- Substantial new mandate wins include Brooks Macdonald International
- Internal operational restructuring of the fund services practice
- NESF acquisition brings an entry to the important US fund services market
- Strong growth prospects from the RBC CEES and INDOS acquisitions
Annual Report 2020
"Strength in the face of adversity"
View Interactive PDF
Financial Highlights
REVENUE (£)
£0M
2019: £99.3M
+15.9%
UNDERLYING EBITDA (£)*
£0M
2019: £35.4M
+9.4%
UNDERLYING EBITDA MARGIN (%)
0
2019: 35.6%
-2.0pp
UNDERLYING BASIC EPS (P)**
0
2019: 21.74
+3.4%
NEW BUSINESS WON (£M)
£0M
2019: £14.9M
+20.1%
LIFETIME VALUE WON (£)***
0
2019: 144
+18.5%
FINAL DIVIDEND PER SHARE (P)
0
2019: 5.3
+1.45P
NET DEBT (£M)
(£0M)
2019: (£66.5M)
+14.3%
* Items classified as non-underlying are detailed in Note 7 of the financial statements. Non-underlying items are defined as specific items of income or expenditure that are not of an operational nature.
** Underlying basic EPS is the profit for the year adjusted to remove the impact of non-underlying items within profit after tax, amortisation of customer relationships and associated deferred tax impact, amortisation of loan arrangement fees and unwinding of NPV discounts.
*** Lifetime Value Won (LVW) is 10 times annualised value of work won minus value of attrition in past year.
Key Performance Indicators
REVENUE (%)
Net organic growth in Group revenue
UNDERLYING EBITDA MARGIN (%)
The EBITDA of the underlying business.
UNDERLYING CASH CONVERSION (%)
Our success in turning profits into cash.
LEVERAGE (multiples)
The relative amount of third party debt we have in the business.
NEW BUSINESS WINS (£M)
The annualised value of new business won (AVNBW) each year.
CLIENT ATTRITION (%)
Work lost in the year that was regretted
STAFF TURNOVER (%)
The number of staff that leave each year that we did not want to leave.
SHARED OWNERSHIP (%)
How many of our permanent employees are owners of the business.
Business Model
Driven by our purpose – to help maximise the potential of every client, colleague and partner with whom we work – our business model enables us to create value sustainably by delivering on our four strategic priorities:
- 1. Every employee an owner of the business
- 2. Grow organically by delivering client service excellence within long-term relationships
- 3. Make strategic acquisitions and integrate them seamlessly so that in our world 2+2 = 5
- 4. Maintain a well-invested, scalable and technology-enabled global platform supports consistent growth
Inputs
Creating Value
Outputs
Our People
We provide an environment where our people can maximise their individual potential and be part of creating something great and long lasting
Creating value for our people
Outstanding career opportunities, lifelong learning through the JTC Academy and support through the JTC Gateway and JTC Wellbeing programmes.
£200+m of value created for JTC employee owners since 1998 and over 20% of ISC held by employee owners.
0+
Employees and every one an owner
0%+
Employee retention
JTC Shared ownership now a harvard business school MBA case study
Clients
We partner with our clients to help them achieve their goals and meet their expectations of the highest levels of service delivered with integrity, energy and dedication
Delivering value for our clients
We deliver sophisticated solutions to our clients and become a trusted advisor, helping them to achieve their long-term goals.
We combine our expertise and experience with an entrepreneurial approach to help our clients find the best solutions.
0+
Clients from over 100 countries
0%+
Increase in the annualised value of new business won to 17.9m
$0bn
Assets under administration (AUA)
+0 years
average client relationship
Intermediaries
We work with intermediaries on common clients, becoming a trusted extension of their offering and they of ours
Unlocking value for our Intermediaries
As an independent we are free to work with leading providers who share a common goal, the best interests of our clients.
We offer our intermediary partners peace of mind that we will always match their own high standards.
0+
Active intermediary partners globally
0%
Of new business referred to JTC by intermediary partners
M&A opportunities
We provide a home and a platform for growth that is compelling across the full range of M&A opportunities
GENERATING VALUE FOR OUR STAKEHOLDERS
The combination of consistent organic growth and highly visible recurring revenue creates a compounding effect that drives the future value of the business.
We are skilled and disciplined at finding acquisitions that complement and expand our core business. We extract value through proven integration methods and seamless transfer to the JTC platform.
We actively engage with key stakeholders, including regulators, governments and local communities to share our knowledge and expertise for the benefit of all.
Shareholders
0 Acquisitions announced since 2010 0% to 0% dividend as % of underlying PAT 0p Underlying basic EPSCommunities
0K+ Donated to good causes in 2020 0+ Charities supported in more than 20 countriesstrengths
Shared ownership culture
We operate around the simple but effective principle that if our people have a stake in the business, they will do a better job for our clients.
Global Platform
- Experienced and entrepreneurial leadership team
- Well balanced between our ICS and PCS Divisions
- 24 offices in 19 jurisdictions
- Tech-enabled to deliver value and drive efficiency
Financial
- 33 year track record of growth
- 8% - 10% net organic revenue growth pa
- 33% - 38% EBITDA margin
- 85% - 90% cash conversion
- Strong balance sheet
- 23 acquisitions announced since 2010
Service Excellence
- Deep expertise delivered by highly qualified professionals
- Director-led client service teams and high employee retention rates
- Long-term, value- enhancing relationships
Our guiding principles EST. 1998
Maximise individual potential
Meritocracy
Stakeholder Mentality
Company before individual
Entrepreneurial outlook
Want to win mentality
Can do attitude
Above and beyond service
Our Strategy
ICS has had a year of strong growth momentum, with strategically important acquisitions, and some of our largest ever new-business wins. It has also been a year of change, where we have reviewed the positioning and go-to-market strategies for both fund and corporate services as well as implementing a revised operating model for our global funds practice.
We have expanded materially through acquiring the fund services business, NESF, in the US and the RBC CEES business, which provides us with a leading position in the corporate and employee services market and brings with it a blue-chip global client base. In addition we were delighted to announce, post period end, the acquisition of INDOS, which will add a sophisticated suite of Depositary, AML and ESG services to our offering and increases our footprint in both the UK and Ireland.
"Clients choose us for our ability to deliver innovative solutions and the highest levels of service. we have expertise across the full spectrum of fund and corporate services and approach client relationships as a long-term collaboration. in addition, technology is improving the efficiency of our core administration services, allowing us even more capacity to serve our clients’ strategic needs."
Jonathan Jennings
Group Head Of Institutional Client Services
Highlights
Revenue (£M)
+17.8%EBITDA (£M)
-0.8%EBITDA Margin (%)
-5.2ppLVW* (£M)
+50.9%* Lifetime Value Won (LVW) is 10 times annualised value of work won minus value of attrition in past year.
The PCS Division had an outstanding year and continues to perform well. In service, efficiency and client feedback, we are meeting all our targets and levels of expectation. Dealing with private clients and families, ours is naturally a people-based business. This year, when the modifications and rigours of dealing with the pandemic have tested us, I think we have shown we really are an extension of our private clients’ lives.
This year, in the face of the Covid-19 crisis, our clients have wanted support, reassurance and options to make sure their affairs are in order and that the impact of the pandemic will be minimal. In doing this, we have both verified and deepened the strength of our personal, long-standing relationships with our clients, even when forced to work remotely. Covid-19 has actually demonstrated the resilience of our business. Our people rose to the challenge, and our clients received the same sensitive and empathetic experience as before.
"I can see several routes to continued growth in the way the market is developing. a broader service suite, supported by leading technology, will help ensure our clients’ experiences are best-inclass. in addition to this, we are seeing far more interest from large global institutions, which see us as a partner of choice in a privateclient environment. we have also developed our strategic direction for geographical growth, both organic and inorganic. our aim is to remain the pre-eminent private client business in our market."
Iain Johns
Group Head Of Private Client Services
Highlights
- Acquisition and full integration of the Sanne Private Clients business
- Development and growth of JTC Private Office as client numbers rise
- Growing technological capability bringing enhancements to Edge portal
- Efficiency improvements as global, regional model beds in
Revenue (£M)
+13.7%EBITDA (£M)
+20.2%EBITDA Margin (%)
+2.2ppLVW* (£M)
-29.5%* Lifetime Value Won (LVW) is 10 times annualised value of work won minus value of attrition in past year.
The foundation of our business will always be organic growth from new and existing clients and JTC grew through purely organic means for its first 20 years. However, we were quick to recognise changes in the market and demand from clients for a global offering delivered from a stable and sophisticated platform.
Since 2010 we have announced 23 acquisitions and in doing so have refined and perfected our approach – from target identification to seamless integration. Fundamentally, we look to do deals that make JTC a better business for the long-term and our disciplined inorganic growth strategy is driven by the interplay of three components.
- Jurisdictional Strength Index (JSI) – this is a proprietary system that grades both the current JTC internal strength and overall market attractiveness of a given jurisdiction
- Core Acquisition Criteria – these are primarily concerned with how value will be added or created through each transaction
- Medium-term Focus – at a given moment in time, we will be particularly focussed on developing certain parts of the business, either in response to client demand or as part of delivering our longer-term strategy in an incremental manner.
"Our approach to integration sits at the heart of capturing value from acquisitions and we place a particular emphasis on welcoming people to our unique culture."
Wendy Holley
Chief Operating Officer
Highlights
JURISDICTIONAL STRENGTH INDEX (JSI)
JTC propriety system. Ratings based on:
- Current JTC strength in a given jurisdiction
- Overall market attractiveness of that jurisdiction
- JSI scores further weight core criteria and current focus scores
- JSI for acquisitions is dovetailed with organic growth initiatives and ongoing investment in our global platform
CORE ACQUISITION CRITERIA
- Add scale or open a new territory
- Strengthen our offering (services, people, technology, processes)
- Create cross-selling opportunities
- Deliver cost synergy opportunities
MEDIUM-TERM FOCUS
- ICS with emphasis on alternative assets
- Mainland US (ICS and PCS)
- Luxembourg, UK and Ireland
- First cousin services
Environmental, Social and Governance Framework
Shared Ownership Est 1998
Maximising Potential + Cultural Values
Social
- Diversity and equal opportunity
- Human rights
- Community relations
- Shared ownership
- JTC Academy
- JTC Gateway
- JTC Wellbeing
- Employee engagement
Environmental
- Carbon emissions
- Energy efficiency
- Waste management
- Climate risk
Governance
- Data management and security
- Ethics risks
- Succession
- Stakeholder engagement
- Purpose and culture
- Board composition
- Executive compensation
- Audit and risk
SHARED OWNERSHIP IS AT THE HEART OF OUR CULTURE AND OUR PURPOSE IS TO HELP MAXIMISE THE POTENTIAL OF EVERY CLIENT, COLLEAGUE AND PARTNER WITH WHOM WE WORK
As a leading global provider of financial services, we understand the opportunity we have to play a role in realigning capital flows to address ESG issues.
We know that we will thrive as a business by working in a sustainable way, within constantly evolving legal and regulatory frameworks, respecting the natural environment and creating a positive impact for the communities where we live and work.
This year we are pleased to report for the first time using the Sustainability Accounting Standards Board (SASB) framework, which we believe is currently the most suitable for our business, a view that has also been expressed by many of our institutional investors.
In the coming year, we have undertaken to become a Carbon Neutral company on a global basis and will also be identifying which of the 17 United Nations Sustainable Development Goals (SDGs) are most relevant for our business and our stakeholders.
