JTC achieves latest business plan early, ends year in line

The FTSE 250 company reported strong momentum in net organic revenue growth throughout 2023, surpassing the medium-term guidance range of 8% to 10%, and the 2022 performance of 12%.

It said the growth was driven by record new business wins totalling £30.8m, representing a substantial 25.2% increase compared to the prior year, with notable contributions from existing clients.

The group's underlying EBITDA for the full year aligned with market expectations, and its EBITDA margin was expected to be at the lower end of the guidance range of 33% to 38%.

That, the board said, reflected the company's ongoing investment in driving organic growth.

JTC also reported robust cash conversion rates, exceeding 90% for the full year, while leverage levels were expected to be towards the lower end of the guidance range of 1.5x to 2.0x underlying EBITDA.

Key highlights of the year included the successful acquisition of South Dakota Trust Company (SDTC) and an accompanying equity placing for new and existing shareholders.

Additionally, significant growth and contributions were seen from treasury and tax compliance services, along with the securing of increased debt facilities to support the ‘Cosmos’ business plan.

JTC's strategic focus for inorganic growth in 2023 centred on the acquisition of SDTC, which was successfully completed on 3 August.

The acquisition solidified JTC's position as the leading independent provider of services to the US personal trust sector.

Post-acquisition, SDTC's trading performance was in line with expectations, and the integration process was progressing smoothly.

JTC said it intended to explore further greenfield expansion opportunities in the US personal client services (PCS) market, while also actively evaluating various attractive acquisition opportunities with the potential to deliver strong returns for the group.

Since the close of the financial year, JTC completed the final earnout payment related to the acquisition of SALI Fund Management and SALI GP Holdings using internally-generated cash.

JTC said it was satisfied with the performance of the SALI business, highlighting its successful integration into the group and citing strong cultural alignment and the provision of highly predictable, long-term revenue streams, with room for further growth.

“In a little under six years since our initial public offering in March 2018, we have quadrupled the size of the group by delivering the goals and strategies set out in our Odyssey and Galaxy era business plans, with the latest, Galaxy, being completed two years ahead of schedule,” said chief executive officer Nigel Le Quesne.

“Whilst growth is important in our rapidly consolidating market, it is vital that this growth does not come at the cost of diluting our unique culture.

“Growth must be sustainable and make our business better.”

Le Quesne said that, having made two strategically important acquisitions in the US in the last two years, the company’s immediate priority was to deliver on its plans for growth for both the ICS and PCS divisions in the country.

“We will continue to supplement organic growth with accretive and value-enhancing mergers and acquisitions.

“Our business combines excellent resilience with strong organic and inorganic growth, and this was demonstrated in the year with outstanding net organic growth and the further development of our platform in the US market across both divisions.

“We remain extremely ambitious for the group and thank all of our employee owners for their strong contributions in 2023 and in particular the achievement of our Galaxy era plan.”

JTC said it would announce its full-year results for the year ended 31 December on 9 April.

At 1126 GMT, shares in JTC were down 1.5% at 788.5p.

Reporting by Josh White for Sharecast.com.