Organic revenue growth may have come in at a respectable 8.7 per cent for JTC (JTC) during its first year as a publicly listed group, but acquisitions continued to account for the lion's share of gains. The group took advantage of rising consolidation within the fund, trust and corporate administration industries, with bolt-on purchases generating 20.6 per cent of revenue growth. New business came in at £9.7m, while the enquiry pipeline stood at a healthy £32m at the period-end.
The rapid integration of Bank of America Merrill Lynch’s international trust and wealth structuring business, bought in 2017 – and the 2018 acquisition of Minerva were the main drivers of the 43 per cent gross revenue increase in the private client services division. In institutional client services, the addition of Van Doorn to the prior year's purchase of New Amsterdam Cititrust reflected management's approach of "layering" acquisitions on existing businesses to build scale.
Acquisition and integration costs of £4.3m, combined with a £13.2m capital distribution to staff post-IPO, meant adjusted cash profits almost halved to £5.3m. However, excluding one-off costs, that metric almost doubled to £23.8m. Given the industry trend towards consolidation, management will continue to pursue “strategic and opportunistic acquisition opportunities in the foreseeable future”. Indeed, post-period the company acquired Exequtive Partners.
Analysts at Numis expect adjusted pre-tax profits of £29.1m and EPS of 23.2p for 2019, rising to £33.8m and 26.7p in 2020.
| JTC (JTC) | ||||
| ORD PRICE: | 369p | MARKET VALUE: | £416m | |
| TOUCH: | 363-370p | 12-MONTH HIGH: | 420p | LOW: 272p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | NA | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 45% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 59.8 | -3.6 | -7.0 | nil |
| 2018 | 77.3 | -2.1 | -3.9 | 3 |
| % change | +29 | – | – | - |
| Ex-div: | 30 May | |||
| Payment: | 21 Jun | |||
| *Includes intangible assets of £147m, or 129p a share **Pre-IPO | ||||
