JTC (JTC) continued to plug in to the trend towards consolidation in the fund, corporate and private wealth services markets during the first half.
Organic growth came in at 8.2 per cent in the period, but was once again eclipsed by 23.8 per cent growth from acquisitions. Management said it is a bumper time for deals – it looked at roughly 30 opportunities in the period – and is particularly interested in strengthening its presence in the US, an outsourcing market that is less mature than Europe.
However, net debt more than doubled to £60.9m following the acquisitions of Van Doorn, Minerva and Exequtive Partners over the past 12 months, with borrowings sitting at 1.9 times adjusted cash profits, admittedly within the group’s target range of between 1.5 and 2.
JTC won £6m in new business, primarily from institutions, in the three months after the period end. However, management warned that some of the larger mandates have long lead times, meaning some of the impact may not be felt until next year. Still, the group expects organic growth of 8-10 per cent and cash profit margins of 30-35 per cent for the full year.
Broker Numis is forecasting pre-tax profits of £26.2m, giving EPS of 20.9p in 2019, up from £19.6m and 18.4p last year.
| JTC (JTC) | ||||
| ORD PRICE: | 392p | MARKET VALUE: | £442m | |
| TOUCH: | 368-394p | 12-MONTH HIGH: | 440p | LOW: 272p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 108p* | NET DEBT: | 50% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 35.3 | -9.20 | -10.97 | 1.00 |
| 2019 | 46.6 | 9.05 | 7.09 | 1.70 |
| % change | +32 | - | - | +70 |
| Ex-div: | 26 Sep | |||
| Payment: | 25 Oct | |||
| *Includes intangible assets of £178m, or 157p a share | ||||
