In This Article:
Release Date: April 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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JTC PLC (JTCPF) reported a significant revenue growth of 18.6% and EBITDA growth of 18.4%, maintaining a strong underlying EBITDA margin of 33.3%.
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The company achieved a record for new business wins, totaling 35.7 million pounds, up 15.9% year on year.
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Net organic growth was 11.3%, surpassing the company's revised guidance and marking the third best performance since their IPO in 2018.
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The acquisition of City Trust is set to make JTC PLC (JTCPF) the global leading independent trust company, enhancing their position in the US market.
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The US region contributed 32% of revenues, with expectations to rise to 35% post-acquisition of City Trust, making it JTC's largest single market.
Negative Points
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The ICS division faced a challenging market environment with a slower than anticipated reduction in the cost of capital, impacting market sentiment and leading to fewer IPOs and fund launches.
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The underlying EBITDA margin dropped slightly by 0.1 percentage point from 2023.
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JTC PLC (JTCPF) reported a loss before tax of GBP7.4 million due to the cost of the Galaxy EBT distribution.
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Net debt increased by 59 million pounds, driven by acquisitions, raising concerns about leverage.
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The anticipated rebound in the global M&A market did not materialize as expected, affecting market sentiment and deal flow.
Q & A Highlights
Q: Can you quantify the revenue impact of the FFP delay and how much of the 14% organic growth in PCS came from the corporate services division? A: (Martin Fotheringham, CFO) The FFP delay only impacted FY24, with no change to FY25. Regarding PCS, the corporate services element is significant, with 50% of the book linked to large financial institutions, highlighting the institutional nature of the division.
Q: What are your expectations for pricing growth in FY25, and what are your M&A priorities beyond City Trust? A: (Martin Fotheringham, CFO) Pricing growth is expected to be 3-4% in FY25, down from 6.5% in FY24. (Nigel McCain, CEO) City Trust is the focus for H1, but there are two promising M&A opportunities, one in each division, with a cautious approach to market conditions.
Q: Can you discuss the impressive new business growth and the investment in ICS infrastructure? A: (Nigel McCain, CEO) New business growth is strong, with strategic opportunities emerging, particularly in lighter operating models for institutions. (Martin Fotheringham, CFO) ICS infrastructure investment will improve margins over time, though short-term margins may be impacted by the City Trust acquisition.