REG - JTC PLC - Interim results for the period ended 30 June 2024
17/09/2024 07:00
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RNS Number : 4168E JTC PLC 17 September 2024
17 September 2024
JTC PLC
(the "Company") together with its subsidiaries (the "Group" or "JTC")
Interim results for the period ended 30 June 2024
Accelerated start to Cosmos era with strong organic performance and strategic
M&A
As reported Underlying*
H1 2024 H1 2023 Change H1 2024 H1 2023 Change
Revenue (£m) 147.1 121.5 +21.1% 147.1 121.5 +21.1%
EBITDA (£m) 46.4 36.5 +27.3% 49.1 40.2 +22.3%
EBITDA margin* 31.6% 30.0% +1.6pp 33.4% 33.1% +0.3pp
Operating profit/EBIT (£m) 31.9 24.7 +29.2% 34.6 28.4 +22.0%
Profit before tax (£m) 19.9 11.9 +67.0% 23.1 19.7 +17.3%
Earnings per share (p)** 11.41 7.61 +50.0% 19.87 18.16 +9.4%
Cash conversion* 104% 113% -9.0pp 104% 113% -9.0pp
Net debt (£m) 150.5 44.6 +105.9 131.9 28.0 +103.9
Interim dividend per share (p) 4.3 3.5 +22.9% 4.3 3.5 +22.9%
* For further information on our alternative performance measures
(APMs) see the appendix to the CFO Review.
** Average number of shares (thousands) for H1 2024: 162,079 (H1 2023:
147,075).
STRONG FINANCIAL PERFORMANCE
· Revenue +21.1% to £147.1m (H1 2023: £121.5m)
· Underlying EBITDA +22.3% to £49.1m (H1 2023: £40.2m) with an
underlying EBITDA margin of 33.4% (H1 2023: 33.1%)
· Outstanding LTM net organic revenue growth of 12.5%, ahead of our
upgraded guidance of 10%+ per annum
· Strong US gross revenue growth of 83.4%
· Record new business wins +28.8% to £18.8 (H1 2023: £14.6m)
· Further reduction in client attrition to 4.8% (LTM H1 2023: 5.7%)
reflecting the longevity and strength of client relationships
· Underlying cash conversion of 104% (H1 2023: 113%)
· Leverage at 1.39x underlying EBITDA at period end, below the
guidance range of 1.5x - 2.0x
· Interim dividend +22.9% to 4.3p (H1 2023: 3.5p)
DISCIPLINED AND STRATEGIC M&A ACTIVITY
· During the period, we added four businesses to our platform that
are balanced between the divisions, were all acquired at attractive multiples
and funded from existing facilities
· FFP, announced in June, broadens our scope of expertise with its
leading position in complex engagements including restructurings, insolvencies
and disputes, and will form a core pillar of our new Governance Services
business line, which is being developed in conjunction with the Group
Commercial Office as well as cementing JTC's leadership position in the Cayman
Islands
· Blackheath Capital and Hanway Advisory, both in the UK, and First
Republic Trust Company (FRTC) in Delaware, USA, were all bolt-on in size and
are integrating swiftly
· SDTC enjoyed its one year anniversary as part of the JTC Group in
August, and we are delighted with its integration and financial performance,
contributing to gross growth of 83.4% in the region
· Post period end we announced two further deals. The acquisition
of the Buck share plan business, to scale our existing Employer Solutions
business, and the acquisition of Citi's global trust company business which we
expect to be a transformational addition to the Group
ACCELERATED START TO THE COSMOS ERA
· Good momentum continues and the Group expects to deliver full
year results in line with management guidance and current market expectations
· All of the recent acquisitions offer significant growth
opportunities; in particular, Citi Trust, which will form part of the PCS
Division, will make JTC the largest independent global trust company business.
Within the ICS Division, FFP will be the foundation of our Governance Services
practice, which will be branded Northpoint Governance
· Good pipeline of further consolidation opportunities across both
the ICS and PCS Divisions and target growth markets over the medium-term
· All medium-term guidance metrics maintained or exceeded as JTC
starts the Cosmos era: net organic revenue growth of 10%+ per annum;
underlying EBITDA margin of 33% - 38%; cash conversion of 85% - 90% and net
debt of between 1.5x - 2.0x underlying EBITDA
Nigel Le Quesne, CEO of JTC PLC, said:
"We have made a strong start to the Cosmos era, with record new business wins,
organic growth above our upgraded guidance at a stable margin even as we
continue to invest in growth. A particular highlight has been our M&A
activity with four acquisitions announced or completed during the period. Post
period end, we were pleased to announce the acquisition of Buck as an addition
to our Employer Solutions business and the significant acquisition from
Citibank of Citi Trust, its global trust company business. This is a
transformational deal for the Group and the PCS Division, cementing JTC as one
of the world's largest independent trust company businesses.
Our commitment to ownership for all employees remains our defining
characteristic and while it did not fall directly within the period, I must
mention our most recent Shared Ownership event, through which £50m of
'warehoused' shares from our Employee Benefit Trust, were awarded 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. As
always, 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
ACCELERATED START TO THE COSMOS ERA
NIGEL LE QUESNE
CHIEF EXECUTIVE OFFICER
We are exceptionally proud of the Group's continued ability to deliver against
stretching multi-year business plans, which we call eras. Having completed the
Galaxy era by the end of 2023, some two years early, we carried the momentum
into the new year as we embarked on the Cosmos era in January 2024. The
Group's ability to perform persists with the strong financial performance and
disciplined and attractive M&A delivery underpinning our progress. We are
particularly pleased with the pace with which we have been able to conduct
M&A activity, adding four businesses to our platform in the period, as
well as the post period announcements of Buck, a bolt-on that will form part
of our Employer Solutions business, and the significant acquisition of Citi's
global trust company business, which will sit within the PCS Division and
cement our position as one of the world's largest independent trust company
businesses. Moving forward we will continue to maintain our disciplined
approach to M&A and have a strong pipeline of further opportunities.
H1 2024 FINANCIAL PERFORMANCE
Revenue grew 21.1% to £147.1m with very good net organic growth of 12.5%,
ahead of our medium-term guidance that was revised upwards to 10%+ for the
Cosmos era, following a 'purple patch' of record organic growth in 2023.
Underlying EBITDA rose by 22.3% to £49.1m (H1 2023: £40.2m), with an
underlying EBITDA margin of 33.4% (H1 2023: 33.1%). We once again saw record
new business wins of £18.8m up 28.8% period on period (H1 2023: £14.6m).
Underlying cash conversion was 104% (H1 2023: 113%), reflecting appropriate
investment in our infrastructure. At the period end, leverage was 1.39x
underlying EBITDA, below our medium-term guidance of between 1.5x and 2.0x
underlying EBITDA. Based on these results and the Board's confidence in
JTC's ability to continue to deliver consistent returns to shareholders, our
interim dividend has increased by 22.9% to 4.3 pence per share.
PRIVATE CLIENT SERVICES DIVISION
Revenue increased strongly by 46.1% to £59.6m (H1 2023: £40.8m) with
sector-leading net organic growth of 13.9% (H1 2023: 18.6%) and a similarly
impressive increase of 51.6% in underlying EBITDA to £22.3m (H1 2023:
£14.7m). The underlying EBITDA margin increased by 1.4pp to 37.4% (H1 2023:
36.0%). The Division continued to leverage the introduction of new services
and secured significant new mandates across the platform resulting in record
new business wins of £8.1m (H1 2023: £3.7m) for the period.
In particular, the performance of our US business has been strong, with the
addition of SDTC to our existing platform, which celebrated its one year
anniversary in August, and the addition of FRTC in Delaware, all providing
additional scale and delivering performance in the high growth US market. Post
period end, we were delighted to announce the acquisition of Citi's global
trust company business. This is a transformational deal for the Division and
makes JTC one of the largest global independent trust company businesses.
INSTITUTIONAL CLIENT SERVICES DIVISION
Revenue increased by 8.5% to £87.5m (H1 2023: £80.7m) and underlying EBITDA
was up 5.5% to £26.9m (H1 2023: £25.5m). The underlying EBITDA margin
stood slightly lower at 30.7% (H1 2023: 31.6%). We saw robust net organic
growth of 11.9% (H1 2023: 22.4%) and new business wins of £10.7m (H1 2023:
10.9m).
Three of the four acquisitions during the period now form part of the ICS
Division, with FFP being the catalyst and a core pillar for a new Governance
Services practice, which we are calling Northpoint Governance Services. We
look forward to developing this offering in conjunction with the Group
Commercial Office and expect it to be launched in 2025. The additions of
Blackheath and Hanway brought ManCo, company secretarial and regulatory
oversight services to our UK client base and service capabilities. Post period
end, we also acquired the Buck share plan administration business,
accelerating our share plan administration ambitions and trustee services in
the UK, Guernsey and Germany, which forms part of our Employer Solutions
business line.
We welcomed Kate Beauchamp as the new Head of the Division this month. Her
outstanding executive credentials and track record, along with her former role
as a NED on our Board, where she was also Chair of the Governance & Risk
committee, provide the perfect background and a seamless transition to her
role as global leader of ICS. We are delighted to have her as part of the
senior management team and look forward to growing the Division even further
under her stewardship.
GOVERNANCE SERVICES PRACTICE
The acquisition of FFP, which will form a cornerstone of the Governance
Services practice, reflects the '2+2=5' intersection between our innovative
Group Commercial Office and the JTC's disciplined and strategic approach to
M&A. During the Cosmos era, we will work to capitalise on what we see as a
substantial opportunity across the Group to develop the business line and we
are excited to leverage this expertise into the markets where we already have
a well-established presence. The revenues from these activities, which will be
marketed under the Northpoint Governance Services brand, will be reflected in
the Institutional Client Services Division going forward.
SHARED OWNERSHIP
Post period end, and in recognition of the tremendous success of the Galaxy
era, we awarded £50m of 'warehoused' shares from our Employee Benefit Trust
to our entire global workforce. This was the fourth Shared Ownership award in
our history and to date, more than £400m of value has been created for JTC
employee-owners.
I have no doubt that our commitment to shared ownership for all staff is
responsible for our continued successes. It has been fundamental to our 36
years of revenue and profit growth, our industry low staff turnover, which
currently stands at 4% Group-wide, and the ambition and spirit of the top
quality JTC team at all levels of the organisation. The Award is well deserved
and will have energised the whole team to succeed in the Cosmos era, and
beyond.
RISK
The principal risks facing the Group remain as set out in the JTC Annual
Report and Accounts 2023 (pages 59 to 63). The Group's principal risks are
periodically re-examined and reported by the Chief Risk Officer to the
Governance and Risk Committee with an assessment on (i) their impact if they
were to occur and (ii) the likelihood of occurrence, together with a
description of the controls and mitigation in place to manage those controls
and any actions deemed necessary by the risk owner to further reduce the
assessed residual risk. Ongoing material risks include acquisition risk,
competitor and client demand risk, strategy risk, performance of business
risk, client and process risk, data security risk, political/regulation risk,
financial crime risk, fiduciary risk and adequate resource risk.
The regulatory environment continues to feature significantly in our markets.
Regulators, globally, have applied increasingly stringent controls and
monitoring in recent years, driven by International standard setters and the
constant introduction of new regulations and regulatory powers. This is a
consequence of a global industry, with local regulators and no 'lead
regulator' concept. It is also reflective of a recognition of JTC as a large,
impactful, leading firm that has an excellent record of regulatory compliance
across our jurisdictions. We actively and positively engage with all our
regulators, horizon scan, consult and assist with observations and advice.
While increased regulation leads to higher compliance costs we overwhelmingly
see it as a tailwind for our business. Not only does it represent barriers to
entry and to scale within our industry, but it also leads to our clients and
potential clients requiring an increasing amount of expert assistance to
remain compliant across the globe and therefore drives demand for such
services.
Global macroeconomic developments and geopolitical tensions, persistent
inflation, elevated interest rates, ongoing energy security challenges, and
global political changes all present a particular set of risks that have the
potential to slow investment and global growth. Whilst the Group is unable to
control these risks we remain vigilant to their impact and respond
proactively. Overall, we remain satisfied as to the effectiveness of the
Group's risk analysis, management and culture, developed over 36 years of
continuous growth at JTC.
DIVIDEND
The Board has declared an interim dividend of 4.3p per share, an increase of
0.8p period on period (H1 2023: 3.5p). The interim dividend will be paid on 25
October 2024 to shareholders on the register as at close of business on the
record date of 27 September 2024. The shares will become ex-dividend on 26
September 2024.
OUTLOOK
Based on these results, we remain confident in the Group's continued success
and ability to deliver against our ambitious Cosmos era business plan. As
before, we will deliver this through a combination of organic and inorganic
growth. In terms of the M&A pipeline, we continue to see potential
opportunities and will maintain our selective and disciplined approach.
Momentum has continued through 2024 and the Group expects to deliver full year
results in line with management guidance and current market expectations.
Alongside leveraging the US platform built during the Galaxy era, the strong
and disciplined start to M&A activity in 2024 will serve as an excellent
foundation for continued success throughout the Cosmos era. Our strong
financial performance with impressive organic growth, record new business
wins, continued high cash conversion and the ability to de-lever, along with
an increased interim dividend, are testament to the Board's confidence in
JTC's ability to continue to deliver consistent growth.
NIGEL LE QUESNE
CHIEF EXECUTIVE OFFICER
CHIEF Financial OFFICER'S REVIEW
EXCELLENT AND CONSISTENT FINANCIAL PERFORMANCE
MARTIN FOTHERINGHAM
CHIEF FINANCIAL OFFICER
"We are pleased to once again report an excellent and consistent set of results. These reflect the nature of our business and our commitment to continued investment in the underlying business to deliver growth."
REVENUE
In H1 2024, revenue was £147.1m, an increase of £25.6m (+21.1%) from H1
2023. Revenue growth on a constant currency basis for H1 2024 was 22.5% (H1
2023: 27.9%).
Net organic growth for the last twelve months (LTM) ended 30 June 2024 was
12.5% (H1 2023: 21.0%), exceeding management's medium-term guidance range of
10% or higher. The rolling three-year average increased to 14.4% (H1 2023:
12.7%), a record high and reflects the impressive growth recorded over recent
years.
Within organic growth, we have continued to see both strong volume and pricing
growth. Continuing high inflation levels have contributed to higher levels of
pricing growth.
Our largest 15 clients represent 9.3% (H1 2023: 11.5%) of our annual revenue,
reducing customer concentration in the business. The new business pipeline is
healthy, and after a number of new business wins in the last weeks of this
reporting period now stands at £51.0m at the period end (31.12.2023:
£54.9m).
Net organic growth was driven by gross new business revenues for the
proceeding twelve months of £38.3m (LTM H1 2023: £44.1m). Within this we
saw client attrition of 4.8% (LTM H1 2023: 5.7%), with the three-year average
falling to 5.7% (H1 2023: 6.9%). The decrease in attrition was expected and
reflects the increased longevity of our client relationships, which has been
positively impacted by the high-quality acquisitions made in recent years.
The retention of revenues that were not end of life dropped slightly to 98.2%
(LTM H1 2023: 98.6%) although the rolling three-year average improved to 98.3%
(H1 2023: 97.9%). These have stayed consistently within a range of 96.6% to
99.0% in the 6 years since our IPO.
Geographical growth is summarised below, with the highlight being the 83.4%
growth recorded in the US (H1 2023: 55.6%) with the region now representing
32% of our reported revenues (H1 2023: 21%).
H1 2024 H1 2023 £ +/- % +/-
Revenue Revenue
UK & Channel Islands £66.7m £64.7m +£2.0m +3.2%
US £46.4m £25.3m +£21.1m +83.4%
Rest of Europe £19.7m £18.6m +£1.1m +5.7%
Rest of the World £14.3m £12.9m +£1.4m +11.0%
£147.1m £121.5m +£25.6m +21.1%
LTM revenue growth, on a constant currency basis, is summarised as follows.
LTM Revenue Jun 23 £224.7m
Lost - JTC decision (£1.0m)
Lost - Change of service provider (£2.9m)
Lost - End of life/no longer required (£6.7m)
Net more from existing clients £24.1m
New clients £14.2m
Acquisitions* £29.9m
LTM Revenue Jun 24 £282.3m
* When JTC acquires a business, the acquired book of clients are
defined as inorganic for the first two years of JTC ownership. Acquired
clients contributed an additional £29.9m in the LTM to 30 June 2024 and is
broken down as follows: Blackheath £0.2m, SDTC £27.4m and NYPTC £2.3m.
UNDERLYING EBITDA AND MARGIN PERFORMANCE
Underlying EBITDA in H1 2024 was £49.1m, an increase of £8.9m (22.3%) from
H1 2023.
We have maintained our underlying EBITDA margin from 2023 of 33.4%, which is
an increase from 33.1% in H1 2023. Whilst we continue to enjoy strong growth
momentum, we will continue to invest into the infrastructure necessary to
drive that growth thereby maintaining our market leading position.
PRIVATE CLIENT SERVICES
Revenue for the first six months of 2024 increased by 46.1% when compared with
H1 2023.
LTM net organic growth, on a constant currency basis, was 13.9% (H1 2023:
18.6%) with standout growth reported in the US and Caribbean. The rolling
three-year average now stands at 12.2% (H1 2023: 10.8%).
Attrition for the Division was consistent at 5.3% (H1 2023: 4.9%), of which
4.0% (H1 2023: 3.0%) were for end of life losses.
LTM revenue growth, on a constant currency basis, is summarised below.
REVENUE GROWTH PCS
LTM Revenue Jun 23 £73.3m
Lost - JTC decision (£0.2m)
Lost - Change of service provider (£0.7m)
Lost - End of life/no longer required (£2.8m)
Net more from existing clients £6.4m
New clients £7.0m
Acquisitions* £29.7m
LTM Revenue Jun 24 £112.7m
* When JTC acquires a business, the acquired book of clients are
defined as inorganic for the first two years of JTC ownership. Acquired
clients contributed an additional £29.9m in the LTM to 30 June 2024 and is
broken down as follows: SDTC £27.4m and NYPTC £2.3m.
The Division's underlying EBITDA margin increased from 36.0% in H1 2023 to an
impressive 37.4% in H1 2024. This reflects both the successful integrations of
NYPTC and SDTC, alongside the continued margin momentum seen in 2023.
INSTITUTIONAL CLIENT SERVICES
Revenue for the first 6 months of 2024 increased by 8.5% when compared with H1
2023.
LTM net organic growth, on a constant currency basis, was 11.9% (H1 2023:
22.4%) and broadly in line with expectations, where the main source of revenue
growth continues to be from the US. The rolling three-year average now stands
at 16.1% (H1 2023: 14.1%).
Attrition for the Division fell to 4.6% (H1 2023: 6.0%), of which 2.6% (H1
2023: 5.0%) was for end of life losses. As noted in the 2023 review,
the improvement in attrition is largely attributable to the acquisition of
the SALI and RBC cees businesses which have much longer mandates.
LTM revenue growth, on a constant currency basis, is summarised below.
REVENUE GROWTH ICS
LTM Revenue Jun 23 £151.4m
Lost - JTC decision (£0.8m)
Lost - Change of service provider (£2.2m)
Lost - End of life/no longer required (£3.9m)
Net more from existing clients £17.7m
New clients £7.2m
Acquisitions* £0.2m
LTM Revenue Jun 24 £169.6m
* When JTC acquires a business, the acquired book of clients are
defined as inorganic for the first two years of JTC ownership. Acquired
clients contributed an additional £0.2m in the LTM to 30 June 2024 and is
broken down as follows: Blackheath £0.2m.
The Division's underlying EBITDA margin decreased from 31.6% in H1 2023 to
30.7% in H1 2024. This is the result of continued investment in the business
in order to capitalise on and maximise growth opportunities, increased
regulatory obligations, and delays in the onboarding of work won which were
largely outside of our control.
We remain confident that the continued investment in the Division will result
in improved long-term returns.
PROFIT BEFORE TAX
The reported profit before tax was £19.9m (H1 2023: £11.9m).
The depreciation and amortisation charge increased to £14.6m from £11.8m in
H1 2023. The major components of the £2.8m increase were £1.4m from acquired
intangible assets (SDTC, NYPTC and Blackheath acquisitions) and £1.2m from
increased depreciation charges on property, plant and equipment.
Adjusting for non-underlying items, the underlying profit before tax increased
by 17.3% to £23.1m (H1 2023: £19.7m).
The relative increase was lower than the 22.3% growth reported in underlying
EBITDA, and this was due to the increased interest expense (+£2.5m) on our
borrowings that fund M&A activity.
At 30 June 2024, bank borrowings stood at £220.7m compared to £103.7m at 30
June 2023. Of the drawn down debt, £180m has been hedged at a fixed rate of
c. 4.3% (excluding bank margin) with the remaining balance chargeable at the
floating SONIA rate.
NON-UNDERLYING ITEMS
Non-underlying items incurred in the period totalled a £3.2m charge (H1 2023:
£7.8m) and comprised the following:
H1 2024 H1 2023
£m £m
EBITDA
Acquisition and integration costs 2.3 3.5
Office start-up costs 0.2 0.1
Other costs 0.2 0.1
Total non-underlying items within EBITDA 2.7 3.7
Profit before tax
Items impacting EBITDA 2.7 3.7
Losses/(gains) on revaluation of contingent consideration 0.3 (0.2)
(Gain) on disposal of subsidiary (0.1) -
Foreign exchange losses 0.3 4.3
Total non-underlying items within profit before tax 3.2 7.8
Acquisition and integration costs of £2.3m were £1.2m lower than H1 2023.
Whilst we have seen increased M&A activity in 2024, H1 2023 included
£2.6m of costs in relation to the SDTC acquisition that completed in H2 2023.
Office start-up costs of £0.2m included final costs in establishing the
infrastructure to trade in Austria.
The loss on revaluation of contingent consideration relates to the perfORM
earn-out where an updated Monte Carlo simulation resulted in an increased
share price used to value the share element of the earn-out.
The foreign exchange loss of £0.3m relates to the revaluation of
inter-company loans (H1 2023: £4.3m). Management considers these losses as
non-underlying as 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 charge in the year was £1.5m (H1 2023: £0.8m). The cash tax
charge was £2.3m (H1 2023: £1.6m), but this is reduced by deferred tax
credits of £0.8m (H1 2023: £0.9m) mainly because of movements in relation to
the value of acquired intangible assets held on the balance sheet. When
excluding non-underlying items, our H1 2024 effective tax rate was 9.9% (H1
2023: 8.3%).
Whilst we have seen a slight increase in the tax rate in the period, we expect
the rate for the full year to be in line with prior guidance.
The Group regularly reviews its transfer pricing policy, is fully committed to
responsible tax practices and continues to be fully compliant 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 increased by 50.0% to 11.41p. Taking into account non-underlying
items and the adjustments that we make against profit for the year, our
adjusted underlying EPS increased by 9.4% and was 19.87p (H1 2023: 18.16p).
Whilst still reporting in line with expectations, the growth of 9.4% is lower
than underlying profit growth of 17.3%. This was due to the fund raise and
subsequent issuance of shares that financed the SDTC acquisition.
Adjusted underlying basic EPS reflects the profit for the year adjusted to
remove the impact of non-underlying items, amortisation of acquired intangible
assets and associated 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.
RETURN ON invested CAPITAL (ROIC)
Normalised ROIC for the last twelve months to 30 June 2024 was 13.0% (2023:
12.3%) which was significantly above our cost of capital. We measure ROIC on a
post-tax basis and more information on our approach can be found in the CFO's
Review appendix.
CASH FLOW AND DEBT
Underlying cash generated from operations was £51.0m (H1 2023: £45.2m) and
underlying cash conversion was strong at 104% (H1 2023: 113%).
The current period is consistent with historic performance (recognising that
H1 2023 was the best in our recent history) and management maintains its
annual medium-term cash conversion guidance range of 85% - 90%.
As is normal, the business has seen cash conversion in the first half of year
exceed 100% and this has primarily been due to annual invoices that are
collected in advance of services being performed.
Reported net debt includes cash balances set aside for regulatory compliance
purposes. Underlying net debt excludes these balances and at the period end
was £131.9m compared with £28.0m at 30 June 2023.
The reason for the £103.9m increase is two-fold; the prior year included a
temporary reduction driven by the timing of the receipt of the gross proceeds
from the equity raise in advance of the SDTC acquisition, and the LTM period
includes the £118m drawdown on 1 August 2023 to satisfy the SDTC
consideration.
On 10 January 2024, the Group paid out £21.1m from its own cash to settle the
SALI earn-out in full. We are pleased to report a slight reduction in our
leverage to 1.39x (31.12.2023: 1.43x).
MARTIN FOTHERINGHAM
CHIEF FINANCIAL OFFICER
Statement of directors' responsibilities in respect of the interim financial
statements
For the 6 month period ended 30 June 2024
"The directors' confirm that these condensed interim financial statements have
been prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and that the
interim management report includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related-party transactions in the first six months and
any material changes in the related-party transactions described in the last
annual report."
Nigel Le
Quesne Martin
Fotheringham
Chief Executive Officer
Chief Financial Officer
16 September
2024 16
September 2024
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 8 in the interim
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 which will
assist in the understanding of the business.
An explanation of our key APMs and link to equivalent statutory measure has
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 current year 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 8 of the interim financial
statements).
Purpose and strategic link: An industry-recognised alternative measure of
performance which has been at the heart of the business since its
incorporation and 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, the latter 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 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 items relating
to the Group's acquisition activities, including amortisation of acquired
intangible assets and associated 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 the effectiveness of our capital
allocation decisions in generating profit against deployed capital. 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
H1 2024 H1 2023
£m £m
Reported prior year full year revenue (2022 / 2021) 200.0 147.5
Less: reported prior year interim revenue (H1 2022, H1 2021) (93.0) (67.0)
Plus: reported interim revenue (H1 2023 / H1 2022) 121.5 93.0
Less: impact of exchange rate restatement* (3.8) (4.5)
Less: acquisition revenues (4.1) (12.4)
a. Prior period LTM organic revenue 220.6 165.6
Reported prior year full year revenue (2023 / 2022) 257.4 200.0
Less: reported prior year interim revenue (H1 2023 / H1 2022) (121.5) (93.0)
Plus: reported interim revenue (H1 2024 / H1 2023) 147.1 121.5
Less: impact of exchange rate restatement* (0.8) (1.1)
Less: acquisition revenues (34.0) (27.1)
b. Current period LTM organic revenue 248.2 200.3
Net organic growth % (b/a) -1 12.5% 21.0%
2. underlying EBITDA
H1 2024 H1 2023
£m £m
Reported profit 18.5 11.2
Add:
Income tax 1.5 0.8
Finance cost 12.0 7.5
Finance income (0.7) (0.3)
Other losses 0.6 5.5
Depreciation and amortisation 14.6 11.8
Non-underlying items within EBITDA* 2.7 3.7
Underlying EBITDA 49.1 40.2
Underlying EBITDA % 33.4% 33.1%
*As set out in note 8 in the interim financial statements. A reconciliation of
divisional EBTIDA can be found in note 6 of the interim financial statements.
3. underlying CASH CONVERSION
H1 2024 H1 2023
£m £m
Net cash generated from operating activities 45.9 41.5
Less:
Non-underlying cash items* 1.7 1.6
Income taxes paid 3.4 2.1
a. Underlying cash generated from operations 51.0 45.2
b. Underlying EBITDA 49.1 40.2
Underlying cash conversion (a / b) 104% 113%
*As set out in note 19.2 in the interim financial statements.
4. Underlying LEVERAGE
H1 2024 H1 2023
£m £m
Cash and cash equivalents 88.9 75.7
Bank debt (220.7) (103.7)
a. Net debt - underlying (131.9) (28.0)
b. LTM underlying EBITDA 94.8 75.5
Leverage (a / b) 1.39 0.37
5. Adjusted underlying basic eps
H1 2024 H1 2023
£m £m
Profit for the year as per basic EPS 18.5 11.2
Less:
Non-underlying items* 3.2 7.8
Amortisation of customer relationships, acquired software and brands 7.9 6.5
Amortisation of loan arrangement fees 0.6 0.4
Unwinding of NPV discounts for contingent consideration 2.8 1.6
Temporary tax differences arising on amortisation of customer relationships, (0.8) (0.9)
acquired software and brands
a. Adjusted underlying profit for the year 32.2 26.7
b. Weighted average number of shares 162.1 147.1
Adjusted underlying EPS (a / b) 19.87 18.16
*As set out in note 8 in the interim financial statements.
6. return on invested capital
LTM 30.06.2024 FY23
£m £m
Profit for the period 29.1 21.8
Add back:
Non-underlying items 11.6 16.2
Amortisation of customer relationships, acquired software and brands 15.7 14.3
Impairment of customer relationship intangible asset 0.7 0.7
Temporary tax differences arising on amortisation of customer relationships, (1.6) (1.7)
acquired software and brands
Net finance costs 22.5 18.4
Tax estimate on financing costs (0.3) (0.3)
a. Net operating profit after tax 77.6 69.5
Opening invested capital (30.06.2023* / 31.12.2022) 542.4 505.0
+ Closing equity 518.5 503.9
+ Closing debt 220.7 220.5
- Closing cash (88.9) (97.2)
Closing invested capital 650.3 627.2
b. Average invested capital (opening + closing/2) 596.4 566.1
c. ROIC (a / b) 13.0% 12.3%
*Invested capital has been adjusted to add back the impact of the £62m gross
proceeds from the equity raise in H1 2023. This adjustment ensures that the
capital movements in relation to the SDTC acquisition (H2 2023) do not result
in a misstatement of ROIC.
Independent review report to JTC PLC
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed JTC PLC's condensed consolidated interim financial statements
(the "interim financial statements") in the Interim Financial Report (the
"interim financial report") of JTC PLC for the six-month period ended 30 June
2024 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
The interim financial statements comprise:
● the condensed consolidated interim balance sheet as at 30 June
2024;
● the condensed consolidated interim income statement for the period
then ended;
● the condensed consolidated interim statement of comprehensive
income for the period then ended;
● the condensed consolidated interim statement of changes in equity
for the period then ended;
● the condensed consolidated interim statement of cash flows for the
period then ended; and
● the explanatory notes to the condensed consolidated interim
financial statements.
The interim financial statements included in the interim financial report have
been prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the International Auditing and
Assurance Standards Board. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and, consequently, does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the interim financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim financial report, including the interim financial statements, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim financial report in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial
statements in the interim financial report based on our review. This report,
including the conclusion, has been prepared for and only for the company for
the purpose of complying with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
PricewaterhouseCoopers CI LLP
Chartered Accountants
Jersey, Channel Islands
16 September 2024
(a) The maintenance and integrity of the JTC PLC website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
(b) Legislation in Jersey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
JTC PLC
INTERIM FINANCIAL REPORT 30 JUNE 2024
UNAUDITED
Condensed consolidated interim income statement
Condensed consolidated interim statement of comprehensive income
Condensed consolidated interim balance sheet
Condensed consolidated interim statement of changes in equity
Condensed consolidated interim statement of cash flows
Notes to the condensed consolidated interim financial statements
1. Reporting entity
2. Significant changes in the current reporting
period
3. Basis of preparation
4. Material accounting policies and standards
5. Critical accounting estimates and judgements
6. Operating segments
7. Staff expenses
8. Non-underlying items
9. Other losses
10. Finance cost
11. Income tax
12. Earnings per share
13. Business combinations
14. Goodwill and other intangible assets
15. Share capital and reserves
16. Contingent consideration
17. Loans and borrowings
18. Financial risk and capital management
19. Cash flow information
20. Related party transactions
21. Contingencies
22. Events occurring after the reporting period
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
£'000 Note H1 2024 H1 2023
Revenue 6 147,111 121,492
Staff expenses 7 (77,793) (61,616)
Other operating expenses (22,297) (22,038)
Credit impairment losses (989) (1,466)
Other operating income 24 22
Share of profit of equity-accounted investee 387 101
Earnings before interest, taxes, depreciation and amortisation ("EBITDA") 46,443 36,495
Comprising:
Underlying EBITDA 49,148 40,174
Non-underlying items 8 (2,705) (3,679)
46,443 36,495
Depreciation and amortisation (14,556) (11,813)
Profit from operating activities 31,887 24,682
Other losses 9 (645) (5,530)
Finance income 674 323
Finance cost 10 (11,973) (7,536)
Profit before tax 19,943 11,939
Comprising:
Underlying profit before tax 23,120 19,708
Non-underlying items 8 (3,177) (7,769)
19,943 11,939
Income tax 11 (1,453) (753)
Profit for the period 18,490 11,186
Earnings per ordinary share ("EPS") Pence Pence
Basic EPS 12.1 11.41 7.61
Diluted EPS 12.2 11.32 7.54
The above condensed consolidated interim income statement should be read in
conjunction with the accompanying notes.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
£'000 Note H1 2024 H1 2023
Profit for the period 18,490 11,186
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations (net of tax) 18.1 1,694 (10,665)
Gains on cash flow hedges 2,758 -
Hedging gains reclassified to profit or loss 10 (890) -
Total comprehensive income for the period (net of tax) 22,052 521
The above condensed consolidated interim statement of comprehensive income
should be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
£'000 Note 30.06.2024 31.12.2023
Assets
Property, plant and equipment 59,038 49,659
Goodwill 14.1 524,786 522,964
Other intangible assets 14.2 141,561 147,302
Derivative financial instruments 1,120 -
Investments 3,738 3,365
Other non-financial assets 3,029 2,981
Deferred tax assets 157 266
Total non-current assets 733,429 726,537
Trade receivables 36,058 32,071
Work in progress 14,513 11,615
Accrued income 28,103 26,574
Other non-financial assets 9,124 6,899
Other receivables 4,650 4,181
Cash and cash equivalents 88,888 97,222
Total current assets 181,336 178,562
Total assets 914,765 905,099
Equity
Share capital 15.1 1,677 1,655
Share premium 15.1 396,022 392,213
Own shares 15.2 (3,929) (3,912)
Capital reserve 29,784 28,584
Translation reserve 10,635 8,941
Other reserves 1,119 (749)
Retained earnings 15.3 83,203 77,144
Total equity 518,511 503,876
Contingent consideration 16 23,736 49,794
Loans and borrowings 17 220,748 220,531
Lease liabilities 44,909 37,924
Deferred tax liabilities 8,356 9,474
Derivative financial instruments - 749
Other non-financial liabilities 1,256 1,307
Provisions 2,665 2,200
Total non-current liabilities 301,670 321,979
Trade and other payables 19,818 19,991
Contingent consideration 16 31,445 26,906
Deferred income 6.4 33,038 19,639
Lease liabilities 6,404 6,117
Other non-financial liabilities 958 873
Current tax liabilities 2,714 5,346
Provisions 207 372
Total current liabilities 94,584 79,244
Total equity and liabilities 914,765 905,099
The above condensed consolidated interim balance sheet should be read in
conjunction with the accompanying notes.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2024
Attributable to owners of JTC PLC
Note Share capital Share premium Own shares Capital reserve Translation reserve Other reserve Retained earnings Total equity
£'000
1,655 392,213 (3,912) 28,584 8,941 (749) 77,144 503,876
Balance at 1 January 2024
Profit for the period - - - - - - 18,490 18,490
Other comprehensive income for the period - - - - 1,694 1,868 - 3,562
Total comprehensive income for the period - - - - 1,694 1,868 18,490 22,052
Issue of share capital 15.1 22 3,809 - - - - - 3,831
Share-based payment expense 7 - - - 1,200 - - - 1,200
Movement of own shares 15.2 - - (17) - - - - (17)
Dividends paid 15.3 - - - - - - (12,431) (12,431)
Balance at 30 June 2024 1,677 396,022 (3,929) 29,784 10,635 1,119 83,203 518,511
For the period ended 30 June 2023
Attributable to owners of JTC PLC
£'000 Share capital Share premium Own shares Capital reserve Translation reserve Other reserve Retained earnings Total equity
Balance at 1 January 2023 1,491 290,435 (3,697) 24,361 15,979 - 71,648 400,217
Profit for the period - - - - - - 11,186 11,186
Other comprehensive income for the period - - - - (10,665) - - (10,665)
Total comprehensive - - - - (10,665) - 11,186 521
income for the period
Issue of share capital 104 60,558 - - - - - 60,662
Share-based payment expense - - - 1,293 - - - 1,293
Movement of own shares - - (215) - - - - (215)
Dividends paid - - - - - - (10,058) (10,058)
Balance at 30 June 2023 1,595 350,993 (3,912) 25,654 5,314 - 72,776 452,420
The above condensed consolidated interim statement of changes in equity should
be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
£'000 Note H1 2024 H1 2023
Cash generated from operations 19.1 49,282 43,639
Income taxes paid (3,399) (2,130)
Net movement in cash generated from operations 45,883 41,509
Comprising:
Underlying cash generated from operations 51,013 45,219
Non-underlying cash items 19.2 (1,731) (1,580)
49,282 43,639
Investing activities
Interest received 646 322
Payments for property, plant and equipment (3,295) (777)
Payments for intangible assets (3,081) (1,462)
Payments for business combinations (net of cash acquired)(1) (21,634) (1,392)
Payment to obtain or fulfil a contract (528) (465)
Payment for investment - (250)
Loan to third party - (160)
Net cash used in investing activities (27,892) (4,184)
Financing activities
Proceeds from the issue of shares - 62,000
Share issuance costs (32) (1,713)
Dividends paid (12,431) (10,058)
Payment of loan arrangement fees (420) -
Repayment of loans and borrowings - (50,000)
Interest paid on loans and borrowings (8,399) (4,668)
Receipts from derivative financial instruments 891 -
Principal paid on lease liabilities (3,487) (3,040)
Interest paid on lease liabilities (711) (645)
Net cash used in financing activities (24,589) (8,124)
Net (decrease)/increase in cash and cash equivalents (6,598) 29,201
Cash and cash equivalents at start of the period 97,222 48,861
Effect of foreign exchange rate changes (1,736) (2,336)
Cash and cash equivalents at end of the period 88,888 75,726
1 Payments for business combinations include the final earn-out payment in
relation to SALI (see note 16) and the net cash flow from the acquisition of
Blackheath (see note 13).
The above condensed consolidated interim statement of cash flows should be
read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. REPORTING ENTITY
JTC PLC ("the Company") was incorporated on 12 January 2018 and is domiciled
in Jersey, Channel Islands. The address of the Company's registered office is
28 Esplanade, St Helier, Jersey.
The condensed consolidated interim financial statements of the Company for the
period from 1 January 2024 to 30 June 2024 comprise the Company and its
subsidiaries (together "the Group" or "JTC") and the Group's interest in an
associate and investments.
2. SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD
The business has continued to perform well during the six months to 30 June
2024. Whilst the economic outlook remains somewhat uncertain, inflationary
pressures have eased and the business has continued to meet the expectations
of the Board.
There were no significant transactions or events during the period that
affected the financial position and performance other than the acquisition of
Blackheath which is disclosed in note 13.
For more detail about the Group's performance and financial position, please
refer to the Chief Financial Officer's review.
3. BASIS OF PREPARATION
The condensed consolidated interim financial statements (the "interim
financial statements") for the six months to 30 June 2024 have been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted by the
European Union ("EU"), the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and Companies
(Jersey) Law 1991. The interim financial statements are presented in pounds
sterling (£), which is the functional and reporting currency of the Company.
They do not include all the information required for a complete set of
International Financial Reporting Standards ("IFRS") financial statements.
Accordingly, the interim financial statements should be read in conjunction
with the annual consolidated financial statements for the year ended 31
December 2023, which have been prepared in accordance with IFRS as adopted by
the EU. Selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual consolidated
financial statements as at and for the year ended 31 December 2023.
The Group has adopted the going concern basis of accounting in preparing the
interim financial statements. The Directors are confident that the Group will
meet its day-to-day working capital requirements through its cash-generating
activities and bank facilities. The Group's forecasts and projections, taking
account of possible changes in trading performance, show that the Group should
be able to operate within the level of its current facilities. The Directors
therefore have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future, being at
least 12 months from the date of approval of these interim financial
statements.
These interim financial statements were approved by the Board on 12 September
2024 and have been reviewed but not audited by the Group's external auditors.
4. MATERIAL ACCOUNTING POLICIES AND STANDARDS
The accounting policies applied in these interim financial statements are the
same as those applied in the Group's consolidated financial statements as at
and for the year ended 31 December 2023.
To the extent relevant, all IFRS standards and interpretations including
amendments that were in issue and effective from 1 January 2024, have been
adopted by the Group from 1 January 2024. All new amendments, effect from 1
January 2024, do not have a material impact on these interim financial
statements. The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.
5. 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 these interim financial statements, all the significant judgments
made by Management in applying the Group's accounting policies and the key
sources of estimation uncertainty applied are disclosed in Note 28.2 of the
2023 Annual Report.
6. OPERATING SEGMENTS
6.1. 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, high-net-worth and ultra-high-net-worth individuals and family
office clients. Recognised revenue is generated from external customers.
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").
6.2. SEGMENTAL INFORMATION
The table below shows the segmental information provided to the Board for the
two reportable segments (ICS and PCS) on an underlying basis:
ICS PCS Total
£'000 H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023
Revenue 87,514 80,692 59,597 40,800 147,111 121,492
Direct staff expenses (38,645) (33,729) (23,700) (15,672) (62,345) (49,401)
Other direct expenses (1,730) (1,408) (1,433) (1,649) (3,163) (3,057)
Indirect staff expenses (9,076) (8,153) (4,722) (3,498) (13,798) (11,651)
Other operating expenses (11,198) (11,931) (7,869) (5,401) (19,067) (17,332)
Other 15 15 395 108 410 123
Underlying EBITDA 26,880 25,485 22,268 14,688 49,148 40,174
Underlying EBITDA margin % 30.7% 31.6% 37.4% 36.0% 33.4% 33.1%
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 revaluation of intercompany 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.
6.3. GEOGRAPHICAL INFORMATION
Revenue generated by contracting subsidiary by their location is as follows:
H1 2024 H1 2023 Increase
£'000 £'000
£'000 %
UK & Channel Islands 66,715 64,675 2,040 3.2%
US 46,366 25,279 21,087 83.4%
Rest of Europe 19,683 18,613 1,070 5.7%
Rest of the World 14,347 12,925 1,422 11.0%
Total revenue 147,111 121,492 25,619 21.1%
6.4. SEASONALITY
There is no material change for seasonality or cyclicality in the condensed
consolidated interim income statement. The condensed consolidated balance
sheet is impacted where annual fees have been billed in advance at the start
of the calendar year and as a result, deferred income is higher at 30 June
than at 31 December.
7. STAFF EXPENSES
£'000 H1 2024 H1 2023
Salaries and Directors' fees 63,630 50,163
Employer-related taxes and other staff-related costs 5,769 4,850
Other short-term employee benefits 3,959 2,801
Pension employee benefits 3,235 2,461
Share-based payments 1,200 1,341
Total staff expenses 77,793 61,616
8. NON-UNDERLYING ITEMS
£'000 H1 2024 H1 2023
EBITDA 46,443 36,495
Non-underlying items within EBITDA:
Acquisition and integration costs(1) 2,273 3,495
Office start-up costs(2) 220 141
Other(3) 212 43
Total non-underlying items within EBITDA 2,705 3,679
Underlying EBITDA 49,148 40,174
Profit before tax 19,943 11,939
Total non-underlying items within EBITDA 2,705 3,679
Loss/(gain) on revaluation of contingent consideration(4) 258 (167)
Gain on disposal of subsidiary(5) (72) -
Foreign exchange losses(6) 286 4,257
Total non-underlying items within profit before tax 3,177 7,769
Underlying profit before tax 23,120 19,708
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 shares (see note 36.3(B) of the 2023 Annual Report for
further information) and legal costs relating to a regulatory action from the
Dutch Central Bank.
4 Loss/(gain) on the revaluation of liability-classified contingent
consideration payable for perfORM (see note 16).
5 On 1 March 2024, the Group sold its call option to purchase Global Tax
Support T.V.
6 Foreign exchange losses that relate to the revaluation of inter-company
loans. Management consider these to be non-underlying as they are unrealisable
movements as the loans are eliminated upon consolidation.
9. OTHER LOSSES
£'000 Note H1 2024 H1 2023
(Loss)/gain on revaluation of contingent consideration 16 (258) 167
Gain on disposal of subsidiary 8((5)) 72 -
Foreign exchange losses 18.1 (459) (5,697)
Total other losses (645) (5,530)
10. FINANCE COST
£'000 H1 2024 H1 2023
Bank loan interest 7,713 4,347
Gain on cash flow hedge reclassified from other comprehensive income (890) -
Amortisation of loan arrangement fees 637 465
Unwinding of net present value ("NPV") discounts 3,799 2,271
Other finance expense 714 453
Total finance cost 11,973 7,536
11. INCOME TAX
£'000 H1 2024 H1 2023
Current tax 2,289 1,635
Deferred tax (836) (882)
Total income tax expense 1,453 753
12. EARNINGS PER SHARE
The Group calculates basic, diluted and adjusted underlying basic EPS. The
results can be summarised as follows:
Pence Note H1 2024 H1 2023
Basic EPS 12.1 11.41 7.61
Diluted EPS 12.2 11.32 7.54
Adjusted underlying basic EPS 12.3 19.87 18.16
12.1. BASIC EARNINGS PER SHARE
£'000 H1 2024 H1 2023
Profit for the period 18,490 11,186
No. of shares (thousands) No. of shares (thousands)
Issued ordinary shares at 1 January 161,445 146,001
Effect of shares issued to acquire business combinations 449 13
Effect of movement in treasury shares held 185 232
Effect of equity placing - 829
Weighted average number of Ordinary shares (basic) 162,079 147,075
Basic EPS (pence) 11.41 7.61
12.2. DILUTED EARNINGS PER SHARE
£'000 Note H1 2024 H1 2023
Profit for the period 18,490 11,186
No. of shares (thousands) No. of shares (thousands)
Weighted average number of Ordinary shares (basic): 162,079 147,075
Effect of movement in share-based payments 1,253 1,187
Weighted average number of Ordinary shares (diluted) 163,332 148,262
Diluted EPS (pence) 11.32 7.54
12.3. ADJUSTED UNDERLYING BASIC EARNINGS PER SHARE
£'000 Note H1 2024 H1 2023
Profit for the period 18,490 11,186
Non-underlying items 8 3,177 7,769
Amortisation of customer relationships, acquired software and brands 7,930 6,548
Amortisation of loan arrangement fees 10 637 465
Unwinding of NPV discounts for contingent consideration 2,811 1,627
Temporary tax differences arising on amortisation of customer relationships, 11 (836) (882)
acquired software and brands
Adjusted underlying profit for the period 32,209 26,713
No. of shares (thousands) No. of shares (thousands)
Weighted average number of Ordinary shares (basic) 162,079 147,075
Adjusted underlying basic EPS (pence) 19.87 18.16
Adjusted underlying basic EPS is an alternative performance measure which
reflects the underlying activities of the Group. The following definition is
not consistent with the requirements of IAS 33.
The Group's definition of underlying basic EPS reflects the profit for the
period adjusted to remove the impact of non-underlying items (see note 8).
Additionally, a number of other items relating to the Group's acquisition
activities including amortisation of acquired intangible assets and associated
deferred tax, 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.
13. BUSINESS COMBINATIONS
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 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 this was the date that control was
obtained by the Group.
The acquired business contributed revenues of £0.16m and underlying profit
before tax (before central costs have been applied) of £0.01m to the Group
for the period from 1 March 2024 to 30 June 2024. If the business had been
acquired on 1 January 2024, the Group's consolidated revenue and underlying
profit before tax for the period would have been £147.19m and £23.13m.
(A) IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED ON ACQUISITION
The following table shows, at fair value, the recognised assets acquired and
liabilities assumed at the acquisition date:
£'000 Book value at acquisition Adjustments Fair value
Property, plant and equipment(1) 2 9 11
Intangible assets - customer relationships(2) - 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(1) - 9 9
Liabilities 72 9 81
Total identifiable net assets 255 145 400
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.
2 On 1 March 2024, the Group recognised customer relationship intangible
assets for Blackheath of £0.15m. The useful economic life of ten years was
based on the historical length of relationships as well as observed attrition
rates for companies operating in a similar industry
(B) CONSIDERATION
Total consideration is satisfied by the following:
£'000
Cash consideration 772
Equity instruments(1) 147
Fair value of 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 15.1).
(C) GOODWILL
£'000
Total consideration 919
Less: fair value of identifiable net assets (400)
Goodwill 519
Goodwill is represented by assets that do not qualify for separate recognition
or other factors.
(D) IMPACT ON CASH FLOW
£'000
Cash consideration 772
Less: cash balance acquired (223)
Net cash outflow from acquisition 549
(E) ACQUISITION-RELATED COSTS
The Group incurred acquisition-related costs of £0.02m which have been
recognised within other operating expenses in the Group's condensed
consolidated income statement and are treated as non-underlying items to
calculate underlying EBITDA (see note 8)
14. GOODWILL AND OTHER INTANGIBLE ASSETS
14.1 GOODWILL
The aggregate carrying amounts of goodwill allocated to each cash-generating
unit ("CGU") is as follows:
CGU Note Balance at Business combinations £'000 Exchange differences £'000 Balance at 30 June 2024
1 Jan 2024
£'000
£'000
Jersey 66,104 - - 66,104
Guernsey 10,761 - - 10,761
BVI 752 - - 752
Switzerland 2,556 - (81) 2,475
Cayman 237 - 2 239
Luxembourg 28,727 - (675) 28,052
Netherlands 14,734 - (378) 14,356
Dubai 1,870 - 12 1,882
Mauritius 2,518 - 19 2,537
US - ICS 194,466 - 1,371 195,837
US - SDTC 171,952 - 1,210 173,162
US - NYPTC 7,398 - 52 7,450
Ireland 8,896 - (229) 8,667
UK 13 11,993 519 - 12,512
Total 522,964 519 1,303 524,786
Goodwill is not amortised but is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that the carrying
amount may not be recoverable. With the exception of US - SDTC and US - NYPTC,
goodwill is monitored at a jurisdictional level by Management. Goodwill is
allocated to CGUs for the purpose of impairment testing and this allocation is
based on the CGU that is expected to benefit from the business combination in
which the goodwill arose.
At 30 June 2024, Management concluded that no impairment indicators were
present for any of the CGUs.
14.2 OTHER INTANGIBLE ASSETS
Various impairment indicators were evaluated for other intangible assets,
including their expected performance and market factors. Management concluded
that no impairment indicators were present at 30 June 2024.
15. SHARE CAPITAL AND RESERVES
15.1. SHARE CAPITAL AND SHARE PREMIUM
Movements in Ordinary shares Note No. of shares (thousands) Par value £'000 Share premium £'000
At 1 January 2024 165,521 1,655 392,213
PLC EBT issue(1) 1,660 17 -
Acquisition of SALI - settlement of earn-out 16 466 5 3,694
Acquisition of Blackheath - initial consideration 13 18 - 147
Less: Cost of share issuance - - (32)
Movement in the period 2,144 22 3,809
At 30 June 2024 167,665 1,677 396,022
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.
15.2. OWN SHARES
Own shares represent the shares of the Company that are unallocated and held
by PLC EBT for the benefit of its employees. Own shares have been excluded
from the weighted average number of Ordinary shares for the purpose of
calculating EPS as they are not outstanding.
No. of shares (thousands) PLC EBT £'000
At 1 January 2024 4,017 3,912
PSP awards (311) -
Other awards (30) -
PLC EBT issue 1,660 17
Movement in the period 1,319 17
At 30 June 2024 5,336 3,929
15.3. RETAINED EARNINGS AND DIVIDENDS
The Retained earnings includes accumulated profits and losses.
The final dividend for the year 2023 of 7.67p per qualifying Ordinary share
was paid on 28 June 2024
An interim dividend of 4.3p per qualifying ordinary share (2023: 3.5p per
qualifying Ordinary share) was declared by the Board on 12 September 2024 and
will be payable on 25 October 2024 to shareholders on the record on 27
September 2024. The interim dividend has not been recognised as a liability as
at 30 June 2024.
16. CONTINGENT CONSIDERATION
Contingent consideration payables are discounted to NPV, split between current
and non-current and are due as follows:
£'000 30.06.2024 31.12.2023
Acquisition
SDTC(1) 23,736 45,989
perfORM(2) - 3,805
Total non-current contingent consideration 23,736 49,794
SALI(3) - 24,644
SDTC(1) 26,628 1,536
perfORM(2) 4,421 -
CNFS(4) 396 -
Sterling - 726
Total current contingent consideration 31,445 26,906
1 Based on Management's assessment of the forecast revenue for the
remainder of the earn-out period, it is estimated that the earn-out will be
met in full and the contingent consideration payable will continue to be
£54.7m ($70.0m) which has been discounted to its present value of £50.4m
($63.7m).
2 The earn-out for perfORM is calculated based on a multiple of their
underlying EBITDA for the year ending 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.
At the acquisition date, Management forecast the underlying EBITDA
for perfORM and estimated that £4.48m would be due. At 30 June 2024,
Management revisited their forecast and reviewed the performance of the
business and have identified no evidence to indicate a material adjustment was
required to the amount due. The fair value of the 282,854 JTC PLC Ordinary
shares payable at the end of the earn-out period was updated using the Monte
Carlo simulation which increased the share price applied to £9.90
(31.12.2023: £8.47).
The simulation is based on JTC's share price at 30 June 2024,
factoring in historical volatility and projected dividend payments, and is
then discounted using an appropriate risk free rate. The updated share price
resulted in a loss on revaluation of £0.26m (see note 9) as the fair value of
the contingent consideration payable in JTC Ordinary shares increased to
£2.8m (31.12.23: £2.4m). The revalued earn-out contingent consideration of
£5.0m (cash £2.2m/ JTC PLC Ordinary shares £2.8m) has then been discounted
to a present value of £4.4m.
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.
This included a cash payment of £21.1m ($26.8m) and the issue of 465,516 JTC
Ordinary shares, equivalent to £3.7m ($4.7m).
4 On 6 March 2024, JTC entered into a facilitation and referral agreement
("F&R agreement") and an outsourcing agreement with Cayman National Fund
Services Ltd ("CNFS"), whereby CNFS will, on an exclusive basis, refer,
introduce and recommend its clients to JTC as a replacement provider of
services. Such services include initial onboarding and client due diligence
services and subsequent provision of fund, director, company management and
administration services.
The fair value of the customer relationship acquired is the
consideration due, which is based on the revenue attributable to each client
successfully introduced. The assets are being amortised over their estimated
useful economic life of 10 years.
JTC made an initial payment of £0.12m ($0.15m) following the signing
of the F&R agreement. The remaining balance of £0.4m ($0.5m) will become
due on 6 March 2025 subject to achieving the successful introduction of
clients resulting in an agreed target of client revenue being transferred to
JTC.
17. LOANS AND BORROWINGS
£'000 30.06.2024 31.12.2023
Non-current
Bank loan 220,748 220,531
Total loans and borrowings 220,748 220,531
£'000 30.06.2024 31.12.2023
Facility Currency Initial termination date Interest rate
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 123,662 123,662
Total principal value 223,662 223,662
Issue costs (2,914) (3,131)
Total bank loans 220,748 220,531
18. FINANCIAL RISK AND CAPITAL MANAGEMENT
PRINCIPAL FINANCIAL INSTRUMENTS
All financial assets and liabilities are recognised at amortised cost with the
exception of the derivative financial instrument and the liability-classified
contingent consideration for perfORM (see note 16) which are measured at fair
value.
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.
The liability-classified contingent consideration payable of £2.8m for
perfORM (31 December 2023: £1.9m) is classified under Level 3 as per the
valuation methodology outlined in note 16, and the derivative financial
instrument is classified under Level 2 and calculated as the present value of
the estimated future cash flows based on observable yield curves.
18.1. FOREIGN CURRENCY RISK
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
continues to be mainly from Euro, US dollar and South African rand. The
Group's bank loans are denominated in £ although the facility is
multicurrency. As disclosed in note 29.1 of the JTC Annual Report and Accounts
2023, Management continue to monitor the effectiveness of the Group's policy
to minimise foreign currency risk and regularly assess if a foreign currency
hedge is appropriate.
For the six months to 30 June 2024, mainly due to the Euro and United States
dollar foreign currency exchange rate movements, the Group recognised the
following:
· a foreign exchange gain of £1.7m in other comprehensive income (H1 2023:
£10.7m loss) upon translating the foreign operations to our functional
currency
· a foreign exchange loss of £0.5m (H1 2023: £5.7m loss) in the condensed
consolidated income statement upon the retranslation of monetary assets and
liabilities denominated in foreign currencies (see note 9)
18.2. INTEREST RATE RISK
On 4 December 2023, the Group entered into a two year interest rate swap on
£180m of its total drawn borrowings with a blended swap rate of 4.237%
(excluding margin). At 30 June 2024, the Group held 80% of fixed rate debt and
20% of floating rate from its total borrowings of £223.7m. The interest risk
on the floating rate debt is managed by maintaining an appropriate leverage
ratio.
The Group continues to apply hedge accounting in accordance with IFRS 9
'Financial Instruments' and has assessed the hedging instrument to remain
highly effective.
18.3. CREDIT RISK
The Group's principal exposure to credit risk arises from contracts with
customers and therefore from the following financial assets: trade
receivables, work in progress and accrued income (together "customer
receivables") as well as cash and cash equivalents and other receivables.
Following an analysis on a customer-by customer basis, we have seen no change
in our customers ability to meet their payment obligations and have not
incorporated updated forward-looking information into measuring expected
credit losses as at 30 June 2024. Our credit risk management as set out in
note 29.2 of the JTC Annual Report and Accounts 2023 remains unchanged.
18.4. LIQUIDITY RISK
There has been no change in our liquidity risk assessment compared to our
disclosure in note 29.3 of the 2023 Annual Report.
18.5. CAPITAL MANAGEMENT
The Group's objective for managing capital is unchanged from that disclosed in
Note 30 of the 2023 Annual Report.
In accordance with the Group's capital risk management objective, the
financial covenants attached to the bank borrowings continue to be met.
19. CASH FLOW INFORMATION
19.1. OPERATING CASH FLOWS
£'000 H1 2024 H1 2023
Operating profit 31,887 24,682
Adjustments:
Depreciation of property, plant and equipment 5,035 3,883
Amortisation of intangible assets and assets recognised from costs to obtain 9,522 7,930
or fulfil a contract
Equity-settled share-based payment expense 1,200 1,293
Share of profit of equity-accounted investee (387) (101)
Operating cash flows before movements in working capital 47,257 37,687
Net changes in working capital:
Increase in receivables (11,275) (6,662)
Increase in payables 13,300 12,614
Cash generated from operations 49,282 43,639
19.2. NON-UNDERLYING ITEMS WITHIN NET CASH FROM OPERATING ACTIVITIES
£'000 H1 2024 H1 2023
Net cash from operating activities 49,282 43,639
Non-underlying items:
Acquisition and integration costs 1,406 1,439
Office start-up 220 141
Other 105 -
Total non-underlying items within net cash from operating activities 1,731 1,580
Underlying net cash from operating activities 51,013 45,219
20. 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.
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:
£'000 H1 2024 H1 2023
Salaries and other short-term employee benefits 1,631 1,250
Post-employment and other long-term benefits 61 60
Share-based payments 829 801
Total payments 2,521 2,111
21. 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.
22. EVENTS OCCURRING AFTER THE REPORTING PERIOD
22.1 ACQUISITION OF HANWAY ADVISORY LIMITED ("HANWAY")
On 1 July 2024, JTC completed 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 initial cash
consideration of £0.75m was paid on completion with contingent consideration
payable subject to meeting performance targets for the period to 30 June 2025
(up to a total maximum consideration amount of £2.0m). This acquisition
brings further scale to JTC's UK business and existing UK listed fund
activities.
22.2 GRANTING OF SHARE AWARDS UNDER THE EMPLOYEE INCENTIVE PLAN
On 25 July 2024, following the successful completion of the Galaxy era
business plan, a total of 4,748,909 JTC Ordinary shares were granted to all
eligible employees of the Group
22.3 ACQUISITION OF FIRST REPUBLIC TRUST CO OF DELAWARE ("FRTC")
On 31 July 2024, JTC completed the acquisition of 100% of the share capital of
FRTC, a US based company offering trust administration services to
high-net-worth individuals. The cash consideration of $24.8m was paid on
completion and was partly funded (£13.5m) through a drawdown of the revolving
credit facility. The acquisition complements JTC's position as the leading
independent provider of trust services in the US, bringing scale to this large
and fast-growing market.
22.4 ACQUISITION OF FFP (HOLDINGS) LIMITED ("FFP")
On 24 June 2024, JTC announced the proposed acquisition of FFP, a privately
owned company which is headquartered 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, for a maximum
consideration of $110.0m. This will be satisfied by $70.0m initial
consideration upon completion; $56.0m in cash and $14.0m in JTC Ordinary
shares with a further earn-out up to $40.0m, payable in cash and JTC Ordinary
shares subject to the achievement of specific performance targets for the
period ending 31 December 2024. The acquisition is subject to final regulatory
approvals and satisfaction of the other customary closing conditions and will
be funded from the Group's cash reserves and existing debt facilities.
22.5 ACQUISITION OF THE BUCK UK AND EUROPEAN SHARE PLAN ADMINISTRATION AND
TRUSTEE BUSINESSES FROM ARTHUR J. GALLAGHER & CO ("BUCK")
On 19 August 2024, JTC announced the proposed acquisition of Buck which
provides fully outsourced administration and trustee services to a blue-chip
global client base. Buck covers a full range of employee share plans and has
operations in the UK, Guernsey and Germany. The proposed acquisition will
complement and enhance JTC's existing Employer Solutions platform and will
accelerate the growth of the Group's share plan trustee and administration
service offering.
22.6 ACQUISITION OF GLOBAL FIDUCIARY AND TRUST ADMINISTRATION SERVICES
BUSINESSES FROM CITIGROUP INC. ("CITI TRUST")
On 16 September 2024, JTC announced the proposed acquisition of Citi Trust for
a total consideration of $80m. Citi Trust is one of the oldest and most
established fiduciary businesses globally and has extensive cross-border
experience operating within high-quality trust jurisdictions.
The proposed acquisition will be highly complementary to JTC's existing
footprint, bolstering several key growth jurisdictions including the US, which
becomes JTC's largest jurisdiction by revenue.
The acquisition is subject to customary regulatory approvals in all relevant
jurisdictions and will be funded through the Group's existing cash reserves
and committed debt facilities.
For the acquisitions disclosed within 22.1, 22.3, 22.4, 22.5 and 22.6, at the
date the interim financial statements were authorised for issue, it was
impracticable to disclose the information required by IFRS 3 'Business
Combinations' as some of the required information was not available.
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