong uptake of our newly launched Banking and
Treasury services.
We achieved £24.0m of inorganic revenue growth in 2024 (2023: £17.9m). The
full year impact of our M&A activity in the year will be felt in 2025 and
2026.
Our fifteen largest clients represent 8.9% (2023: 9.5%) of our annual revenue,
reflecting continuing reduction in customer concentration and diversification
of the business. The new business pipeline remains healthy, and after a record
year of new business wins, now stands at £49.8m at the period end
(31.12.2023: £54.9m).
Net organic growth was driven by gross new business revenues for 2024 of
£38.7m (2023: £49.6m). Within growth, we saw client attrition of 4.7% (2023:
5.1%), with the three-year average falling to 5.4% (2023: 6.4%). Our
decreasing attrition rates reflect the increasing longevity of our client
relationships, positively impacted by high-quality acquisitions in recent
years.
The retention of revenues increased to 98.4% (2023: 98.2%), with the rolling
three-year average also improving to 98.3% (2023: 98.0%). The three-year
average has remained within a range of 96.6% to 99.0% since our IPO.
Geographical growth is summarised below, the highlight being the 48.8% growth
recorded in the US (2023: 70.5%), with the region now representing 32% of our
reported revenues (2023: 25%). The US remains a key strategic region and has
delivered the highest growth for five successive years.
2024 2023 £ +/- % +/-
Revenue
Revenue
UK & Channel Islands £135.9m £128.2m +£7.7m +6.0%
US £96.5m £64.8m +£31.6m +48.8%
Rest of Europe £40.8m £38.7m +£2.1m +5.5%
Rest of the World £32.3m £25.7m +£6.5m +25.5%
Total Revenue £305.4m £257.4m +£48.0m +18.6%
Revenue growth, on a constant currency basis, is summarised as follows.
2023 Revenue £254.1m
Lost - JTC decision (£1.1m)
Lost - Moved service provider (£2.7m)
Lost - Natural end/no longer required (£7.6m)
Won - Net more from existing clients £21.8m
Won - New clients £16.9m
Won - Acquisitions* £24.0m
2024 Revenue £305.4m
* When JTC acquires a business, the acquired book of clients is
defined as inorganic for the first two years of JTC ownership. Acquired
clients contributed an additional £24.0m in 2024, which can be broken down
as follows: SDTC £18.1m, FRTC £2.3m, Blackheath £0.3m, Hanway £0.8m, Buck
£0.2m, and FFP £2.3m.
Underlying EBITDA and Margin Performance
Underlying EBITDA in 2024 was £101.7m, an increase of £15.8m (+18.4%) from
2023. This was a significant increase on the prior year, although it was lower
than anticipated due to the weakening of the US dollar and a later than
expected completion date for FFP.
Our underlying EBITDA margin remained consistent but reported a slight drop to
33.3% (2023: 33.4%). Achieving increased revenue growth requires significant
up-front investment and this inherently slows down margin progression.
As a people-driven business, our human capital is vital to the continued
longevity of our client relationships and the quality of our service. In 2024,
our staff expenses (excluding the EIP share-based payment) were 53.1% of
revenue (2023: 51.2%) and are indicative of our continued investment in the
business.
To sustain growth and maintain our market position, while aiming for +10%
organic growth across our Divisions, we will continue investing in the
necessary infrastructure.
Institutional Client Services
Revenue increased by 10.8% when compared with 2023 (+19.5%).
Net organic growth, on a constant currency basis, was 9.9% (2023: 19.4%), with
the main source of growth coming from the Caribbean and the US. The rolling
three-year average now stands at a strong 14.7% (2023: 15.2%), well above our
medium-term guidance range.
Our net organic growth was particularly pleasing in a period where the
macroeconomic uncertainty resulted in tougher markets in the UK and Europe,
with a slowdown in the new fund launches and overall activity levels, that was
largely outside of our control.
Attrition for the Division fell to 4.5% (2023: 5.2%), of which 2.9% (2023:
3.5%) was for end-of-life losses. The rolling three-year average attrition now
stands at 5.7% (2023: 7.1%). The continued improvement in attrition is still
largely attributable to the SALI and RBC cees acquisitions and to the
lengthening of structure lives as the adverse economic environment persisted.
Revenue growth, on a constant currency basis, is summarised below.
2023 Revenue £161.3m
Lost - JTC decision (£0.8m)
Lost - Moved service provider (£1.8m)
Lost - Natural end/no longer required (£4.6m)
Won - Net more from existing clients £14.9m
Won - New clients £8.3m
Won - Acquisitions* £3.6m
2024 Revenue £180.9m
* When JTC acquires a business, the acquired book of clients is
defined as inorganic for the first two years of JTC ownership. Acquired
clients contributed an additional £3.6m in 2024, which can be broken down as
follows: Blackheath £0.3m, Hanway £0.8m, Buck £0.2m, and FFP £2.3m.
The Division's underlying EBITDA margin decreased from 31.6% in 2023 to 30.6%
in 2024, driven by ongoing investments in people and infrastructure to
capitalise on growth opportunities, increased regulatory obligations, and the
delays in the launch of new funds.
We remain confident that continued investment in the Division will result in
improved longer-term returns
Private Client Services
Revenue increased by 32.3% when compared with 2023 (+48.5%).
Net organic growth, on a constant currency basis, was 14.0% (2023: 20.9%),
with particularly strong growth in the US and the Caribbean. The rolling
three-year average now stands at 14.5% (2023: 12.2%).
Attrition for the Division increased slightly to 5.2% (2023: 5.0%), of which
3.7% (2023: 3.0%) was for end-of-life losses.
Revenue growth, on a constant currency basis, is summarised below.
2023 Revenue £92.8m
Lost - JTC decision (£0.3m)
Lost - Moved service provider (£0.9m)
Lost - Natural end/no longer required (£3.0m)
Won - Net more from existing clients £6.9m
Won - New clients £8.6m
Won - Acquisitions* £20.4m
2024 Revenue £124.5m
* When JTC acquires a business, the acquired book of clients is
defined as inorganic for the first two years of JTC ownership. Acquired
clients contributed an additional £20.4m in 2024, which can be broken down as
follows: SDTC £18.1m, and FRTC £2.3m.
The Division's underlying EBITDA margin increased from 36.5% in 2023 to 37.3%
in 2024, driven by the integration of recent acquisitions and an improved
performance from Kensington.
The Division continues to perform very well and has consistently reported
towards the top end of Management's medium-term guidance range.
(Loss)/Profit Before Tax
We have reported a loss before tax of £7.4m (2023: £24.3m profit). This loss
was driven by a £36.4m expense for Employee Incentive Plan (EIP) share
awards, these are non-cash awards and are settled out of shares held in the
EBT and are treated as a non-underlying expense. We had higher than average
acquisition and integration costs as a result of the M&A activity across
the year.
The depreciation and amortisation charge increased to £30.1m from £25.1m in
2023. Of this £5.0m increase, £3.2m was as a result of intangible assets and
£1.6m was as a result of increased depreciation charges on right-of-use
assets.
Adjusting for non-underlying items, the underlying profit before tax increased
by 17.1% to £47.4m (2023: £40.5m). The relative increase was slightly lower
than the 18.4% growth reported in underlying EBITDA, and this was due to the
increased interest expense on our borrowings that fund M&A activity, with
our financing expenses increasing by 31.0% and impacted by additional debt
drawdowns of £49.2m.
The interest rate applied to our loan facilities is determined using SONIA,
plus a margin based on net leverage calculations. £180m of the drawn debt
facilities are fixed under a two-year interest rate swap at c.4.3% (excluding
bank margin), with the remaining facility (£94.1m) chargeable at the floating
SONIA rate.
Non-Underlying Items
Due to the Employee Incentive Plan distributions, non-underlying items
incurred in the period increased significantly and totalled a £54.8m debit
(2023: £16.2m) and comprised the following:
2024 2023
£m
£m
EBITDA
Acquisition and integration costs 15.3 7.1
Office start-ups 0.6 0.6
Employee Incentive Plan (EIP) 36.4 -
Other 0.3 0.4
Total non-underlying items within EBITDA 52.6 8.1
(Loss)/Profit Before Tax
Items impacting EBITDA 52.6 8.1
Loss/(gain) on revaluation of contingent consideration 2.0 (0.5)
(Gain) on bargain purchase (0.7) -
(Gain) on disposal of subsidiary (0.1) -
Foreign exchange losses 1.0 8.5
Total non-underlying items within Profit Before Tax 54.8 16.2
Acquisition and integration costs of £15.3m were £8.2m higher than in 2023,
reflecting the increased M&A activity and the increased costs in H2 2024
associated with the acquisitions of FFP, FRTC, Buck, and Citi.
Office start-up costs of £0.6m included costs related to establishing
infrastructure to trade in Austria and Dubai, along with a new Netherlands
entity. Our experience is that these require significant up-front investment
in personnel in advance of trading and the generation of revenues.
On 25 July 2024, following the successful conclusion of the Galaxy era, the
business granted 4.7m shares to our employees. Of these, 50% vested in July
2024 and were expensed in full, with the remaining shares due to vest in July
2025 and the expense accruing evenly over the period.
The £2.0m loss on revaluation of contingent consideration relates to the
perfORM earn-out. The business had better than anticipated H2 2024 trading,
leading to an increased valuation and expected payout.
The gain on bargain purchase of £0.7m relates to the acquisition of Buck.
The gain is supported by the synergies that Management expect to realise and
the acquired book being viewed as non-core by the sellers.
The foreign exchange loss of £1.0m relates to the revaluation of
inter-company loans (2023: £8.5m). Management considers these losses as
non-underlying since they are unrealisable movements from the elimination of
inter-company loans upon consolidation and do not relate to the underlying
trading activities of the Group.
Tax
The net tax credit in the year was £0.1m (2023: £2.5m charge). The current
tax charge was £3.5m (2023: £4.1m), but this is reduced by deferred tax
credits of £3.7m (2023: £1.6m), mainly as a result of movements in relation
to the value of acquired intangible assets held on the balance sheet and
temporary tax differences arising on acquired US entities, where an element of
our purchase consideration is tax-amortisable.
Calculated against underlying profit before tax, our 2024 effective tax rate
was 7.5% (2023: 10.1%).
The Group continues to regularly review its transfer pricing policy, is fully
committed to responsible tax practices and compliance with OECD guidelines.
Whilst we are not legally required to publish our tax strategy, we consider it
best practice to demonstrate transparency on tax matters and our
Board-approved strategy is available online.
Earnings Per Share
Basic EPS decreased significantly to -4.44p (2023: 14.20p). Taking into
account non-underlying items our adjusted underlying EPS was 41.80p (2023:
37.3p), an increase of 12.1%.
Adjusted underlying basic EPS reflects the profit for the year, adjusted to
remove the impact of non-underlying items, amortisation of acquired intangible
assets, deferred tax, amortisation of loan arrangement fees, impairment of
intangible customer relationships and the unwinding of net present value
discounts in relation to contingent consideration.
Management reviewed and updated its definition of adjusted underlying EPS to
exclude the impact of all deferred tax releases. 2024 includes a significant
non-cash deferred tax credit that is not considered to be reflective of
operational trading and this change ensures that the metric continues to
report in line with those used more widely by external investors and analysts.
Prior to this change, adjusted underlying EPS was 47.45p (2023: 37.23p).
Return On Invested Capital (ROIC)
ROIC for 2024 was 12.6%, reporting an increase on prior year (2023: 12.3%),
with both periods significantly above our cost of capital. Improving returns
is particularly pleasing during periods of heightened acquisition activity. In
2023, we completed our largest acquisition to date (SDTC), and in 2024, we
completed a further five acquisitions.
We operate in an industry which is characterised by widespread Private Equity
ownership and a significant level of past and continuing consolidation, often
at premium valuations. Such outlays can result in the short-term dilution of
returns. As I wrote in 2023, these investment decisions are critical, and when
evaluating opportunities, we approach the question as shareholders ourselves,
considering both the immediate return on capital and also the long-term
potential and strategic fit.
We measure ROIC on a post-tax basis and more information on our approach can
be found in the appendix to Chief Financial Officer's Review.
Intangible Assets
Our total assets at 31 December 2024 were £1.0bn (2023: £0.9bn). Much of
this increase has been as a result of acquisitions, with goodwill continuing
to represent 58% (2023: 58%) of our total assets and other intangible assets
representing a further 17% (2023: 16%).
Goodwill is assessed for impairment on an annual basis and no impairments were
recorded in 2024.
Customer relationships that form part of other intangible assets are subject
to impairment assessments when impairment indicators are present. No customer
relationship impairments were recorded in 2024.
Cash Flow and Debt
Underlying cash generated from operations was £99.3m (2023: £91.2m) and
underlying cash conversion was 98%, which, although a drop from an exceptional
2023 (106%), was well above our medium-term guidance range.
Our strong performance was driven by our Treasury and Banking services and our
growing US presence, both of which continued to shorten our working capital
cycle with highly predictable and timely cash receipts. Our net investment
days were stable in the period at 71 days (2023: 72 days).
Management maintains their medium-term cash conversion guidance range of 85% -
90%.
Reported net debt includes cash balances set aside for regulatory compliance
purposes. Our increasing US presence has brought with it a greater regulatory
capital obligation, and at the end of the period, we had £24.5m set aside for
these purposes (2023: £11.8m). Underlying net debt excludes this and, at the
period end, was £182.3m compared with £123.3m at 31 December 2023. This
increase in underlying net debt at the year-end was expected, as the business
part-funded the FRTC acquisition with a £13.5m drawdown in July 2024 and FFP
with a $46.3m drawdown in October 2024.
We are pleased to report that our underlying net debt/underlying EBITDA
leverage at the year end is comfortably within our guidance range (1.5x -
2.0x) at 1.79x (2023: 1.43x). When taking into account the full year impact of
acquisitions completed in 2024, we remain towards the bottom end of our
guidance range.
As of 31 December 2024, the Group had undrawn funds of £125.9m, which will
allow us to finance our acquisition activity. Our existing facilities mature
on 4 December 2026, with an option to extend to 30 June 2028.
Dividend Per Share
We are pleased to propose a final dividend of 8.24p, resulting in a 2024
dividend per share of 12.54p (2023: 11.17p), which was a 12.3% increase on
the prior year. This remains consistent with our dividend policy to declare at
30% of adjusted underlying EPS.
Subject to shareholders' approval at the forthcoming AGM, the final dividend
will be paid on 27 June 2025 to shareholders on the register of members as at
the close of business on 31 May 2025.
Martin Fotheringham
Chief Financial Officer
Appendix: Reconciliation of reported results to alternative performance
measures (APMs)
In order to assist the reader's understanding of the financial performance of
the Group, APMs have been included to better reflect the underlying activities
of the Group, excluding specific items as set out in note 9 to the financial
statements. The Group appreciates that APMs are not considered to be a
substitute for, or superior to, IFRS measures but believes that the selected
use of these may provide stakeholders with additional information that will
assist in understanding the business.
An explanation of our key APMs and links to the equivalent statutory measures
have been detailed below.
Alternative performance measure Closest equivalent statutory measure APM Definition / purpose and strategic link
Net organic revenue growth % Revenue Definition: Revenue growth from clients not acquired through business
combinations and reported on a constant currency basis, where the prior year
results are restated using the current year's consolidated income statement
exchange rates.
Acquired clients are defined as inorganic for the first two years of JTC
ownership.
Purpose and strategic link: Enables the business to monitor growth excluding
acquisitions and the impact of external exchange rate factors. The current
strategy is to double the size of the business by a mix of organic and
acquisition growth, and the ability to monitor and set clear expectations on
organic growth is vital to the successful execution of its business strategy.
Management's medium-term guidance range is 10% or higher.
Underlying EBITDA % Profit/(loss) Definition: Earnings before interest, tax, depreciation, and amortisation,
excluding non-underlying items (see note 9 of the financial statements).
Purpose and strategic link: An industry-recognised alternative measure of
performance that has been at the heart of the business since its incorporation
and is therefore, fundamental to the performance management of all business
units.
The measure enables the business to measure the relative profitability of
servicing clients.
Management's medium-term guidance range is 33% - 38%.
Underlying cash conversion % Net cash from operating activities Definition: The conversion of underlying EBITDA into cash, excluding
non-underlying items.
Purpose and strategic link: Measures how effectively the business is managing
its operating cash flows. It differs to net cash from operating profits as it
excludes non-underlying items and tax, with the latter being excluded in order
to better compare operating profitability to cash from operating activities.
Management's medium-term guidance range is 85% - 90%.
Underlying leverage Cash and cash equivalents Definition: Leverage ratio showing the relative amount of third party debt
(net of cash held in the business) that we have in comparison to underlying
LTM EBITDA.
Purpose and strategic link: Ensures that Management can measure and control
exposure to reliance on third party debt in support of its inorganic growth.
Management's medium-term guidance range is 1.5x - 2.0x.
Adjusted underlying basic EPS (p) Basic Earnings Per Share Definition: Reflects the profit after tax for the year, adjusted to remove the
impact of non-underlying items. Additionally, a number of other non-cash items
relating to the Group's acquisition activities, including amortisation of
acquired intangible assets, deferred tax, amortisation of loan arrangement
fees, impairment of intangible customer relationships and the unwinding of NPV
discounts in relation to contingent consideration, are removed.
Purpose and strategic link: Presents an adjusted underlying basic EPS, which
is used more widely by external investors and analysts and is, in addition,
the basis upon which the dividend is calculated.
Return On Invested Capital (ROIC) Profit/(loss) Definition: Reflects the net operating profit after tax, divided by the
average invested capital.
Purpose and strategic link: Measures our capital efficiency in generating
profit against deployed capital. This is an industry-accepted APM and one that
both external investors and analysts use in addition to statutory measures.
A reconciliation of our APMs to their closest equivalent statutory measure has
been provided below.
1. Organic Growth
2024 2023
£m
£m
Reported prior year revenue 257.4 200.0
Impact of exchange rate restatement (3.7) -
Acquisition revenues (12.4) (1.0)
a. Prior year organic growth 241.7 199.0
Reported revenue 305.4 257.4
Less: acquisition revenues (36.4) (18.9)
b. Current year organic growth 269.0 238.5
Net organic growth % (b/a) -1 11.3% 19.9%
2. Underlying EBITDA
2024 2023
£m
£m
Reported profit (7.3) 21.8
Less:
Income tax 0.1 2.7
Finance cost 25.4 19.2
Finance income (1.3) (0.8)
Other losses/(gains) 2.3 9.7
Depreciation and amortisation 30.1 25.1
Non-underlying items within EBITDA* 52.6 8.1
Underlying EBITDA 101.7 85.9
Underlying EBITDA % 33.3% 33.4%
* As set out in note 9 to the financial statements. A reconciliation
of divisional EBTIDA can be found in note 4 of the financial statements.
3. Underlying Cash Conversion
2024 2023
£m
£m
Net cash generated from operating activities 78.7 81.3
Less:
Non-underlying cash items* 15.6 6.5
Income taxes paid 5.0 3.4
a. Underlying cash generated from operations 99.3 91.2
b. Underlying EBITDA 101.7 85.9
Underlying cash conversion (a/b) 98% 106%
* As set out in note 36.2 to the financial statements.
4. Underlying Leverage
2024 2023
£m
£m
Cash and cash equivalents 89.2 97.2
Bank debt (271.5) (220.5)
a. Net debt - underlying 182.3 123.3
b. Underlying EBITDA 101.7 85.9
Leverage (a/b) 1.79 1.43
5. Adjusted Underlying Basic EPS
2024 2023
£m
£m
Profit for the year as per basic EPS (7.3) 21.8
Less:
Non-underlying items* 54.8 16.8
Amortisation of customer relationships, acquired software and brands 16.9 14.3
Impairment of customer relationship intangible asset - 0.7
Amortisation of loan arrangement fees 1.4 0.8
Unwinding of NPV discounts for contingent consideration 6.2 5.1
Temporary tax differences (3.7) (1.6)
a. Adjusted underlying profit for the year 68.2 57.3
b. Weighted average number of shares 163.3 153.7
Adjusted underlying basic EPS (a/b) 41.80 37.30
* As set out in note 9 to the financial statements.
6. Return On Invested C--apital
2024 2023
£m
£m
Profit for the period (7.3) 21.8
Add back:
Non-underlying items* 54.8 16.2
Amortisation of customer relationships, acquired software and brands 16.9 14.3
Impairment of customer relationship intangible asset - 0.7
Temporary tax differences arising on amortisation of customer relationships, (3.7) (1.7)
acquired software and brands
Net finance costs 24.0 18.4
Tax estimate on financing costs (0.3) (0.3)
a. Net operating profit after tax 84.4 69.5
+ Closing equity 533.9 503.9
+ Closing debt 271.6 220.5
- Closing cash (89.2) (97.2)
Invested capital 716.3 627.2
b. Average invested capital (opening + closing/2) 671.7 566.1
c. ROIC (a/b) 12.6% 12.3%
* As set out in note 9 to the financial statements.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Note 2024 2023
£'000 £'000
Revenue 4 305,383 257,440
Staff expenses 5 (196,619) (131,921)
Other operating expenses 8 (57,548) (44,855)
Credit impairment losses 18 (2,659) (2,934)
Other operating income 73 75
Share of profit/(loss) of equity-accounted investee 24 430 (15)
Earnings before interest, taxes, depreciation and amortisation ("EBITDA") 49,060 77,790
Comprising:
Underlying EBITDA 101,683 85,909
Non-underlying items 9 (52,623) (8,119)
49,060 77,790
Depreciation and amortisation 10 (30,119) (25,140)
Profit from operating activities 18,941 52,650
Other losses 11 (2,328) (9,912)
Finance income 12 1,355 794
Finance cost 12 (25,370) (19,222)
(Loss)/profit before tax (7,402) 24,310
Comprising:
Underlying profit before tax 47,426 40,498
Non-underlying items 9 (54,828) (16,188)
(7,402) 24,310
Income tax 13 (2,489)
146
(Loss)/profit for the year (7,256) 21,821
Earnings Per Share ("EPS") Pence Pence
Basic EPS 14.1 (4.44) 14.20
Diluted EPS 14.2 (4.38) 14.07
Adjusted underlying basic EPS 14.3 41.80 37.30
The notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Note 2024 2023
£'000 £'000
(Loss)/profit for the year (7,256) 21,821
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations (net of tax) 34.1 6,198 (7,038)
Gain/(loss) recognised on revaluation of cash flow hedges 33 2,800 (615)
Hedging gains reclassified to profit or loss 12 (1,710) (134)
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations 7 (82) (300)
Total other comprehensive income/(loss) 7,206 (8,087)
Total comprehensive (loss)/income for the year (50) 13,734
The notes are an integral part of these consolidated financial statements.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
Note 2024 2023
£'000 £'000
Assets
Goodwill 16 592,187 522,964
Other intangible assets 17 170,821 147,302
Property, plant and equipment 22 12,335 9,874
Right-of-use assets 22 45,347 39,785
Investments 24 3,788 3,365
Derivative financial instruments 33 341 -
Deferred tax assets 29 1,012 266
Other non-current assets 23 2,860 2,981
Total non-current assets 828,691 726,537
Trade receivables 18 45,091 32,071
Work in progress 19 15,379 11,615
Accrued income 20 28,204 26,574
Cash and cash equivalents 21 89,232 97,222
Other current assets 23 12,987 11,080
Total current assets 190,893 178,562
Total assets 1,019,584 905,099
Equity
Share capital 31.1 1,688 1,655
Share premium 31.1 406,648 392,213
Own shares 31.2 (5,760) (3,912)
Capital reserve 31.3 65,570 28,584
Translation reserve 31.3 15,139 8,941
Other reserve 31.3 341 (749)
Retained earnings 31.3 50,310 77,144
Total equity 533,936 503,876
Liabilities
Loans and borrowings 25 271,552 220,531
Contingent consideration 26 25,158 49,794
Lease liabilities 28 44,647 37,924
Deferred tax liabilities 29 6,510 9,474
Derivative financial instruments 33 - 749
Other non-current liabilities 30 3,949 3,507
Total non-current liabilities 351,816 321,979
Trade and other payables 27 28,096 19,991
Contingent consideration 26 65,357 26,906
Deferred income 29,296 19,639
Lease liabilities 28 6,682 6,117
Other current liabilities 30 4,401 6,591
Total current liabilities 133,832 79,245
Total equity and liabilities 1,019,584 905,099
The consolidated financial statements were approved by the Board of Directors
on 7 April 2025 and signed on its behalf by:
Nigel Le Quesne
Chief Executive Officer
Martin Fotheringham
Chief Financial Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Note Share capital Share Own Capital Translation Other Retained Total
£'000 premium shares reserve reserve reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 1,655 392,213 (3,912) 28,584 8,941 (749) 77,144 503,876
Loss for the year - - - - - - (7,256) (7,256)
Other comprehensive income - - - - 6,198 1,090 (82) 7,206
Total comprehensive loss for the year - - - - 6,198 1,090 (7,338) (50)
Issue of share capital 31.1 33 14,529 - - - - - 14,562
Cost of share issuance 31.1 - (94) - - - - - (94)
Share-based payments 6.5 - - - 2,480 - - - 2,480
EIP share-based payments 6.5 - - - 34,506 - - - 34,506
Movement of own shares 31.2 - - (1,848) - - - - (1,848)
Dividends paid 32 - - - - - - (19,496) (19,496)
Total transactions with owners 33 14,435 (1,848) 36,986 - - (19,496) 30,110
Balance at 31 December 2024 1,688 406,648 (5,760) 65,570 15,139 341 50,310 533,936
Balance at 1 January 2023 1,491 290,435 (3,697) 24,361 15,979 - 71,648 400,217
Profit for the year - - - - - - 21,821 21,821
Other comprehensive loss - - - - (7,038) (749) (300) (8,087)
Total comprehensive income for the year - - - - (7,038) (749) 21,521 13,734
Issue of share capital 31.1 164 103,631 - - - - - 103,795
Cost of share issuance 31.1 - (1,853) - - - - - (1,853)
Share-based payments 6.5 - - - 4,223 - - - 4,223
Movement of own shares 31.2 - - (215) - - - - (215)
Dividends paid 32 - - - - - - (16,025) (16,025)
Total transactions with owners 164 101,778 (215) 4,223 - - (16,025) 89,925
Balance at 31 December 2023 1,655 392,213 (3,912) 28,584 8,941 (749) 77,144 503,876
The notes are an integral part of these consolidated financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Note 2024 2023
£'000 £'000
Cash generated from operations 36.1 83,710 84,725
Income taxes paid (5,020) (3,432)
Net movement in cash generated from operations 78,690 81,293
Comprising:
Underlying cash generated from operations 99,282 91,180
Non-underlying cash items 36.2 (15,572) (6,455)
83,710 84,725
Investing activities
Interest received 1,299 744
Payments for property, plant and equipment (3,691) (2,346)
Payments for intangible assets (5,881) (3,811)
Payments for business combinations (net of cash acquired) 15.6 (80,114) (114,719)
Payments to obtain or fulfil a contract (813) (693)
Proceeds from sale of subsidiary 92 -
Payment for investment - (250)
Loan to third party - (160)
Net cash used in investing activities (89,108) (121,235)
Financing activities
Proceeds from issue of shares - 62,000
Share issuance costs 31.1 (94) (1,853)
Purchase of own shares (1,831) (200)
Dividends paid 32 (19,496) (16,025)
Repayment of loans and borrowings - (50,000)
Proceeds from loans and borrowings 25 49,187 118,000
Loan arrangement fees 25 (720) (1,896)
Interest paid on loans and borrowings (14,888) (11,348)
Principal paid on lease liabilities (6,754) (6,074)
Interest paid on lease liabilities (1,795) (1,439)
Net cash generated from financing activities 3,609 91,165
Net (decrease)/increase in cash and cash equivalents (6,809) 51,223
Cash and cash equivalents at the beginning of the year 97,222 48,861
Effect of foreign exchange rate changes (1,181) (2,862)
Cash and cash equivalents at the end of the year 21 89,232 97,222
The notes are an integral part of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1. General information
2. Accounting policies
3. Critical accounting estimates and judgements
4. Operating segments
5. Staff expenses
6. Share-based payments
7. Defined benefit pension plans
8. Other operating expenses
9. Non-underlying items
10. Depreciation and amortisation
11. Other losses
12. Finance income and finance cost
13. Income tax
14. Earnings Per Share
15. Business combinations
16. Goodwill
17. Other intangible assets
18. Trade receivables
19. Work in progress
20. Accrued income
21. Cash and cash equivalents
22. Tangible assets
23. Other assets
24. Investments
25. Loans and borrowings
26. Contingent consideration
27. Trade and other payables
28. Lease liabilities
29. Deferred tax
30. Other liabilities
31. Share capital and reserves
32. Dividends
33. Derivative financial instruments
34. Financial risk management
35. Capital management
36. Cash flow information
37. Subsidiaries
38. Contingencies
39. Related party transactions
40. Consideration of climate change
41. Events occurring after the reporting period
1. General information
JTC PLC (the "Company") was incorporated on 12 January 2018 and is domiciled
in Jersey, Channel Islands. The Company was admitted to the London Stock
Exchange on 14 March 2018. The address of the Company's registered office is
28 Esplanade, St Helier, Jersey.
The consolidated financial statements of the Company for the year ended 31
December 2024 comprise the Company and its subsidiaries (together, the "Group"
or "JTC") and the Group's interest in an associate and investments.
The Group provides fund, corporate and private wealth services to
institutional and private clients.
2. Accounting policies
2.1. Basis of preparation
The consolidated financial statements for the year ended 31 December 2024 have
been approved by the Board of Directors of JTC PLC. They are prepared in
accordance with International Financial Reporting Standards ("IFRS") as
adopted by the European Union, the interpretations of the IFRS Interpretations
Committee ("IFRS IC") and the Companies (Jersey) Law 1991.
They are prepared on a going concern basis and under the historical cost
convention, except for the following:
· Defined benefit liabilities recognised at the fair value of plan
assets less the present value of defined benefit obligations (see note 7)
· Certain contingent consideration measured at fair value (see note
26)
· Derivative financial instruments (see note 33)
In assessing the going concern assumption, the Directors considered the
principal risks and uncertainties that could be impacted by wider
macroeconomic uncertainty. Despite this backdrop, they noted that the Group
continued to experience revenue growth, generate positive cash flows from its
operating activities, and has funding available from its bank loan
facilities. Taking these factors into account during the review of the Group's
financial performance and position, forecasts and expected liquidity, the
Directors have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for the foreseeable future,
defined as being at least 12 months from the date of approval of the
consolidated financial statements. While the Directors acknowledge that the
Group made a loss for the financial year, this was due to the EIP share awards
(see note 6.1), which has no impact on the Group's cash flows. Given the
above, they have concluded that it is appropriate to adopt the going concern
basis of accounting when preparing the consolidated financial statements.
The consolidated financial statements are presented in pounds sterling, which
is the functional and reporting currency of the Company and the presentation
currency of the consolidated financial statements. All amounts disclosed in
the consolidated financial statements and notes have been rounded to the
nearest thousand (£'000) unless otherwise stated.
2.2. Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its "subsidiaries"). The
Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the entity.
De-facto control exists where the Company has the practical ability to direct
the relevant activities of the entity without holding the majority of the
voting rights. In determining whether de-facto control exists, the Company
considers the size of the Company's voting rights relative to other parties,
substantive potential voting rights held by the Company and by other parties,
other contractual arrangements and historical patterns in voting attendance.
Subsidiaries (see note 37) are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated from the date
that control ceases. When the Group loses control over a subsidiary, it
derecognises the assets and liabilities of the subsidiary and any related
non-controlling interest and other components of equity. Any resulting gain or
loss is recognised in the consolidated income statement.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with the Group. All
inter-company transactions and balances arising from transactions between
Group companies are eliminated on consolidation.
The acquisition method of accounting is used to account for business
combinations by the Group (see note 15). Investments in associates are
accounted for using the equity method of accounting (see note 24).
2.3. Summary of material accounting policies
The accounting policies set out in these consolidated financial statements
have been consistently applied by all Group entities for the years presented.
There have been no significant changes compared to the prior year consolidated
financial statements as at and for the year ended 31 December 2024.
(A) Revenue recognition
Revenue is measured as the fair value of the consideration received or
receivable for satisfying those performance obligations contained in contracts
with customers excluding discounts and sales-related taxes.
To recognise revenue in accordance with IFRS 15 "Revenue from Contracts with
Customers", the Group applies a five-step approach: identify the contract(s)
with a customer, identify the performance obligations in the contract,
determine the transaction price, allocate the transaction price to the
performance obligations and recognise revenue when, or as, performance
obligations are satisfied by the Group.
The Group enters into contractual agreements with institutional and private
clients for the provision of fund, corporate and private client services. The
agreements set out the services to be provided and each component is distinct
and can be performed and delivered separately. For each of these performance
obligations, the transaction price can be either a pre-set (fixed) fee, based
on the expected amount of work to be performed, or a variable time spent fee
for the actual amount of work performed. For some clients, the fee for agreed
services is set at a percentage of the net asset value ("NAV") of funds being
administered or deposits held. Where contracts include multiple performance
obligations, the transaction price is allocated to each performance obligation
based on its stand-alone selling price.
Revenue is recognised in the consolidated income statement when, or as, the
Group satisfies performance obligations by transferring control of services to
clients. This occurs as follows, depending upon the nature of the contract for
services:
· Variable fees are recognised over time as services are provided at
the agreed charge out rates in force at the work date, where there is an
enforceable right to payment for performance completed to date. Time recorded
but not invoiced is shown in the consolidated balance sheet as work in
progress (see note 19). To determine the transaction price, an assessment of
the variable consideration for services rendered is performed by estimating
the expected value, including any price concessions, of the unbilled amount
due from clients for the work performed to date (see note 3.2).
· Pre-set (fixed), cash management and NAV-based fees are recognised
over time; this is based on the actual service provided to the end of the
reporting period as a proportion of the total services to be provided where
there is an enforceable right to payment for performance completed to date.
This is determined based on the actual inputs of time and expenses relative to
the total expected inputs. Where services have been rendered and performance
obligations have been met but clients have not been invoiced at the reporting
date, accrued income is recognised; this is recorded based on agreed fees to
be billed in arrears (see note 20).
· Where fees are billed in advance in respect of services under
contract and give rise to a trade receivable when recognised, deferred income
is recognised as a liability and released to revenue on a time-apportioned
basis in the appropriate reporting period.
The Group does not adjust transaction prices for the time value of money as it
does not have any contracts where it expects the period between the transfer
of the promised services to the client and the payment by the client to exceed
one year.
(B) Employee benefits
(i) Short-term benefits
Short-term employee benefits are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid if the Group has
a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee, and the obligation can be estimated
reliably.
(ii) Defined contribution pension plans
Under defined contribution pension plans, the Group pays contributions to
publicly or privately administered pension insurance plans. The Group has no
further payment obligation once the contributions have been paid. The
contributions are recognised as an employee benefit expense when they are due.
(iii) Defined benefit pension plans
The liability or asset recognised in the consolidated balance sheet in respect
of defined benefit pension plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan
assets. The calculation of defined benefit obligations is performed annually
by independent, qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates of
high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid, and that have terms approximating to the terms of the
related obligation. In countries where there is no established market in such
bonds, the market rates on local government bonds are used.
The net interest cost is calculated by applying the discount rate to the net
balance of the defined benefit obligation and the fair value of plan assets.
This cost is included as an employee benefit expense in the consolidated
income statement.
Remeasurement gains and losses arising from experience adjustments and changes
in actuarial assumptions are recognised in the period in which they occur,
directly in other comprehensive income. They are included in retained earnings
in the consolidated statement of changes in equity and the consolidated
balance sheet.
Changes in the present value of the defined benefit obligation resulting from
plan amendments or curtailments are recognised immediately in the consolidated
income statement as past service costs.
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no
longer withdraw the offer of those benefits and when the Group recognises
costs for a restructuring that is within the scope of IAS 37 and involves the
payment of termination benefits. If benefits are not expected to be settled
wholly within one year of the end of the reporting period, then they are
discounted to their present value using an appropriate discount rate.
(C) Share-based payments
The Group operates equity-settled share-based payment arrangements under which
services are received from eligible employees as consideration for equity
instruments. The total amount to be expensed for services received is
determined by reference to the fair value at grant date of the share-based
payment awards made, including the impact of any non-vesting and market
conditions.
The fair value determined at the grant date is expensed on a straight-line
basis over the vesting period, based on Management's estimate of equity
instruments that will eventually vest. At each balance sheet date, Management
revises its estimate of the number of equity instruments expected to vest as a
result of the effect of non-market based vesting conditions. The impact of the
revision of the original estimates, if any, is recognised in the consolidated
income statement, such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.
(D) Non-underlying items
Non-underlying items represent specific items of income or expenditure that
are not of a continuing operational nature or do not represent the underlying
operating results, and, based on their significance in size or nature, are
presented separately to provide further understanding about the financial
performance of the Group.
(E) Finance income
Finance income includes interest income from loan receivables and bank
deposits and is recognised when it is probable that the economic benefits will
flow to the Group and the amount of revenue can be measured reliably.
(F) Finance costs
Finance costs include interest expenses on loans and borrowings, gains on cash
flow hedges reclassified from other comprehensive income (see note 2.3(S)),
the unwinding of the discount on provisions, contingent consideration and
lease liabilities and the amortisation of directly attributable transaction
costs that have been capitalised upon issuance of the financial instrument and
released to the consolidated income statement on a straight-line basis over
the contractual term.
(G) Income tax
Income tax includes current and deferred taxes. Current and deferred taxes are
recognised in the consolidated income statement, except when they relate to
items that are recognised in other comprehensive income or directly in equity,
in which case, the current and deferred taxes are recognised in other
comprehensive income or directly in equity, respectively. Where current tax or
deferred tax arises from the initial accounting for a business combination,
the tax effect is included in the accounting for the business combination.
(i) Current tax
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax laws enacted or substantively enacted at the
consolidated balance sheet date and any adjustment to tax payable or
receivable in respect of previous years.
(ii) Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit or losses.
Deferred tax liabilities are generally recognised for all taxable temporary
differences, and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and is reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated using tax rates that have been enacted or
substantively enacted at the consolidated balance sheet date for the periods
when the asset is expected to be realised or the liability is expected to be
settled.
Deferred tax assets are offset with deferred tax liabilities when there is a
legally enforceable right to set off tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority, and the Group intends to settle its current tax assets and
liabilities on a net basis.
(H) Foreign currency
The individual financial statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each Group company are
expressed in pounds sterling, which is the functional currency of the Company
and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recognised at the rates of exchange prevailing on the
dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on
that date. Exchange differences are recognised in the consolidated income
statement in the year in which they arise.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's operations with a functional currency other
than pounds sterling are translated at exchange rates prevailing on the
balance sheet date.
Income and expense items are translated at the average exchange rates for the
year, unless exchange rates fluctuate significantly during that year, in which
case the exchange rates at the date of transactions are used. Goodwill and
other intangible assets arising on the acquisition of a foreign operation are
treated as assets of the foreign operation and are translated at the closing
rate. Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated in equity in the translation reserve.
(I) Business combinations
A business combination is defined as a transaction or other event in which an
acquirer obtains control of one or more businesses. Where the business
combination does not include the purchase of a legal entity but the
transaction includes acquired inputs and the processes applied to those inputs
in order to generate outputs, the transaction is also considered a business
combination.
The Group applies the acquisition method to account for business combinations.
The consideration transferred in an acquisition comprises the fair value of
assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group in exchange for control
of the acquiree. The identifiable assets acquired and liabilities assumed in a
business combination are measured at their fair values at the acquisition
date. Acquisition-related costs are recognised in the consolidated income
statement as non-underlying items within operating expenses.
The excess of the consideration transferred, the amount of any non-controlling
interest in the acquiree and the acquisition date fair value of any previous
equity interest in the acquiree over the fair value of the identifiable net
assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the business acquired, the
difference is recognised directly in the consolidated income statement as a
gain on bargain purchase.
When the consideration transferred includes an asset or liability resulting
from a contingent consideration arrangement, this is measured at its
acquisition-date fair value. Changes in fair value of the contingent
consideration that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional
information obtained during the measurement period (which cannot exceed one
year from the acquisition date) about facts and circumstances that existed at
the acquisition date.
The subsequent accounting for changes in the fair value of the contingent
consideration that do not qualify as measurement period adjustments is
dependent upon how the contingent consideration is classified, see note
2.3(O(i)).
(J) Goodwill and other intangible assets
(i) Goodwill
Goodwill that arises on the acquisition of subsidiaries is considered an
intangible asset. See note 2.3(I) for the measurement of goodwill at initial
recognition; subsequent to this, measurement is at cost less accumulated
impairment losses.
(ii) Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately
from goodwill are initially recognised at their fair value at the acquisition
date (which is regarded as their cost). The initial valuation work is
performed with support from external valuation specialists. Subsequent to
initial recognition, these are measured at cost, less accumulated amortisation
and accumulated impairment losses.
Amortisation is recognised in the consolidated income statement on a
straight-line basis over the estimated useful life of the asset from the date
of acquisition.
The estimated useful lives are as follows:
· Customer relationships - 8 to 25 years
· Software - 5 to 10 years
· Brand - 5 to 10 years
The estimated useful lives and residual value are reviewed at each reporting
date and adjusted if appropriate, with the effect of any change in estimate
being accounted for on a prospective basis.
(iii) Intangible assets acquired separately
Intangible assets that are acquired separately by the Group and have finite
useful lives are measured at cost, less accumulated amortisation and
accumulated impairment losses.
Amortisation is recognised in the consolidated income statement on a
straight-line basis over the estimated useful life of the asset from the date
that they are available for use. The estimated useful lives are as follows:
· Customer relationships - 10 years
· Regulatory licence - 12 years
· Software - 4 years
The estimated useful lives and residual value are reviewed at each reporting
date and adjusted if appropriate, with the effect of any change in estimate
being accounted for on a prospective basis.
(iv) Internally generated software intangible assets
Development costs that are directly attributable to the design and testing of
identifiable software products controlled by the Group are recognised as
intangible assets when the criteria under IAS 38 are met.
Directly attributable costs that are capitalised as part of the software
include employee costs and an appropriate portion of relevant overheads.
Capitalised development costs are recorded as intangible assets and
amortisation is recognised in the consolidated income statement on a
straight-line basis over the estimated useful life of the asset from the date
at which the asset is ready to use. The estimated useful life for internally
generated software intangible assets is between four and seven years.
The estimated useful lives and residual value are reviewed at each reporting
date and adjusted if appropriate, with the effect of any change in estimate
being accounted for on a prospective basis.
(v) Impairment of intangible assets
Goodwill that arises on the acquisition of business combinations and
intangible assets that have an indefinite useful life is not subject to
amortisation and is tested annually for impairment, or more frequently if
events or changes in circumstances indicate that it might be impaired.
Intangible assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount might not be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs of disposal ("FVLCD") and value in use
("VIU"). For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash inflows that
are largely independent of the cash inflows from other assets or groups of
assets (cash-generating units or CGUs).
Intangible assets other than goodwill that have previously been impaired are
reviewed for possible reversal of the impairment at the end of each reporting
period.
(K) Financial assets
Financial assets comprise trade receivables, work in progress, accrued income,
other receivables and cash and cash equivalents. The accounting policy for
derivative financial instruments is disclosed separately.
Financial assets are measured at either amortised cost, fair value through
profit or loss ("FVTPL") or fair value through other comprehensive income
("FVOCI") depending on the business model objective for managing financial
assets and their contractual cash flow characteristics.
All financial assets held by the Group (except for derivative financial
instruments) are measured at amortised cost as they arise from the provision
of services to clients (e.g. trade receivables) or when the objective is to
hold the asset to collect contractual cash flows (where the contractual cash
flows are solely payments of principal and interest).
Financial assets measured at amortised cost are recognised on the trade date,
this being the date that the Group became party to the contractual provisions
of the instrument. They are initially recognised at fair value less
transaction costs and then are subsequently carried at amortised cost using
the effective interest rate method, less provision for impairment. Financial
assets are derecognised when the contractual rights to the cash flows from the
asset expire, or the rights to receive the contractual cash flows from the
transaction in which substantially all of the risks and rewards of ownership
of the financial asset have been transferred. The Group assesses, on a
forward-looking basis, the expected credit losses ("ECL") associated with its
financial assets carried at amortised cost. The impairment methodology applied
takes into consideration whether there has been a significant increase in
credit risk.
(L) Property, plant and equipment
Items of property, plant and equipment are initially recorded at cost and are
stated at historical cost, less depreciation and impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives, using the straight-line
method, on the following bases:
· Computer equipment - 4 years
· Office furniture and equipment - 4 years
· Leasehold improvements - over the period of the lease
The estimated useful lives, residual values and depreciation methods are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is less than its estimated recoverable
amount.
An item of property, plant and equipment and any significant part initially
recognised is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the
consolidated income statement when the asset is derecognised.
For right-of-use assets, upon inception of a contract, the Group assesses
whether a contract conveys the right to control the use of an identified asset
for a period in exchange for consideration, in which case it is classified as
a lease. The Group recognises a right-of-use asset and a lease liability at
the lease commencement date. Right-of-use assets are measured at cost and
comprise of the following: the amount of the initial measurement of lease
liability; any lease payments made at or before the commencement date less any
lease incentives received; any initial direct costs; and estimated restoration
costs.
(M) Other non-financial assets
Incremental costs to obtain or fulfil a contract (i.e. costs that would not
have been incurred if the contract had not been obtained) and the costs
incurred to fulfil a contract are recognised within non-financial assets if
the costs are expected to be recovered. The capitalised costs are amortised on
a straight-line basis over the estimated useful economic life of the contract.
The carrying amount of the asset is tested for impairment on an annual basis.
(N) Investments
(i) Investments in associate
An associate is an entity in which the Group has significant influence, but
not control or joint control, over the financial and operating policies. The
Group's interest in an equity-accounted investee solely comprises an interest
in an associate.
Investments in associates are accounted for using the equity method. Under the
equity method, the investment in an associate is initially recognised at cost,
which includes transaction costs. Subsequent to initial recognition, the
carrying amount of the investment is adjusted to recognise the Group's share
of post-acquisition profits or losses in the consolidated income statement
within EBITDA, and the Group's share of movements in other comprehensive
income of the investee in other comprehensive income.
Unrealised gains and losses resulting from transactions between the Group and
the associate are eliminated to the extent of the interest in the associate.
At each reporting date, the carrying value of the investment in associate is
assessed for impairment by comparing it to the recoverable amount, this being
the higher of the asset's FVLCD and VIU.
(ii) Other investments
Other investments are held at cost and assessed for impairment at the end of
each reporting date.
(O) Financial liabilities
The Group classifies its financial liabilities as either amortised cost or
FVTPL, depending on the purpose for which the liability was acquired.
All financial liabilities are measured at amortised cost, with the exception
of liability-classified contingent consideration, which is measured at
FVTPL. The accounting policy for derivative financial instruments is disclosed
separately.
(i) Contingent consideration
Contingent consideration that is classified as an asset or liability is
remeasured at subsequent reporting dates at fair value, with the
corresponding gain or loss being recognised in the consolidated income
statement. Contingent consideration that is classified as equity is not
remeasured at subsequent reporting dates and its subsequent settlement is
accounted for within equity.
(ii) Loans and borrowings
Loans and borrowings are initially recognised at fair value, net of
transaction costs incurred, and subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the consolidated income statement over the period of
the borrowings, using the effective interest rate method.
Loans and borrowings are removed from the consolidated balance sheet when the
obligation specified in the contract is discharged, cancelled or has expired.
The difference between the carrying amount of a financial liability that has
been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is
recognised in the consolidated income statement as net finance charge.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
(iii) Trade and other payables
Trade and other payables represent liabilities incurred for goods and services
provided to the Group prior to the end of the financial year that are unpaid.
They are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method and are presented as
current liabilities unless payment is not due within 12 months after the
reporting period. The Group derecognises a financial liability when its
contractual obligations have been discharged, cancelled or expired.
(iv) Leases
Lease liabilities are financial liabilities measured at amortised cost. They
are initially measured at the net present value ("NPV") of the following lease
payments:
· fixed payments, less any lease incentives receivable;
· variable lease payments that are based on an index or a rate;
· amounts expected to be payable by the lessee under residual value
guarantees;
· the exercise price of a purchase option if the lessee is reasonably
certain to exercise that option; and
· payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments are
discounted using the interest rate implicit in the lease. If that rate cannot
be determined, which is generally the case for leases in the Group, the
lessee's incremental borrowing rate is used, this being the rate that the
lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with
similar terms, security and conditions. The incremental borrowing rate applied
to each lease was determined considering the Group's borrowing rate and the
risk-free interest rate, adjusted for factors specific to the country,
currency and term of the lease.
The Group can be exposed to potential future increases in variable lease
payments, based on an index or rate, which are not included in the lease
liability until they take effect. When adjustments to lease payments based on
an index or rate take effect, the lease liability is reassessed and adjusted
against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to the consolidated income statement over the lease period to
produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
(P) Non-financial liabilities
(i) Deferred income
Fixed fees received in advance across all the service lines and up-front fees
in respect of services due under contract are time-apportioned to respective
accounting periods, and those billed but not yet earned are included in
deferred income in the consolidated balance sheet. As such liabilities are
associated with future services, they do not give rise to a contractual
obligation to pay cash or another financial asset.
(ii) Contract liabilities
Commissions expected to be paid over the term of a customer contract are
discounted and recognised at the NPV. The finance cost is charged to the
consolidated income statement over the contract life to produce a constant
periodic rate of interest on the remaining balance of the liability for each
period.
(Q) Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. Provisions are not recognised for
future operating losses. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the
end of the reporting period, considering the risks and uncertainties
surrounding the obligation. If the impact of the time value of money is
material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the
discount is recognised as a finance cost in the consolidated income statement.
(i) Dilapidations
The estimated cost of the dilapidations payable at the end of each tenancy,
unless specified, is generally estimated by reference to the square footage of
the building and in consultation with local property agents, landlords and
prior experience. Having estimated the likely amount due, a country-specific
discount rate is applied to calculate the present value of the expected
outflow. The provisions are expected to be utilised when the leases expire or
upon exit. The discounted dilapidation cost has been capitalised against the
leasehold improvement asset in accordance with IFRS 16.
(R) Dividends
Provision is made for the amount of any dividend declared, this being
appropriately authorised and no longer at the discretion of the Board, on or
before the end of the reporting period but not distributed at the end of the
reporting period. Interim dividends are recognised when paid.
(S) Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to
interest rate risks. All derivative financial instruments are initially
measured at fair value on the contract date and are subsequently remeasured at
fair value at each reporting date. Derivatives are only used for economic
hedging purposes and not as speculative investments. Hedge accounting is
applied only where all of the following conditions are met:
· formal documentation exists of the relationship between the hedging
instrument and hedged item at inception;
· the hedged cash flows must be highly probable and must present an
exposure to variations in cash flows that could affect comprehensive income;
· the effectiveness of the hedge can be reliably measured; and
· an economic relationship exists, with the relationship being assessed
on an ongoing basis.
For qualifying cash flow hedges, the fair value gain or loss associated with
the effective portion of the cash flow hedge is recognised initially in other
comprehensive income and is released to the consolidated income statement in
the same period during which the hedged item will affect the Group's results.
Any ineffective portion of the gain or loss on the hedging instrument is
recognised in the consolidated income statement immediately.
2.4. Change to accounting policies
For the year ended 31 December 2024, the Group did not adopt any new standards
or amendments issued by the International Accounting Standards Board ("IASB")
or interpretations by the International Financial Reporting Standards
Interpretations Committee ("IFRS IC") that have had a material impact on the
consolidated financial statements. Standards, amendments and interpretations
effective from 1 January 2024 were as follows:
· 'Presentation of Financial Statements' - Amendments to IAS 1
· 'Leases' - Amendments to IFRS 16
· 'Supplier Finance' - Amendments to IAS 7 and IFRS 7
Certain new accounting standards, amendments and interpretations have been
published that are not mandatory for the 31 December 2024 reporting period and
have not been early adopted by the Group. These are not expected to have a
material impact on the Group in the current or future reporting periods or on
foreseeable future transactions, with the exception of IFRS 18 'Presentation
and Disclosure in Financial Statements', which will change how certain aspects
of the consolidated financial statements are presented. This new accounting
standard becomes effective for annual reporting periods beginning on or after
1 January 2027 and will be adopted by the Group.
3. Critical accounting estimates and judgements
In the application of the Group's accounting policies, Management are required
to make judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are regularly evaluated, based on
historical experience, current circumstances, expectation of future events and
other factors that are considered to be relevant. Actual results may differ
from these estimates. In preparing the consolidated financial statements,
Management have ensured that they have assessed the macro-economic environment
and global landscape when applying IFRS.
This note provides an overview of the areas that involved a higher degree of
judgement or complexity, and of items that are more likely to be materially
adjusted due to incorrect estimates and assumptions.
The following are the critical judgements and estimates that Management have
made in the process of applying the Group's accounting policies and that have
the most significant effect on the amounts recognised in the consolidated
financial statements.
3.1. Critical judgements in applying the group's accounting policies
Recognition of separately identifiable intangible assets
During the year, the Group acquired Blackheath Capital Management LLP, Hanway
Advisory Limited, First Republic Trust Company of Delaware, The Buck UK and
European Share Plan Administration and Trustee Businesses and FFP (Holdings)
Limited and it's subsidiaries. IFRS 3 'Business Combinations' requires
Management to identify assets and liabilities purchased, including intangible
assets. Following their assessment, Management concluded that customer
relationships and brands meet the recognition criteria. The fair values at
acquisition date have been disclosed within note 15.
Recognition of Employee Incentive Plan ("EIP") Awards
On 25 July 2024, 4,707,098 share awards were granted to employees following
the conclusion of the Galaxy business plan, which ran from 1 January 2021 to
31 December 2023. The vesting, and issue of share awards upon vesting, is made
at the discretion of the Remuneration Committee (consisting solely of the
independent non-executive directors) and the Trustees of the EBT. Following
their assessment, Management have concluded that employees have no reasonable
expectation of a future award as they have no right to participate in the EIP
nor be granted an award on a particular basis or at all, and the receipt of an
award in one year is no indication of subsequent awards on any basis, in
subsequent years.
IFRS 2 requires an expense to be recognised when employees have reason to
believe that they are working towards an award and while some employees may
have unilaterally developed an expectation of a future award as a result of
past awards received, it is not possible to reliably estimate the level of any
future expense that might be recognised as a result of any expectation and
therefore an expense can only be recognised upon grant.
As the EIP was granted on 25 July 2024, and vests in two tranches (50% as an
upfront award that vests immediately and 50% as a deferred award), 50% was
recognised upon grant (being the date the award was communicated to employees
and an expectation created) and the remaining 50% over the one year vesting
period to 25 July 2025 (see note 6.1).
The cost of EIP awards is reflected in the Group's consolidated income
statement within staff costs and is treated
as non-underlying.
3.2. Critical accounting estimates and assumptions
Recoverability of work in progress ("WIP")
To assess the fair value of consideration received for services rendered,
Management are required to make an assessment of the net unbilled amount
expected to be collected from clients for work performed to date. To make this
assessment, WIP balances are reviewed regularly on a by-client basis and the
following factors are taken into account: the ageing profile of the WIP, the
agreed billing arrangements, value added and status of the client
relationship. The recoverability of the WIP is considered a significant
assumption, see note 19.
Goodwill impairment
Goodwill is tested annually for impairment and the recoverable amount of CGUs
is determined based on the higher of value in use and fair value less cost of
disposal calculations that use cash flow projections containing significant
assumptions. See note 16.1 for further information, including a sensitivity
analysis on significant assumptions.
Fair value of customer relationship intangibles
The customer relationship intangible assets are valued using the multi-period
excess earnings method financial valuation model. Cash flow forecasts and
projections are produced by Management and form the basis of the valuation
analysis. Other significant estimates and assumptions used in the modelling to
derive the fair values include: the discount rate applied to free cash flow
and annual client attrition rates. See note 17.1 for the sensitivity analysis
on significant assumptions.
4. Operating segments
4.1. Basis of segmentation
The Group has a multi-jurisdictional footprint and the core focus of
operations is on providing services to its institutional and private client
base, with revenues from alternative asset managers, financial institutions,
corporates, HNW and UHNW individuals and family office clients.
The Chief Executive Officer and Chief Financial Officer are together the Chief
Operating Decision Makers of the Group and determine the appropriate business
segments to monitor financial performance. Each segment is defined as a set of
business activities generating a revenue stream determined by divisional
responsibility and the management information reviewed by the Board. They have
determined that the Group has two reportable segments: these are Institutional
Client Services (ICS) and Private Client Services (PCS). Business activities
include the following:
Fund services
Supporting a diverse range of asset classes, including real estate, private
equity, renewables, hedge, debt and alternative asset classes, providing a
comprehensive set of fund administration services (e.g. fund launch, NAV
calculations, accounting, compliance and risk monitoring, investor reporting
and listing services).
Corporate services
Includes clients spanning across small and medium entities, public companies,
multinationals, sovereign wealth funds, fund managers, HNW and UHNW
individuals and families requiring a 'corporate' service for business and
investments. As well as entity formation, administration, cash management and
other company secretarial services, the Group services international and local
pension plans, employee share incentive plans, employee ownership plans and
deferred compensation plans.
Private Client Services
Supporting HNW and UHNW individuals and families, from 'emerging
entrepreneurs' to established single and multi-family offices. Services
include JTC's own comprehensive Private Office, a range of cash management,
foreign exchange and lending services, as well as the formation and
administration of trusts, companies, partnerships, and other vehicles and
structures across a range of asset classes, including cash and investments.
4.2. Segmental information
The table below shows the segmental information provided to the Board for the
two reportable segments on an underlying basis:
ICS PCS Total
2024 2023 2024 2023 2024 2023
£'000
£'000
£'000
£'000
£'000
£'000
Revenue 180,904 163,323 124,479 94,117 305,383 257,440
Direct staff expenses (78,825) (68,405) (49,534) (36,870) (128,359) (105,275)
Other direct expenses (3,821) (2,910) (2,604) (3,241) (6,425) (6,151)
Indirect staff expenses (17,769) (16,024) (11,035) (7,805) (28,804) (23,829)
Other operating expenses (25,245) (24,445) (15,371) (11,890) (40,616) (36,335)
Other 46 47 458 12 504 59
Underlying EBITDA 55,290 51,586 46,393 34,323 101,683 85,909
Underlying EBITDA margin % 30.6% 31.6% 37.3% 36.5% 33.3% 33.4%
The Board evaluates segmental performance based on revenue, underlying EBITDA
and underlying EBITDA margin. Profit before tax is not used to measure the
performance of the individual segments, as items such as depreciation,
amortisation of intangibles, other losses (including foreign exchange movement
on the revaluation of inter-company loans) and finance costs are not
allocated to individual segments. Consistent with the aforementioned
reasoning, assets and liabilities are not reviewed regularly on a by-segment
basis and are, therefore, not included in segmental information.
4.3. Geographical information
Revenue generated by contracting subsidiary according to their location is as
follows:
2024 2023 Increase
£'000 £'000 £'000 %
UK & Channel Islands 135,852 128,193 7,659 6.0%
US 96,466 64,839 31,627 48.8%
Rest of Europe 40,798 38,687 2,111 5.5%
Rest of the World 32,267 25,721 6,546 25.5%
Total revenue 305,383 257,440 47,943 18.6%
No single customer made up more than 5% of the Group's revenue in the current
or prior year.
5. Staff expenses
Note 2024 2023
£'000 £'000
Salaries and Directors' fees 130,581 107,765
Employer-related taxes and other staff-related costs 13,845 10,571
Other short-term employee benefits 8,446 5,521
Employee pension benefits(1) 6,761 5,230
Share-based payments 6.5 2,480 2,834
Employee Incentive Plan ("EIP") share-based payments 6.5 34,506 -
Total staff expenses 196,619 131,921
1 Employee pension benefits include defined contributions of £6.49m
(2023: £5.08m) and defined benefits of £0.27m (2023: £0.15m).
6. Share-based payments
6.1. Employee Incentive Plan ("EIP")
JTC adopted the current EIP upon listing on the London Stock Exchange in March
2018. All permanent employees of the Group, excluding the Executive Directors
of JTC PLC, are eligible to be granted an award under the EIP. The grant, vest
and issue of shares to satisfy awards, is at discretion of the Remuneration
Committee (consisting solely of the independent non-executive directors) and
the Trustees of the EBT.
On 25 July 2024, 4,707,098 share awards were granted to employees following
the conclusion of the Galaxy business plan, which ran from 1 January 2021 to
31 December 2023. Each award was separated into two tranches: 50% vested at
the grant date ("Tranche One") and 50% was a deferred award in the form of a
conditional right to receive shares on the first anniversary of grant, subject
to the achievement of the applicable performance conditions ("Tranche Two").
Tranche One was expensed in full upon grant and Tranche Two will be expensed
over the one year vesting period to 25 July 2025.
Details of the movements in the number of shares are as follows:
2024 2023
No. of shares £'000 No. of shares £'000
(thousands)
(thousands)
Outstanding at the beginning of the year - - - -
Granted 4,707 48,439 - -
Exercised (2,354) (24,221) - -
Forfeited (106) (1,086) - -
Outstanding at the end of the year 2,247 23,132 - -
6.2. Performance Share Plan ("PSP")
Executive Directors and senior managers may receive awards of shares, which
may be granted annually under the PSP. The maximum policy opportunity award
size under the PSP for an Executive Director is between 150% and 200% of
annual base salary; however, the plan rules allow the Remuneration Committee
the discretion to award up to 250% of annual base salary in exceptional
circumstances. The Remuneration Committee determines the appropriate
performance measures, weightings and targets prior to granting any awards.
Performance conditions include Total Shareholder Return relative to a relevant
comparator group and the Company's absolute underlying EPS performance.
The following table provides relevant details for PSP awards:
Plan name Performance period Grant date Vest date(1) No. of shares Fixed amount at fair value
(thousands)
£'000
PSP 2020 01.01.2020 - 31.12.2022 23.04.2020 06.04.2023 213 825
PSP 2021 01.01.2021 - 31.12.2023 20.05.2021 09.04.2024 283 1,507
PSP 2022 01.01.2022 - 31.12.2024 19.04.2022 - 246 1,384
PSP 2023 01.01.2023 - 31.12.2025 11.04.2023 - 414 2,328
PSP 2024 01.01.2024 - 31.01.2026 09.04.2024 - 360 2,420
1 The vesting of awards is subject to continued employment and the
achievement of performance conditions over the specified period. The awards
will vest for each PSP when the conditions have been measured for the relevant
performance period.
Details of movements in the number of shares are as follows:
2024 2023
No. of shares £'000 No. of shares £'000
(thousands)
(thousands)
Outstanding at the beginning of the year 884 4,886 673 3,346
Awarded 360 2,420 414 2,328
Exercised (250) (1,326) (200) (771)
Forfeited (94) (611) (3) (17)
Outstanding at the end of the year 900 5,369 884 4,886
6.3. Deferred Bonus Share Plan ("DBSP")
Depending on the performance of the Group, consideration is given annually by
the Remuneration Committee to the granting of share awards under the DBSP to
eligible Directors. This forms part of the annual bonus award for performance
during the preceding financial year end.
(A) Annual bonus awards to Executive Directors
For their performance during the relevant year, 33% of the bonus earned by
Executive Directors is deferred into shares for two years.
The following table provides relevant details for DBSP awards for Executive
Directors ("ED"):
Plan name Performance period Grant date(1) Vest date(2) No. of shares Fixed amount
(thousands)(1)
£'000
ED DBSP 1 01.01.2023 - 31.12.2023 09.04.2024 01.01.2026 42 347
ED DBSP 2 01.01.2024 - 31.12.2024 - 01.01.2027 - 444
1 The grant date and no. shares will be determined following the
release of this annual report.
2 The vesting of awards is subject to continued employment up to the
vest date.
Details of movements in the number of shares are as follows:
2024 2023
No. of shares £'000 No. of shares £'000
(thousands)
(thousands)
Outstanding at the beginning of the year 42 347 - -
Awarded - - 42 347
Outstanding at the end of the year 42 347 42 347
(B) Annual bonus awards to Directors
For the performance period covering the year ended 31 December 2019 to 31
December 2022, the Remuneration Committee exercised its discretion and, in
accordance with the DBSP rules, determined that 50% of the annual cash bonus
awards for Directors would be awarded as shares. The portion of the bonus
award deferred into shares was expensed over the three year period to the date
of vest. For the year ended 31 December 2024, the Remuneration Committee
intends to make annual bonus awards to Directors in cash rather than deferring
a portion of the bonus into shares (consistent with the year ended 31 December
2023). As a result, the cash bonus awards have been expensed in full and are
shown within salaries and Directors fees. The remaining expenses associated
with the DBSP 5 award that continues to the vesting date are shown
within non-underlying items (see note 9).
The following table provides relevant details for DBSP awards for Directors:
Plan name Performance period Grant date Vest date(1) No. of shares Fixed amount
(thousands)
£'000
DBSP 4 01.01.2021 - 31.12.2021 19.04.2022 01.01.2024 67 476
DBSP 5 01.01.2022 - 31.12.2022 11.04.2023 01.01.2025 96 679
1 The vesting of awards is subject to continued employment up to the
vest date.
Details of movements in the number of shares held within the DBSP schemes at
the year end was as follows:
2024 2023
No. of shares £'000 No. of shares £'000
(thousands)
(thousands)
Outstanding at the beginning of the year 153 1,092 109 756
Awarded - - 96 680
Exercised (61) (432) (48) (315)
Forfeited (3) (19) (4) (29)
Outstanding at the end of the year 89 641 153 1,092
6.4. Other awards
Ad hoc awards
The Group may offer ad hoc awards to Directors joining the business. The award
is expensed from the start of their employment, with the value being a fixed
amount as stated in the employee's offer letter. The number of shares awarded
is determined by the mid-market close price at the grant date, which is at
the next available window after their start date (typically April or
September). The awards vest two years following grant, subject to continued
employment.
New joiner awards
As part of the Group's commitment to 100% employee share ownership, a share
award is made to every employee joining the business. The award is expensed
from the start of their employment, with the amount based on a pre-determined
number of shares as stated in the employee's offer letter. Following
successful completion of their probationary period, the shares are granted at
the next available window (typically April or September). The awards vest two
years following grant, subject to continued employment.
Employee referral scheme
As part of the Group's employee referral scheme, permanent employees up to
senior manager level are eligible to receive a pre-determined bonus when a
referred employee is hired following completion of their probation period. The
award comprises an initial 50% cash payment and a 50% share award. The number
of shares will be calculated using the mid-market close price on the date
that the referred employee completes their probationary period and is expensed
from this date. The shares are granted at the next available window
(typically April and September) and will vest one year following grant,
subject to continued employment.
Details of movements in the number of shares are as follows:
2024 2023
No. of shares £'000 No. of shares £'000
(thousands)
(thousands)
Outstanding at the beginning of the year 190 1,553 254 2,104
Awarded 42 362 41 296
Exercised (147) (1,184) (89) (673)
Forfeited (16) (171) (16) (174)
Outstanding at the end of the year 69 560 190 1,553
6.5. Expenses recognised during the year
The equity-settled share-based payment expenses recognised during the year,
per plan and in total, are as follows:
2024 2023
£'000 £'000
PSP awards 1,673 1,616
DBSP awards 314 471
Other awards(1) 493 747
Share-based payments(2) 2,480 2,834
EIP share-based payments 34,506 -
Total share-based payments expense 36,986 2,834
1 Other awards includes cash and equity settled awards (50% cash/50%
equity) of £nil in 2024 (2023: £0.1m).
2 The share-based expense in the capital reserve for 2023 of £4.2m
included other awards that were 100% cash settled, as well as those that were
settled 50% cash and 50% equity; it also included the settlement of contingent
consideration for INDOS (£1.5m).
7. Defined benefit pension plans
The Group operates defined benefit pension plans in Switzerland and Mauritius.
Both plans are contribution-based, with the guarantee of a minimum interest
credit and fixed conversion rates at retirement. Disability and death benefits
are defined as a percentage of the insured salary. The Group does not expect a
significant change in contributions year on year.
The Swiss plan must be fully funded, in accordance with Swiss Federal Law on
Occupational Benefits (LPP/BVG), on a static basis at all times. The
subsidiary, JTC (Suisse) SA, is affiliated to the collective foundation Swiss
Life. The collective foundation is a separate legal entity. The foundation is
responsible for the governance of the plan; the board is composed of an equal
number of representatives from the employers and the employees, chosen from
all affiliated companies. The foundation has set up investment guidelines,
defining in particular the strategic allocation with margins. Additionally,
there is a pension committee responsible for the set-up of the plan benefit;
this is composed of an equal number of representatives of JTC (Suisse) SA and
its employees.
The Mauritius plan is administered by Swan Life Ltd. JTC Fiduciary Services
(Mauritius) Limited is required to contribute a specific percentage of payroll
costs to the retirement benefit scheme. Employees under this pension plan are
entitled to statutory benefits prescribed under parts VIII and IX of the
Workers' Rights Act 2019.
The amounts recognised in the consolidated balance sheet are as follows:
Note 2024 2023
£'000 £'000
Present value of funded obligations (3,747) (4,020)
Fair value of plan assets(1) 2,852 3,205
Employee benefit obligations 30 (895) (815)
1 All plan assets are held in insurance contracts.
The movement in the net defined benefit obligation recognised in the
consolidated balance sheet is as follows:
2024 2023
Defined benefit obligation £'000 Fair value of plan assets £'000 Net defined benefit obligation £'000 Defined benefit obligation £'000 Fair value of plan assets £'000 Net defined benefit obligation £'000
At 1 January (4,020) 3,205 (815) (3,342) 2,770 (572)
Included in the consolidated income statement
Current service cost (231) - (231) (229) - (229)
Past service cost (35) - (35) 98 - 98
Interest (58) 50 (8) (81) 67 (14)
Total (324) 50 (274) (212) 67 (145)
Included in other comprehensive income/(loss)
Remeasurements:
- Change in demographic assumptions - - - (15) - (15)
- Change in financial assumptions (153) - (153) (360) - (360)
- Experience adjustment 57 - 57 127 - 127
- Return on plan assets - 14 14 - (52) (52)
Total (96) 14 (82) (248) (52) (300)
Other
Contributions:
- Employers - 232 232 - 221 221
- Plan participants (114) 114 - (109) 109 -
Benefit payments 598 (598) - 18 (18) -
Exchange differences 209 (165) 44 (127) 108 (19)
Total 693 (417) 276 (218) 420 202
At 31 December (3,747) 2,852 (895) (4,020) 3,205 (815)
The plans are exposed to actuarial risks relating to the discount rate, the
interest rate for the projection of the savings capital, salary increases and
pension increases.
The principal actuarial assumptions used for the IAS 19 disclosures were as
follows:
Switzerland Mauritius
Discount rate at 1 January 2024 1.4% 5.0%
Discount rate at 31 December 2024 1.0% 5.2%
Future salary increases 1.3% 5.0%
Rate of increase in deferred pensions 0.0% 0.0%
For the Swiss plan, longevity must be reflected in the defined benefit
liability. The mortality probabilities used were as follows:
2024 2023
Years
Years
Mortality probabilities for pensioners at age 65
- Males 21.86 21.80
- Females 23.61 23.54
Mortality probabilities at age 65 for current members aged 45
- Males 23.54 23.46
- Females 25.21 25.14
8. Other operating expenses
2024 2023
£'000
£'000
Third party administration fees 6,512 6,241
Legal and professional fees 19,592 12,226
Auditor's remuneration for audit services 1,880 1,409
Auditor's remuneration for other assurance services 285 287
Establishment costs 4,248 3,362
Insurance 1,707 1,649
Travel and accommodation 3,149 2,559
Marketing 3,512 2,235
Computer software and maintenance 12,921 10,915
Telephones and postage 1,805 1,726
Other expenses 1,937 2,246
Total other operating expenses 57,548 44,855
9. Non-underlying items
Note 2024 2023
£'000 £'000
EBITDA 49,060 77,790
Non-underlying items within EBITDA:
Acquisition and integration costs(1) 15,272 7,080
Office start-ups(2) 585 612
Other(3) 365 427
EIP share-based payments(4) 36,401 -
Total non-underlying items within EBITDA 52,623 8,119
Underlying EBITDA 101,683 85,909
(Loss)/profit before tax (7,402) 24,310
Total non-underlying items within EBITDA 52,623 8,119
Loss/(gain) on revaluation of contingent consideration(5) 2,019 (446)
(Gain) on bargain purchase 15.4 (720) -
(Gain) on disposal of subsidiary(6) (69) -
Foreign exchange losses(7) 975 8,515
Total non-underlying items within profit before tax 54,828 16,188
Underlying profit before tax 47,426 40,498
1 Acquisition and integration costs include deal and tax advisory
fees, legal and professional fees, staff reorganisation costs and other
integration costs. This includes acquisition-related share-based payment
awards granted to act as retention tools for key management and/or to recruit
senior management to support various acquisitions. Acquisition and integration
costs are typically incurred in the first two years following acquisition.
2 Office start-up includes up-front investment in personnel and
infrastructure, which is required in advance of trading.
3 Includes expenses in relation to a change in making annual bonus
awards in cash rather than share awards (see note 6.3(B)), legal costs
relating to a regulatory action from the Dutch Central Bank and EIP
administrative costs.
4 Following the conclusion of the Galaxy business plan era, share
awards were made to staff members under the EIP (see note 6.1); this includes
£1.9m of employer-related taxes relating to the share awards.
5 Relates to the loss on revaluation of the contingent consideration
payable for perfORM of £2.0m (2023: £0.17m), see note 26 for more
information on the valuation methodology used. The 2023 comparative also
included gains for Segue £0.58m and INDOS £0.03m.
6 On 1 March 2024, the Group sold its call option to purchase Global
Tax Support B.V.
7 Foreign exchange losses that relate to the revaluation of
inter-company loans. Management consider these to be non-underlying as they
are unrealisable movements since the loans are eliminated upon consolidation.
10. Depreciation and amortisation
Note 2024 2023
£'000 £'000
Depreciation of right-of-use assets 22 7,461 5,844
Depreciation of property, plant and equipment 22 2,583 2,418
Amortisation of other intangible assets 17 18,973 15,766
Amortisation of assets recognised from costs to obtain or fulfil a contract 23 1,102 1,112
Total depreciation and amortisation 30,119 25,140
11. Other losses
Note 2024 2023
£'000 £'000
(Loss)/gain on revaluation of contingent consideration 26 (2,019) 446
Gain on bargain purchase 15.4 720 -
Foreign exchange losses(1) 34.1 (1,089) (9,626)
Net (loss)/gain on disposal of fixed asset (9) 5
Gain on disposal of subsidiary 69 -
Impairment of customer relationship intangible asset - (737)
Total other losses (2,328) (9,912)
1 This includes £0.9m of foreign exchange losses (2023: £8.5m loss)
that relate to the revaluation of inter-company loans; these foreign exchange
movements are considered by Management to be non-underlying items (see note
9).
12. Finance income and finance cost
Note 2024 2023
£'000 £'000
Bank interest 1,299 744
Loan interest 56 50
Total finance income 1,355 794
Bank loan interest 16,107 11,123
Gain on cash flow hedge reclassified from other comprehensive income 33 (1,710) (134)
Amortisation of loan arrangement fees 1,348 805
Unwinding of net present value ("NPV") discounts 8,308 6,514
Other finance expense 1,317 914
Total finance cost 25,370 19,222
Within the £8.3m (2023: £6.5m) recognised from the unwinding of NPV
discounts, £6.1m (2023: £5.1m) relates to contingent consideration. This
amount is excluded from the calculation of adjusted underlying basic EPS (see
note 14.3). The breakdown by acquisition is as follows:
2024 2023
£'000 £'000
SDTC 4,922 2,123
perfORM 507 461
FFP 526 -
Hanway 101 -
SALI 87 2,316
Segue - 139
INDOS - 54
Unwinding of NPV discounts on contingent consideration 6,143 5,093
13. Income tax
Income tax in the consolidated income statement comprises:
2024 2023
£'000 £'000
Jersey tax on current year profit 1,220 1,197
Foreign company taxes on current year profit 2,155 2,583
Adjustment in respect of the previous periods 166 305
Total current tax expense 3,541 4,086
Deferred tax (see note 29):
Temporary differences in relation to acquired intangible assets 5,542 (1,694)
Jersey origination and reversal of temporary differences (29) (6)
Foreign company origination and reversal of temporary differences (9,200) 104
Total deferred tax credit (3,687) (1,596)
Income tax (credit)/expense (146) 2,489
The difference between the total current tax shown above and the amount
calculated by applying the standard rate of Jersey income tax to the
(loss)/profit on ordinary activities before tax is as follows:
2024 2023
£'000 £'000
(Loss)/profit on ordinary activities before tax (7,402) 24,310
Tax on (loss)/profit on ordinary activities at Jersey income tax rate of 10% (740) 2,431
(2023: 10%)
Effects of:
Results from entities subject to tax at a rate of 0% (Jersey company) 702 (1,262)
Results from tax exempt entities (foreign company) (58) (186)
Foreign taxes not at Jersey rate 1,749 1,313
Temporary differences in relation to acquired intangible assets 5,542 (1,694)
Other temporary differences (Jersey company) (29) (6)
Other temporary differences (foreign company) (9,200) 104
Non-deductible expenses 601 118
Consolidation adjustments 1,258 1,639
Other differences 29 32
Income tax (credit)/expense (146) 2,489
Income tax expense computations are based on the jurisdictions in which
profits were earned at prevailing rates in the respective jurisdictions.
Reconciliation of effective tax rates 2024 2023
% %
Jersey income tax rate on (loss)/profit on ordinary activities 10.00 10.00
Effect of:
Results from entities subject to tax at a rate of 0% (Jersey company) 0.78 (5.19)
Results from tax exempt entities (foreign company) (9.48) (0.77)
Foreign taxes not at Jersey rate (23.63) 5.40
Other temporary differences (Jersey company) 0.39 (0.02)
Other temporary differences (foreign company) 124.33 0.43
Temporary differences in relation to acquired intangible assets (74.87) (6.97)
Non-deductible expenses (8.12) 0.48
Consolidation adjustments (16.99) 6.75
Other differences (0.42) 0.13
Effective tax rate 1.99 10.24
14. Earnings Per Share ("EPS")
The Group calculates basic, diluted and adjusted underlying basic EPS. The
results can be summarised as follows:
2024 2023
Pence Pence
Basic EPS (4.44) 14.20
Diluted EPS (4.38) 14.07
Adjusted underlying basic EPS 41.80 37.30
14.1. Basic EPS
The calculation of basic EPS is based on the (loss)/profit for the year,
divided by the weighted average number of Ordinary shares for the same year.
2024 2023
£'000 £'000
(Loss)/profit for the year (7,256) 21,821
No. of shares No. of shares
(thousands) (thousands)
Issued Ordinary shares at 1 January 161,445 146,001
Effect of shares issued to acquire business combinations 598 2,474
Effect of movement in treasury shares held 1,265 322
Effect of placing - 4,862
Weighted average number of Ordinary shares (basic): 163,308 153,659
Pence Pence
Basic EPS (4.44) 14.20
14.2. Diluted EPS
The calculation of diluted EPS is based on basic EPS after adjusting for the
potentially dilutive effect of Ordinary shares that have been granted.
2024 2023
£'000 £'000
(Loss)/profit for the year (7,256) 21,821
No. of shares No. of shares
(thousands) (thousands)
Weighted average number of Ordinary shares (basic) 163,308 153,659
Effect of share-based payments 2,215 1,440
Weighted average number of Ordinary shares (diluted): 165,523 155,099
Pence Pence
Diluted EPS (4.38) 14.07
14.3. Adjusted underlying basic EPS
Adjusted underlying basic EPS is an alternative performance measure that
reflects the underlying activities of the Group. The following definition is
not consistent with the requirements of IAS 33.
The Group's definition of adjusted underlying basic EPS reflects the profit
for the year, adjusted to remove the impact of non-underlying items (see note
9) and temporary tax differences. Additionally, a number of other items
relating to the Group's acquisition activities, including amortisation of
acquired intangible assets, impairment of acquired intangible assets,
amortisation of loan arrangement fees and unwinding of NPV discounts in
relation to contingent consideration, are removed to present an adjusted
underlying basic EPS, which is used more widely by external investors and
analysts.
The definition of adjusted underlying EPS has been updated to include all
temporary tax differences. Prior to this update, adjusted underlying basic EPS
was 47.45p (2023: 37.23p).
Note 2024 2023
£'000 £'000
(Loss)/profit for the year (7,256) 21,821
Adjusted for:
Non-underlying items 9 54,828 16,188
Amortisation of customer relationships, acquired software and brands 17 16,889 14,265
Impairment of customer relationship intangible asset 17 - 737
Amortisation of loan arrangement fees 12 1,348 805
Unwinding of NPV discounts for contingent consideration 12 6,143 5,093
Temporary tax differences 13 (3,687) (1,597)
Adjusted underlying profit for the year 68,265 57,312
No. of shares No. of shares
(thousands) (thousands)
Weighted average number of Ordinary shares (basic) 163,308 153,659
Pence Pence
Adjusted underlying basic EPS 41.80 37.30
15. Business combinations
15.1. 'Blackheath Capital Management LLP ("Blackheath")
On 24 November 2023, JTC entered into an agreement to acquire 100% of the
partnership interest in Blackheath, a UK limited liability partnership that
provides management and regulatory oversight services to investment funds and
offers management company ("ManCo") services as an Alternative Investment Fund
Manager ("AIFM"). The acquisition complements JTC's existing AIFM Global
Solutions businesses and brings additional scale to existing fund
administration and depositary services in the UK.
Following regulatory approval for the transaction, cash consideration was
transferred on 1 March 2024, as well as the equity element of initial
consideration. The results of the acquired business have been consolidated
from 1 March 2024 as Management concluded that this was the date that control
was obtained by the Group. The acquired business contributed revenues of
£0.35m and underlying loss before tax (before central costs have been
applied) of £0.1m to the Group for the period from 1 March 2024 to 31
December 2024. If the business had been acquired on 1 January 2024, the
Group's consolidated revenue and underlying profit before tax for the year
would have been £305.8m and £47.4m.
The Group incurred acquisition-related costs of £0.5m, which have been
recognised within other operating expenses in the Group's consolidated income
statement and are treated as non-underlying items to calculate underlying
EBITDA (see note 9).
Total consideration is satisfied by:
£'000
Cash consideration 772
Equity instruments(1) 147
Total consideration at acquisition 919
1 On 4 March 2024, the Company issued 18,435 Ordinary shares at fair
value to satisfy the equity element of the initial consideration (see note
31.1).
Identifiable net assets acquired by the Group included:
Note Book value Adjustments Fair value
£'000 £'000 £'000
Property, plant and equipment 2 9 11
Intangible assets - customer relationships 17.1 - 145 145
Trade receivables 54 - 54
Other receivables 48 - 48
Cash and cash equivalents 223 - 223
Assets 327 154 481
Trade and other payables 72 - 72
Lease liabilities - 9 9
Liabilities 72 9 81
Total identifiable net assets 255 145 400
Goodwill arising on acquisition is as follows:
Note £'000
Total consideration 919
Less: identifiable net assets (400)
Goodwill 16 519
15.2. Hanway Advisory Limited ("Hanway")
On 1 July 2024, JTC transferred cash consideration to complete the acquisition
of 100% of the share capital of Hanway, a UK-based company offering corporate
governance, fund administration and accounting services to UK listed
investment companies. The acquisition brings further scale to JTC's UK
business and existing UK listed fund activities.
The results of the acquired business have been consolidated from 1 July 2024
as Management concluded that this was the date that control was obtained by
the Group. The acquired business contributed revenues of £0.7m and underlying
profit before tax (before central costs have been applied) of £0.4m to the
Group for the period from 1 July 2024 to 31 December 2024. If the business had
been acquired on 1 January 2024, the Group's consolidated revenue and
underlying profit before tax for the year would have been £306.9m and
£48.3m.
The Group incurred acquisition-related costs of £0.2m, which have been
recognised within other operating expenses in the Group's consolidated income
statement and are treated as non-underlying items to calculate underlying
EBITDA (see note 9).
Total consideration is satisfied by:
£'000
Cash consideration 755
Contingent consideration - earn-out(1) 1,364
Total consideration 2,119
1 A total of £1.5m is payable subject to meeting revenue targets for
the period to 30 June 2025. Based on Management's assessment of the forecast
for the period, it is estimated that the earn-out will be met in full. The
estimated contingent consideration is payable in cash and has been discounted
to its present value of £1.4m at the acquisition date (£1.5m at 31 December
2024).
Identifiable net assets acquired by the Group included:
Note Book value at acquisition Adjustments Fair value
£'000 £'000 £'000
Intangible assets - customer relationships 17.1 - 529 529
Trade receivables 314 - 314
Cash and cash equivalents 58 - 58
Other receivables 117 - 117
Assets 489 529 1,018
Trade and other payables 41 - 41
Deferred tax liabilities 29 - 133 133
Liabilities 41 133 174
Total identifiable net assets 448 396 844
Goodwill arising on acquisition is as follows:
Note £'000
Total consideration 2,119
Less: identifiable net assets (844)
Goodwill 16 1,275
15.3. First Republic Trust Company of Delaware ("FRTC")
On 31 July 2024, JTC transferred cash consideration to complete the
acquisition of 100% of the share capital of FRTC, a US-based company offering
trust administration services to high-net-worth individuals, building on JTC's
position as the leading independent provider of trust services in the US.
The results of the acquired business have been consolidated from 31 July 2024
as Management concluded that this was the date that control was obtained by
the Group. The acquired business contributed revenues of £2.1m and underlying
profit before tax (before central costs have been applied) of £1.7m to the
Group for the period from 31 July 2024 to 31 December 2024. If the business
had been acquired on 1 January 2024, the Group's consolidated revenue and
underlying profit before tax for the year would have been £310.5m and
£51.5m.
The Group incurred acquisition-related costs of £2.0m, which have been
recognised within other operating expenses in the Group's consolidated income
statement and are treated as non-underlying items to calculate underlying
EBITDA (see note 9).
Total consideration is satisfied by:
£'000 $'000
Cash consideration 19,402 24,907
Total consideration 19,402 24,907
Identifiable net assets acquired by the Group included:
Note Book value at acquisition Adjustments Fair value Fair value
£'000 £'000 £'000 $'000
Intangible assets - customer relationships 17.1 - 8,005 8,005 10,277
Accrued income 453 - 453 582
Cash and cash equivalents 3,940 - 3,940 5,058
Assets 4,393 8,005 12,398 15,917
Trade and other payables 42 - 42 54
Deferred income 612 - 612 786
Liabilities 654 - 654 840
Total identifiable net assets 3,739 8,005 11,744 15,077
Goodwill arising on acquisition is as follows:
Note £'000 $'000
Total consideration 19,402 24,907
Less: identifiable net assets (11,744) (15,077)
Goodwill 16 7,658 9,830
15.4. The Buck UK and European share plan administration and trustee
businesses ("Buck")
On 31 October 2024, JTC transferred cash consideration to Arthur J. Gallagher
& Co to complete the acquisition of Buck. The acquired businesses provide
fully outsourced administration and trustee services to a blue-chip global
client base, covering a full range of employee share plans. With operations in
the UK, Guernsey and Germany, the acquisition complements and enhances JTC's
existing Employer Solutions platform and will accelerate the growth of the
Group's share plan trustee and administration service offering.
The results of the acquired business have been consolidated from 31 October
2024 as Management concluded that this was the date that control was obtained
by the Group.The acquired business contributed revenues of £0.24m and
underlying profit before tax (before central costs have been applied) of
£0.01m to the Group for the period from 31 October 2024 to 31 December 2024.
If the business had been acquired on 1 January 2024, the Group's consolidated
revenue and underlying profit before tax for the year would have been £306.8m
and £48.0m.
The Group incurred acquisition-related costs of £1.7m, which have been
recognised within other operating expenses in the Group's consolidated income
statement and are treated as non-underlying items to calculate underlying
EBITDA (see note 9).
Total consideration is satisfied by:
£'000
Cash consideration(1) 173
Total consideration 173
1 The cash consideration comprises a purchase price of £1, paid at the
acquisition date, and an additional £0.17m accrued at 31 December 2024, which
relates to the payment for working capital.
Identifiable net assets acquired by the Group included:
Note Book value at acquisition Adjustments Fair value
£'000 £'000 £'000
Intangible assets - customer relationships 17.1 - 488 488
Property, plant and equipment 1 - 1
Trade receivables 56 - 56
Accrued income 47 - 47
Cash and cash equivalents 395 - 395
Other receivables 74 - 74
Assets 573 488 1,061
Trade and other payables 118 - 118
Deferred income 50 - 50
Liabilities 168 - 168
Total identifiable net assets 405 488 893
Goodwill arising on acquisition is as follows:
Note £'000
Total consideration 173
Less: identifiable net assets (893)
Gain on bargain purchase 11 (720)
Gain on bargain purchase represents negative goodwill. This is supported by:
(i) the synergies that Management expect to realise and (ii) the purchase
price being impacted by the acquired business being viewed as non-core by the
sellers.
15.5. FFP (Holdings) Limited and Subsidiaries ("FFP")
On 15 November 2024, JTC transferred cash consideration to complete the
acquisition of FFP, a group of privately owned companies with headquarters in
the Cayman Islands. FFP provides a range of specialist fiduciary,
restructuring, trustee, fund administration and corporate services to clients
globally, with a focus on complex engagements including restructurings,
insolvencies and disputes.
The results of the acquired business have been consolidated from 15 November
2024 as Management concluded that this was the date that control was obtained
by the Group. The acquired business contributed revenues of £2.3m and
underlying profit before tax (before central costs have been applied) of
£0.9m to the Group for the period from 15 November 2024 to 31 December 2024.
If the business had been acquired on 1 January 2024, the Group's consolidated
revenue and underlying profit before tax for the year would have been £331.1m
and £62.3m.
The Group incurred acquisition-related costs of £3.0m, which have been
recognised within other operating expenses in the Group's consolidated income
statement and are treated as non-underlying items to calculate underlying
EBITDA (see note 9).
Total consideration is satisfied by:
£'000 $'000
Cash consideration(1) 46,329 58,991
Equity instruments(2) 10,700 13,501
Contingent consideration - earn-out(3) 29,638 37,537
Total consideration 86,667 110,029
1 The cash consideration comprises initial cash consideration of
£45.3m ($57.8m) and £1.0m ($1.2m) accrued in other payables at 31 December
2024 (see note 27).
2 On 18 November 2024, the Company issued 1,087,341 Ordinary shares at
fair value to satisfy the equity element of the initial consideration (see
note 31.1).
3 A total of up to £31.6m ($40.0m) is payable, subject to meeting
EBITDA targets for the calendar year 2024. Management have estimated that the
contingent consideration payable has been met in full. The contingent
consideration is payable in a 80%/20% ratio of cash and JTC PLC Ordinary
shares and has been discounted to its present value of £29.6m ($37.5m) at the
acquisition date (£30.5m at 31 December 2024).
Identifiable net assets acquired by the Group included:
Note Book value at acquisition Adjustments Fair value Fair value
£'000 £'000 £'000 $'000
Intangible assets - customer relationships 17.1 - 25,977 25,977 32,900
Intangible assets - brand 17.2 - 711 711 900
Property, plant and equipment(1) 198 866 1,064 1,347
Trade receivables 2,986 - 2,986 3,781
Other receivables 669 - 669 848
Cash and cash equivalents 2,625 - 2,625 3,325
Assets 6,478 27,554 34,032 43,101
Trade and other payables 1,191 - 1,191 1,509
Deferred income 798 - 798 1,010
Lease liabilities(1) - 866 866 1,096
Other creditors 167 - 167 212
Liabilities 2,156 866 3,022 3,827
Total identifiable net assets 4,322 26,688 31,010 39,274
1 The acquired business leases office premises; an adjustment was
recognised to account for the lease liability, which is measured at the
present value of the remaining lease payments with a corresponding
right-of-use asset.
Goodwill arising on acquisition is as follows:
Note £'000 $'000
Total consideration 86,667 110,029
Less: identifiable net assets (31,010) (39,274)
Goodwill 16 55,657 70,755
15.6. Net cash outflow from acquisitions
The tables below illustrate the net cash outflow from acquisitions:
2024 Note Cash Less: cash acquired Net
consideration £'000 £'000
£'000
Blackheath 15.1 772 (223) 549
Hanway 15.2 755 (58) 697
FRTC 15.3 19,402 (3,940) 15,462
Buck 15.4 - (395) (395)
FFP 15.5 45,341 (2,625) 42,716
SALI - settlement of contingent consideration 26 21,085 - 21,085
Net cash outflow from acquisition 87,355 (7,241) 80,114
2023 Cash Less: cash acquired Net
consideration £'000 £'000
£'000
SDTC 114,916 (1,588) 113,328
Segue - settlement of contingent consideration 1,391 - 1,391
Net cash outflow from acquisition 116,307 (1,588) 114,719
16. Goodwill
The aggregate carrying amounts of goodwill allocated to each CGU is as
follows:
In the current year: Note Balance at Combination Business Exchange Balance at
CGU 1 Jan 2024 of CGUs combinations differences £'000 31 Dec 2024
£'000 £'000 £'000 £'000
Jersey 66,104 - - - 66,104
Guernsey 10,761 - - - 10,761
BVI 752 - - - 752
Switzerland 2,556 - - (78) 2,478
Cayman 237 - - 4 241
Luxembourg 28,727 - - (1,208) 27,519
Netherlands 14,734 - - (677) 14,057
Dubai 1,870 - - 27 1,897
Mauritius 2,518 - - 39 2,557
US - ICS 194,466 - - 2,868 197,334
US - SDTC 171,952 - - 2,533 174,485
US - NYPTC 7,398 - - 109 7,507
US - FRTC 15.3 - - 7,658 176 7,834
Cayman - FFP 15.5 - - 55,657 730 56,387
Ireland - AIFM 8,896 - - (409) 8,487
UK 15.1, 15.2 11,993 - 1,794 - 13,787
Total 522,964 - 65,109 4,114 592,187
In the prior year: Balance at Combination Business Exchange Balance at
CGU 1 Jan 2023 of CGUs combinations differences £'000 31 Dec 2023
£'000 £'000 £'000 £'000
Jersey 66,104 - - - 66,104
Guernsey 10,761 - - - 10,761
BVI 752 - - - 752
Switzerland 2,504 - - 52 2,556
Cayman 251 - - (14) 237
Luxembourg 29,186 - - (459) 28,727
Netherlands 14,992 - - (258) 14,734
Dubai 1,975 - - (105) 1,870
Mauritius 2,656 - - (138) 2,518
US - ICS - 205,421 - (10,955) 194,466
US - NESF 49,704 (49,704) - - -
US - SALI 144,271 (144,271) - - -
US - Other 11,446 (11,446) - - -
US - SDTC - - 171,108 844 171,952
US - NYPTC 8,062 - - (664) 7,398
Ireland - AIFM 9,051 - - (155) 8,896
UK 11,993 - - - 11,993
Total 363,708 - 171,108 (11,852) 522,964
16.1. Impairment of goodwill
Key assumptions used to calculate the recoverable amount for each CGU
The recoverable amount of all CGUs has been determined based on the higher of
value in use ("VIU") and fair value less cost of disposal ("FVLCD"). Projected
cash flows are calculated with reference to each CGU's latest budget and
business plan, which are subject to a rigorous review and challenge process.
Management prepare the budgets through an assessment of historical revenues
from existing clients, the pipeline of new projects, historical pricing, and
the required resource base needed to service new and existing clients, coupled
with their knowledge of wider industry trends and the economic environment.
Year 1 cash flow projections are based on the latest approved budget and years
2 to 5 are based on detailed outlooks prepared by Management. The US - ICS CGU
employs a 10 year period due to the significantly longer useful economic life
of their customer relationships, where these cash flow projections are able to
be accurately forecast due to their recurring nature and increased client
longevity.
The terminal growth rate considers the long-term average growth expectation
for the jurisdiction and services provided.
Management estimate discount rates using pre-tax rates that reflect current
market assessments of the time value of money. In assessing the discount rate
applicable to the Group, the following factors have been considered:
· long-term treasury bond rates for the relevant jurisdiction;
· the cost of equity, based on an adjusted Beta for the relevant
jurisdiction; and
· the risk premium to reflect the increased risk of investing in
equities.
Management have given due consideration to climate change and any potential
impact on projected cash flows. Such is the nature of JTC's business and the
diversification of customer relationships that Management have concluded the
impact to be immaterial to each of the CGUs' recoverable amounts.
The recoverable amount for the US - SDTC, Cayman - FFP and Ireland CGUs were
determined based on FVLCD. These were calculated using a discounted cash flow
model, utilising Level 3 inputs under the IFRS 13 fair value hierarchy.
A summary of the values assigned to the key assumptions used in the VIU and
FVLCD are as follows:
· Revenue growth rate: up to 20%
· Terminal value growth rate: between 1.5% and 4.0%
· Discount rate: between 10.8% and 15.0%
The key assumptions used for CGUs where the carrying amount is a significant
proportion of the Group's total carrying value of goodwill is as follows:
Forecasted average annual revenue Terminal value Discount rate
growth rate
growth rate
CGU % of Group's total carrying value of goodwill 2024 2023 2024 2023 2024 2023
% % % % % %
Jersey 11.2 8.1 6.8 2.8 2.6 12.6 10.8
US - ICS 33.3 11.8 18.2 4.0 4.0 12.3 10.9
US - SDTC 29.5 13.5 13.1 3.0 2.5 12.2 10.5
Cayman - FFP 9.5 4.8 - 3.0 - 15.0 -
At 31 December 2024, the recoverable amount of goodwill determined for each
CGU was found to be higher than its carrying amount.
Sensitivity to changes in assumptions
Management believe that any reasonable changes to the key assumptions on which
recoverable amounts are based would not cause the aggregate carrying amount to
exceed the recoverable amount of the CGUs, except for US - SDTC where, for the
recoverable amount to equal the carrying amount, there would need to be a
reduction of £16.4m. This may be caused by an increase of 1.0% in the
discount rate from 12.2% to 13.2%, a 1.4% decrease in terminal growth rate, or
a 2.9% drop in estimated annual revenue growth.
17. Other intangible assets
The movements in other intangible assets are as follows:
Customer Brands Software Regulatory Total
relationships £'000 £'000 licence £'000
£'000 £'000
Cost
At 1 January 2023 156,604 2,881 14,149 331 173,965
Additions - - 3,811 - 3,811
Additions through business combinations 34,747 2,455 16 - 37,218
Impairment charge (737) - - - (737)
Disposals (1,003) - (182) - (1,185)
Exchange differences (4,165) (365) (79) (6) (4,614)
At 31 December 2023 185,446 4,971 17,715 325 208,458
Additions 508 - 5,035 - 5,543
Additions through business combinations 35,177 711 - - 35,888
Exchange differences 868 74 40 (15) 966
At 31 December 2024 221,999 5,756 22,790 310 250,855
Accumulated amortisation
At 1 January 2023 37,577 843 7,307 218 45,945
Charge for the year 12,799 712 2,236 20 15,766
Disposals (79) - (119) - (199)
Exchange differences (151) (58) (146) (4) (360)
At 31 December 2023 50,146 1,497 9,278 234 61,155
Charge for the year(1) 15,282 970 2,701 20 18,973
Exchange differences (168) 38 47 (11) (94)
At 31 December 2024 65,260 2,505 12,026 243 80,034
Carrying amount
At 31 December 2024 156,739 3,251 10,764 67 170,821
At 31 December 2023 135,300 3,474 8,437 91 147,302
1 Total amortisation charge includes £2.1m (2023: £1.6m) related to
software not acquired through business combinations; the balance of £16.9m
(2023: £14.2m) is excluded when calculating adjusted underlying basic EPS
(see note 14.3).
17.1. Customer relationship intangible assets
The carrying amount of identifiable customer relationship intangible assets
acquired separately and through business combinations are as follows:
Amortisation Useful Carrying amount
period end economic
life ("UEL")
Acquisitions Note 2024 2023
£'000 £'000
During previous financial reporting periods
Signes 30 April 2025 10 years 131 412
KB Group 30 June 2027 12 years 872 1,221
S&GFA 30 September 2025 10 years 300 689
BAML 30 September 2029 12 years 4,067 4,851
NACT 31 July 2027 10 years 445 706
Van Doorn 28 February 2030 11.4 years 3,174 3,985
Minerva 30 May 2027 - 30 July 2030 8.7 - 11.8 years 6,107 7,387
Exequtive 31 March 2029 10 years 4,063 5,261
Aufisco 30 June 2029 10 years 311 398
Sackville 28 February 2029 10 years 463 545
NESF 30 April 2028 8 years 293 739
Sanne Private Clients 30 June 2030 10 years 3,516 4,155
Anson Registrars 28 February 2030 10 years 16 19
RBC cees 31 March 2033 12 years 15,376 17,241
INDOS 31 May 2031 10 years 868 1,003
Segue 30 September 2031 10 years 701 826
perfORM 30 September 2031 10 years 18 21
Ballybunion 31 October 2031 10 years 1,713 2,058
SALI 31 October 2046 25 years 40,675 41,917
EFS 30 November 2031 10 years 1,008 1,136
Sterling 30 June 2032 10 years 2,302 2,621
NYPTC 31 October 2032 10 years 4,099 4,555
SDTC 31 January 2036 12.5 years 31,230 33,554
During the year ended 31 December 2024
Blackheath 15.1 28 February 2034 10 years 133 -
CNFS 17.1(B) 5 March 2035 10 years 478 -
Hanway 15.2 30 June 2033 9 years 499 -
FRTC 15.3 31 July 2033 9 years 7,849 -
Buck 15.4 31 October 2035 11 years 480 -
FFP 15.5 14 November 2029 5 years 25,552 -
Total 156,739 135,300
(A) Customer relationships acquired in a business combination
Customer relationship intangible assets acquired in a business combination and
recognised separately from goodwill are initially recognised at their fair
value at the acquisition date. During the year, the Group recognised customer
relationship intangible assets as follows: Blackheath £0.15m, Hanway £0.5m,
FRTC £8.0m, Buck £0.5m and FFP £26.0m. The UEL and carrying amounts at 31
December 2024 are shown in the previous table.
Key assumptions in determining fair value
The fair value at acquisition was derived using the multi-period excess
earnings method ("MEEM") financial valuation model. Management consider the
following key assumptions to be significant for the valuation of new customer
relationships:
· the discount rate applied to free cash flow; and
· annual client attrition rate.
Management have assessed the sensitivity of key assumptions used in the
valuation of new customer relationships acquired during the year and concluded
that, with the exception of FFP, any reasonable change to these would not
result in a significant change to the fair value.
Sensitivity analysis
The following table shows in £'000 the impact that reasonable changes in the
UEL/Attrition rate % and discount rate would have on the valuation of the
customer relationship for FFP:
UEL / Attrition rate %
Discount rate 5.6 years / 5 years / 5.4 years /
27.5% 30.0% 32.5%
14.5% 2,290 158 (3,158)
15.0% 2,132 - (3,316)
15.5% 1,895 (237) (3,474)
In addition to the reasonable changes in UEL/Attrition rate % and discount
rate, a movement of 4.2pp in the estimated annual EBIT margin would result in
a £2.3m change in the valuation of the customer relationship.
(B) Customer relationships acquired separately
On 6 March 2024, the Group acquired a new customer relationship from Cayman
National Fund Services Ltd ("CNFS"). The Group made an initial payment of
£0.12m ($0.15m) and the remaining balance of £0.4m ($0.5m) was paid on 20
March 2025, following successful achievement of revenue targets. The fair
value of the customer relationship acquired equates to the consideration due.
17.2. Brand intangible assets
The fair value at acquisition was derived using a relief from royalty
methodology. Management consider the key assumptions in this model to be the
UEL and the royalty rate applied to projected revenue growth.
On 15 November 2024, the Group recognised a brand intangible asset for FFP of
£0.7m ($0.9m) (see note 15.5). The UEL of five years was based on
Management's expectation, as well as UELs observed for benchmark transactions.
17.3. Impairment of other intangible assets
Consideration was given to many indicators, including the current
macroeconomic environment and its potential impact on financial performance.
Management concluded that there were no indicators of impairment present at 31
December 2024.
18. Trade receivables
The ageing analysis of trade receivables with the loss allowance is as
follows:
2024 Gross Loss allowance £'000 Net
£'000 £'000
<30 days 21,900 (363) 21,537
30 - 60 days 8,842 (643) 8,199
61 - 90 days 3,565 (102) 3,463
91 - 120 days 2,075 (169) 1,906
121 - 180 days 2,654 (389) 2,265
180> days 12,853 (5,132) 7,721
Total 51,889 (6,798) 45,091
2023 Gross Loss Net
£'000 allowance £'000 £'000
<30 days 12,633 (216) 12,417
30 - 60 days 5,019 (376) 4,643
61 - 90 days 2,976 (247) 2,729
91 - 120 days 1,532 (142) 1,390
121 - 180 days 2,236 (307) 1,929
180> days 14,088 (5,125) 8,963
Total 38,484 (6,413) 32,071
The movement in the allowances for trade receivables is as follows:
2024 2023
£'000 £'000
Balance at the beginning of the year (6,413) (5,645)
Credit impairment losses in the consolidated income statement (2,659) (2,934)
Amounts written off (including unused amounts reversed) 2,274 2,166
Total allowance for doubtful debts (6,798) (6,413)
The loss allowance includes both specific and expected credit loss ("ECL")
provisions. To measure the ECL, trade receivables are grouped based on shared
credit risk characteristics and the days past due. The ECLs are estimated
collectively using a provision matrix based on the Group's historical credit
loss experience, adjusted for factors that are specific to the debtor's
financial position (this includes unlikely to pay indicators such as liquidity
issues, insolvency or other financial difficulties) and an assessment of both
the current as well as the forecast direction of macroeconomic conditions at
the reporting date. Management have identified gross domestic product and
inflation in each country the Group provides services in to be the most
relevant macroeconomic factors. Management have considered these factors, as
well as the impact of climate-related changes on customers, and are satisfied
that any impact is not material to the ultimate recovery of receivables, such
is the diversification across the book in industries and geographies. The loss
allowance at 31 December 2024 is in line with previous trading and supports
this conclusion. See note 34.2 for further comment on credit risk management.
ECL provision rates are segregated according to geographical location and by
business line. The Group considers any specific impairments on a by-client
basis rather than on a collective basis. The carrying amount of the asset is
reduced through the use of an allowance account and the amount of the loss is
recognised in the consolidated income statement as a credit impairment loss.
When a trade receivable is uncollectible, it is written off against the
allowance account. Subsequent recoveries of amounts previously written off are
credited against credit impairment losses.
19. Work in progress ("WIP")
2024 2023
£'000 £'000
Total 15,492 11,710
Loss allowance (113) (95)
Net 15,379 11,615
WIP relates to variable fee contracts and represents the net unbilled amount
expected to be collected from clients for work performed to date. It is
measured at the chargeable rate agreed with the individual clients, adjusted
for unrecoverable amounts less progress billed and ECL. As these financial
assets relate to unbilled work and have substantially the same risk
characteristics as trade receivables, the Group has concluded that the
expected loss rates for trade receivables of <30 days is an appropriate
estimation of the ECL.
Sensitivity analysis
The total carrying amount of WIP (before ECL allowances) is £15.5m (2023:
£11.7m). If Management's estimate of the recoverability of the WIP (the
amount expected to be billed and collected from clients for work performed to
date) is 10% lower than expected on the total WIP balance, due to adjustments
for unrecoverable amounts, revenue would be £1.5m lower (2023: £1.2m lower).
20. Accrued income
2024 2023
£'000 £'000
Total 28,236 26,609
Loss allowance (32) (35)
Net 28,204 26,574
Accrued income relates to pre-set (fixed), cash management, and NAV-based fees
across all service lines and represents the billable amount relating to the
provision of services to clients that has not been invoiced at the reporting
date. Accrued income is recorded based on agreed fees billed in arrears less
ECL. As these financial assets relate to unbilled work and have substantially
the same risk characteristics as trade receivables, the Group has concluded
that the expected loss rates for trade receivables of <30 days is an
appropriate estimation of the ECL.
21. Cash and cash equivalents
2024 2023
£'000 £'000
Cash and cash equivalents 89,232 97,222
Total cash and cash equivalents 89,232 97,222
For the purpose of presentation in the consolidated statement of cash flow,
cash and cash equivalents includes cash in hand, deposits held on call with
banks, other short-term highly liquid investments with original maturities of
three months or less and bank overdrafts.
Cash and cash equivalents are subject to the impairment requirements of IFRS 9
but, as balances are held with reputable international banking institutions,
they were assessed to have low credit risk and no loss allowance
is recognised.
The cash and cash equivalents disclosed above and in the statement of cash
flows includes cash allocated against regulatory and capital adequacy
requirements of £24.5m (see note 36.4). These deposits vary by jurisdiction
and, therefore, are not available for general use by the other entities within
the Group.
22. Tangible assets
The movements of all tangible assets, which include property, plant and
equipment and right-of-use assets, are as follows:
Computer Office furniture and equipment Leasehold Total Total
equipment £'000 improvements Property, plant and equipment Right-of-use
£'000 £'000 £'000 assets(1)
£'000
Cost
At 1 January 2023 4,629 3,231 10,213 18,073 60,452
Additions 424 406 1,770 2,600 4,482
Additions through business combinations 62 38 616 716 2,735
Disposals (278) (271) - (549) (1,454)
Exchange differences 34 415 395 844 (828)
At 31 December 2023 4,871 3,819 12,994 21,684 65,387
Additions 856 774 3,304 4,934 12,744
Additions through business combinations 2 - 200 202 883
Disposals (220) (161) (334) (715) (2,693)
Exchange differences (16) (15) (14) (45) (663)
At 31 December 2024 5,493 4,417 16,150 26,060 75,658
Accumulated depreciation
At 1 January 2023 3,487 1,452 3,954 8,894 20,066
Charge for the year 523 598 1,296 2,418 5,844
Disposals (208) (261) - (469) (186)
Exchange differences 66 481 422 969 (122)
At 31 December 2023 3,868 2,270 5,672 11,812 25,602
Charge for the year 561 587 1,435 2,583 7,461
Disposals (220) (156) (278) (654) (2,441)
Exchange differences (21) (6) 13 (16) (311)
At 31 December 2024 4,188 2,695 6,842 13,725 30,311
Carrying amount
At 31 December 2024 1,305 1,722 9,308 12,335 45,347
At 31 December 2023 1,003 1,549 7,322 9,874 39,785
1 Right-of-use assets have been disclosed separately from property,
plant and equipment on the consolidated balance sheet, this reclassification
has been applied consistently to the prior year comparatives.
23. Other assets
2024 2023
£'000 £'000
Non-current
Costs to obtain or fulfil a contract(1) 2,429 2,367
Prepayments 431 614
Total other non-current assets 2,860 2,981
Current
Prepayments 7,128 5,237
Other receivables(2) 2,642 2,685
Loan receivable from a third party 1,556 1,496
Costs to obtain or fulfil a contract(1) 782 656
Tax receivables 879 1,006
Total other current assets 12,987 11,080
1 Current and non-current assets recognised from costs to obtain or
fulfil a contract include £2.0m for costs to obtain a contract (2023: £1.9m)
and £1.0m for costs incurred to fulfil a contract (2023: £1.1m). The
amortisation charge for the year was £1.1m (2023: £1.1m). Management review
assets recognised from costs to obtain or fulfil a contract and have concluded
that there was no impairment at 31 December 2024.
2 Other receivables are subject to the impairment requirements of IFRS
9 and they were assessed to have low credit risk, and no loss allowance is
recognised.
24. Investments
The following table details the associate and investments held by the Group at
31 December 2024. The entities listed have share capital consisting solely of
Ordinary shares, which are held directly by the Group. The country of
incorporation is also their principal place of business, and the proportion of
ownership interest is the same as the proportion of voting rights held.
% of ownership interest Carrying amount
Name of entity Country of Nature of Measurement 2024 2023 2024 2023
incorporation relationship method % % £'000 £'000
Kensington International Group Pte. Ltd Singapore Associate(1) Equity method 42 42 2,740 2,310
Harmonate Corp. United States Investment(2) Cost 11.2 11.2 798 805
FOMTech Limited United Kingdom Investment(3) Cost 0.2 0.2 250 250
Total investments 3,788 3,365
1 Kensington International Group Pte. Ltd ("KIG") provides corporate,
fiduciary, trust and accounting services and is a strategic partner of the
Group, providing access to new clients and markets in the Far East.
2 Harmonate Corp. ("Harmonate") provides fund operation and data
management solutions to the financial services industry.
3 FOMTech Limited and its subsidiaries operates a FinTech platform
that specialises in venture capital funding.
The summarised financial information for KIG, which is accounted for using the
equity method, is as follows:
Summarised income statement 2024 2023
£'000 £'000
Revenue 8,845 7,554
Gross profit 7,181 6,313
Operating expenditure 5,196 5,753
Total comprehensive income for the year 847 114
Summarised balance sheet 2024 2023
£'000 £'000
Non-current assets 514 650
Current assets 8,732 6,944
Current liabilities (4,000) (3,365)
Closing net assets 5,246 4,229
Reconciliation of summarised financial information 2024 2023
£'000 £'000
Opening net assets 4,229 4,264
Total comprehensive income for the year 847 114
Foreign exchange differences 170 (149)
Closing net assets 5,246 4,229
Group's share of closing net assets 2,218 1,788
Goodwill 522 522
Carrying value of investment in associate 2,740 2,310
Impact on consolidated income statements 2024 2023
£'000 £'000
Balance at 1 January 2,310 2,325
Share of profit/(loss) of equity-accounted investee 430 (15)
Balance at 31 December 2,740 2,310
25. Loans and borrowings
This note provides information about the contractual term of the Group's
interest-bearing loans and borrowings, which are measured at amortised cost.
2024 2023
£'000 £'000
Non-current
Bank loans 271,552 220,531
Total loans and borrowings 271,552 220,531
The terms and conditions of outstanding bank loans are as follows:
Facility Currency Initial termination date Interest rate 2024 2023
£'000 £'000
Term facility GBP 4 December 2026 SONIA + 1.65% margin 100,000 100,000
Revolving credit facility GBP 4 December 2026 SONIA + 1.65% margin 137,163 123,662
Revolving credit facility USD 4 December 2026 SONIA + 1.65% margin 36,898 -
Total principal value 274,061 223,662
Issue costs (2,509) (3,131)
Total bank loans 271,552 220,531
On 6 October 2021, the Group entered into a multicurrency loan facility
agreement (the "original facilities agreement") with an initial termination
date of 6 October 2024. On 4 December 2023, an amendment and restatement
agreement (the "A&R agreement") relating to the original facilities
agreement increased the total commitment to £400m and extended the initial
termination date to 4 December 2026, with an option for two further extensions
available to 30 June 2027 and 30 June 2028, respectively.
On 26 July 2024, the Group drew down £13.5m to partly fund the acquisition of
FRTC. On 29 October 2024, the Group utilised the multicurrency facility and
drew in US dollars (£35.7m, $46.3m) to contribute towards the cash
consideration for FPP.
At 31 December 2024, the Group had available £125.9m of committed facilities
currently undrawn (2023: £176.3m).
The cost of the facility depends upon a covenant tested on net leverage, this
being the ratio of total net debt to underlying EBITDA (for the last twelve
months ("LTM") at average exchange rates and adjusted for pro-forma
contributions from acquisitions), for a relevant period as defined in the
A&R agreement.
The interest rate applied to loan facilities is determined using SONIA plus a
margin based on net leverage calculations. At 1 January 2023, the margin
was 1.65%; this reduced to 1.15%, effective from 29 September 2023, and
increased to 1.65% on 4 December 2023. The margin remained at 1.65%
throughout 2024.
On 4 December 2023, the Group entered into a two year interest rate swap at a
fixed interest (excluding margin) of 4.237% on £180m of its drawn debt
facilities. For more information on the Group's hedging strategy, see note 33.
The movement in bank facilities is as follows:
At 1 January Drawdowns Repayment Amortisation Foreign At
2024 £'000 £'000 release exchange 31 December
£'000 £'000 £'000 2024
£'000
Principal value 223,662 49,187 - - 1,212 274,061
Issue costs (3,131) (720) - 1,342 - (2,509)
Total 220,531 48,467 - 1,342 1,212 271,552
At 1 January Drawdowns Repayment Amortisation Foreign At
2023 £'000 £'000 release exchange 31 December
£'000 £'000 £'000 2023
£'000
Principal value 155,662 118,000 (50,000) - - 223,662
Issue costs (2,040) (1,896) - 805 - (3,131)
Total 153,622 116,104 (50,000) 805 - 220,531
At 31 December 2024, arrangement and legal fees amounting to £6.0m have been
capitalised for amortisation over the term of the loan (2023: £5.3m).
The Group has complied with the financial covenants of its borrowing
facilities during the 2024 and 2023 reporting periods (see note 35.2).
Under the terms of the facility, the debt is supported by guarantees from JTC
PLC and its other applicable subsidiaries deemed to be obligors, and in the
event of default, demand could be placed on these entities to settle
outstanding liabilities.
For the majority of the borrowings, the fair values are not materially
different from their carrying amounts, since the interest payable on those
borrowings is close to current market rates or the borrowings are short term
in nature.
26. Contingent consideration
Contingent consideration payables are discounted to NPV, split between current
and non-current, and are due as follows:
Acquisition Note 2024 2023
£'000 £'000
SDTC(1) 25,158 45,989
perfORM - 3,805
Total non-current contingent consideration 25,158 49,794
SDTC(1) 26,486 1,536
FFP 15.5 30,450 -
perfORM(2) 6,558 -
Hanway 15.2 1,465 -
CNFS 17.1(B) 398 -
SALI(3) - 24,644
Sterling(4) - 726
Total current contingent consideration 65,357 26,906
Total contingent consideration 90,515 76,700
1 A total of up to £54.7m ($70.0m) is payable, subject to meeting
revenue targets for the calendar years 2024 and 2025. Based on Management's
assessment of the forecast for the remaining period, it is estimated that the
contingent consideration payable will be met in full. The estimated contingent
consideration has been discounted to its present value of £51.6m ($64.8m) and
is payable in a 73.5%/26.5% ratio of cash and JTC PLC Ordinary shares.
2 The earn-out for perfORM is calculated based on a multiple of their
underlying EBITDA for the year ended 31 December 2024. This is payable in an
equal split of cash and JTC PLC Ordinary shares; the 50% payable in shares is
liability-classified contingent consideration as this is settled by a variable
number of shares. In accordance with IAS 32, Management are required to update
the fair value at each reporting date.
To update the fair value of the JTC PLC Ordinary shares payable,
the Monte Carlo simulation was updated and this increased the share price
applied to £9.94 (2023: £8.47). The simulation is based on JTC's share price
at 31 December 2024, factoring in historical volatility and projected dividend
payments, and is then discounted using an appropriate risk-free rate.
At the acquisition date, Management forecast the underlying EBITDA
for perfORM and estimated that £4.48m would be due. At 31 December 2024,
Management revisited their forecast of underlying EBITDA and estimate that
£6.8m will be due. Based on this, the number of Ordinary shares to be issued
was reassessed by Management to be 382,166 (2023: 282,854).
The estimated contingent consideration has been discounted to its
present value of £6.6m, resulting in a loss on revaluation of contingent
consideration of £2.0m (2023: loss of £0.17m).
3 On 10 January 2024, having successfully met earn-out targets for the
two year period following acquisition, the earn-out for SALI was settled in
full with cash (£21.1m) and the issue of 465,516 JTC Ordinary shares (see
note 31.1).
4 On 1 February 2024, the contingent consideration was paid in full
settlement of all obligations due.
27. Trade and other payables
2024 2023
£'000 £'000
Trade payables 2,917 1,255
Other taxation and social security 1,454 1,127
Other payables 5,486 4,333
Accruals 18,239 13,276
Total trade and other payables 28,096 19,991
For current trade and other payables, due to their short-term nature,
Management consider the carrying value of these financial liabilities to
approximate to their fair value.
28. Lease liabilities
2024 2023
£'000 £'000
At 1 January 44,041 44,894
Additions 13,479 4,482
Additions through business combinations 883 2,735
Disposals - (1,039)
Accretion of interest 1,956 922
Payments (8,549) (7,513)
Exchange differences (481) (440)
At 31 December 51,329 44,041
Analysis of total provisions: 2024 2023
£'000 £'000
Non-current 44,647 37,924
Current 6,682 6,117
Total lease liabilities 51,329 44,041
The Group has lease contracts for the rental of buildings for office space and
also for various items of office furniture and equipment. The Group makes
business decisions that affect their lease contracts and those containing
renewal and termination clauses are reassessed to determine whether there is
any change to the lease term. Management have an ongoing programme of review
and have not identified any leases with an extension option that would have a
significant impact on the carrying amount of lease assets and liabilities.
Where the Group has issued an early termination notice, the net present value
of the liability and carrying value of the right-of-use asset has been
reassessed based on the new expected termination date.
29. Deferred tax
The deferred tax (assets) and liabilities recognised in the consolidated
financial statements are set out below:
2024 2023
£'000 £'000
Deferred tax (assets) (1,012) (266)
Deferred tax liabilities 6,510 9,474
5,498 9,208
Intangible assets 14,876 9,167
Other origination and reversal of temporary differences (9,378) 41
5,498 9,208
The movement in the year is analysed as follows:
2024 2023
£'000 £'000
Intangible assets
Balance at 1 January 9,167 11,097
Recognised through business combinations 133 -
Recognised in the consolidated income statement 5,542 (1,694)
Foreign exchange (to other comprehensive income) 34 (236)
Balance at 31 December 14,876 9,167
Other origination and reversal of temporary differences
Balance at 1 January 41 (56)
Recognised in the consolidated income statement (9,229) 97
Foreign exchange (to other comprehensive income) (190) -
Balance at 31 December (9,378) 41
At 31 December 2024, the total unrecognised deferred tax asset in respect of
brought-forward losses was approximately £3.6m (2023: £2.1m). All tax losses
carry no expiry, with the exception of Luxembourg (£1.2m), which has an
expiration of 17 years. These deferred tax assets have not been recognised, on
the basis that their future economic benefit is not probable.
A deferred tax liability has not been recognised in respect of temporary
differences associated with investment in subsidiaries of £1.9m.
The movement in deferred tax for intangible assets is primarily attributable
to US tax-deductible amortisation creating a temporary difference between the
carrying amount and tax base of goodwill and other intangible assets arising
from business combinations. The movement in deferred tax for other timing
differences is primarily attributable to the recognition of deferred tax
assets in the US, which are expected to be offset against future taxable
profits.
30. Other liabilities
2024 2023
£'000 £'000
Non-current
Provisions 2,740 2,200
Employee benefit obligations 895 815
Contract liabilities 314 492
Total other non-current liabilities 3,949 3,507
Current
Provisions 277 372
Current tax liabilities 3,268 5,346
Contract liabilities 856 873
Total other current liabilities 4,401 6,591
30.1. Provisions
Provisions relate to leasehold dilapidation provisions that are expected to
arise on leasehold premises contracts held by the Group. The balance will be
utilised on vacation of the premises.
Dilapidations
2024 2023
£'000 £'000
At 1 January 2,572 2,153
Additions 399 277
Additions through business combinations 191 409
Release of unutilised provided amount (291) (230)
Unwind of discount 74 40
Amounts utilised (5) -
Impact of foreign exchange 77 (77)
At 31 December 3,017 2,572
Analysis of total provisions: 2024 2023
£'000 £'000
Non-current 2,740 2,200
Current 277 372
Total 3,017 2,572
31. Share capital and reserves
31.1. Share capital and share premium
The Group's Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of Ordinary shares are recognised as a
deduction from equity, net of any tax effects.
2024 2023
£'000 £'000
Authorised
300,000,000 Ordinary shares (2023: 300,000,000 Ordinary shares) 3,000 3,000
Called up, issued and fully paid
168,753,026 Ordinary shares (2023: 165,521,678 Ordinary shares) 1,688 1,655
Ordinary shares have a par value of £0.01 each. All shares are equally
eligible to receive dividends and the repayment of capital and represent one
vote at shareholders' meetings of JTC PLC.
Movements in Ordinary shares Note No. of shares Par value Share premium
(thousands)
£'000 £'000
At 1 January 2023 149,061 1,491 290,435
Shares issued for equity raises 8,857 88 61,912
PLC EBT issue 1,580 16 -
Acquisition of SDTC 5,978 60 41,359
Acquisition of Segue 46 - 360
16,461 164 103,632
Less: Cost of share issuance - - (1,853)
Movement in the year 16,461 164 101,778
At 31 December 2023 165,522 1,655 392,213
PLC EBT issue(1) 1,660 17 -
Acquisition of SALI 26 466 5 3,693
Acquisition of Blackheath 15.1 18 - 147
Acquisition of FFP 15.5 1,087 11 10,689
3,231 33 14,529
Less: Cost of share issuance - - (94)
Movement in the year 3,231 33 14,435
At 31 December 2024 168,753 1,688 406,648
1 On 30 May 2024, the Company issued an additional 1,660,056 Ordinary
shares to the Company's Employee Benefit Trust ("PLC EBT") in order for PLC
EBT to satisfy anticipated future exercises of awards granted to
beneficiaries.
31.2. Own shares
Own shares represent the shares of the Company that are unallocated and
currently held by PLC EBT. They are recorded at cost and deducted from equity.
When shares vest unconditionally, are cancelled or are reissued, they are
transferred from the own shares reserve at their cost. Any consideration paid
or received for the purchase or sale of the Company's own shares is shown as a
movement in shareholders' equity.
Note No. of shares PLC EBT
(thousands)
£'000
At 1 January 2023 2,957 3,697
PSP awards (200) -
DBSP awards (48) -
Other awards (89) -
Acquisition of INDOS (212) -
PLC EBT issue 1,580 15
Purchase of own shares 29 200
Movement in year 1,060 215
At 31 December 2023 4,017 3,912
EIP awards 6.1 (2,354) -
PSP awards 6.2 (250) -
DBSP awards 6.3 (61) -
Other awards 6.4 (147) -
PLC EBT issue 31.1 1,660 17
Purchase of own shares 176 1,831
Movement in year (976) 1,848
At 31 December 2024 3,041 5,760
31.3. Other reserves
Capital reserve
This reserve is used to record the gains or losses recognised on the purchase,
sale, issue or cancellation of the Company's own shares, which may arise from
capital transactions by the Group's employee benefit trusts, as well as any
movements in share-based awards to employees (see note 6).
Translation reserve
The translation reserve comprises all foreign currency differences arising
from the translation of the financial statements of foreign operations.
Other reserve
Other reserve includes the cash flow hedge reserve, which is used to recognise
the effective portion of gains or losses on derivatives designated and
qualifying as cash flow hedges (see note 33).
Retained earnings
Retained earnings includes accumulated profits and losses.
32. Dividends
The following dividends were declared and paid by the Company for the year:
2024 2023
£'000 £'000
Final dividend for 2022 of 6.88p per qualifying ordinary share - 10,240
Interim dividend for 2023 of 3.5p per qualifying ordinary share - 5,785
Final dividend for 2023 of 7.67p per qualifying ordinary share 12,429 -
Interim dividend for 2024 of 4.3p per qualifying ordinary share 7,067 -
Total dividend declared and paid 19,496 16,025
33. Derivative financial instruments
The Group holds the following derivative financial assets/(liabilities), which
are presented in the consolidated balance sheet:
2024 2023
£'000 £'000
Interest rate swaps - cash flow hedges 341 (749)
Total derivative financial instruments 341 (749)
Note 2024 2023
£'000 £'000
Gain/(loss) recognised on revaluation of cash flow hedges 2,800 (615)
Gain reclassified from other comprehensive income to the profit or loss 12 (1,710) (134)
Total gains/(losses) recognised on derivative financial instruments 1,090 (749)
The Group holds three interest rate swap contracts, which commenced on 4
December 2023 and expire on 4 December 2025, with a blended swap rate of
4.237% (excluding margin). Each of the contracts cover a notional amount of
£60.0m, and as at 31 December 2024, the Group held 66% (2023: 80%) of fixed
rate debt and 34% (2023: 20%) of floating rate debt, based upon its total
borrowings of £274.1m (2023: £223.7m).
Hedge accounting
The Group exercised the option to use hedge accounting for the two year
interest rate swap on its loans and borrowings, in accordance with IFRS 9
'Financial Instruments'.
The Group designates certain derivatives held for risk management as hedging
instruments in qualifying hedging relationships. On initial designation of the
hedge, the Group formally documents the relationship between the hedging
instruments and hedged items, including the risk management objective, the
strategy in undertaking the hedge and the method that will be used to assess
the effectiveness of the hedging relationship.
The Group makes an assessment, both at the inception of the hedge relationship
and on an ongoing basis, as to whether the hedging instruments are expected to
be highly effective in offsetting the movements in the fair value of the
respective hedged items during the period for which the hedge is designated.
Cash flow hedges
In accordance with its risk management strategy, the Group entered into
interest rate swap contracts to manage the interest rate risk arising in
respect of the floating interest rate exposures on its borrowings.
The Group assessed prospective hedge effectiveness by comparing the changes in
the floating rate on its borrowings with the changes in fair value of
allocated interest rate swaps used to hedge the exposure.
The Group has identified the following possible sources of ineffectiveness:
· the use of derivatives as a protection against interest rate risk
creates an exposure to the derivative counterparty's credit risk that is not
offset by the hedged item;
· different amortisation profiles on hedged item principal amounts and
interest rate swap notionals;
· for derivatives, the discounting curve used depends on
collateralisation and the type of collateral used; and
· differences in the timing of settlement of hedging instruments and
hedged items.
Management have concluded that there are no sources of ineffectiveness.
34. Financial risk management
The Group is exposed through its operations to the following financial risks:
market risk (including foreign currency risk and interest rate risk), credit
risk and liquidity risk.
The Group is exposed to risks that arise from the use of its financial
instruments. This note describes the Group's objectives, policies and
processes for managing those risks and the methods used to measure them.
There have been no material changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods, unless
otherwise stated in this note.
General objectives, policies and processes
The Board has overall responsibility for determining the Group's financial
risk management objectives and policies and, whilst retaining ultimate
responsibility for them, it delegates the authority for designing and
operating processes that ensure effective implementation of the objectives and
policies to Management, in conjunction with the Group's finance department.
The financial risk management policies are considered on a regular basis to
ensure that these are in line with the overall business strategies and the
Board's risk management philosophy. The overall objective is to set policies
to minimise risk as far as possible without adversely affecting the Group's
financial performance, competitiveness and flexibility.
Principal financial instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
Note 2024 2023
£'000 £'000
Financial assets - measured at amortised cost
Trade receivables 18 45,091 32,071
Work in progress 19 15,379 11,615
Accrued income 20 28,204 26,574
Other assets
Other receivables 23 2,642 2,685
Loan receivable from a third party 23 1,556 1,496
Cash and cash equivalents 21 89,232 97,222
182,104 171,663
Financial assets - measured at fair value
Derivative financial assets 33 341 -
341 -
Financial liabilities - measured at amortised cost
Loans and borrowings 25 271,552 220,531
Contingent consideration 26 86,716 74,798
Trade and other payables 27 28,096 19,991
Lease liabilities 28 51,329 44,041
437,693 359,361
Financial liabilities - measured at fair value
Derivative financial liabilities 33 - 749
Contingent consideration 26 3,799 1,902
3,799 2,651
Management considered the following fair value hierarchy levels in line with
IFRS 13.
Level 1 - Inputs are quoted prices (unadjusted) in active markets for
identical assets and liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are
observable for the asset and liability, either directly or indirectly
Level 3 - Inputs are unobservable inputs for the asset or liability
Management concluded that the interest rate swap was classified under Level 2,
calculated as the present value of the estimated future cash flows based on
observable yield curves, and the liability-classified contingent consideration
was classified under Level 3, as per the valuation methodology outlined in
note 26.
34.1. Market risk
Market risk arises from the Group's use of interest-bearing, tradable and
foreign currency financial instruments. It is the risk that changes in
interest rates (interest rate risk) or foreign exchange rates (currency risk)
will affect the Group's future cash flows or the fair value of the financial
instruments held. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising
the return.
Foreign currency risk management and sensitivity
Foreign currency risk arises when individual Group entities enter into
transactions denominated in a currency other than their functional currency.
The Group's policy is, where possible, to allow Group entities to settle
liabilities denominated in their functional currency with the cash generated
from their own operations in that currency. Where Group entities have
liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them), cash already
denominated in the required currency will, where possible and ensuring no
adverse impact on local regulatory capital adequacy requirements (see note
35.3), be transferred from elsewhere in the Group.
In order to monitor this policy, Management periodically analyse cash reserves
by individual Group entities and in major currencies, together with
information on expected liabilities due for settlement. The effectiveness of
this policy is measured by the number of resulting cash transfers made between
entities and any necessary foreign exchange trades. The Group has utilised its
multicurrency bank facility to assist with the funding of US-based
acquisitions (see note 25).
The Group's exposure to the risk of changes in exchange rates relates
primarily to the Group's operating activities when the revenue or expenses are
denominated in a different currency from the Group's functional and
presentation currency of pounds sterling ("£"). For trading entities that
principally affect the profit or net assets of the Group, the exposure is
mainly from the Euro and US dollar.
Management consider this policy to be working effectively but continue to
regularly assess if foreign currency hedging is appropriate.
As at 31 December 2024, the Group's exposure to the Group's material foreign
currency-denominated financial assets and liabilities is as follows:
Net foreign currency assets/(liabilities) £ Euro US dollar
2024 2023 2024 2023 2024 2023
£'000 £'000 £'000 £'000 £'000 £'000
Trade receivables 19,459 18,661 2,653 2,894 22,341 10,021
Work in progress 12,966 8,894 1,422 1,441 1,352 875
Accrued income 12,014 13,820 2,553 2,314 12,724 10,326
Other receivables 1,118 1,243 376 - 2,507 2,776
Cash and cash equivalents 15,321 12,102 18,271 15,534 53,499 67,669
Trade and other payables (13,939) (5,083) (3,415) (7,529) (9,568) (6,202)
Loans and borrowings (237,162) (223,662) - - (36,898) -
Contingent consideration (8,023) (3,625) - - (82,493) (72,894)
Lease liabilities (28,742) (24,966) (7,030) (9,168) (13,187) (7,093)
Total net exposure (226,988) (202,616) 14,830 5,486 (49,723) 5,477
For the year ended 31 December 2024, mainly due to the Euro and United States
dollar foreign currency exchange rate movements, the Group have recognised the
following:
· a foreign exchange gain of £6.2m in other comprehensive income
(2023: £7.0m loss) upon translating our foreign operations to our functional
currency.
· a foreign exchange loss of £1.1m (2023: £9.6m loss) in the
consolidated income statement upon the retranslation of monetary assets and
liabilities denominated in foreign currencies (see note 11).
The following table illustrates the possible effect on comprehensive income
for the year and net assets arising from a 20% strengthening or weakening of
UK sterling against other currencies.
Strengthening/ Effect on comprehensive income and net assets
(weakening) of
UK sterling(1)
2024 2023
£'000 £'000
Euro +20% (2,472) (914)
US dollar +20% 8,287 (913)
Total 5,185 (1,827)
Euro (20%) 3,707 1,371
US dollar (20%) (12,431) 1,369
Total (8,724) 2,740
1 Holding all other variables constant
Interest rate risk management and sensitivity
The Group is exposed to interest rate risk as it borrows funds at floating
interest rates. The interest rate applied to loan facilities is determined
using SONIA, plus a margin based on net leverage calculations. The Group
manages the interest rate risk by holding three interest rate swap contracts
(see note 33) and maintaining an appropriate leverage ratio (ensuring that the
interest rate is kept as low as possible).
Sensitivity analysis
An increase/decrease of 100 basis points in interest rates on loans and
borrowing with floating interest rates would have decreased/increased the
profit and loss before tax by £0.8m (2023: increase/decrease by 100 basis
points, +/-£1.6m). This analysis assumes that all other variables remain
constant.
The Group's exposures to interest rates on financial assets and financial
liabilities are detailed in note 34.3.
34.2 Credit risk management
Credit risk is the risk of financial loss to the Group should a customer or
counterparty to a financial instrument fail to meet its contractual
obligations. The Group's principal exposure to credit risk arises from
contracts with customers and, therefore, the following financial assets: trade
receivables, work in progress and accrued income (together, "customer
receivables").
The Group manages credit risk for each new customer by giving consideration to
the risk of insolvency or closure of the customer's business, current or
forecast liquidity issues and general creditworthiness (including past default
experience of the customer or customer type).
Subsequently, customer credit risk is managed by each of the Group entities,
subject to the Group's policy, procedures and control relating to customer
credit risk management. Outstanding customer receivables are monitored and
followed up continuously. Specific provisions incremental to ECL are made when
there is objective forward-looking evidence that the Group will not be able to
bill the customer in line with the contract or collect the debts arising from
previous invoices. This evidence can include the following: indication that
the customer is experiencing significant financial difficulty or default,
probability of bankruptcy, problems in contacting the customer, disputes with
a customer, or similar factors.
Management gives close and regular consideration to the potential impact of
the macroeconomic environment and any climate-related risks upon the
customer's behaviours and ability to pay. This analysis is performed on a
customer-by-customer basis. Such is the diversification across the book in
industries and geographies that any impact is not considered to be material to
the recoverability of customer receivables. For more commentary on this, the
ageing of trade receivables and the provisions thereon at the year end,
including the movement in the provision, see note 18.
Credit risk in relation to other receivables and loan receivables from third
parties are considered for each separate contractual arrangement, and the risk
of the counterparty defaulting is considered to be low.
Credit risk also arises from cash and cash equivalents and deposits with banks
and financial institutions. Cash and cash equivalents are held mainly with
banks that are rated 'A-' or higher by Standard & Poor's Rating Services
or Fitch Ratings Ltd for long-term credit rating.
Credit risk exposure
Trade receivables, work in progress and accrued income result from the
provision of services to a large number of customers (individuals and
corporate), spread across different industries and geographies. The gross
carrying amount of financial assets represents the maximum credit exposure and
as at the reporting date, this can be summarised as follows:
Loss Loss
Total allowance Net Total allowance Net
2024 2024 2024 2023 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000
Trade receivables 51,889 (6,798) 45,091 38,484 (6,413) 32,071
Work in progress 15,492 (113) 15,379 11,710 (95) 11,615
Accrued income 28,236 (32) 28,204 26,609 (35) 26,574
Other assets
Other receivables 2,642 - 2,642 2,685 - 2,685
Loan receivable from third party 1,556 - 1,556 1,496 - 1,496
Cash and cash equivalents 89,232 - 89,232 97,222 - 97,222
189,047 (6,943) 182,104 178,206 (6,543) 171,663
34.3. Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group manages liquidity risk to
maintain adequate reserves by regular review around the working capital cycle,
using information on forecast and actual cash flows.
The Board is responsible for liquidity risk management and it has established
an appropriate liquidity risk management framework for the management of the
Group's short, medium and long-term funding and liquidity management
requirements. Regulation in most jurisdictions also requires the Group to
maintain a level of liquidity in order that the Group does not become exposed.
Liquidity tables
The table below detail the Group's remaining contractual maturity for its
financial liabilities with agreed repayment years. The tables have been drawn
up based on the undiscounted cash flows of financial liabilities, based on the
earliest date on which the Group can be required to pay. The table includes
both interest and principal cash flows. To the extent that interest flows are
floating rate, the undiscounted amount is derived from interest rates at the
consolidated balance sheet date. The contractual maturity is based on the
earliest date on which the Group may be required to pay.The total contractual
cash flows are as follows:
2024 <6 6 - 12 1 - 3 3 - 5 5 - 10 >10 Total
months months years years years years contractual
£'000 £'000 £'000 £'000 £'000 £'000 cash flow
£'000
Loans and borrowings(1) 8,568 8,710 304,741 - - - 322,019
Trade payables and accruals 27,108 - - - - - 27,108
Contingent consideration 50,314 149 20,923 - - - 71,386
Lease liabilities 4,460 4,088 15,484 12,467 17,846 8,200 62,545
Total 90,450 12,947 341,148 12,467 17,846 8,200 483,058
2023 <6 6 - 12 1 - 3 3 - 5 5 - 10 >10 Total
months months years years years years contractual
£'000 £'000 £'000 £'000 £'000 £'000 cash flow
£'000
Loans and borrowings(1) 7,292 7,372 253,457 - - - 268,121
Trade and other payables 19,896 - - - - - 19,896
Contingent consideration 25,465 - 59,342 - - - 84,807
Lease liabilities 3,888 3,888 13,136 10,887 14,012 5,931 51,742
Total 56,541 11,260 325,935 10,887 14,012 5,931 424,566
1 This includes the future interest payments not yet accrued and the
repayment of capital upon maturity.
35. Capital management
35.1. Risk management
The Group's objective for managing capital is to safeguard the ability to
continue as a going concern, while maximising the return to Shareholders
through the optimisation of the debt and equity balance, and to ensure capital
adequacy requirements are met for local regulatory requirements at entity
level.
The managed capital refers to the Group's debt and equity balances; for
quantitative disclosures, see note 25 for loans and borrowings and note 31 for
share capital. For the Group's risk management and strategy regarding interest
rate and foreign exchange risk, see note 34.1.
35.2. Loan covenants
The Group has bank loans that require it to meet leverage and interest cover
covenants. In order to achieve the Group's capital risk management objective,
the Group aims to ensure that it meets the financial covenants attached to
bank borrowings. Breaches in meeting the financial covenants would permit the
lender to immediately recall the loan. In line with the loan agreement, the
Group tests compliance with the financial covenants on a bi-annual basis.
Under the terms of the loan facility, the Group is required to comply with the
following financial covenants:
· Leverage (this being the ratio of total net debt to underlying EBITDA
(for LTM at average exchange rates and adjusted for pro-forma contributions
from acquisitions) for a relevant period) must not be more than 3:1.
· Interest cover (this being the ratio of underlying EBITDA to net
finance charges) must not be less than 4:1.
The Group has complied with all financial covenants throughout the reporting
period and the Board is satisfied that there is sufficient headroom in our
banking covenants.
35.3. Capital adequacy
Individual regulated entities within the Group are subject to regulatory
requirements to maintain adequate capital and liquidity to meet local
requirements; all are monitored regularly to ensure compliance. There have
been no breaches of applicable regulatory requirements during the reporting
period.
36. Cash flow information
36.1. Cash generated from operations
2024 2023
£'000
£'000
Profit from operating activities 18,941 52,650
Adjustments:
Depreciation of right-of-use assets 7,461 5,844
Depreciation of property, plant and equipment 2,583 2,418
Amortisation of intangible assets and assets recognised from costs to obtain 20,075 16,878
or fulfil a contract
Share-based payments 2,480 2,716
EIP share-based payments 34,506 -
Share of (profit)/loss of equity-accounted investee (430) 15
Operating cash flows before movements in working capital 85,616 80,521
Net changes in working capital:
(Increase)/decrease in receivables (15,306) 164
Increase in payables 13,400 4,040
Cash generated from operations 83,710 84,725
36.2. Non-underlying items within cash generated from operations
2024 2023
£'000
£'000
Cash generated from operations 83,710 84,725
Non-underlying items:
Acquisition and integration costs 14,810 5,799
Office start-ups 585 612
Other 177 44
Total non-underlying items within cash generated from operations 15,572 6,455
Underlying cash generated from operations 99,282 91,180
36.3. Financing activities
Changes in liabilities arising from financing activities:
Lease liabilities Lease liabilities Borrowings <1 year Borrowings Total
<1 year
> 1 year
£'000
> 1 year
£'000
£'000
£'000
£'000
At 1 January 2023 4,292 40,602 - 153,622 198,516
Cash flows:
Acquired on acquisition 554 2,230 - - 2,784
Drawdowns - - - 118,000 118,000
Repayments (28) (7,482) - (50,000) (57,510)
Other non-cash movements(1) 1,299 2,574 - (1,091) 2,782
At 31 December 2023 6,117 37,924 - 220,531 264,572
Cash flows:
Acquired on acquisition 9 1,096 - - 1,105
Drawdowns - - - 49,187 49,187
Repayments (122) (8,427) - - (8,549)
Other non-cash movements(1) 678 14,054 - 1,834 16,564
At 31 December 2024 6,682 44,647 - 271,552 322,879
1 Non-cash movements include the capitalisation and amortisation of
loan arrangement fees, foreign exchange movements, additions and disposals of
lease liabilities relating to right-of-use assets and the unwinding of NPV
discounts.
36.4. Net debt
2024 2023
£'000
£'000
Bank loans 271,552 220,531
Cash allocated against regulatory and capital adequacy requirements(1) 24,535 11,827
Less: cash and cash equivalents (89,232) (97,222)
Total net debt 206,855 135,136
1 Represents the minimum cash balance to be held to meet regulatory
capital requirements.
37. Subsidiaries
In the opinion of Management, the Group's subsidiaries which principally
affect the profit or the net assets of the Group at 31 December 2024 are
listed below. Unless otherwise stated, the Company owns 100% of share capital
consisting solely of Ordinary shares, and the proportion of ownership
interests held equals the voting rights held by the Group. The country of
incorporation is also their principal place of business.
Where shareholding and voting rights are less than 100%, Management have
considered the circumstances of each subsidiary shareholding and any specific
agreements in support and have concluded that the subsidiaries should be
consolidated (as per the accounting policy in note 2), with the interest
attributed in full to the Company and no minority interest recognised. Please
see specific comments below the table.
Name of subsidiary Country of incorporation and place of business Activity %
holding
JTC Group Holdings Limited Jersey Holding 100
JTC Group Limited Jersey Head office 100
JTC (Jersey) Limited Jersey Trading 100
JTC Employer Solutions Limited Jersey Trading 100
JTC Fund Solutions (Jersey) Limited Jersey Trading 100
JTC (Austria) GmbH Austria Trading 100
JTC (Bahamas) Limited Bahamas Trading 100
JTC (BVI) Limited BVI Trading 100
FFP (BVI) Limited(1) BVI Trading 100
JTC (Cayman) Limited Cayman Islands Trading 100
JTC Fund Services (Cayman) Ltd Cayman Islands Trading 100
FFP (Holdings) Limited(1) Cayman Islands Trading 100
FFP (Cayman) Limited(1) Cayman Islands Trading 100
FFP Limited(1) Cayman Islands Trading 100
JTC Corporate Services (DIFC) Limited Dubai Trading 100
JTC (Deutschland) GmbH(1) Germany Trading 100
JTC Fund Solutions (Guernsey) Limited Guernsey Trading 100
JTC Global AIFM Solutions Limited Guernsey Trading 100
JTC Registrars Limited Guernsey Trading 100
JTC Employer Solutions (Guernsey) Limited Guernsey Trading 100
JTC Share Plan Trustees (Guernsey) Limited Guernsey Trading 100
(formerly Buck Trustees (Guernsey) Ltd)(1)
JTC Corporate Services (Ireland) Limited Ireland Trading 100
JTC Fund Solutions (Ireland) Limited Ireland Trading 100
JTC Global AIFM Solutions (Ireland) Limited Ireland Trading 100
INDOS Financial (Ireland) Limited Ireland Trading 100
JTC Trustees (IOM) Limited IoM Trading 100
JTC Luxembourg Holdings S.à r.l. Luxembourg Holding 100
JTC (Luxembourg) S.A. Luxembourg Trading 100
JTC Global AIFM Solutions SA Luxembourg Trading 100
JTC Corporate Services (Luxembourg) SARL Luxembourg Trading 100
JTC Signes Services SA Luxembourg Trading 100
Exequtive Services S.à r.l. Luxembourg Trading 100
JTC Fiduciary Services (Mauritius) Limited Mauritius Trading 100
JTC (Netherlands) B.V. Netherlands Trading 100
JTC Holdings (Netherlands) B.V. Netherlands Holding 100
JTC Institutional Services Netherlands B.V. Netherlands Trading 100
JTC Fund and Corporate Services (Singapore) Pte. Limited Singapore Trading 100
JTC Fund Solutions RSA (Pty) Ltd South Africa Trading 100
JTC (Suisse) SA Switzerland Trading 100
JTC Trustees (Suisse) Sàrl Switzerland Trading 100
JTC Group Holdings (UK) Limited UK Holding 100
INDOS Financial Limited UK Trading 100
JTC Fund Services (UK) Limited UK Trading 100
JTC Trust Company (UK) Limited UK Trading 100
JTC (UK) Limited UK Trading 100
JTC UK (Amsterdam) Limited UK Holding 100
JTC Registrars (UK) Limited UK Trading 100
perfORM Due Diligence Services Limited UK Trading 100
JTC GAS UK LLP (formerly Blackheath Capital Management LLP)(1) UK Trading 100
Hanway Advisory Limited(1) UK Trading 100
Employer Solutions (UK) Limited UK Trading 100
JTC USA Holdings, Inc. US Trading 100
JTC Miami Corporation(2) US Trading 50
JTC Trust Company (South Dakota) Ltd US Trading 100
Essential Fund Services, LLC US Trading 100
SALI Fund Management, LLC US Trading 100
JTC Americas Holdings, LLC US Holding 100
JTC Americas TrustCo Holdings, LLC US Holding 100
Segue Partners, LLC US Trading 100
JTC Trust Company (Delaware) Limited US Trading 100
TC3 Group Holding, LLC US Holding 100
South Dakota Trust Company, LLC US Trading 100
JTC Trustees (Delaware) LLC (formerly First Republic Trust Company US Trading 100
of Delaware, LLC)(1)
1 These entities were either incorporated or acquired during the year.
2 JTC Miami Corporation is 50% owned by an employee as part of their
residential status in the US. The employee has signed a declaration of trust
to confirm that they hold the shares in trust for JTC, would vote as directed
and would not seek to benefit from dividends or profit. Management,therefore,
consider it appropriate to attribute 100% of the interest to JTC and no
minority interest is recognised.
JTC PLC has the following dormant UK subsidiaries that are exempt from filing
individual accounts with the registrar in accordance with s448A of the
Companies Act 2006: PTC Securities Limited, Stratford Securities Limited, St
James's Securities Limited, JTC Fiduciary Services (UK) Limited, JTC Trustees
(UK) Limited, PTC Investments Limited, Castle Directors (UK) Limited, JTC
Securities (UK) Limited, JTC Corporate Services (UK) Limited, JTC Trustees
Services (UK) Limited and JTC Directors (UK) Limited.
38. Contingencies
The Group operates in a number of jurisdictions and enjoys a close working
relationship with all of its regulators. It is not unusual for the Group to
find itself in discussion with regulators in relation to past events. With any
such discussions, there is inherent uncertainty in the ultimate outcome, but
the Board currently does not believe that any such current discussions are
likely to result in an outcome that would have a material impact upon the
Group.
39. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not disclosed
in this note.
39.1. Key management personnel
The Group has defined key management personnel as Directors and members of
senior management who have the authority and responsibility to plan, direct
and control the activities of the Group. The remuneration of key management
personnel in aggregate for each of the specified categories is as follows:
2024 2023
£'000
£'000
Salaries and other short-term employee benefits 3,377 3,136
Post-employment and other long-term benefits 121 119
Share-based payments 1,836 1,624
EIP share-based payments 309 -
Total payments 5,643 4,879
39.2. Other related party transactions
The Group's associate, KIG (see note 24), has provided £1.1m of services to
Group entities during the year (2023: £0.6m).
39.3. Ultimate controlling party
JTC PLC is the ultimate controlling party of the Group.
40. Consideration of climate change
As set out in the TCFD disclosures on pages 52 to 59 of the Annual Report,
climate change has the potential to give rise to a number of transition risks,
physical risks and opportunities.
In preparing the consolidated financial statements, Management have considered
the impacts and areas that could potentially be affected by climate-related
changes and initiatives. No material impact was identified on the key areas of
judgement or sources of estimation uncertainty for the year ended 31 December
2024. Items that may be impacted by climate-related risks and that were
considered by Management were the recoverability of trade receivables (see
note 18) and the cash flow forecasts used in the impairment assessments of
goodwill (see note 16).
Whilst Management consider that there is no material medium-term impact
expected from climate change, they are aware of the ever-changing risks
related to climate change and will ensure the regular assessment of risks
against judgements and estimates when preparing the consolidated financial
statements.
41. Events occurring after the reporting period
There were no material subsequent events to disclose other than those already
noted in the consolidated financial statements.
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