True to JTC’s (JTC) strategy of taking advantage of rising consolidation within the fund, trust and corporate administration industries, acquisitions accounted for 17 per cent of revenue growth during the first-half. The newly-listed group benefited from the 2017 purchase of Netherlands-based New Amsterdam Citytrust and Bank of America’s International Trust and Wealth Structuring business. Operating in 18 jurisdictions, management’s aim is to broaden services offered in existing markets rather than chase further geographical expansion.
Sweating acquired assets and operational efficiencies between the South African global service centre and the markets it supports boosted the underlying cash profit margin to 29.9 per cent, from 23.6 per cent in the comparable period. Management says a margin of between 30 and 35 per cent is “the place to be”, although acquiring “sub-optimal” businesses acts as a short-term drag. Underlying cashflow conversion reduced to 56 per cent of cash profits, although management says that was impacted by the timing of billings by the Bank of America acquisition. IPO-related expenses and the cost of capital distributions to employee benefits trusts post-IPO dampened statutory profits, but strip those out and adjusted cash profits rose more than half to £10.5m.
Analysts at Numis expect adjusted pre-tax profits of £20.3m for the year to December 2018 and EPS of 17.1p.
| JTC (JTC) | ||||
| ORD PRICE: | 398p | MARKET VALUE: | £ 425m | |
| TOUCH: | 396-409p | 12-MONTH HIGH: | 420p | LOW: 295p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | NA | |
| NET ASSET VALUE: | 82p* | NET DEBT: | 27% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 28.2 | -1.1 | -2.5 | nil |
| 2018 | 35.3 | -9.2 | -11.0 | 1.0 |
| % change | +25 | - | - | - |
| Ex-div: | 27 Sep | |||
| Payment: | 26 Oct | |||
| *Includes intangible assets of £97m, or 91p a share **Pre-IPO | ||||
