Last checked at 22 Jul 2021 07:00
22 July 2021
JTC PLC
(the "Company" and together with its subsidiaries "JTC" or the "Group")
Pre-close Interim Trading Update and Notice of Results
Continued resilient performance; accelerating new business growth and on course for full year trading in line with market expectations
JTC, the global professional services business, today issues the following trading update in advance of its interim results for the six months ended 30 June 2021.
Despite the ongoing macro-economic uncertainty as a result of the pandemic, the Company performed well during the first half of the year. There was good momentum in new business won, particularly in the second half of Q2, with wins of £10.3m for the period (H1 2020: £8.6m and H1 2019: £5.9m). This momentum has continued into H2 and the Board expects to deliver full year results in line with management guidance and market expectations.
The Private Client Services (PCS) Division continued to perform strongly. Within the Institutional Client Services (ICS) Division, the focus has remained on delivering and embedding operational enhancements, including the deployment of technology solutions, within the fund services practice and this work is yielding incremental improvements.
At Group level, and as anticipated, the short-term impact of recent acquisitions and on-going operational restructuring resulted in underlying EBITDA margin for the period slightly below medium term guidance, but this is expected to improve in H2 to deliver a full year result within the medium term guidance range of 33% - 38%. Management expects this to improve further as acquisitions are fully integrated into JTC and the benefits of operational improvements are realised.
Cash conversion during the period was strong and exceeded medium term guidance of 85% - 90%. Net debt at 30 June was £23.6m (31 Dec 20: £75.8m).
The Company completed the acquisitions of RBC cees and Indos Financial in the period. Both businesses are integrating well and are expected to achieve results in line with management expectations.
Following the placing in April, JTC remains well placed to deploy the net proceeds on high-quality businesses that increase the Group's scale, service offerings, capabilities and can accelerate growth. The Company's acquisition pipeline remains healthy, with a number of value accretive opportunities across both divisions, ranging in size from bolt-ons to larger deals. Management remains committed to maintaining pricing discipline in order to unlock long-term value.
The Group is delighted to have made an Employee Incentive Plan (EIP) award of JTC shares to all employees globally meaning that every employee is a direct owner in the business. This is the first award since IPO and the third in the Company's history. Shared ownership remains at the heart of JTC's culture and is a key differentiator for the Group.
The Company maintains its medium-term guidance metrics of 8%-10% net organic revenue growth; underlying EBITDA margin of 33%-38%; net debt of 1.5x to 2.0x underlying EBITDA and cash conversion in the range 85%-90%.
Nigel Le Quesne, CEO of JTC PLC, said:
"JTC has again demonstrated the resilience of its business model and delivered a good performance in the first half of 2021. The positive momentum seen in new business wins, combined with incremental operational improvements, give us confidence for the remainder of the year, which is the first of our new 'Galaxy Era' business plan. Our acquisition pipeline remains strong and we expect to continue to act as a key consolidator in the sector while remaining disciplined in terms of quality and pricing. As always, I would like to thank our people for the outstanding service they provide to our clients and I am delighted that their contribution to the Group's success has again been recognised through our shared ownership programme, which is now in its 24th year."
Notice of Results
The Company will announce its interim results for the period ended 30 June 2021 on Tuesday 21 September 2021. An analyst briefing will be given by Nigel Le Quesne, Chief Executive Officer, and Martin Fotheringham, Chief Financial Officer, at 09:30 GMT via audio conference.
Slides and an audio-cast of the presentation will be made available on the JTC website following the presentation. Those analysts wishing to dial into the audio conference are asked to contact Camarco on +44 (0)20 3757 4999 or jtc@camarco.co.uk
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 +44 (0)20 3757 4985
Geoffrey Pelham-Lane
Georgia Edmonds
Monique Perks
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 of our stakeholders. Our purpose is to maximise potential and our success is built on service excellence, long-term relationships and technology capabilities that drive efficiency and add value.
www.jtcgroup.com