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JTC Plc Earnings Release 2024
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Earnings Release
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RNS Number : 0128E
JTC PLC
08 April 2025
full year RESULTS for the year ended 31 december 2024
8 April 2025
JTC PLC
("the Company" together with its subsidiaries ("the Group" or "JTC")
Full year results for the year ended 31 December 2024
A fast start to our "Cosmos" era from both an organic and inorganic perspective proving JTC's defensive growth capabilities
| As reported | Underlying* | |||||
| 2024 | 2023 | Change | 2024 | 2023 | % +/- | |
| Revenue (£m) | 305.4 | 257.4 | +18.6% | 305.4 | 257.4 | +18.6% |
| EBITDA (£m) | 49.1 | 77.8 | -36.9% | 101.7 | 85.9 | +18.4% |
| EBITDA margin* | 16.1% | 30.2% | -14.1pp | 33.3% | 33.4% | -0.1pp |
| Operating profit/EBIT (£m) | 18.9 | 52.7 | -64.0% | 71.6 | 60.8 | +17.8% |
| Profit before tax (£m) | -7.4 | 24.3 | -130.5% | 47.4 | 40.5 | +17.1% |
| Earnings per share (p)** | -4.44 | 14.20 | -131.3% | 41.80 | 37.30 | +12.1% |
| Cash conversion* | 98% | 106% | -8pp | 98% | 106% | -8pp |
| Net debt (£m) | 206.9 | 135.1 | +71.8 | 182.3 | 123.3 | +59.0 |
| Dividend per share (p) | 12.54 | 11.17 | +12.3% | 12.54 | 11.17 | +12.3% |
* For further information on our alternative performance measures (APM's) see the appendix to the CFO Review.
** Average number of shares (thousands) for 2024: 163,308 (2023: 153,659)
STRONG FINANCIAL PERFORMANCE
· Revenue +18.6%, driven by net organic growth of 11.3% (2023: 19.9%)
· Underlying EBITDA +18.4% to £101.7m (2023: £85.9m) with consistent underlying EBITDA margin of 33.3% (2023: 33.4%)
· New business wins +15.9% to a record £35.7m (2023: £30.8m)
· Excellent underlying cash conversion of 98% (2023: 106%)
· Leverage of 1.79x underlying EBITDA at period end, comfortably within the guidance range of 1.5x - 2.0x
· Undrawn funds of £125.9m of £400m facility at period end
· Total dividend per share +12.3% to 12.54p (2023: 11.17p)
· Doubling of business in Galaxy era marked by award of c.£50m in JTC shares to all eligible employees in July 2024, reflected in reported earnings
CONTINUED SUCCESSFUL EXECUTION OF GROWTH STRATEGY
· Institutional Client Services Division performed well in the current market environment with net organic growth of +9.9% and revenue of £180.9m
· Private Client Services Division saw outstanding net organic growth of +14.0% and revenue for the first time over the £100m barrier at £124.5m. This was driven by particularly strong growth in the US, Cayman and Jersey
· Six acquisitions announced or completed in the year. FRTC (PCS Division) and Blackheath, Hanway, Buck and FFP (ICS Division) are all integrated. The exciting Citi Trust acquisition (PCS) is due to complete by the end of Q2 2025. ROIC improved to 12.6% (2023: 12.3%) significantly above cost of capital.
STRONG GROWTH OUTLOOK
· Good start to the new year, with strong organic growth trends set to continue, supported by a robust pipeline of new business opportunities across both Divisions that has grown to £55m at end of Q1.
· Active pipeline of M&A opportunities across both Divisions and key target markets, supported by existing balance sheet capacity
· Medium term guidance maintained:
o Net organic revenue growth 10%+ per annum
o Underlying EBITDA margin of 33% - 38%
o Cash conversion of 85% - 90%
o Net debt of between 1.5x - 2.0x underlying EBITDA
· On track to deliver on our Cosmos era strategic objective to double the size of the business again from FY23 by FY27
Nigel Le Quesne, CEO of JTC PLC, said:
"2024 was the first year of our Cosmos era business plan and we have made a fast start towards our goal of doubling the size of the Group for the third time since IPO. We delivered record new business wins, organic growth above our upgraded guidance and a strong margin, even as we continue to invest in growth.
Alongside the strong organic performance, we announced or completed six acquisitions during the period, including Citi Trust, the global trust company business of Citi Bank. This is a significant addition to our PCS Division and cements JTC's position of the world's leading independent trust company business.
We have carried strong momentum into 2025, growing our new business enquiry pipeline, a driver of organic growth, to £55m by the end of Q1 and we maintain a healthy pipeline of further M&A opportunities across both Divisions.
Finally, we were delighted to be able to make an award of c. £50m to our global workforce, in recognition of their collective achievement to double the size of the Group in just three years by delivering our Galaxy era plan. Our commitment to ownership for all employees remains our defining characteristic and I thank our employee-owners for their dedication to our clients and for bringing the JTC culture to life."
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 | ||
| Geoffrey Pelham-Lane | +44 (0) 7733 124 226 | |
| Sam Morris | +44 (0) 7796 827 008 |
A presentation for analysts will be held at 09:30 BST today via Zoom video conference. The slides and an audio-cast of the presentation will subsequently be made available on the JTC website www.jtcgroup.com/investor-relations
FORWARD LOOKING STATEMENTS
This announcement may contain forward looking statements. No forward-looking statement is a guarantee of future performance and actual results or performance or other financial condition could differ materially from those contained in the forward looking statements. These forward-looking statements can be identified by the fact they do not relate only to historical or current facts. They may contain words such as "may", "will", "seek", "continue", "aim", "anticipate", "target", "projected", "expect", "estimate", "intend", "plan", "goal", "believe", "achieve" or other words with similar meaning. By their nature forward looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of these influences and factors are outside of the Company's control. As a result, actual results may differ materially from the plans, goals and expectations contained in this announcement. Any forward-looking statements made in this announcement speak only as of the date they are made. Except as required by the FCA or any applicable law or regulation, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement.
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 our stakeholders. Our purpose is to maximize potential and our success is built on service excellence, long-term relationships and technology capabilities that drive efficiency and add value.
Chief Executive Officer's review
A fast start to the Cosmos era
"2024 was the first year of our latest multi-year business plan, the Cosmos era, where we aim to once again double the size of the business, in terms of revenue and underlying EBITDA, from where we finished FY23. This means that we are targeting revenue of £500m+ and underlying EBITDA of over £170m+ by or before the end of 2027."
Nigel Le Quesne
CEO
Aiming to double in size yet again
2024 was the first year of our latest multi-year business plan, the Cosmos era, where we aim to once again double the size of the business, in terms of revenue and underlying EBITDA, from where we finished FY23. This means that we are targeting revenue of over £500m and underlying EBITDA of £170m+ by or before the end of 2027.
On the basis that the Cosmos plan is achieved, it will be the third time we have doubled the size of the business since our IPO in 2018, first through the Odyssey era (2018 to 2020) and most recently the Galaxy era (2021 to 2023).
A clear strategy driven by a unique culture
JTC is a people business powered by a unique culture of shared ownership for all employees and our ability to deliver client service excellence and superior financial performance has been honed over nearly four decades.
At our core, we focus on strong net organic growth, which is achieved by partnering with our clients for an average of 14 years. These long relationships allow us to grow alongside our clients, supporting their success and creating opportunities to provide more and better services over the lifetime of each mandate. For the Cosmos era we increased our guidance for net organic revenue growth to 10%+ per annum and in 2024 we met that target with a result of 11.3%.
Alongside organic growth, our industry continues to consolidate and JTC has become a preferred buyer of businesses across a wide range of service lines and geographies, including the high growth US market, where we are now the largest independent private trust company provider and have established a good platform in fund and corporate services. We apply a highly disciplined approach to our M&A activity, always focusing on the long-term value that each addition to our platform will bring and putting people and culture at the heart of each transaction.
In 2024 we announced or completed six acquisitions, which further increased the range of services we offer and strengthened and deepened our business in key geographies, including the UK and the US.
In addition to these well-defined growth strategies, our global platform is built around employing top talent, operating in all the locations where our clients and partners need us and utilising the best technology to ensure that our services are sophisticated, secure and highly efficient.
Our people and Shared Ownership
No review of 2024 would be complete without specific mention of our people and the continued success of our Shared Ownership programme. Shared Ownership has been at the heart of our culture for over 25 years and during the period was recognised through multiple award wins and featured for the fifth time as part of the prestigious Harvard Business School MBA programme.
Having 2,300 owners, rather than employees makes an enormous difference to the working environment, and the organisations culture ensuring that the team are happy valued empowered and highly motivated to improve our business everyday.
Having achieved our Galaxy era plan in FY23, where we doubled the size of the business relative to where we finished FY20, in July 2024 we made Galaxy era EIP awards of c. £50m in JTC shares to all eligible employees globally. The Galaxy award was the fourth share award event in our history and brings the total current value of JTC Shared Ownership awards since 1998 to over £450m. The Galaxy award was celebrated across our global network and it remains a source of enormous pride and motivation to hear the feedback from our people as they enjoy sharing in the successful growth of our company.
The Galaxy awards energised the business going into year one of the Cosmos era and the positive effects for our global team were evidenced by another year of high employee retention. Our regretted attrition again stood at 4%, which remains well within our KPI of 10% or less. This is significantly better than industry norms, with typical attrition rates of c. 20%. In addition, feedback from our annual employee survey, which had a response rate of 89%, demonstrated the difference that Shared Ownership makes with it having the highest scoring average of all survey areas, 86% of respondents said that they value being an employee owner at JTC and 84% agreed that JTC's Shared Ownership culture provides the business with a key differentiator in the market.
We believe that these qualitative and quantitative feedback metrics, when combined with the consistent financial performance delivered by the Group, demonstrate the power of our unique culture and underscore our ongoing commitment to 100% Shared Ownership for all JTC employees. Shared Ownership also continues to play a positive and significant role in our M&A activity as well as being the foundation for our talent development, leadership and succession planning programmes.
Financial performance
Revenue grew 18.6% to £305.4m (2023: £257.4m) and underlying EBITDA increased 18.4% to £101.7m (2023: £85.9m). Net organic revenue growth was 11.3% (2023: 19.9%), lower than 2023 as anticipated, but in-line with our upgraded guidance for the Cosmos era of 10%+ per annum and driven by a 15.9% increase in new business wins to a record £35.7m (2023: £30.8m). Despite the strong organic growth performance and associated costs of on-boarding new business, our underlying EBITDA margin remained stable at 33.3% (2023: 33.4%) and continued within our medium-term guidance for this metric of 33% to 38%. Cash conversion was once again robust and at the top end of guidance at 98% (2023: 106%). Following the series of acquisitions made, leverage at the period end, excluding the Citi Trust transaction, was 1.79x, which is well within our guidance range of 1.5x to 2.0x. The Citi Trust acquisition remains on track to complete by the end of Q2 2025.
Consistent growth during macro uncertainty
2024 was another eventful year on the macro front, not least due to elections in the US, which remains our priority growth market for both Divisions, the first budget from a new government in the UK and continued conflict and geopolitical tensions in Europe and the Middle East.
I have written before about the natural 'hedge' that exists within the business, which allows us to deliver consistent growth throughout the economic cycle. When markets are buoyant, we win more 'new from new' business as clients launch new investment vehicles (notably funds) and the propensity to invest and add to portfolios more generally increases. When conditions are less favourable, we generate more work from existing clients as they respond to threats and opportunities in relation to their current holdings and structures. As a professional services business with client contracts that span 14 years on average, increased activity levels within the existing client base is meaningful for the Group.
In addition to this established pattern of demand, which we have observed for more than 30 years, we have a culture of continuous improvement and innovation that permeates through the business. Through both M&A and internal development, we add new services that are complementary to our core fund, corporate and private client offering. This allows us to grow 'share of wallet' with existing clients and also helps us to win new mandates. Service lines added in the Galaxy era now make meaningful contributions to Group revenue and these include our banking platform (incorporating foreign exchange, treasury and custody), operational due diligence and strategic transformation services.
During the period, and aligned with our acquisition of FFP, we announced the creation of Northpoint Governance Services, a new practice area that will provide a range of highly specialised and expert services across the full spectrum of governance. Northpoint will be complementary to our core offering and also create opportunities for us to work with and provide unbundled services to a new cohort of businesses.
With a global addressable market for our full range of services that we believe is at least $15.3bn per annum in size, there remains enormous opportunity for further long-term growth.
Institutional Client Services Division
Revenue increased 10.8% to £180.9m (2023: £163.3m) with a 7.2% increase in underlying EBITDA to £55.3m (2023: £51.6m). Underlying EBITDA margin decreased by 1pp to 30.6% (2023: 31.6%) and despite a challenging environment with fewer fund launches and IPO's, net organic revenue growth was robust at 9.9% following the exceptional performance in the prior year (2023: 19.4%). The annualised value of new business wins was £20.5m, matching last year's record (2023: £20.6m).
Our ability to identify and complete value accretive deals continued with four acquisitions completed during the period. Blackheath Capital, an established UK ManCo business which was announced in 2023, completed in March and adds further scale and strategically important UK coverage to our Global AIFM Solutions business. Complementary to this was the acquisition of Hanway Advisory in July. Hanway provides corporate governance, fund administration and accounting services to UK listed investment companies and as well as adding scale, supports strategic growth objectives by leveraging the wider JTC fund services offering to Hanway's existing client base.
JTC's Employer Solutions business delivered a strong performance and was bolstered by the acquisition of Buck Share Plans, which was announced in August and completed in November. Buck helps to accelerate the growth of our share plan trustee and administration service offering, and brings with it an existing book of high quality, long-standing blue-chip clients, and an experienced, client-focused and committed team across the UK, Guernsey and Germany.
The most significant acquisition of the year for the ICS Division was FFP, which was announced in June and completed in November. FFP is a provider of specialist fiduciary services to fund, trust and corporate clients with a leading position in complex engagements including restructurings, insolvencies and disputes. The business is headquartered in the Cayman Islands, with further offices in the BVI and Dubai, all of which are complementary to JTC's existing footprint. The acquisition enhances and differentiates the range of fiduciary services JTC can offer to existing and new clients, serving to expand the Group's overall addressable market. The business sits alongside our new Northpoint Governance Services practice, the strategic initiative focused on the provision of a suite of specialist services designed to ensure effective management, oversight and decision-making within the Group's client base.
Within the core ICS business, the US remained the fastest-growing market, with excellent performance from SALI Fund Services and the wider US platform, which continues to go from strength to strength under the direction of the US leadership team. There were also good performances from Luxembourg and the Channel Islands.
In September, Kate Beauchamp took over as Group Head of the Division, having previously been an Independent Non-Executive Director on the JTC Board for two and a half years. Kate's understanding of the business from her time as a NED, combined with her proven track record of providing exceptional corporate and advisory services in the UK and US, make her the perfect choice to lead the ICS Division through the Cosmos era and beyond. In particular, Kate's skills as a qualified lawyer with over two decades of experience in both private and commercial practice are well aligned with the Division's plans to develop and grow its governance services offering.
At the end of the year, the Division stood at some c. 1,150 people serving clients from 25 offices and generating 59% of Group revenues (2023: 63.4%). This scale and reach, combined with our focus on providing client service excellence enabled by best-in-class technology, stands us in good stead to succeed in what remains a competitive market.
Overall, the ICS Division made good progress in 2024 despite the macro environment and as it continues to scale through the development of new services lines, we anticipate strong organic growth and additional opportunities for M&A.
Private Client Services Division
Revenue increased 32.3% to £124.5m (2023: £94.1m) with an increase of 35.2% in underlying EBITDA to £46.4m (2023: £34.3m). The underlying EBITDA margin was 37.3% (2023: 36.5%). The investments made in the PCS platform continued to bear fruit, with net organic revenue growth remaining very strong at 14.0% following the 'purple patch' last year (2023: 20.9%). New business wins increased by an excellent 49% to £15.2m (2023: £10.2m) driven by strong performance from the US, Cayman and Jersey in particular.
PCS had an excellent year and I must commend Iain for his contributions to the ongoing success of the business. Under his leadership over the past 12 years, the Division has consistently outperformed the market.
The continued strong organic growth of the Division reflects both the quality and range of our PCS offering as well as our ability to capture value from acquisitions, in particular those in the US. NYPTC, acquired in 2022, enabled us to become the first non-US bank to be licensed to provide trust company services in Delaware. SDTC, a strategic acquisition made in 2023, brought an established client base of c. 1,700 high net worth and ultra-high net worth clients and a 22 year track record of consistent growth, high margins and strong cash conversion.
Our US platform was further enhanced with the acquisition of First Republic Trust Company Delaware (FRTC-DE) in August, which increased our footprint in one of the pre-eminent locations for trust work in the US. Then in September, we announced the transformational purchase from Citi Group of Citi Trust, their Global Trust company business. In addition to building upon our leading position in the US market and making JTC arguably the world's leading independent trust business, it will enhance our capabilities in the Middle East and Asia regions. Once the US element of Citi Trust is taken into account, our run rate revenues for the Group will make the US JTC's largest market by revenue at Group level. The Citi Trust transaction remains subject to regulatory approval and we anticipate it closing at the end of Q2 2025.
The Division continues to attract top talent from the industry and we are successfully redefining the parameters of a world-class PCS offering, which includes both direct services to end clients and indirect services to provide solutions and support to institutions for their PCS client books, which in turn, enlarges our addressable global market.
The Division won 10 awards during the period, but the highlight among them was being named 'Trust Company of the Year (Large Business)' at the Society of Trust and Estate Practitioners (STEP) Awards in September. The STEP Awards are recognised as the 'Oscars' of the private client industry and this is the second time we have won the top award.
These successes, along with continued ambitious growth plans and a clear plan to fully integrate the Citi Trust business once regulatory approval is received, form the foundation of the Division's plans as it enters the second year of the Cosmos era.
Risk
The team worked to further enhance our global Risk & Compliance function to meet the ever-evolving requirements of international regulation, including the initiation of a Cosmos era project to update our policy and procedures frameworks and the deployment of new technology solutions to enhance accuracy and efficiency across our global platform. While work in this area inevitably presents challenges, it also creates opportunities for growth and we embrace these as our clients, especially the larger and more complex organisations, look to us for expertise and support in this area. Many of our most recently developed service lines, including tax compliance and regulatory reporting are driven, in part or in whole, by the regulatory landscape and this connects commercially to our development of the new Northpoint Governance practice.
We continue to see long-term emerging risks come into greater focus, including transition risks associated with the world seeking to decarbonise. The war in Ukraine and conflict between Israel and Palestine continued in 2024 and despite new approaches in the early part of 2025 following the election of President Trump in the US, there remains significant uncertainty around the outcomes in these regions. As a Group, we are acutely aware of our responsibilities in relation to sanctions compliance and continue to enforce all such measures rigorously.
Further advances and increasing competition in artificial intelligence (AI) were seen in 2024, in particular generative AI and large language models. One of our significant technological advancements we've made in 2024 is the roll-out of ChatJTC, our own Gen AI tool, across our entire business.
As with almost every technological innovation, we see both opportunity and risk inherent in these inventions. Given that our services rely extensively on dealing with large amounts of data in a secure manner and where many of the outputs we produce to clients are in the form of 'words and numbers', we have embraced the opportunity to partner with our technology providers and examine use cases that are of benefit to the growth of the business, as well as those that present risks. This work has been supplemented with updates to system use policies and internal training and communications.
Our internal Sustainability Forum, created in 2022, worked to manage and deliver our sustainability roadmap across the Group. At Board level, the Governance and Risk Committee has responsibility for oversight of risk at a Group level, as well as providing guidance on our sustainability journey and the commercial opportunities the Group might capture through the provision of sustainability services to clients, more details can be found in the Committee's report starting on page 93. We were once again a Carbon Neutral+ organisation and made our second public submission to the Carbon Disclosure Project (CDP). We have enhanced our disclosures further this year, providing details of our Scope 3 emissions, with 2023 as our baseline year, and substantially expanding our disclosures under Task Force on Climate-related Financial Disclosures (TCFD).
Outlook
In 2024 we made a fast start to the Cosmos era, delivering strong net organic growth in-line with our upgraded guidance and securing six acquisitions at attractive multiples, including the Citi Trust business, which when completed, will make JTC the largest independent provider of private trust services in the US and will drive our revenue profile on a pro-forma basis such that the US market becomes the Group's largest region.
Despite ongoing macro uncertainty during the period, our ability to grow consistently is a fundamental feature of the business that has been refined over 37 years of continuous revenue and profit growth and we remain dedicated to the culture, approach and discipline that have enabled it. The ability to continually expand client relationships, as well as to win new clients in competitive markets, is testament to the quality of service that our people deliver and the way we add value through the development and introduction of relevant new services over time.
While we are committed to using the best technology tools available, it is our people that form and nurture relationships with our clients and it is our culture of Shared Ownership that binds our team together and gives us shared vision, purpose and belief in our ability to succeed. Our commitment to a meritocratic Shared Ownership culture remains unwavering and it was a major highlight of the year to see c. £50m of value awarded to our employee-owners in recognition of their achievements in delivering the Galaxy era plan between 2021 and 2023, doubling the size of the Group some two years earlier than first anticipated.
Our approach to inorganic growth is highly disciplined and always focuses on the opportunities that we believe will deliver the best long-term benefits for the Group. Despite a lacklustre market for M&A overall, we were still able to announce or complete six deals in the year across both Divisions at an average multiple of c. 6.5x EBITDA. The most notable of course is the acquisition of Citi Trust, which builds upon our leading position in the US market. The transaction remains subject to regulatory approval and we anticipate it closing mid-2025. While our focus in the near term will remain on the completion and subsequent integration of Citi Trust, we maintain a healthy pipeline of high quality opportunities in our chosen markets.
The balance and diversification that our two Divisions continue to provide to the Group was demonstrated in the period. The ICS Division faced market headwinds, but was still able to deliver impressive organic growth and was the beneficiary of four of the six acquisitions announced. The PCS Division continued its run of excellent results, with outstanding organic growth and record new business wins, cementing its position as one of, if not the, leading Trust company business in the world. The opportunities and market positioning delivered by the Citi Trust acquisition give an excellent outlook for continued strong performance.
Looking ahead, we carry energy and momentum from a successful first year of the Cosmos era as we work towards our goal of doubling the size of the Group for the third time in a decade and achieve £500m+ of revenue and £170m+ of underlying EBITDA before or by the end of 2027. We will continue to ensure that the JTC platform remains well invested at all times and that our talented global team are ready and equipped to grow with the business, maximise their individual potential and exceed the expectations of our clients. The Group will continue to innovate and shape the markets we serve in a way that supports long-term value creation for all stakeholders.
In concluding, I once again extend my thanks to every member of the growing and talented JTC team for their efforts in 2024.
Nigel Le Quesne
Chief Executive Officer
Chief Financial Officer's review
Continuing our revenue growth momentum into the Cosmos era
"Having raised our annual organic growth guidance to at least 10% for the Cosmos era, we are pleased to deliver 11.3% of organic growth at a consistent margin. Once again, this demonstrates our ability to invest and deliver on growth whilst maintaining our profitability."
Martin Fotheringham
Chief Financial Officer
Revenue
2024 revenue was £305.4m, an increase of £48.0m (+18.6%) from 2023. Constant currency revenue growth was marginally higher at 20.2%, reflecting some weakening of the US dollar throughout the year (2023: 28.7%).
Net organic growth was 11.3% (2023: 19.9%), delivering on Management's medium-term guidance range of 10% or higher. The rolling three-year average increased to 14.4% (2023: 13.8%), remaining consistent with the position mid-year and reflecting the sustained growth that the business has delivered over recent years.
Within organic growth, we have continued to see both strong volume and pricing growth. We were delighted to beat our upgraded net organic growth guidance target in 2024, noting that, as previously highlighted, volume growth in 2023 was exceptional thanks to the strong uptake of our newly launched Banking and Treasury services.
We achieved £24.0m of inorganic revenue growth in 2024 (2023: £17.9m). The full year impact of our M&A activity in the year will be felt in 2025 and 2026.
Our fifteen largest clients represent 8.9% (2023: 9.5%) of our annual revenue, reflecting continuing reduction in customer concentration and diversification of the business. The new business pipeline remains healthy, and after a record year of new business wins, now stands at £49.8m at the period end (31.12.2023: £54.9m).
Net organic growth was driven by gross new business revenues for 2024 of £38.7m (2023: £49.6m). Within growth, we saw client attrition of 4.7% (2023: 5.1%), with the three-year average falling to 5.4% (2023: 6.4%). Our decreasing attrition rates reflect the increasing longevity of our client relationships, positively impacted by high-quality acquisitions in recent years.
The retention of revenues increased to 98.4% (2023: 98.2%), with the rolling three-year average also improving to 98.3% (2023: 98.0%). The three-year average has remained within a range of 96.6% to 99.0% since our IPO.
Geographical growth is summarised below, the highlight being the 48.8% growth recorded in the US (2023: 70.5%), with the region now representing 32% of our reported revenues (2023: 25%). The US remains a key strategic region and has delivered the highest growth for five successive years.
| 2024 Revenue |
2023 Revenue |
£ +/- | % +/- | |
| UK & Channel Islands | £135.9m | £128.2m | +£7.7m | +6.0% |
| US | £96.5m | £64.8m | +£31.6m | +48.8% |
| Rest of Europe | £40.8m | £38.7m | +£2.1m | +5.5% |
| Rest of the World | £32.3m | £25.7m | +£6.5m | +25.5% |
| Total Revenue | £305.4m | £257.4m | +£48.0m | +18.6% |
Revenue growth, on a constant currency basis, is summarised as follows.
| 2023 Revenue | £254.1m |
| Lost - JTC decision | (£1.1m) |
| Lost - Moved service provider | (£2.7m) |
| Lost - Natural end/no longer required | (£7.6m) |
| Won - Net more from existing clients | £21.8m |
| Won - New clients | £16.9m |
| Won - Acquisitions* | £24.0m |
| 2024 Revenue | £305.4m |
* When JTC acquires a business, the acquired book of clients is defined as inorganic for the first two years of JTC ownership. Acquired clients contributed an additional £24.0m in 2024, which can be broken down as follows: SDTC £18.1m, FRTC £2.3m, Blackheath £0.3m, Hanway £0.8m, Buck £0.2m, and FFP £2.3m.
Underlying EBITDA and Margin Performance
Underlying EBITDA in 2024 was £101.7m, an increase of £15.8m (+18.4%) from 2023. This was a significant increase on the prior year, although it was lower than anticipated due to the weakening of the US dollar and a later than expected completion date for FFP.
Our underlying EBITDA margin remained consistent but reported a slight drop to 33.3% (2023: 33.4%). Achieving increased revenue growth requires significant up-front investment and this inherently slows down margin progression.
As a people-driven business, our human capital is vital to the continued longevity of our client relationships and the quality of our service. In 2024, our staff expenses (excluding the EIP share-based payment) were 53.1% of revenue (2023: 51.2%) and are indicative of our continued investment in the business.
To sustain growth and maintain our market position, while aiming for +10% organic growth across our Divisions, we will continue investing in the necessary infrastructure.
Institutional Client Services
Revenue increased by 10.8% when compared with 2023 (+19.5%).
Net organic growth, on a constant currency basis, was 9.9% (2023: 19.4%), with the main source of growth coming from the Caribbean and the US. The rolling three-year average now stands at a strong 14.7% (2023: 15.2%), well above our medium-term guidance range.
Our net organic growth was particularly pleasing in a period where the macroeconomic uncertainty resulted in tougher markets in the UK and Europe, with a slowdown in the new fund launches and overall activity levels, that was largely outside of our control.
Attrition for the Division fell to 4.5% (2023: 5.2%), of which 2.9% (2023: 3.5%) was for end-of-life losses. The rolling three-year average attrition now stands at 5.7% (2023: 7.1%). The continued improvement in attrition is still largely attributable to the SALI and RBC cees acquisitions and to the lengthening of structure lives as the adverse economic environment persisted.
Revenue growth, on a constant currency basis, is summarised below.
| 2023 Revenue | £161.3m |
| Lost - JTC decision | (£0.8m) |
| Lost - Moved service provider | (£1.8m) |
| Lost - Natural end/no longer required | (£4.6m) |
| Won - Net more from existing clients | £14.9m |
| Won - New clients | £8.3m |
| Won - Acquisitions* | £3.6m |
| 2024 Revenue | £180.9m |
* When JTC acquires a business, the acquired book of clients is defined as inorganic for the first two years of JTC ownership. Acquired clients contributed an additional £3.6m in 2024, which can be broken down as follows: Blackheath £0.3m, Hanway £0.8m, Buck £0.2m, and FFP £2.3m.
The Division's underlying EBITDA margin decreased from 31.6% in 2023 to 30.6% in 2024, driven by ongoing investments in people and infrastructure to capitalise on growth opportunities, increased regulatory obligations, and the delays in the launch of new funds.
We remain confident that continued investment in the Division will result in improved longer-term returns
Private Client Services
Revenue increased by 32.3% when compared with 2023 (+48.5%).
Net organic growth, on a constant currency basis, was 14.0% (2023: 20.9%), with particularly strong growth in the US and the Caribbean. The rolling three-year average now stands at 14.5% (2023: 12.2%).
Attrition for the Division increased slightly to 5.2% (2023: 5.0%), of which 3.7% (2023: 3.0%) was for end-of-life losses.
Revenue growth, on a constant currency basis, is summarised below.
| 2023 Revenue | £92.8m |
| Lost - JTC decision | (£0.3m) |
| Lost - Moved service provider | (£0.9m) |
| Lost - Natural end/no longer required | (£3.0m) |
| Won - Net more from existing clients | £6.9m |
| Won - New clients | £8.6m |
| Won - Acquisitions* | £20.4m |
| 2024 Revenue | £124.5m |
* When JTC acquires a business, the acquired book of clients is defined as inorganic for the first two years of JTC ownership. Acquired clients contributed an additional £20.4m in 2024, which can be broken down as follows: SDTC £18.1m, and FRTC £2.3m.
The Division's underlying EBITDA margin increased from 36.5% in 2023 to 37.3% in 2024, driven by the integration of recent acquisitions and an improved performance from Kensington.
The Division continues to perform very well and has consistently reported towards the top end of Management's medium-term guidance range.
(Loss)/Profit Before Tax
We have reported a loss before tax of £7.4m (2023: £24.3m profit). This loss was driven by a £36.4m expense for Employee Incentive Plan (EIP) share awards, these are non-cash awards and are settled out of shares held in the EBT and are treated as a non-underlying expense. We had higher than average acquisition and integration costs as a result of the M&A activity across the year.
The depreciation and amortisation charge increased to £30.1m from £25.1m in 2023. Of this £5.0m increase, £3.2m was as a result of intangible assets and £1.6m was as a result of increased depreciation charges on right-of-use assets.
Adjusting for non-underlying items, the underlying profit before tax increased by 17.1% to £47.4m (2023: £40.5m). The relative increase was slightly lower than the 18.4% growth reported in underlying EBITDA, and this was due to the increased interest expense on our borrowings that fund M&A activity, with our financing expenses increasing by 31.0% and impacted by additional debt drawdowns of £49.2m.
The interest rate applied to our loan facilities is determined using SONIA, plus a margin based on net leverage calculations. £180m of the drawn debt facilities are fixed under a two-year interest rate swap at c.4.3% (excluding bank margin), with the remaining facility (£94.1m) chargeable at the floating SONIA rate.
Non-Underlying Items
Due to the Employee Incentive Plan distributions, non-underlying items incurred in the period increased significantly and totalled a £54.8m debit (2023: £16.2m) and comprised the following:
| 2024 £m |
2023 £m |
|
| EBITDA | ||
| Acquisition and integration costs | 15.3 | 7.1 |
| Office start-ups | 0.6 | 0.6 |
| Employee Incentive Plan (EIP) | 36.4 | - |
| Other | 0.3 | 0.4 |
| Total non-underlying items within EBITDA | 52.6 | 8.1 |
| (Loss)/Profit Before Tax | ||
| Items impacting EBITDA | 52.6 | 8.1 |
| Loss/(gain) on revaluation of contingent consideration | 2.0 | (0.5) |
| (Gain) on bargain purchase | (0.7) | - |
| (Gain) on disposal of subsidiary | (0.1) | - |
| Foreign exchange losses | 1.0 | 8.5 |
| Total non-underlying items within Profit Before Tax | 54.8 | 16.2 |
Acquisition and integration costs of £15.3m were £8.2m higher than in 2023, reflecting the increased M&A activity and the increased costs in H2 2024 associated with the acquisitions of FFP, FRTC, Buck, and Citi.
Office start-up costs of £0.6m included costs related to establishing infrastructure to trade in Austria and Dubai, along with a new Netherlands entity. Our experience is that these require significant up-front investment in personnel in advance of trading and the generation of revenues.
On 25 July 2024, following the successful conclusion of the Galaxy era, the business granted 4.7m shares to our employees. Of these, 50% vested in July 2024 and were expensed in full, with the remaining shares due to vest in July 2025 and the expense accruing evenly over the period.
The £2.0m loss on revaluation of contingent consideration relates to the perfORM earn-out. The business had better than anticipated H2 2024 trading, leading to an increased valuation and expected payout.
The gain on bargain purchase of £0.7m relates to the acquisition of Buck. The gain is supported by the synergies that Management expect to realise and the acquired book being viewed as non-core by the sellers.
The foreign exchange loss of £1.0m relates to the revaluation of inter-company loans (2023: £8.5m). Management considers these losses as non-underlying since they are unrealisable movements from the elimination of inter-company loans upon consolidation and do not relate to the underlying trading activities of the Group.
Tax
The net tax credit in the year was £0.1m (2023: £2.5m charge). The current tax charge was £3.5m (2023: £4.1m), but this is reduced by deferred tax credits of £3.7m (2023: £1.6m), mainly as a result of movements in relation to the value of acquired intangible assets held on the balance sheet and temporary tax differences arising on acquired US entities, where an element of our purchase consideration is tax-amortisable.
Calculated against underlying profit before tax, our 2024 effective tax rate was 7.5% (2023: 10.1%).
The Group continues to regularly review its transfer pricing policy, is fully committed to responsible tax practices and compliance with OECD guidelines. Whilst we are not legally required to publish our tax strategy, we consider it best practice to demonstrate transparency on tax matters and our Board-approved strategy is available online.
Earnings Per Share
Basic EPS decreased significantly to -4.44p (2023: 14.20p). Taking into account non-underlying items our adjusted underlying EPS was 41.80p (2023: 37.3p), an increase of 12.1%.
Adjusted underlying basic EPS reflects the profit for the year, adjusted to remove the impact of non-underlying items, amortisation of acquired intangible assets, deferred tax, amortisation of loan arrangement fees, impairment of intangible customer relationships and the unwinding of net present value discounts in relation to contingent consideration.
Management reviewed and updated its definition of adjusted underlying EPS to exclude the impact of all deferred tax releases. 2024 includes a significant non-cash deferred tax credit that is not considered to be reflective of operational trading and this change ensures that the metric continues to report in line with those used more widely by external investors and analysts. Prior to this change, adjusted underlying EPS was 47.45p (2023: 37.23p).
Return On Invested Capital (ROIC)
ROIC for 2024 was 12.6%, reporting an increase on prior year (2023: 12.3%), with both periods significantly above our cost of capital. Improving returns is particularly pleasing during periods of heightened acquisition activity. In 2023, we completed our largest acquisition to date (SDTC), and in 2024, we completed a further five acquisitions.
We operate in an industry which is characterised by widespread Private Equity ownership and a significant level of past and continuing consolidation, often at premium valuations. Such outlays can result in the short-term dilution of returns. As I wrote in 2023, these investment decisions are critical, and when evaluating opportunities, we approach the question as shareholders ourselves, considering both the immediate return on capital and also the long-term potential and strategic fit.
We measure ROIC on a post-tax basis and more information on our approach can be found in the appendix to Chief Financial Officer's Review.
Intangible Assets
Our total assets at 31 December 2024 were £1.0bn (2023: £0.9bn). Much of this increase has been as a result of acquisitions, with goodwill continuing to represent 58% (2023: 58%) of our total assets and other intangible assets representing a further 17% (2023: 16%).
Goodwill is assessed for impairment on an annual basis and no impairments were recorded in 2024.
Customer relationships that form part of other intangible assets are subject to impairment assessments when impairment indicators are present. No customer relationship impairments were recorded in 2024.
Cash Flow and Debt
Underlying cash generated from operations was £99.3m (2023: £91.2m) and underlying cash conversion was 98%, which, although a drop from an exceptional 2023 (106%), was well above our medium-term guidance range.
Our strong performance was driven by our Treasury and Banking services and our growing US presence, both of which continued to shorten our working capital cycle with highly predictable and timely cash receipts. Our net investment days were stable in the period at 71 days (2023: 72 days).
Management maintains their medium-term cash conversion guidance range of 85% - 90%.
Reported net debt includes cash balances set aside for regulatory compliance purposes. Our increasing US presence has brought with it a greater regulatory capital obligation, and at the end of the period, we had £24.5m set aside for these purposes (2023: £11.8m). Underlying net debt excludes this and, at the period end, was £182.3m compared with £123.3m at 31 December 2023. This increase in underlying net debt at the year-end was expected, as the business part-funded the FRTC acquisition with a £13.5m drawdown in July 2024 and FFP with a $46.3m drawdown in October 2024.
We are pleased to report that our underlying net debt/underlying EBITDA leverage at the year end is comfortably within our guidance range (1.5x - 2.0x) at 1.79x (2023: 1.43x). When taking into account the full year impact of acquisitions completed in 2024, we remain towards the bottom end of our guidance range.
As of 31 December 2024, the Group had undrawn funds of £125.9m, which will allow us to finance our acquisition activity. Our existing facilities mature on 4 December 2026, with an option to extend to 30 June 2028.
Dividend Per Share
We are pleased to propose a final dividend of 8.24p, resulting in a 2024 dividend per share of 12.54p (2023: 11.17p), which was a 12.3% increase on the prior year. This remains consistent with our dividend policy to declare at 30% of adjusted underlying EPS.
Subject to shareholders' approval at the forthcoming AGM, the final dividend will be paid on 27 June 2025 to shareholders on the register of members as at the close of business on 31 May 2025.
Martin Fotheringham
Chief Financial Officer
Appendix: Reconciliation of reported results to alternative performance measures (APMs)
In order to assist the reader's understanding of the financial performance of the Group, APMs have been included to better reflect the underlying activities of the Group, excluding specific items as set out in note 9 to the financial statements. The Group appreciates that APMs are not considered to be a substitute for, or superior to, IFRS measures but believes that the selected use of these may provide stakeholders with additional information that will assist in understanding the business.
An explanation of our key APMs and links to the equivalent statutory measures have been detailed below.
| Alternative performance measure | Closest equivalent statutory measure | APM Definition / purpose and strategic link |
| Net organic revenue growth % | Revenue | Definition: Revenue growth from clients not acquired through business combinations and reported on a constant currency basis, where the prior year results are restated using the current year's consolidated income statement exchange rates. Acquired clients are defined as inorganic for the first two years of JTC ownership. Purpose and strategic link: Enables the business to monitor growth excluding acquisitions and the impact of external exchange rate factors. The current strategy is to double the size of the business by a mix of organic and acquisition growth, and the ability to monitor and set clear expectations on organic growth is vital to the successful execution of its business strategy. Management's medium-term guidance range is 10% or higher. |
| Underlying EBITDA % | Profit/(loss) | Definition: Earnings before interest, tax, depreciation, and amortisation, excluding non-underlying items (see note 9 of the financial statements). Purpose and strategic link: An industry-recognised alternative measure of performance that has been at the heart of the business since its incorporation and is therefore, fundamental to the performance management of all business units. The measure enables the business to measure the relative profitability of servicing clients. Management's medium-term guidance range is 33% - 38%. |
| Underlying cash conversion % | Net cash from operating activities | Definition: The conversion of underlying EBITDA into cash, excluding non-underlying items. Purpose and strategic link: Measures how effectively the business is managing its operating cash flows. It differs to net cash from operating profits as it excludes non-underlying items and tax, with the latter being excluded in order to better compare operating profitability to cash from operating activities. Management's medium-term guidance range is 85% - 90%. |
| Underlying leverage | Cash and cash equivalents | Definition: Leverage ratio showing the relative amount of third party debt (net of cash held in the business) that we have in comparison to underlying LTM EBITDA. Purpose and strategic link: Ensures that Management can measure and control exposure to reliance on third party debt in support of its inorganic growth. Management's medium-term guidance range is 1.5x - 2.0x. |
| Adjusted underlying basic EPS (p) | Basic Earnings Per Share | Definition: Reflects the profit after tax for the year, adjusted to remove the impact of non-underlying items. Additionally, a number of other non-cash items relating to the Group's acquisition activities, including amortisation of acquired intangible assets, deferred tax, amortisation of loan arrangement fees, impairment of intangible customer relationships and the unwinding of NPV discounts in relation to contingent consideration, are removed. Purpose and strategic link: Presents an adjusted underlying basic EPS, which is used more widely by external investors and analysts and is, in addition, the basis upon which the dividend is calculated. |
| Return On Invested Capital (ROIC) | Profit/(loss) | Definition: Reflects the net operating profit after tax, divided by the average invested capital. Purpose and strategic link: Measures our capital efficiency in generating profit against deployed capital. This is an industry-accepted APM and one that both external investors and analysts use in addition to statutory measures. |
A reconciliation of our APMs to their closest equivalent statutory measure has been provided below.
1. Organic Growth
| 2024 £m |
2023 £m |
|
| Reported prior year revenue | 257.4 | 200.0 |
| Impact of exchange rate restatement | (3.7) | - |
| Acquisition revenues | (12.4) | (1.0) |
| a. Prior year organic growth | 241.7 | 199.0 |
| Reported revenue | 305.4 | 257.4 |
| Less: acquisition revenues | (36.4) | (18.9) |
| b. Current year organic growth | 269.0 | 238.5 |
| Net organic growth % (b/a) -1 | 11.3% | 19.9% |
2. Underlying EBITDA
| 2024 £m |
2023 £m |
|
| Reported profit | (7.3) | 21.8 |
| Less: | ||
| Income tax | 0.1 | 2.7 |
| Finance cost | 25.4 | 19.2 |
| Finance income | (1.3) | (0.8) |
| Other losses/(gains) | 2.3 | 9.7 |
| Depreciation and amortisation | 30.1 | 25.1 |
| Non-underlying items within EBITDA* | 52.6 | 8.1 |
| Underlying EBITDA | 101.7 | 85.9 |
| Underlying EBITDA % | 33.3% | 33.4% |
* As set out in note 9 to the financial statements. A reconciliation of divisional EBTIDA can be found in note 4 of the financial statements.
3. Underlying Cash Conversion
| 2024 £m |
2023 £m |
|
| Net cash generated from operating activities | 78.7 | 81.3 |
| Less: | ||
| Non-underlying cash items* | 15.6 | 6.5 |
| Income taxes paid | 5.0 | 3.4 |
| a. Underlying cash generated from operations | 99.3 | 91.2 |
| b. Underlying EBITDA | 101.7 | 85.9 |
| Underlying cash conversion (a/b) | 98% | 106% |
* As set out in note 36.2 to the financial statements.
4. Underlying Leverage
| 2024 £m |
2023 £m |
|
| Cash and cash equivalents | 89.2 | 97.2 |
| Bank debt | (271.5) | (220.5) |
| a. Net debt - underlying | 182.3 | 123.3 |
| b. Underlying EBITDA | 101.7 | 85.9 |
| Leverage (a/b) | 1.79 | 1.43 |
5. Adjusted Underlying Basic EPS
| 2024 £m |
2023 £m |
|
| Profit for the year as per basic EPS | (7.3) | 21.8 |
| Less: | ||
| Non-underlying items* | 54.8 | 16.8 |
| Amortisation of customer relationships, acquired software and brands | 16.9 | 14.3 |
| Impairment of customer relationship intangible asset | - | 0.7 |
| Amortisation of loan arrangement fees | 1.4 | 0.8 |
| Unwinding of NPV discounts for contingent consideration | 6.2 | 5.1 |
| Temporary tax differences | (3.7) | (1.6) |
| a. Adjusted underlying profit for the year | 68.2 | 57.3 |
| b. Weighted average number of shares | 163.3 | 153.7 |
| Adjusted underlying basic EPS (a/b) | 41.80 | 37.30 |
* As set out in note 9 to the financial statements.
6. Return On Invested C--apital
| 2024 £m |
2023 £m |
|
| Profit for the period | (7.3) | 21.8 |
| Add back: | ||
| Non-underlying items* | 54.8 | 16.2 |
| Amortisation of customer relationships, acquired software and brands | 16.9 | 14.3 |
| Impairment of customer relationship intangible asset | - | 0.7 |
| Temporary tax differences arising on amortisation of customer relationships, acquired software and brands | (3.7) | (1.7) |
| Net finance costs | 24.0 | 18.4 |
| Tax estimate on financing costs | (0.3) | (0.3) |
| a. Net operating profit after tax | 84.4 | 69.5 |
| + Closing equity | 533.9 | 503.9 |
| + Closing debt | 271.6 | 220.5 |
| - Closing cash | (89.2) | (97.2) |
| Invested capital | 716.3 | 627.2 |
| b. Average invested capital (opening + closing/2) | 671.7 | 566.1 |
| c. ROIC (a/b) | 12.6% | 12.3% |
* As set out in note 9 to the financial statements.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
| Note | 2024 £'000 |
2023 £'000 |
|
| Revenue | 4 | 305,383 | 257,440 |
| Staff expenses | 5 | (196,619) | (131,921) |
| Other operating expenses | 8 | (57,548) | (44,855) |
| Credit impairment losses | 18 | (2,659) | (2,934) |
| Other operating income | 73 | 75 | |
| Share of profit/(loss) of equity-accounted investee | 24 | 430 | (15) |
| Earnings before interest, taxes, depreciation and amortisation ("EBITDA") | 49,060 | 77,790 | |
| Comprising: | |||
| Underlying EBITDA | 101,683 | 85,909 | |
| Non-underlying items | 9 | (52,623) | (8,119) |
| 49,060 | 77,790 | ||
| Depreciation and amortisation | 10 | (30,119) | (25,140) |
| Profit from operating activities | 18,941 | 52,650 | |
| Other losses | 11 | (2,328) | (9,912) |
| Finance income | 12 | 1,355 | 794 |
| Finance cost | 12 | (25,370) | (19,222) |
| (Loss)/profit before tax | (7,402) | 24,310 | |
| Comprising: | |||
| Underlying profit before tax | 47,426 | 40,498 | |
| Non-underlying items | 9 | (54,828) | (16,188) |
| (7,402) | 24,310 | ||
| Income tax | 13 | 146 | (2,489) |
| (Loss)/profit for the year | (7,256) | 21,821 | |
| Earnings Per Share ("EPS") | Pence | Pence | |
| Basic EPS | 14.1 | (4.44) | 14.20 |
| Diluted EPS | 14.2 | (4.38) | 14.07 |
| Adjusted underlying basic EPS | 14.3 | 41.80 | 37.30 |
The notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
| Note | 2024 £'000 |
2023 £'000 |
|
| (Loss)/profit for the year | (7,256) | 21,821 | |
| Other comprehensive income/(loss) | |||
| Items that may be reclassified to profit or loss: | |||
| Exchange difference on translation of foreign operations (net of tax) | 34.1 | 6,198 | (7,038) |
| Gain/(loss) recognised on revaluation of cash flow hedges | 33 | 2,800 | (615) |
| Hedging gains reclassified to profit or loss | 12 | (1,710) | (134) |
| Items that will not be reclassified to profit or loss: | |||
| Remeasurements of post-employment benefit obligations | 7 | (82) | (300) |
| Total other comprehensive income/(loss) | 7,206 | (8,087) | |
| Total comprehensive (loss)/income for the year | (50) | 13,734 |
The notes are an integral part of these consolidated financial statements.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
| Note | 2024 £'000 |
2023 £'000 |
|
|---|---|---|---|
| Assets | |||
| Goodwill | 16 | 592,187 | 522,964 |
| Other intangible assets | 17 | 170,821 | 147,302 |
| Property, plant and equipment | 22 | 12,335 | 9,874 |
| Right-of-use assets | 22 | 45,347 | 39,785 |
| Investments | 24 | 3,788 | 3,365 |
| Derivative financial instruments | 33 | 341 | - |
| Deferred tax assets | 29 | 1,012 | 266 |
| Other non-current assets | 23 | 2,860 | 2,981 |
| Total non-current assets | 828,691 | 726,537 | |
| Trade receivables | 18 | 45,091 | 32,071 |
| Work in progress | 19 | 15,379 | 11,615 |
| Accrued income | 20 | 28,204 | 26,574 |
| Cash and cash equivalents | 21 | 89,232 | 97,222 |
| Other current assets | 23 | 12,987 | 11,080 |
| Total current assets | 190,893 | 178,562 | |
| Total assets | 1,019,584 | 905,099 | |
| Equity | |||
| Share capital | 31.1 | 1,688 | 1,655 |
| Share premium | 31.1 | 406,648 | 392,213 |
| Own shares | 31.2 | (5,760) | (3,912) |
| Capital reserve | 31.3 | 65,570 | 28,584 |
| Translation reserve | 31.3 | 15,139 | 8,941 |
| Other reserve | 31.3 | 341 | (749) |
| Retained earnings | 31.3 | 50,310 | 77,144 |
| Total equity | 533,936 | 503,876 | |
| Liabilities | |||
| Loans and borrowings | 25 | 271,552 | 220,531 |
| Contingent consideration | 26 | 25,158 | 49,794 |
| Lease liabilities | 28 | 44,647 | 37,924 |
| Deferred tax liabilities | 29 | 6,510 | 9,474 |
| Derivative financial instruments | 33 | - | 749 |
| Other non-current liabilities | 30 | 3,949 | 3,507 |
| Total non-current liabilities | 351,816 | 321,979 | |
| Trade and other payables | 27 | 28,096 | 19,991 |
| Contingent consideration | 26 | 65,357 | 26,906 |
| Deferred income | 29,296 | 19,639 | |
| Lease liabilities | 28 | 6,682 | 6,117 |
| Other current liabilities | 30 | 4,401 | 6,591 |
| Total current liabilities | 133,832 | 79,245 | |
| Total equity and liabilities | 1,019,584 | 905,099 |
The consolidated financial statements were approved by the Board of Directors on 7 April 2025 and signed on its behalf by:
Nigel Le Quesne
Chief Executive Officer
Martin Fotheringham
Chief Financial Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
| Note | Share capital £'000 |
Share premium £'000 |
Own shares £'000 |
Capital reserve £'000 |
Translation reserve £'000 |
Other reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
| Balance at 1 January 2024 | 1,655 | 392,213 | (3,912) | 28,584 | 8,941 | (749) | 77,144 | 503,876 | |
| Loss for the year | - | - | - | - | - | - | (7,256) | (7,256) | |
| Other comprehensive income | - | - | - | - | 6,198 | 1,090 | (82) | 7,206 | |
| Total comprehensive loss for the year | - | - | - | - | 6,198 | 1,090 | (7,338) | (50) | |
| Issue of share capital | 31.1 | 33 | 14,529 | - | - | - | - | - | 14,562 |
| Cost of share issuance | 31.1 | - | (94) | - | - | - | - | - | (94) |
| Share-based payments | 6.5 | - | - | - | 2,480 | - | - | - | 2,480 |
| EIP share-based payments | 6.5 | - | - | - | 34,506 | - | - | - | 34,506 |
| Movement of own shares | 31.2 | - | - | (1,848) | - | - | - | - | (1,848) |
| Dividends paid | 32 | - | - | - | - | - | - | (19,496) | (19,496) |
| Total transactions with owners | 33 | 14,435 | (1,848) | 36,986 | - | - | (19,496) | 30,110 | |
| Balance at 31 December 2024 | 1,688 | 406,648 | (5,760) | 65,570 | 15,139 | 341 | 50,310 | 533,936 | |
| Balance at 1 January 2023 | 1,491 | 290,435 | (3,697) | 24,361 | 15,979 | - | 71,648 | 400,217 | |
| Profit for the year | - | - | - | - | - | - | 21,821 | 21,821 | |
| Other comprehensive loss | - | - | - | - | (7,038) | (749) | (300) | (8,087) | |
| Total comprehensive income for the year | - | - | - | - | (7,038) | (749) | 21,521 | 13,734 | |
| Issue of share capital | 31.1 | 164 | 103,631 | - | - | - | - | - | 103,795 |
| Cost of share issuance | 31.1 | - | (1,853) | - | - | - | - | - | (1,853) |
| Share-based payments | 6.5 | - | - | - | 4,223 | - | - | - | 4,223 |
| Movement of own shares | 31.2 | - | - | (215) | - | - | - | - | (215) |
| Dividends paid | 32 | - | - | - | - | - | - | (16,025) | (16,025) |
| Total transactions with owners | 164 | 101,778 | (215) | 4,223 | - | - | (16,025) | 89,925 | |
| Balance at 31 December 2023 | 1,655 | 392,213 | (3,912) | 28,584 | 8,941 | (749) | 77,144 | 503,876 |
The notes are an integral part of these consolidated financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
| Note | 2024 £'000 |
2023 £'000 |
|
| Cash generated from operations | 36.1 | 83,710 | 84,725 |
| Income taxes paid | (5,020) | (3,432) | |
| Net movement in cash generated from operations | 78,690 | 81,293 | |
| Comprising: | |||
| Underlying cash generated from operations | 99,282 | 91,180 | |
| Non-underlying cash items | 36.2 | (15,572) | (6,455) |
| 83,710 | 84,725 | ||
| Investing activities | |||
| Interest received | 1,299 | 744 | |
| Payments for property, plant and equipment | (3,691) | (2,346) | |
| Payments for intangible assets | (5,881) | (3,811) | |
| Payments for business combinations (net of cash acquired) | 15.6 | (80,114) | (114,719) |
| Payments to obtain or fulfil a contract | (813) | (693) | |
| Proceeds from sale of subsidiary | 92 | - | |
| Payment for investment | - | (250) | |
| Loan to third party | - | (160) | |
| Net cash used in investing activities | (89,108) | (121,235) | |
| Financing activities | |||
| Proceeds from issue of shares | - | 62,000 | |
| Share issuance costs | 31.1 | (94) | (1,853) |
| Purchase of own shares | (1,831) | (200) | |
| Dividends paid | 32 | (19,496) | (16,025) |
| Repayment of loans and borrowings | - | (50,000) | |
| Proceeds from loans and borrowings | 25 | 49,187 | 118,000 |
| Loan arrangement fees | 25 | (720) | (1,896) |
| Interest paid on loans and borrowings | (14,888) | (11,348) | |
| Principal paid on lease liabilities | (6,754) | (6,074) | |
| Interest paid on lease liabilities | (1,795) | (1,439) | |
| Net cash generated from financing activities | 3,609 | 91,165 | |
| Net (decrease)/increase in cash and cash equivalents | (6,809) | 51,223 | |
| Cash and cash equivalents at the beginning of the year | 97,222 | 48,861 | |
| Effect of foreign exchange rate changes | (1,181) | (2,862) | |
| Cash and cash equivalents at the end of the year | 21 | 89,232 | 97,222 |
The notes are an integral part of these consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1. General information
2. Accounting policies
3. Critical accounting estimates and judgements
4. Operating segments
5. Staff expenses
6. Share-based payments
7. Defined benefit pension plans
8. Other operating expenses
9. Non-underlying items
10. Depreciation and amortisation
11. Other losses
12. Finance income and finance cost
13. Income tax
14. Earnings Per Share
15. Business combinations
16. Goodwill
17. Other intangible assets
18. Trade receivables
19. Work in progress
20. Accrued income
21. Cash and cash equivalents
22. Tangible assets
23. Other assets
24. Investments
25. Loans and borrowings
26. Contingent consideration
27. Trade and other payables
28. Lease liabilities
29. Deferred tax
30. Other liabilities
31. Share capital and reserves
32. Dividends
33. Derivative financial instruments
34. Financial risk management
35. Capital management
36. Cash flow information
37. Subsidiaries
38. Contingencies
39. Related party transactions
40. Consideration of climate change
41. Events occurring after the reporting period
1. General information
JTC PLC (the "Company") was incorporated on 12 January 2018 and is domiciled in Jersey, Channel Islands. The Company was admitted to the London Stock Exchange on 14 March 2018. The address of the Company's registered office is 28 Esplanade, St Helier, Jersey.
The consolidated financial statements of the Company for the year ended 31 December 2024 comprise the Company and its subsidiaries (together, the "Group" or "JTC") and the Group's interest in an associate and investments.
The Group provides fund, corporate and private wealth services to institutional and private clients.
2. Accounting policies
2.1. Basis of preparation
The consolidated financial statements for the year ended 31 December 2024 have been approved by the Board of Directors of JTC PLC. They are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, the interpretations of the IFRS Interpretations Committee ("IFRS IC") and the Companies (Jersey) Law 1991.
They are prepared on a going concern basis and under the historical cost convention, except for the following:
· Defined benefit liabilities recognised at the fair value of plan assets less the present value of defined benefit obligations (see note 7)
· Certain contingent consideration measured at fair value (see note 26)
· Derivative financial instruments (see note 33)
In assessing the going concern assumption, the Directors considered the principal risks and uncertainties that could be impacted by wider macroeconomic uncertainty. Despite this backdrop, they noted that the Group continued to experience revenue growth, generate positive cash flows from its operating activities, and has funding available from its bank loan facilities. Taking these factors into account during the review of the Group's financial performance and position, forecasts and expected liquidity, the Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future, defined as being at least 12 months from the date of approval of the consolidated financial statements. While the Directors acknowledge that the Group made a loss for the financial year, this was due to the EIP share awards (see note 6.1), which has no impact on the Group's cash flows. Given the above, they have concluded that it is appropriate to adopt the going concern basis of accounting when preparing the consolidated financial statements.
The consolidated financial statements are presented in pounds sterling, which is the functional and reporting currency of the Company and the presentation currency of the consolidated financial statements. All amounts disclosed in the consolidated financial statements and notes have been rounded to the nearest thousand (£'000) unless otherwise stated.
2.2. Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its "subsidiaries"). The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
De-facto control exists where the Company has the practical ability to direct the relevant activities of the entity without holding the majority of the voting rights. In determining whether de-facto control exists, the Company considers the size of the Company's voting rights relative to other parties, substantive potential voting rights held by the Company and by other parties, other contractual arrangements and historical patterns in voting attendance.
Subsidiaries (see note 37) are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in the consolidated income statement.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group. All inter-company transactions and balances arising from transactions between Group companies are eliminated on consolidation.
The acquisition method of accounting is used to account for business combinations by the Group (see note 15). Investments in associates are accounted for using the equity method of accounting (see note 24).
2.3. Summary of material accounting policies
The accounting policies set out in these consolidated financial statements have been consistently applied by all Group entities for the years presented. There have been no significant changes compared to the prior year consolidated financial statements as at and for the year ended 31 December 2024.
(A) Revenue recognition
Revenue is measured as the fair value of the consideration received or receivable for satisfying those performance obligations contained in contracts with customers excluding discounts and sales-related taxes.
To recognise revenue in accordance with IFRS 15 "Revenue from Contracts with Customers", the Group applies a five-step approach: identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations and recognise revenue when, or as, performance obligations are satisfied by the Group.
The Group enters into contractual agreements with institutional and private clients for the provision of fund, corporate and private client services. The agreements set out the services to be provided and each component is distinct and can be performed and delivered separately. For each of these performance obligations, the transaction price can be either a pre-set (fixed) fee, based on the expected amount of work to be performed, or a variable time spent fee for the actual amount of work performed. For some clients, the fee for agreed services is set at a percentage of the net asset value ("NAV") of funds being administered or deposits held. Where contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on its stand-alone selling price.
Revenue is recognised in the consolidated income statement when, or as, the Group satisfies performance obligations by transferring control of services to clients. This occurs as follows, depending upon the nature of the contract for services:
· Variable fees are recognised over time as services are provided at the agreed charge out rates in force at the work date, where there is an enforceable right to payment for performance completed to date. Time recorded but not invoiced is shown in the consolidated balance sheet as work in progress (see note 19). To determine the transaction price, an assessment of the variable consideration for services rendered is performed by estimating the expected value, including any price concessions, of the unbilled amount due from clients for the work performed to date (see note 3.2).
· Pre-set (fixed), cash management and NAV-based fees are recognised over time; this is based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided where there is an enforceable right to payment for performance completed to date. This is determined based on the actual inputs of time and expenses relative to the total expected inputs. Where services have been rendered and performance obligations have been met but clients have not been invoiced at the reporting date, accrued income is recognised; this is recorded based on agreed fees to be billed in arrears (see note 20).
· Where fees are billed in advance in respect of services under contract and give rise to a trade receivable when recognised, deferred income is recognised as a liability and released to revenue on a time-apportioned basis in the appropriate reporting period.
The Group does not adjust transaction prices for the time value of money as it does not have any contracts where it expects the period between the transfer of the promised services to the client and the payment by the client to exceed one year.
(B) Employee benefits
(i) Short-term benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
(ii) Defined contribution pension plans
Under defined contribution pension plans, the Group pays contributions to publicly or privately administered pension insurance plans. The Group has no further payment obligation once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due.
(iii) Defined benefit pension plans
The liability or asset recognised in the consolidated balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The calculation of defined benefit obligations is performed annually by independent, qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. In countries where there is no established market in such bonds, the market rates on local government bonds are used.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included as an employee benefit expense in the consolidated income statement.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the consolidated statement of changes in equity and the consolidated balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the consolidated income statement as past service costs.
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. If benefits are not expected to be settled wholly within one year of the end of the reporting period, then they are discounted to their present value using an appropriate discount rate.
(C) Share-based payments
The Group operates equity-settled share-based payment arrangements under which services are received from eligible employees as consideration for equity instruments. The total amount to be expensed for services received is determined by reference to the fair value at grant date of the share-based payment awards made, including the impact of any non-vesting and market conditions.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on Management's estimate of equity instruments that will eventually vest. At each balance sheet date, Management revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the consolidated income statement, such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
(D) Non-underlying items
Non-underlying items represent specific items of income or expenditure that are not of a continuing operational nature or do not represent the underlying operating results, and, based on their significance in size or nature, are presented separately to provide further understanding about the financial performance of the Group.
(E) Finance income
Finance income includes interest income from loan receivables and bank deposits and is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.
(F) Finance costs
Finance costs include interest expenses on loans and borrowings, gains on cash flow hedges reclassified from other comprehensive income (see note 2.3(S)), the unwinding of the discount on provisions, contingent consideration and lease liabilities and the amortisation of directly attributable transaction costs that have been capitalised upon issuance of the financial instrument and released to the consolidated income statement on a straight-line basis over the contractual term.
(G) Income tax
Income tax includes current and deferred taxes. Current and deferred taxes are recognised in the consolidated income statement, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred taxes are recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
(i) Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax laws enacted or substantively enacted at the consolidated balance sheet date and any adjustment to tax payable or receivable in respect of previous years.
(ii) Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or losses.
Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated using tax rates that have been enacted or substantively enacted at the consolidated balance sheet date for the periods when the asset is expected to be realised or the liability is expected to be settled.
Deferred tax assets are offset with deferred tax liabilities when there is a legally enforceable right to set off tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority, and the Group intends to settle its current tax assets and liabilities on a net basis.
(H) Foreign currency
The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in pounds sterling, which is the functional currency of the Company and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on that date. Exchange differences are recognised in the consolidated income statement in the year in which they arise.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's operations with a functional currency other than pounds sterling are translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during that year, in which case the exchange rates at the date of transactions are used. Goodwill and other intangible assets arising on the acquisition of a foreign operation are treated as assets of the foreign operation and are translated at the closing rate. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity in the translation reserve.
(I) Business combinations
A business combination is defined as a transaction or other event in which an acquirer obtains control of one or more businesses. Where the business combination does not include the purchase of a legal entity but the transaction includes acquired inputs and the processes applied to those inputs in order to generate outputs, the transaction is also considered a business combination.
The Group applies the acquisition method to account for business combinations. The consideration transferred in an acquisition comprises the fair value of assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. The identifiable assets acquired and liabilities assumed in a business combination are measured at their fair values at the acquisition date. Acquisition-related costs are recognised in the consolidated income statement as non-underlying items within operating expenses.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in the consolidated income statement as a gain on bargain purchase.
When the consideration transferred includes an asset or liability resulting from a contingent consideration arrangement, this is measured at its acquisition-date fair value. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments is dependent upon how the contingent consideration is classified, see note 2.3(O(i)).
(J) Goodwill and other intangible assets
(i) Goodwill
Goodwill that arises on the acquisition of subsidiaries is considered an intangible asset. See note 2.3(I) for the measurement of goodwill at initial recognition; subsequent to this, measurement is at cost less accumulated impairment losses.
(ii) Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). The initial valuation work is performed with support from external valuation specialists. Subsequent to initial recognition, these are measured at cost, less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised in the consolidated income statement on a straight-line basis over the estimated useful life of the asset from the date of acquisition.
The estimated useful lives are as follows:
· Customer relationships - 8 to 25 years
· Software - 5 to 10 years
· Brand - 5 to 10 years
The estimated useful lives and residual value are reviewed at each reporting date and adjusted if appropriate, with the effect of any change in estimate being accounted for on a prospective basis.
(iii) Intangible assets acquired separately
Intangible assets that are acquired separately by the Group and have finite useful lives are measured at cost, less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised in the consolidated income statement on a straight-line basis over the estimated useful life of the asset from the date that they are available for use. The estimated useful lives are as follows:
· Customer relationships - 10 years
· Regulatory licence - 12 years
· Software - 4 years
The estimated useful lives and residual value are reviewed at each reporting date and adjusted if appropriate, with the effect of any change in estimate being accounted for on a prospective basis.
(iv) Internally generated software intangible assets
Development costs that are directly attributable to the design and testing of identifiable software products controlled by the Group are recognised as intangible assets when the criteria under IAS 38 are met.
Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate portion of relevant overheads. Capitalised development costs are recorded as intangible assets and amortisation is recognised in the consolidated income statement on a straight-line basis over the estimated useful life of the asset from the date at which the asset is ready to use. The estimated useful life for internally generated software intangible assets is between four and seven years.
The estimated useful lives and residual value are reviewed at each reporting date and adjusted if appropriate, with the effect of any change in estimate being accounted for on a prospective basis.
(v) Impairment of intangible assets
Goodwill that arises on the acquisition of business combinations and intangible assets that have an indefinite useful life is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired.
Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount might not be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal ("FVLCD") and value in use ("VIU"). For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units or CGUs).
Intangible assets other than goodwill that have previously been impaired are reviewed for possible reversal of the impairment at the end of each reporting period.
(K) Financial assets
Financial assets comprise trade receivables, work in progress, accrued income, other receivables and cash and cash equivalents. The accounting policy for derivative financial instruments is disclosed separately.
Financial assets are measured at either amortised cost, fair value through profit or loss ("FVTPL") or fair value through other comprehensive income ("FVOCI") depending on the business model objective for managing financial assets and their contractual cash flow characteristics.
All financial assets held by the Group (except for derivative financial instruments) are measured at amortised cost as they arise from the provision of services to clients (e.g. trade receivables) or when the objective is to hold the asset to collect contractual cash flows (where the contractual cash flows are solely payments of principal and interest).
Financial assets measured at amortised cost are recognised on the trade date, this being the date that the Group became party to the contractual provisions of the instrument. They are initially recognised at fair value less transaction costs and then are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, or the rights to receive the contractual cash flows from the transaction in which substantially all of the risks and rewards of ownership of the financial asset have been transferred. The Group assesses, on a forward-looking basis, the expected credit losses ("ECL") associated with its financial assets carried at amortised cost. The impairment methodology applied takes into consideration whether there has been a significant increase in credit risk.
(L) Property, plant and equipment
Items of property, plant and equipment are initially recorded at cost and are stated at historical cost, less depreciation and impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method, on the following bases:
· Computer equipment - 4 years
· Office furniture and equipment - 4 years
· Leasehold improvements - over the period of the lease
The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is less than its estimated recoverable amount.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognised.
For right-of-use assets, upon inception of a contract, the Group assesses whether a contract conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are measured at cost and comprise of the following: the amount of the initial measurement of lease liability; any lease payments made at or before the commencement date less any lease incentives received; any initial direct costs; and estimated restoration costs.
(M) Other non-financial assets
Incremental costs to obtain or fulfil a contract (i.e. costs that would not have been incurred if the contract had not been obtained) and the costs incurred to fulfil a contract are recognised within non-financial assets if the costs are expected to be recovered. The capitalised costs are amortised on a straight-line basis over the estimated useful economic life of the contract. The carrying amount of the asset is tested for impairment on an annual basis.
(N) Investments
(i) Investments in associate
An associate is an entity in which the Group has significant influence, but not control or joint control, over the financial and operating policies. The Group's interest in an equity-accounted investee solely comprises an interest in an associate.
Investments in associates are accounted for using the equity method. Under the equity method, the investment in an associate is initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the carrying amount of the investment is adjusted to recognise the Group's share of post-acquisition profits or losses in the consolidated income statement within EBITDA, and the Group's share of movements in other comprehensive income of the investee in other comprehensive income.
Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.
At each reporting date, the carrying value of the investment in associate is assessed for impairment by comparing it to the recoverable amount, this being the higher of the asset's FVLCD and VIU.
(ii) Other investments
Other investments are held at cost and assessed for impairment at the end of each reporting date.
(O) Financial liabilities
The Group classifies its financial liabilities as either amortised cost or FVTPL, depending on the purpose for which the liability was acquired.
All financial liabilities are measured at amortised cost, with the exception of liability-classified contingent consideration, which is measured at FVTPL. The accounting policy for derivative financial instruments is disclosed separately.
(i) Contingent consideration
Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates at fair value, with the corresponding gain or loss being recognised in the consolidated income statement. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity.
(ii) Loans and borrowings
Loans and borrowings are initially recognised at fair value, net of transaction costs incurred, and subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the consolidated income statement over the period of the borrowings, using the effective interest rate method.
Loans and borrowings are removed from the consolidated balance sheet when the obligation specified in the contract is discharged, cancelled or has expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the consolidated income statement as net finance charge.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
(iii) Trade and other payables
Trade and other payables represent liabilities incurred for goods and services provided to the Group prior to the end of the financial year that are unpaid. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method and are presented as current liabilities unless payment is not due within 12 months after the reporting period. The Group derecognises a financial liability when its contractual obligations have been discharged, cancelled or expired.
(iv) Leases
Lease liabilities are financial liabilities measured at amortised cost. They are initially measured at the net present value ("NPV") of the following lease payments:
· fixed payments, less any lease incentives receivable;
· variable lease payments that are based on an index or a rate;
· amounts expected to be payable by the lessee under residual value guarantees;
· the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
· payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, this being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The incremental borrowing rate applied to each lease was determined considering the Group's borrowing rate and the risk-free interest rate, adjusted for factors specific to the country, currency and term of the lease.
The Group can be exposed to potential future increases in variable lease payments, based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the consolidated income statement over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
(P) Non-financial liabilities
(i) Deferred income
Fixed fees received in advance across all the service lines and up-front fees in respect of services due under contract are time-apportioned to respective accounting periods, and those billed but not yet earned are included in deferred income in the consolidated balance sheet. As such liabilities are associated with future services, they do not give rise to a contractual obligation to pay cash or another financial asset.
(ii) Contract liabilities
Commissions expected to be paid over the term of a customer contract are discounted and recognised at the NPV. The finance cost is charged to the consolidated income statement over the contract life to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
(Q) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties surrounding the obligation. If the impact of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost in the consolidated income statement.
(i) Dilapidations
The estimated cost of the dilapidations payable at the end of each tenancy, unless specified, is generally estimated by reference to the square footage of the building and in consultation with local property agents, landlords and prior experience. Having estimated the likely amount due, a country-specific discount rate is applied to calculate the present value of the expected outflow. The provisions are expected to be utilised when the leases expire or upon exit. The discounted dilapidation cost has been capitalised against the leasehold improvement asset in accordance with IFRS 16.
(R) Dividends
Provision is made for the amount of any dividend declared, this being appropriately authorised and no longer at the discretion of the Board, on or before the end of the reporting period but not distributed at the end of the reporting period. Interim dividends are recognised when paid.
(S) Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to interest rate risks. All derivative financial instruments are initially measured at fair value on the contract date and are subsequently remeasured at fair value at each reporting date. Derivatives are only used for economic hedging purposes and not as speculative investments. Hedge accounting is applied only where all of the following conditions are met:
· formal documentation exists of the relationship between the hedging instrument and hedged item at inception;
· the hedged cash flows must be highly probable and must present an exposure to variations in cash flows that could affect comprehensive income;
· the effectiveness of the hedge can be reliably measured; and
· an economic relationship exists, with the relationship being assessed on an ongoing basis.
For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognised initially in other comprehensive income and is released to the consolidated income statement in the same period during which the hedged item will affect the Group's results. Any ineffective portion of the gain or loss on the hedging instrument is recognised in the consolidated income statement immediately.
2.4. Change to accounting policies
For the year ended 31 December 2024, the Group did not adopt any new standards or amendments issued by the International Accounting Standards Board ("IASB") or interpretations by the International Financial Reporting Standards Interpretations Committee ("IFRS IC") that have had a material impact on the consolidated financial statements. Standards, amendments and interpretations effective from 1 January 2024 were as follows:
· 'Presentation of Financial Statements' - Amendments to IAS 1
· 'Leases' - Amendments to IFRS 16
· 'Supplier Finance' - Amendments to IAS 7 and IFRS 7
Certain new accounting standards, amendments and interpretations have been published that are not mandatory for the 31 December 2024 reporting period and have not been early adopted by the Group. These are not expected to have a material impact on the Group in the current or future reporting periods or on foreseeable future transactions, with the exception of IFRS 18 'Presentation and Disclosure in Financial Statements', which will change how certain aspects of the consolidated financial statements are presented. This new accounting standard becomes effective for annual reporting periods beginning on or after 1 January 2027 and will be adopted by the Group.
3. Critical accounting estimates and judgements
In the application of the Group's accounting policies, Management are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are regularly evaluated, based on historical experience, current circumstances, expectation of future events and other factors that are considered to be relevant. Actual results may differ from these estimates. In preparing the consolidated financial statements, Management have ensured that they have assessed the macro-economic environment and global landscape when applying IFRS.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items that are more likely to be materially adjusted due to incorrect estimates and assumptions.
The following are the critical judgements and estimates that Management have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.
3.1. Critical judgements in applying the group's accounting policies
Recognition of separately identifiable intangible assets
During the year, the Group acquired Blackheath Capital Management LLP, Hanway Advisory Limited, First Republic Trust Company of Delaware, The Buck UK and European Share Plan Administration and Trustee Businesses and FFP (Holdings) Limited and it's subsidiaries. IFRS 3 'Business Combinations' requires Management to identify assets and liabilities purchased, including intangible assets. Following their assessment, Management concluded that customer relationships and brands meet the recognition criteria. The fair values at acquisition date have been disclosed within note 15.
Recognition of Employee Incentive Plan ("EIP") Awards
On 25 July 2024, 4,707,098 share awards were granted to employees following the conclusion of the Galaxy business plan, which ran from 1 January 2021 to 31 December 2023. The vesting, and issue of share awards upon vesting, is made at the discretion of the Remuneration Committee (consisting solely of the independent non-executive directors) and the Trustees of the EBT. Following their assessment, Management have concluded that employees have no reasonable expectation of a future award as they have no right to participate in the EIP nor be granted an award on a particular basis or at all, and the receipt of an award in one year is no indication of subsequent awards on any basis, in subsequent years.
IFRS 2 requires an expense to be recognised when employees have reason to believe that they are working towards an award and while some employees may have unilaterally developed an expectation of a future award as a result of past awards received, it is not possible to reliably estimate the level of any future expense that might be recognised as a result of any expectation and therefore an expense can only be recognised upon grant.
As the EIP was granted on 25 July 2024, and vests in two tranches (50% as an upfront award that vests immediately and 50% as a deferred award), 50% was recognised upon grant (being the date the award was communicated to employees and an expectation created) and the remaining 50% over the one year vesting period to 25 July 2025 (see note 6.1).
The cost of EIP awards is reflected in the Group's consolidated income statement within staff costs and is treated
as non-underlying.
3.2. Critical accounting estimates and assumptions
Recoverability of work in progress ("WIP")
To assess the fair value of consideration received for services rendered, Management are required to make an assessment of the net unbilled amount expected to be collected from clients for work performed to date. To make this assessment, WIP balances are reviewed regularly on a by-client basis and the following factors are taken into account: the ageing profile of the WIP, the agreed billing arrangements, value added and status of the client relationship. The recoverability of the WIP is considered a significant assumption, see note 19.
Goodwill impairment
Goodwill is tested annually for impairment and the recoverable amount of CGUs is determined based on the higher of value in use and fair value less cost of disposal calculations that use cash flow projections containing significant assumptions. See note 16.1 for further information, including a sensitivity analysis on significant assumptions.
Fair value of customer relationship intangibles
The customer relationship intangible assets are valued using the multi-period excess earnings method financial valuation model. Cash flow forecasts and projections are produced by Management and form the basis of the valuation analysis. Other significant estimates and assumptions used in the modelling to derive the fair values include: the discount rate applied to free cash flow and annual client attrition rates. See note 17.1 for the sensitivity analysis on significant assumptions.
4. Operating segments
4.1. Basis of segmentation
The Group has a multi-jurisdictional footprint and the core focus of operations is on providing services to its institutional and private client base, with revenues from alternative asset managers, financial institutions, corporates, HNW and UHNW individuals and family office clients.
The Chief Executive Officer and Chief Financial Officer are together the Chief Operating Decision Makers of the Group and determine the appropriate business segments to monitor financial performance. Each segment is defined as a set of business activities generating a revenue stream determined by divisional responsibility and the management information reviewed by the Board. They have determined that the Group has two reportable segments: these are Institutional Client Services (ICS) and Private Client Services (PCS). Business activities include the following:
Fund services
Supporting a diverse range of asset classes, including real estate, private equity, renewables, hedge, debt and alternative asset classes, providing a comprehensive set of fund administration services (e.g. fund launch, NAV calculations, accounting, compliance and risk monitoring, investor reporting and listing services).
Corporate services
Includes clients spanning across small and medium entities, public companies, multinationals, sovereign wealth funds, fund managers, HNW and UHNW individuals and families requiring a 'corporate' service for business and investments. As well as entity formation, administration, cash management and other company secretarial services, the Group services international and local pension plans, employee share incentive plans, employee ownership plans and deferred compensation plans.
Private Client Services
Supporting HNW and UHNW individuals and families, from 'emerging entrepreneurs' to established single and multi-family offices. Services include JTC's own comprehensive Private Office, a range of cash management, foreign exchange and lending services, as well as the formation and administration of trusts, companies, partnerships, and other vehicles and structures across a range of asset classes, including cash and investments.
4.2. Segmental information
The table below shows the segmental information provided to the Board for the two reportable segments on an underlying basis:
| ICS | PCS | Total | ||||
| 2024 £'000 |
2023 £'000 |
2024 £'000 |
2023 £'000 |
2024 £'000 |
2023 £'000 |
|
| Revenue | 180,904 | 163,323 | 124,479 | 94,117 | 305,383 | 257,440 |
| Direct staff expenses | (78,825) | (68,405) | (49,534) | (36,870) | (128,359) | (105,275) |
| Other direct expenses | (3,821) | (2,910) | (2,604) | (3,241) | (6,425) | (6,151) |
| Indirect staff expenses | (17,769) | (16,024) | (11,035) | (7,805) | (28,804) | (23,829) |
| Other operating expenses | (25,245) | (24,445) | (15,371) | (11,890) | (40,616) | (36,335) |
| Other | 46 | 47 | 458 | 12 | 504 | 59 |
| Underlying EBITDA | 55,290 | 51,586 | 46,393 | 34,323 | 101,683 | 85,909 |
| Underlying EBITDA margin % | 30.6% | 31.6% | 37.3% | 36.5% | 33.3% | 33.4% |
The Board evaluates segmental performance based on revenue, underlying EBITDA and underlying EBITDA margin. Profit before tax is not used to measure the performance of the individual segments, as items such as depreciation, amortisation of intangibles, other losses (including foreign exchange movement on the revaluation of inter-company loans) and finance costs are not allocated to individual segments. Consistent with the aforementioned reasoning, assets and liabilities are not reviewed regularly on a by-segment basis and are, therefore, not included in segmental information.
4.3. Geographical information
Revenue generated by contracting subsidiary according to their location is as follows:
| 2024 | 2023 | Increase | ||
| £'000 | £'000 | £'000 | % | |
| UK & Channel Islands | 135,852 | 128,193 | 7,659 | 6.0% |
| US | 96,466 | 64,839 | 31,627 | 48.8% |
| Rest of Europe | 40,798 | 38,687 | 2,111 | 5.5% |
| Rest of the World | 32,267 | 25,721 | 6,546 | 25.5% |
| Total revenue | 305,383 | 257,440 | 47,943 | 18.6% |
No single customer made up more than 5% of the Group's revenue in the current or prior year.
5. Staff expenses
| Note | 2024 £'000 |
2023 £'000 |
|
| Salaries and Directors' fees | 130,581 | 107,765 | |
| Employer-related taxes and other staff-related costs | 13,845 | 10,571 | |
| Other short-term employee benefits | 8,446 | 5,521 | |
| Employee pension benefits 1 | 6,761 | 5,230 | |
| Share-based payments | 6.5 | 2,480 | 2,834 |
| Employee Incentive Plan ("EIP") share-based payments | 6.5 | 34,506 | - |
| Total staff expenses | 196,619 | 131,921 |
1 Employee pension benefits include defined contributions of £6.49m (2023: £5.08m) and defined benefits of £0.27m (2023: £0.15m).
6. Share-based payments
6.1. Employee Incentive Plan ("EIP")
JTC adopted the current EIP upon listing on the London Stock Exchange in March 2018. All permanent employees of the Group, excluding the Executive Directors of JTC PLC, are eligible to be granted an award under the EIP. The grant, vest and issue of shares to satisfy awards, is at discretion of the Remuneration Committee (consisting solely of the independent non-executive directors) and the Trustees of the EBT.
On 25 July 2024, 4,707,098 share awards were granted to employees following the conclusion of the Galaxy business plan, which ran from 1 January 2021 to 31 December 2023. Each award was separated into two tranches: 50% vested at the grant date ("Tranche One") and 50% was a deferred award in the form of a conditional right to receive shares on the first anniversary of grant, subject to the achievement of the applicable performance conditions ("Tranche Two"). Tranche One was expensed in full upon grant and Tranche Two will be expensed over the one year vesting period to 25 July 2025.
Details of the movements in the number of shares are as follows:
| 2024 | 2023 | |||
| No. of shares (thousands) |
£'000 | No. of shares (thousands) |
£'000 | |
| Outstanding at the beginning of the year | - | - | - | - |
| Granted | 4,707 | 48,439 | - | - |
| Exercised | (2,354) | (24,221) | - | - |
| Forfeited | (106) | (1,086) | - | - |
| Outstanding at the end of the year | 2,247 | 23,132 | - | - |
6.2. Performance Share Plan ("PSP")
Executive Directors and senior managers may receive awards of shares, which may be granted annually under the PSP. The maximum policy opportunity award size under the PSP for an Executive Director is between 150% and 200% of annual base salary; however, the plan rules allow the Remuneration Committee the discretion to award up to 250% of annual base salary in exceptional circumstances. The Remuneration Committee determines the appropriate performance measures, weightings and targets prior to granting any awards. Performance conditions include Total Shareholder Return relative to a relevant comparator group and the Company's absolute underlying EPS performance.
The following table provides relevant details for PSP awards:
| Plan name | Performance period | Grant date | Vest date 1 | No. of shares (thousands) |
Fixed amount at fair value £'000 |
| PSP 2020 | 01.01.2020 - 31.12.2022 | 23.04.2020 | 06.04.2023 | 213 | 825 |
| PSP 2021 | 01.01.2021 - 31.12.2023 | 20.05.2021 | 09.04.2024 | 283 | 1,507 |
| PSP 2022 | 01.01.2022 - 31.12.2024 | 19.04.2022 | - | 246 | 1,384 |
| PSP 2023 | 01.01.2023 - 31.12.2025 | 11.04.2023 | - | 414 | 2,328 |
| PSP 2024 | 01.01.2024 - 31.01.2026 | 09.04.2024 | - | 360 | 2,420 |
1 The vesting of awards is subject to continued employment and the achievement of performance conditions over the specified period. The awards will vest for each PSP when the conditions have been measured for the relevant performance period.
Details of movements in the number of shares are as follows:
| 2024 | 2023 | |||
| No. of shares (thousands) |
£'000 | No. of shares (thousands) |
£'000 | |
| Outstanding at the beginning of the year | 884 | 4,886 | 673 | 3,346 |
| Awarded | 360 | 2,420 | 414 | 2,328 |
| Exercised | (250) | (1,326) | (200) | (771) |
| Forfeited | (94) | (611) | (3) | (17) |
| Outstanding at the end of the year | 900 | 5,369 | 884 | 4,886 |
6.3. Deferred Bonus Share Plan ("DBSP")
Depending on the performance of the Group, consideration is given annually by the Remuneration Committee to the granting of share awards under the DBSP to eligible Directors. This forms part of the annual bonus award for performance during the preceding financial year end.
(A) Annual bonus awards to Executive Directors
For their performance during the relevant year, 33% of the bonus earned by Executive Directors is deferred into shares for two years.
The following table provides relevant details for DBSP awards for Executive Directors ("ED"):
| Plan name | Performance period | Grant date 1 | Vest date 2 | No. of shares (thousands)1 |
Fixed amount £'000 |
| ED DBSP 1 | 01.01.2023 - 31.12.2023 | 09.04.2024 | 01.01.2026 | 42 | 347 |
| ED DBSP 2 | 01.01.2024 - 31.12.2024 | - | 01.01.2027 | - | 444 |
1 The grant date and no. shares will be determined following the release of this annual report.
2 The vesting of awards is subject to continued employment up to the vest date.
Details of movements in the number of shares are as follows:
| 2024 | 2023 | |||
| No. of shares (thousands) |
£'000 | No. of shares (thousands) |
£'000 | |
| Outstanding at the beginning of the year | 42 | 347 | - | - |
| Awarded | - | - | 42 | 347 |
| Outstanding at the end of the year | 42 | 347 | 42 | 347 |
(B) Annual bonus awards to Directors
For the performance period covering the year ended 31 December 2019 to 31 December 2022, the Remuneration Committee exercised its discretion and, in accordance with the DBSP rules, determined that 50% of the annual cash bonus awards for Directors would be awarded as shares. The portion of the bonus award deferred into shares was expensed over the three year period to the date of vest. For the year ended 31 December 2024, the Remuneration Committee intends to make annual bonus awards to Directors in cash rather than deferring a portion of the bonus into shares (consistent with the year ended 31 December 2023). As a result, the cash bonus awards have been expensed in full and are shown within salaries and Directors fees. The remaining expenses associated with the DBSP 5 award that continues to the vesting date are shown within non-underlying items (see note 9).
The following table provides relevant details for DBSP awards for Directors:
| Plan name | Performance period | Grant date | Vest date 1 | No. of shares (thousands) |
Fixed amount £'000 |
| DBSP 4 | 01.01.2021 - 31.12.2021 | 19.04.2022 | 01.01.2024 | 67 | 476 |
| DBSP 5 | 01.01.2022 - 31.12.2022 | 11.04.2023 | 01.01.2025 | 96 | 679 |
1 The vesting of awards is subject to continued employment up to the vest date.
Details of movements in the number of shares held within the DBSP schemes at the year end was as follows:
| 2024 | 2023 | |||
| No. of shares (thousands) |
£'000 | No. of shares (thousands) |
£'000 | |
| Outstanding at the beginning of the year | 153 | 1,092 | 109 | 756 |
| Awarded | - | - | 96 | 680 |
| Exercised | (61) | (432) | (48) | (315) |
| Forfeited | (3) | (19) | (4) | (29) |
| Outstanding at the end of the year | 89 | 641 | 153 | 1,092 |
6.4. Other awards
Ad hoc awards
The Group may offer ad hoc awards to Directors joining the business. The award is expensed from the start of their employment, with the value being a fixed amount as stated in the employee's offer letter. The number of shares awarded is determined by the mid-market close price at the grant date, which is at the next available window after their start date (typically April or September). The awards vest two years following grant, subject to continued employment.
New joiner awards
As part of the Group's commitment to 100% employee share ownership, a share award is made to every employee joining the business. The award is expensed from the start of their employment, with the amount based on a pre-determined number of shares as stated in the employee's offer letter. Following successful completion of their probationary period, the shares are granted at the next available window (typically April or September). The awards vest two years following grant, subject to continued employment.
Employee referral scheme
As part of the Group's employee referral scheme, permanent employees up to senior manager level are eligible to receive a pre-determined bonus when a referred employee is hired following completion of their probation period. The award comprises an initial 50% cash payment and a 50% share award. The number of shares will be calculated using the mid-market close price on the date that the referred employee completes their probationary period and is expensed from this date. The shares are granted at the next available window (typically April and September) and will vest one year following grant, subject to continued employment.
Details of movements in the number of shares are as follows:
| 2024 | 2023 | |||
| No. of shares (thousands) |
£'000 | No. of shares (thousands) |
£'000 | |
| Outstanding at the beginning of the year | 190 | 1,553 | 254 | 2,104 |
| Awarded | 42 | 362 | 41 | 296 |
| Exercised | (147) | (1,184) | (89) | (673) |
| Forfeited | (16) | (171) | (16) | (174) |
| Outstanding at the end of the year | 69 | 560 | 190 | 1,553 |
6.5. Expenses recognised during the year
The equity-settled share-based payment expenses recognised during the year, per plan and in total, are as follows:
| 2024 £'000 |
2023 £'000 |
|
| PSP awards | 1,673 | 1,616 |
| DBSP awards | 314 | 471 |
| Other awards 1 | 493 | 747 |
| Share-based payments 2 | 2,480 | 2,834 |
| EIP share-based payments | 34,506 | - |
| Total share-based payments expense | 36,986 | 2,834 |
1 Other awards includes cash and equity settled awards (50% cash/50% equity) of £nil in 2024 (2023: £0.1m).
2 The share-based expense in the capital reserve for 2023 of £4.2m included other awards that were 100% cash settled, as well as those that were settled 50% cash and 50% equity; it also included the settlement of contingent consideration for INDOS (£1.5m).
7. Defined benefit pension plans
The Group operates defined benefit pension plans in Switzerland and Mauritius. Both plans are contribution-based, with the guarantee of a minimum interest credit and fixed conversion rates at retirement. Disability and death benefits are defined as a percentage of the insured salary. The Group does not expect a significant change in contributions year on year.
The Swiss plan must be fully funded, in accordance with Swiss Federal Law on Occupational Benefits (LPP/BVG), on a static basis at all times. The subsidiary, JTC (Suisse) SA, is affiliated to the collective foundation Swiss Life. The collective foundation is a separate legal entity. The foundation is responsible for the governance of the plan; the board is composed of an equal number of representatives from the employers and the employees, chosen from all affiliated companies. The foundation has set up investment guidelines, defining in particular the strategic allocation with margins. Additionally, there is a pension committee responsible for the set-up of the plan benefit; this is composed of an equal number of representatives of JTC (Suisse) SA and its employees.
The Mauritius plan is administered by Swan Life Ltd. JTC Fiduciary Services (Mauritius) Limited is required to contribute a specific percentage of payroll costs to the retirement benefit scheme. Employees under this pension plan are entitled to statutory benefits prescribed under parts VIII and IX of the Workers' Rights Act 2019.
The amounts recognised in the consolidated balance sheet are as follows:
| Note | 2024 £'000 |
2023 £'000 |
|
| Present value of funded obligations | (3,747) | (4,020) | |
| Fair value of plan assets 1 | 2,852 | 3,205 | |
| Employee benefit obligations | 30 | (895) | (815) |
1 All plan assets are held in insurance contracts.
The movement in the net defined benefit obligation recognised in the consolidated balance sheet is as follows:
| 2024 | 2023 | |||||
| Defined benefit obligation £'000 | Fair value of plan assets £'000 | Net defined benefit obligation £'000 | Defined benefit obligation £'000 | Fair value of plan assets £'000 | Net defined benefit obligation £'000 | |
| At 1 January | (4,020) | 3,205 | (815) | (3,342) | 2,770 | (572) |
| Included in the consolidated income statement | ||||||
| Current service cost | (231) | - | (231) | (229) | - | (229) |
| Past service cost | (35) | - | (35) | 98 | - | 98 |
| Interest | (58) | 50 | (8) | (81) | 67 | (14) |
| Total | (324) | 50 | (274) | (212) | 67 | (145) |
| Included in other comprehensive income/(loss) | ||||||
| Remeasurements: | ||||||
| - Change in demographic assumptions | - | - | - | (15) | - | (15) |
| - Change in financial assumptions | (153) | - | (153) | (360) | - | (360) |
| - Experience adjustment | 57 | - | 57 | 127 | - | 127 |
| - Return on plan assets | - | 14 | 14 | - | (52) | (52) |
| Total | (96) | 14 | (82) | (248) | (52) | (300) |
| Other | ||||||
| Contributions: | ||||||
| - Employers | - | 232 | 232 | - | 221 | 221 |
| - Plan participants | (114) | 114 | - | (109) | 109 | - |
| Benefit payments | 598 | (598) | - | 18 | (18) | - |
| Exchange differences | 209 | (165) | 44 | (127) | 108 | (19) |
| Total | 693 | (417) | 276 | (218) | 420 | 202 |
| At 31 December | (3,747) | 2,852 | (895) | (4,020) | 3,205 | (815) |
The plans are exposed to actuarial risks relating to the discount rate, the interest rate for the projection of the savings capital, salary increases and pension increases.
The principal actuarial assumptions used for the IAS 19 disclosures were as follows:
| Switzerland | Mauritius | |
| Discount rate at 1 January 2024 | 1.4% | 5.0% |
| Discount rate at 31 December 2024 | 1.0% | 5.2% |
| Future salary increases | 1.3% | 5.0% |
| Rate of increase in deferred pensions | 0.0% | 0.0% |
For the Swiss plan, longevity must be reflected in the defined benefit liability. The mortality probabilities used were as follows:
| 2024 Years |
2023 Years |
|
| Mortality probabilities for pensioners at age 65 | ||
| - Males | 21.86 | 21.80 |
| - Females | 23.61 | 23.54 |
| Mortality probabilities at age 65 for current members aged 45 | ||
| - Males | 23.54 | 23.46 |
| - Females | 25.21 | 25.14 |
8. Other operating expenses
| 2024 £'000 |
2023 £'000 |
|
| Third party administration fees | 6,512 | 6,241 |
| Legal and professional fees | 19,592 | 12,226 |
| Auditor's remuneration for audit services | 1,880 | 1,409 |
| Auditor's remuneration for other assurance services | 285 | 287 |
| Establishment costs | 4,248 | 3,362 |
| Insurance | 1,707 | 1,649 |
| Travel and accommodation | 3,149 | 2,559 |
| Marketing | 3,512 | 2,235 |
| Computer software and maintenance | 12,921 | 10,915 |
| Telephones and postage | 1,805 | 1,726 |
| Other expenses | 1,937 | 2,246 |
| Total other operating expenses | 57,548 | 44,855 |
9. Non-underlying items
| Note | 2024 £'000 |
2023 £'000 |
|
| EBITDA | 49,060 | 77,790 | |
| Non-underlying items within EBITDA: | |||
| Acquisition and integration costs 1 | 15,272 | 7,080 | |
| Office start-ups 2 | 585 | 612 | |
| Other 3 | 365 | 427 | |
| EIP share-based payments 4 | 36,401 | - | |
| Total non-underlying items within EBITDA | 52,623 | 8,119 | |
| Underlying EBITDA | 101,683 | 85,909 | |
| (Loss)/profit before tax | (7,402) | 24,310 | |
| Total non-underlying items within EBITDA | 52,623 | 8,119 | |
| Loss/(gain) on revaluation of contingent consideration 5 | 2,019 | (446) | |
| (Gain) on bargain purchase | 15.4 | (720) | - |
| (Gain) on disposal of subsidiary 6 | (69) | - | |
| Foreign exchange losses 7 | 975 | 8,515 | |
| Total non-underlying items within profit before tax | 54,828 | 16,188 | |
| Underlying profit before tax | 47,426 | 40,498 |
1 Acquisition and integration costs include deal and tax advisory fees, legal and professional fees, staff reorganisation costs and other integration costs. This includes acquisition-related share-based payment awards granted to act as retention tools for key management and/or to recruit senior management to support various acquisitions. Acquisition and integration costs are typically incurred in the first two years following acquisition.
2 Office start-up includes up-front investment in personnel and infrastructure, which is required in advance of trading.
3 Includes expenses in relation to a change in making annual bonus awards in cash rather than share awards (see note 6.3(B)), legal costs relating to a regulatory action from the Dutch Central Bank and EIP administrative costs.
4 Following the conclusion of the Galaxy business plan era, share awards were made to staff members under the EIP (see note 6.1); this includes £1.9m of employer-related taxes relating to the share awards.
5 Relates to the loss on revaluation of the contingent consideration payable for perfORM of £2.0m (2023: £0.17m), see note 26 for more information on the valuation methodology used. The 2023 comparative also included gains for Segue £0.58m and INDOS £0.03m.
6 On 1 March 2024, the Group sold its call option to purchase Global Tax Support B.V.
7 Foreign exchange losses that relate to the revaluation of inter-company loans. Management consider these to be non-underlying as they are unrealisable movements since the loans are eliminated upon consolidation.
10. Depreciation and amortisation
| Note | 2024 £'000 |
2023 £'000 |
|
| Depreciation of right-of-use assets | 22 | 7,461 | 5,844 |
| Depreciation of property, plant and equipment | 22 | 2,583 | 2,418 |
| Amortisation of other intangible assets | 17 | 18,973 | 15,766 |
| Amortisation of assets recognised from costs to obtain or fulfil a contract | 23 | 1,102 | 1,112 |
| Total depreciation and amortisation | 30,119 | 25,140 |
11. Other losses
| Note | 2024 £'000 |
2023 £'000 |
|
| (Loss)/gain on revaluation of contingent consideration | 26 | (2,019) | 446 |
| Gain on bargain purchase | 15.4 | 720 | - |
| Foreign exchange losses 1 | 34.1 | (1,089) | (9,626) |
| Net (loss)/gain on disposal of fixed asset | (9) | 5 | |
| Gain on disposal of subsidiary | 69 | - | |
| Impairment of customer relationship intangible asset | - | (737) | |
| Total other losses | (2,328) | (9,912) |
1 This includes £0.9m of foreign exchange losses (2023: £8.5m loss) that relate to the revaluation of inter-company loans; these foreign exchange movements are considered by Management to be non-underlying items (see note 9).
12. Finance income and finance cost
| Note | 2024 £'000 |
2023 £'000 |
|
| Bank interest | 1,299 | 744 | |
| Loan interest | 56 | 50 | |
| Total finance income | 1,355 | 794 | |
| Bank loan interest | 16,107 | 11,123 | |
| Gain on cash flow hedge reclassified from other comprehensive income | 33 | (1,710) | (134) |
| Amortisation of loan arrangement fees | 1,348 | 805 | |
| Unwinding of net present value ("NPV") discounts | 8,308 | 6,514 | |
| Other finance expense | 1,317 | 914 | |
| Total finance cost | 25,370 | 19,222 |
Within the £8.3m (2023: £6.5m) recognised from the unwinding of NPV discounts, £6.1m (2023: £5.1m) relates to contingent consideration. This amount is excluded from the calculation of adjusted underlying basic EPS (see note 14.3). The breakdown by acquisition is as follows:
| 2024 £'000 |
2023 £'000 |
|
| SDTC | 4,922 | 2,123 |
| perfORM | 507 | 461 |
| FFP | 526 | - |
| Hanway | 101 | - |
| SALI | 87 | 2,316 |
| Segue | - | 139 |
| INDOS | - | 54 |
| Unwinding of NPV discounts on contingent consideration | 6,143 | 5,093 |
13. Income tax
Income tax in the consolidated income statement comprises:
| 2024 £'000 |
2023 £'000 |
|
| Jersey tax on current year profit | 1,220 | 1,197 |
| Foreign company taxes on current year profit | 2,155 | 2,583 |
| Adjustment in respect of the previous periods | 166 | 305 |
| Total current tax expense | 3,541 | 4,086 |
| Deferred tax (see note 29): | ||
| Temporary differences in relation to acquired intangible assets | 5,542 | (1,694) |
| Jersey origination and reversal of temporary differences | (29) | (6) |
| Foreign company origination and reversal of temporary differences | (9,200) | 104 |
| Total deferred tax credit | (3,687) | (1,596) |
| Income tax (credit)/expense | (146) | 2,489 |
The difference between the total current tax shown above and the amount calculated by applying the standard rate of Jersey income tax to the (loss)/profit on ordinary activities before tax is as follows:
| 2024 £'000 |
2023 £'000 |
|
| (Loss)/profit on ordinary activities before tax | (7,402) | 24,310 |
| Tax on (loss)/profit on ordinary activities at Jersey income tax rate of 10% (2023: 10%) | (740) | 2,431 |
| Effects of: | ||
| Results from entities subject to tax at a rate of 0% (Jersey company) | 702 | (1,262) |
| Results from tax exempt entities (foreign company) | (58) | (186) |
| Foreign taxes not at Jersey rate | 1,749 | 1,313 |
| Temporary differences in relation to acquired intangible assets | 5,542 | (1,694) |
| Other temporary differences (Jersey company) | (29) | (6) |
| Other temporary differences (foreign company) | (9,200) | 104 |
| Non-deductible expenses | 601 | 118 |
| Consolidation adjustments | 1,258 | 1,639 |
| Other differences | 29 | 32 |
| Income tax (credit)/expense | (146) | 2,489 |
Income tax expense computations are based on the jurisdictions in which profits were earned at prevailing rates in the respective jurisdictions.
| Reconciliation of effective tax rates | 2024 % |
2023 % |
| Jersey income tax rate on (loss)/profit on ordinary activities | 10.00 | 10.00 |
| Effect of: | ||
| Results from entities subject to tax at a rate of 0% (Jersey company) | 0.78 | (5.19) |
| Results from tax exempt entities (foreign company) | (9.48) | (0.77) |
| Foreign taxes not at Jersey rate | (23.63) | 5.40 |
| Other temporary differences (Jersey company) | 0.39 | (0.02) |
| Other temporary differences (foreign company) | 124.33 | 0.43 |
| Temporary differences in relation to acquired intangible assets | (74.87) | (6.97) |
| Non-deductible expenses | (8.12) | 0.48 |
| Consolidation adjustments | (16.99) | 6.75 |
| Other differences | (0.42) | 0.13 |
| Effective tax rate | 1.99 | 10.24 |
14. Earnings Per Share ("EPS")
The Group calculates basic, diluted and adjusted underlying basic EPS. The results can be summarised as follows:
| 2024 Pence |
2023 Pence |
|
| Basic EPS | (4.44) | 14.20 |
| Diluted EPS | (4.38) | 14.07 |
| Adjusted underlying basic EPS | 41.80 | 37.30 |
14.1. Basic EPS
The calculation of basic EPS is based on the (loss)/profit for the year, divided by the weighted average number of Ordinary shares for the same year.
| 2024 £'000 |
2023 £'000 |
|
| (Loss)/profit for the year | (7,256) | 21,821 |
| No. of shares (thousands) |
No. of shares (thousands) |
|
| Issued Ordinary shares at 1 January | 161,445 | 146,001 |
| Effect of shares issued to acquire business combinations | 598 | 2,474 |
| Effect of movement in treasury shares held | 1,265 | 322 |
| Effect of placing | - | 4,862 |
| Weighted average number of Ordinary shares (basic): | 163,308 | 153,659 |
| Pence | Pence | |
| Basic EPS | (4.44) | 14.20 |
14.2. Diluted EPS
The calculation of diluted EPS is based on basic EPS after adjusting for the potentially dilutive effect of Ordinary shares that have been granted.
| 2024 £'000 |
2023 £'000 |
|
| (Loss)/profit for the year | (7,256) | 21,821 |
| No. of shares (thousands) |
No. of shares (thousands) |
|
| Weighted average number of Ordinary shares (basic) | 163,308 | 153,659 |
| Effect of share-based payments | 2,215 | 1,440 |
| Weighted average number of Ordinary shares (diluted): | 165,523 | 155,099 |
| Pence | Pence | |
| Diluted EPS | (4.38) | 14.07 |
14.3. Adjusted underlying basic EPS
Adjusted underlying basic EPS is an alternative performance measure that reflects the underlying activities of the Group. The following definition is not consistent with the requirements of IAS 33.
The Group's definition of adjusted underlying basic EPS reflects the profit for the year, adjusted to remove the impact of non-underlying items (see note 9) and temporary tax differences. Additionally, a number of other items relating to the Group's acquisition activities, including amortisation of acquired intangible assets, impairment of acquired intangible assets, amortisation of loan arrangement fees and unwinding of NPV discounts in relation to contingent consideration, are removed to present an adjusted underlying basic EPS, which is used more widely by external investors and analysts.
The definition of adjusted underlying EPS has been updated to include all temporary tax differences. Prior to this update, adjusted underlying basic EPS was 47.45p (2023: 37.23p).
| Note | 2024 £'000 |
2023 £'000 |
|
| (Loss)/profit for the year | (7,256) | 21,821 | |
| Adjusted for: | |||
| Non-underlying items | 9 | 54,828 | 16,188 |
| Amortisation of customer relationships, acquired software and brands | 17 | 16,889 | 14,265 |
| Impairment of customer relationship intangible asset | 17 | - | 737 |
| Amortisation of loan arrangement fees | 12 | 1,348 | 805 |
| Unwinding of NPV discounts for contingent consideration | 12 | 6,143 | 5,093 |
| Temporary tax differences | 13 | (3,687) | (1,597) |
| Adjusted underlying profit for the year | 68,265 | 57,312 |
| No. of shares (thousands) |
No. of shares (thousands) |
|
| Weighted average number of Ordinary shares (basic) | 163,308 | 153,659 |
| Pence | Pence | |
| Adjusted underlying basic EPS | 41.80 | 37.30 |
15. Business combinations
15.1. 'Blackheath Capital Management LLP ("Blackheath")
On 24 November 2023, JTC entered into an agreement to acquire 100% of the partnership interest in Blackheath, a UK limited liability partnership that provides management and regulatory oversight services to investment funds and offers management company ("ManCo") services as an Alternative Investment Fund Manager ("AIFM"). The acquisition complements JTC's existing AIFM Global Solutions businesses and brings additional scale to existing fund administration and depositary services in the UK.
Following regulatory approval for the transaction, cash consideration was transferred on 1 March 2024, as well as the equity element of initial consideration. The results of the acquired business have been consolidated from 1 March 2024 as Management concluded that this was the date that control was obtained by the Group. The acquired business contributed revenues of £0.35m and underlying loss before tax (before central costs have been applied) of £0.1m to the Group for the period from 1 March 2024 to 31 December 2024. If the business had been acquired on 1 January 2024, the Group's consolidated revenue and underlying profit before tax for the year would have been £305.8m and £47.4m.
The Group incurred acquisition-related costs of £0.5m, which have been recognised within other operating expenses in the Group's consolidated income statement and are treated as non-underlying items to calculate underlying EBITDA (see note 9).
Total consideration is satisfied by:
| £'000 | |
| Cash consideration | 772 |
| Equity instruments 1 | 147 |
| Total consideration at acquisition | 919 |
1 On 4 March 2024, the Company issued 18,435 Ordinary shares at fair value to satisfy the equity element of the initial consideration (see note 31.1).
Identifiable net assets acquired by the Group included:
| Note | Book value £'000 |
Adjustments £'000 |
Fair value £'000 |
|
| Property, plant and equipment | 2 | 9 | 11 | |
| Intangible assets - customer relationships | 17.1 | - | 145 | 145 |
| Trade receivables | 54 | - | 54 | |
| Other receivables | 48 | - | 48 | |
| Cash and cash equivalents | 223 | - | 223 | |
| Assets | 327 | 154 | 481 | |
| Trade and other payables | 72 | - | 72 | |
| Lease liabilities | - | 9 | 9 | |
| Liabilities | 72 | 9 | 81 | |
| Total identifiable net assets | 255 | 145 | 400 |
Goodwill arising on acquisition is as follows:
| Note | £'000 | |
| Total consideration | 919 | |
| Less: identifiable net assets | (400) | |
| Goodwill | 16 | 519 |
15.2. Hanway Advisory Limited ("Hanway")
On 1 July 2024, JTC transferred cash consideration to complete the acquisition of 100% of the share capital of Hanway, a UK-based company offering corporate governance, fund administration and accounting services to UK listed investment companies. The acquisition brings further scale to JTC's UK business and existing UK listed fund activities.
The results of the acquired business have been consolidated from 1 July 2024 as Management concluded that this was the date that control was obtained by the Group. The acquired business contributed revenues of £0.7m and underlying profit before tax (before central costs have been applied) of £0.4m to the Group for the period from 1 July 2024 to 31 December 2024. If the business had been acquired on 1 January 2024, the Group's consolidated revenue and underlying profit before tax for the year would have been £306.9m and £48.3m.
The Group incurred acquisition-related costs of £0.2m, which have been recognised within other operating expenses in the Group's consolidated income statement and are treated as non-underlying items to calculate underlying EBITDA (see note 9).
Total consideration is satisfied by:
| £'000 | ||
| Cash consideration | 755 | |
| Contingent consideration - earn-out 1 | 1,364 | |
| Total consideration | 2,119 |
1 A total of £1.5m is payable subject to meeting revenue targets for the period to 30 June 2025. Based on Management's assessment of the forecast for the period, it is estimated that the earn-out will be met in full. The estimated contingent consideration is payable in cash and has been discounted to its present value of £1.4m at the acquisition date (£1.5m at 31 December 2024).
Identifiable net assets acquired by the Group included:
| Note | Book value at acquisition £'000 |
Adjustments £'000 |
Fair value £'000 |
|
| Intangible assets - customer relationships | 17.1 | - | 529 | 529 |
| Trade receivables | 314 | - | 314 | |
| Cash and cash equivalents | 58 | - | 58 | |
| Other receivables | 117 | - | 117 | |
| Assets | 489 | 529 | 1,018 | |
| Trade and other payables | 41 | - | 41 | |
| Deferred tax liabilities | 29 | - | 133 | 133 |
| Liabilities | 41 | 133 | 174 | |
| Total identifiable net assets | 448 | 396 | 844 |
Goodwill arising on acquisition is as follows:
| Note | £'000 | |
| Total consideration | 2,119 | |
| Less: identifiable net assets | (844) | |
| Goodwill | 16 | 1,275 |
15.3. First Republic Trust Company of Delaware ("FRTC")
On 31 July 2024, JTC transferred cash consideration to complete the acquisition of 100% of the share capital of FRTC, a US-based company offering trust administration services to high-net-worth individuals, building on JTC's position as the leading independent provider of trust services in the US.
The results of the acquired business have been consolidated from 31 July 2024 as Management concluded that this was the date that control was obtained by the Group. The acquired business contributed revenues of £2.1m and underlying profit before tax (before central costs have been applied) of £1.7m to the Group for the period from 31 July 2024 to 31 December 2024. If the business had been acquired on 1 January 2024, the Group's consolidated revenue and underlying profit before tax for the year would have been £310.5m and £51.5m.
The Group incurred acquisition-related costs of £2.0m, which have been recognised within other operating expenses in the Group's consolidated income statement and are treated as non-underlying items to calculate underlying EBITDA (see note 9).
Total consideration is satisfied by:
| £'000 | $'000 | |
| Cash consideration | 19,402 | 24,907 |
| Total consideration | 19,402 | 24,907 |
Identifiable net assets acquired by the Group included:
| Note | Book value at acquisition £'000 |
Adjustments £'000 |
Fair value £'000 |
Fair value $'000 |
|
| Intangible assets - customer relationships | 17.1 | - | 8,005 | 8,005 | 10,277 |
| Accrued income | 453 | - | 453 | 582 | |
| Cash and cash equivalents | 3,940 | - | 3,940 | 5,058 | |
| Assets | 4,393 | 8,005 | 12,398 | 15,917 | |
| Trade and other payables | 42 | - | 42 | 54 | |
| Deferred income | 612 | - | 612 | 786 | |
| Liabilities | 654 | - | 654 | 840 | |
| Total identifiable net assets | 3,739 | 8,005 | 11,744 | 15,077 |
Goodwill arising on acquisition is as follows:
| Note | £'000 | $'000 | |
| Total consideration | 19,402 | 24,907 | |
| Less: identifiable net assets | (11,744) | (15,077) | |
| Goodwill | 16 | 7,658 | 9,830 |
15.4. The Buck UK and European share plan administration and trustee businesses ("Buck")
On 31 October 2024, JTC transferred cash consideration to Arthur J. Gallagher & Co to complete the acquisition of Buck. The acquired businesses provide fully outsourced administration and trustee services to a blue-chip global client base, covering a full range of employee share plans. With operations in the UK, Guernsey and Germany, the acquisition complements and enhances JTC's existing Employer Solutions platform and will accelerate the growth of the Group's share plan trustee and administration service offering.
The results of the acquired business have been consolidated from 31 October 2024 as Management concluded that this was the date that control was obtained by the Group.The acquired business contributed revenues of £0.24m and underlying profit before tax (before central costs have been applied) of £0.01m to the Group for the period from 31 October 2024 to 31 December 2024. If the business had been acquired on 1 January 2024, the Group's consolidated revenue and underlying profit before tax for the year would have been £306.8m and £48.0m.
The Group incurred acquisition-related costs of £1.7m, which have been recognised within other operating expenses in the Group's consolidated income statement and are treated as non-underlying items to calculate underlying EBITDA (see note 9).
Total consideration is satisfied by:
| £'000 | |
| Cash consideration 1 | 173 |
| Total consideration | 173 |
1 The cash consideration comprises a purchase price of £1, paid at the acquisition date, and an additional £0.17m accrued at 31 December 2024, which relates to the payment for working capital.
Identifiable net assets acquired by the Group included:
| Note | Book value at acquisition £'000 |
Adjustments £'000 |
Fair value £'000 |
|
| Intangible assets - customer relationships | 17.1 | - | 488 | 488 |
| Property, plant and equipment | 1 | - | 1 | |
| Trade receivables | 56 | - | 56 | |
| Accrued income | 47 | - | 47 | |
| Cash and cash equivalents | 395 | - | 395 | |
| Other receivables | 74 | - | 74 | |
| Assets | 573 | 488 | 1,061 | |
| Trade and other payables | 118 | - | 118 | |
| Deferred income | 50 | - | 50 | |
| Liabilities | 168 | - | 168 | |
| Total identifiable net assets | 405 | 488 | 893 |
Goodwill arising on acquisition is as follows:
| Note | £'000 | |
| Total consideration | 173 | |
| Less: identifiable net assets | (893) | |
| Gain on bargain purchase | 11 | (720) |
Gain on bargain purchase represents negative goodwill. This is supported by: (i) the synergies that Management expect to realise and (ii) the purchase price being impacted by the acquired business being viewed as non-core by the sellers.
15.5. FFP (Holdings) Limited and Subsidiaries ("FFP")
On 15 November 2024, JTC transferred cash consideration to complete the acquisition of FFP, a group of privately owned companies with headquarters in the Cayman Islands. FFP provides a range of specialist fiduciary, restructuring, trustee, fund administration and corporate services to clients globally, with a focus on complex engagements including restructurings, insolvencies and disputes.
The results of the acquired business have been consolidated from 15 November 2024 as Management concluded that this was the date that control was obtained by the Group. The acquired business contributed revenues of £2.3m and underlying profit before tax (before central costs have been applied) of £0.9m to the Group for the period from 15 November 2024 to 31 December 2024. If the business had been acquired on 1 January 2024, the Group's consolidated revenue and underlying profit before tax for the year would have been £331.1m and £62.3m.
The Group incurred acquisition-related costs of £3.0m, which have been recognised within other operating expenses in the Group's consolidated income statement and are treated as non-underlying items to calculate underlying EBITDA (see note 9).
Total consideration is satisfied by:
| £'000 | $'000 | |
| Cash consideration 1 | 46,329 | 58,991 |
| Equity instruments 2 | 10,700 | 13,501 |
| Contingent consideration - earn-out 3 | 29,638 | 37,537 |
| Total consideration | 86,667 | 110,029 |
1 The cash consideration comprises initial cash consideration of £45.3m ($57.8m) and £1.0m ($1.2m) accrued in other payables at 31 December 2024 (see note 27).
2 On 18 November 2024, the Company issued 1,087,341 Ordinary shares at fair value to satisfy the equity element of the initial consideration (see note 31.1).
3 A total of up to £31.6m ($40.0m) is payable, subject to meeting EBITDA targets for the calendar year 2024. Management have estimated that the contingent consideration payable has been met in full. The contingent consideration is payable in a 80%/20% ratio of cash and JTC PLC Ordinary shares and has been discounted to its present value of £29.6m ($37.5m) at the acquisition date (£30.5m at 31 December 2024).
Identifiable net assets acquired by the Group included:
| Note | Book value at acquisition £'000 |
Adjustments £'000 |
Fair value £'000 |
Fair value $'000 |
|
| Intangible assets - customer relationships | 17.1 | - | 25,977 | 25,977 | 32,900 |
| Intangible assets - brand | 17.2 | - | 711 | 711 | 900 |
| Property, plant and equipment 1 | 198 | 866 | 1,064 | 1,347 | |
| Trade receivables | 2,986 | - | 2,986 | 3,781 | |
| Other receivables | 669 | - | 669 | 848 | |
| Cash and cash equivalents | 2,625 | - | 2,625 | 3,325 | |
| Assets | 6,478 | 27,554 | 34,032 | 43,101 | |
| Trade and other payables | 1,191 | - | 1,191 | 1,509 | |
| Deferred income | 798 | - | 798 | 1,010 | |
| Lease liabilities 1 | - | 866 | 866 | 1,096 | |
| Other creditors | 167 | - | 167 | 212 | |
| Liabilities | 2,156 | 866 | 3,022 | 3,827 | |
| Total identifiable net assets | 4,322 | 26,688 | 31,010 | 39,274 |
1 The acquired business leases office premises; an adjustment was recognised to account for the lease liability, which is measured at the present value of the remaining lease payments with a corresponding right-of-use asset.
Goodwill arising on acquisition is as follows:
| Note | £'000 | $'000 | |
| Total consideration | 86,667 | 110,029 | |
| Less: identifiable net assets | (31,010) | (39,274) | |
| Goodwill | 16 | 55,657 | 70,755 |
15.6. Net cash outflow from acquisitions
The tables below illustrate the net cash outflow from acquisitions:
| 2024 | Note | Cash consideration £'000 |
Less: cash acquired £'000 |
Net £'000 |
| Blackheath | 15.1 | 772 | (223) | 549 |
| Hanway | 15.2 | 755 | (58) | 697 |
| FRTC | 15.3 | 19,402 | (3,940) | 15,462 |
| Buck | 15.4 | - | (395) | (395) |
| FFP | 15.5 | 45,341 | (2,625) | 42,716 |
| SALI - settlement of contingent consideration | 26 | 21,085 | - | 21,085 |
| Net cash outflow from acquisition | 87,355 | (7,241) | 80,114 |
| 2023 | Cash consideration £'000 |
Less: cash acquired £'000 |
Net £'000 |
|
| SDTC | 114,916 | (1,588) | 113,328 | |
| Segue - settlement of contingent consideration | 1,391 | - | 1,391 | |
| Net cash outflow from acquisition | 116,307 | (1,588) | 114,719 |
16. Goodwill
The aggregate carrying amounts of goodwill allocated to each CGU is as follows:
| In the current year: CGU |
Note | Balance at 1 Jan 2024 £'000 |
Combination of CGUs £'000 |
Business combinations £'000 |
Exchange differences £'000 |
Balance at 31 Dec 2024 £'000 |
| Jersey | 66,104 | - | - | - | 66,104 | |
| Guernsey | 10,761 | - | - | - | 10,761 | |
| BVI | 752 | - | - | - | 752 | |
| Switzerland | 2,556 | - | - | (78) | 2,478 | |
| Cayman | 237 | - | - | 4 | 241 | |
| Luxembourg | 28,727 | - | - | (1,208) | 27,519 | |
| Netherlands | 14,734 | - | - | (677) | 14,057 | |
| Dubai | 1,870 | - | - | 27 | 1,897 | |
| Mauritius | 2,518 | - | - | 39 | 2,557 | |
| US - ICS | 194,466 | - | - | 2,868 | 197,334 | |
| US - SDTC | 171,952 | - | - | 2,533 | 174,485 | |
| US - NYPTC | 7,398 | - | - | 109 | 7,507 | |
| US - FRTC | 15.3 | - | - | 7,658 | 176 | 7,834 |
| Cayman - FFP | 15.5 | - | - | 55,657 | 730 | 56,387 |
| Ireland - AIFM | 8,896 | - | - | (409) | 8,487 | |
| UK | 15.1, 15.2 | 11,993 | - | 1,794 | - | 13,787 |
| Total | 522,964 | - | 65,109 | 4,114 | 592,187 |
| In the prior year: CGU |
Balance at 1 Jan 2023 £'000 |
Combination of CGUs £'000 |
Business combinations £'000 |
Exchange differences £'000 |
Balance at 31 Dec 2023 £'000 |
|
| Jersey | 66,104 | - | - | - | 66,104 | |
| Guernsey | 10,761 | - | - | - | 10,761 | |
| BVI | 752 | - | - | - | 752 | |
| Switzerland | 2,504 | - | - | 52 | 2,556 | |
| Cayman | 251 | - | - | (14) | 237 | |
| Luxembourg | 29,186 | - | - | (459) | 28,727 | |
| Netherlands | 14,992 | - | - | (258) | 14,734 | |
| Dubai | 1,975 | - | - | (105) | 1,870 | |
| Mauritius | 2,656 | - | - | (138) | 2,518 | |
| US - ICS | - | 205,421 | - | (10,955) | 194,466 | |
| US - NESF | 49,704 | (49,704) | - | - | - | |
| US - SALI | 144,271 | (144,271) | - | - | - | |
| US - Other | 11,446 | (11,446) | - | - | - | |
| US - SDTC | - | - | 171,108 | 844 | 171,952 | |
| US - NYPTC | 8,062 | - | - | (664) | 7,398 | |
| Ireland - AIFM | 9,051 | - | - | (155) | 8,896 | |
| UK | 11,993 | - | - | - | 11,993 | |
| Total | 363,708 | - | 171,108 | (11,852) | 522,964 |
16.1. Impairment of goodwill
Key assumptions used to calculate the recoverable amount for each CGU
The recoverable amount of all CGUs has been determined based on the higher of value in use ("VIU") and fair value less cost of disposal ("FVLCD"). Projected cash flows are calculated with reference to each CGU's latest budget and business plan, which are subject to a rigorous review and challenge process. Management prepare the budgets through an assessment of historical revenues from existing clients, the pipeline of new projects, historical pricing, and the required resource base needed to service new and existing clients, coupled with their knowledge of wider industry trends and the economic environment.
Year 1 cash flow projections are based on the latest approved budget and years 2 to 5 are based on detailed outlooks prepared by Management. The US - ICS CGU employs a 10 year period due to the significantly longer useful economic life of their customer relationships, where these cash flow projections are able to be accurately forecast due to their recurring nature and increased client longevity.
The terminal growth rate considers the long-term average growth expectation for the jurisdiction and services provided.
Management estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money. In assessing the discount rate applicable to the Group, the following factors have been considered:
· long-term treasury bond rates for the relevant jurisdiction;
· the cost of equity, based on an adjusted Beta for the relevant jurisdiction; and
· the risk premium to reflect the increased risk of investing in equities.
Management have given due consideration to climate change and any potential impact on projected cash flows. Such is the nature of JTC's business and the diversification of customer relationships that Management have concluded the impact to be immaterial to each of the CGUs' recoverable amounts.
The recoverable amount for the US - SDTC, Cayman - FFP and Ireland CGUs were determined based on FVLCD. These were calculated using a discounted cash flow model, utilising Level 3 inputs under the IFRS 13 fair value hierarchy.
A summary of the values assigned to the key assumptions used in the VIU and FVLCD are as follows:
· Revenue growth rate: up to 20%
· Terminal value growth rate: between 1.5% and 4.0%
· Discount rate: between 10.8% and 15.0%
The key assumptions used for CGUs where the carrying amount is a significant proportion of the Group's total carrying value of goodwill is as follows:
| Forecasted average annual revenue growth rate |
Terminal value growth rate |
Discount rate | |||||
| CGU | % of Group's total carrying value of goodwill | 2024 % |
2023 % |
2024 % |
2023 % |
2024 % |
2023 % |
| Jersey | 11.2 | 8.1 | 6.8 | 2.8 | 2.6 | 12.6 | 10.8 |
| US - ICS | 33.3 | 11.8 | 18.2 | 4.0 | 4.0 | 12.3 | 10.9 |
| US - SDTC | 29.5 | 13.5 | 13.1 | 3.0 | 2.5 | 12.2 | 10.5 |
| Cayman - FFP | 9.5 | 4.8 | - | 3.0 | - | 15.0 | - |
At 31 December 2024, the recoverable amount of goodwill determined for each CGU was found to be higher than its carrying amount.
Sensitivity to changes in assumptions
Management believe that any reasonable changes to the key assumptions on which recoverable amounts are based would not cause the aggregate carrying amount to exceed the recoverable amount of the CGUs, except for US - SDTC where, for the recoverable amount to equal the carrying amount, there would need to be a reduction of £16.4m. This may be caused by an increase of 1.0% in the discount rate from 12.2% to 13.2%, a 1.4% decrease in terminal growth rate, or a 2.9% drop in estimated annual revenue growth.
17. Other intangible assets
The movements in other intangible assets are as follows:
| Customer relationships £'000 |
Brands £'000 |
Software £'000 |
Regulatory licence £'000 |
Total £'000 |
|
| Cost | |||||
| At 1 January 2023 | 156,604 | 2,881 | 14,149 | 331 | 173,965 |
| Additions | - | - | 3,811 | - | 3,811 |
| Additions through business combinations | 34,747 | 2,455 | 16 | - | 37,218 |
| Impairment charge | (737) | - | - | - | (737) |
| Disposals | (1,003) | - | (182) | - | (1,185) |
| Exchange differences | (4,165) | (365) | (79) | (6) | (4,614) |
| At 31 December 2023 | 185,446 | 4,971 | 17,715 | 325 | 208,458 |
| Additions | 508 | - | 5,035 | - | 5,543 |
| Additions through business combinations | 35,177 | 711 | - | - | 35,888 |
| Exchange differences | 868 | 74 | 40 | (15) | 966 |
| At 31 December 2024 | 221,999 | 5,756 | 22,790 | 310 | 250,855 |
| Accumulated amortisation | |||||
| At 1 January 2023 | 37,577 | 843 | 7,307 | 218 | 45,945 |
| Charge for the year | 12,799 | 712 | 2,236 | 20 | 15,766 |
| Disposals | (79) | - | (119) | - | (199) |
| Exchange differences | (151) | (58) | (146) | (4) | (360) |
| At 31 December 2023 | 50,146 | 1,497 | 9,278 | 234 | 61,155 |
| Charge for the year 1 | 15,282 | 970 | 2,701 | 20 | 18,973 |
| Exchange differences | (168) | 38 | 47 | (11) | (94) |
| At 31 December 2024 | 65,260 | 2,505 | 12,026 | 243 | 80,034 |
| Carrying amount | |||||
| At 31 December 2024 | 156,739 | 3,251 | 10,764 | 67 | 170,821 |
| At 31 December 2023 | 135,300 | 3,474 | 8,437 | 91 | 147,302 |
1 Total amortisation charge includes £2.1m (2023: £1.6m) related to software not acquired through business combinations; the balance of £16.9m (2023: £14.2m) is excluded when calculating adjusted underlying basic EPS (see note 14.3).
17.1. Customer relationship intangible assets
The carrying amount of identifiable customer relationship intangible assets acquired separately and through business combinations are as follows:
| Amortisation period end |
Useful economic life ("UEL") |
Carrying amount | |||
| Acquisitions | Note | 2024 £'000 |
2023 £'000 |
||
| During previous financial reporting periods | |||||
| Signes | 30 April 2025 | 10 years | 131 | 412 | |
| KB Group | 30 June 2027 | 12 years | 872 | 1,221 | |
| S&GFA | 30 September 2025 | 10 years | 300 | 689 | |
| BAML | 30 September 2029 | 12 years | 4,067 | 4,851 | |
| NACT | 31 July 2027 | 10 years | 445 | 706 | |
| Van Doorn | 28 February 2030 | 11.4 years | 3,174 | 3,985 | |
| Minerva | 30 May 2027 - 30 July 2030 | 8.7 - 11.8 years | 6,107 | 7,387 | |
| Exequtive | 31 March 2029 | 10 years | 4,063 | 5,261 | |
| Aufisco | 30 June 2029 | 10 years | 311 | 398 | |
| Sackville | 28 February 2029 | 10 years | 463 | 545 | |
| NESF | 30 April 2028 | 8 years | 293 | 739 | |
| Sanne Private Clients | 30 June 2030 | 10 years | 3,516 | 4,155 | |
| Anson Registrars | 28 February 2030 | 10 years | 16 | 19 | |
| RBC cees | 31 March 2033 | 12 years | 15,376 | 17,241 | |
| INDOS | 31 May 2031 | 10 years | 868 | 1,003 | |
| Segue | 30 September 2031 | 10 years | 701 | 826 | |
| perfORM | 30 September 2031 | 10 years | 18 | 21 | |
| Ballybunion | 31 October 2031 | 10 years | 1,713 | 2,058 | |
| SALI | 31 October 2046 | 25 years | 40,675 | 41,917 | |
| EFS | 30 November 2031 | 10 years | 1,008 | 1,136 | |
| Sterling | 30 June 2032 | 10 years | 2,302 | 2,621 | |
| NYPTC | 31 October 2032 | 10 years | 4,099 | 4,555 | |
| SDTC | 31 January 2036 | 12.5 years | 31,230 | 33,554 | |
| During the year ended 31 December 2024 | |||||
| Blackheath | 15.1 | 28 February 2034 | 10 years | 133 | - |
| CNFS | 17.1(B) | 5 March 2035 | 10 years | 478 | - |
| Hanway | 15.2 | 30 June 2033 | 9 years | 499 | - |
| FRTC | 15.3 | 31 July 2033 | 9 years | 7,849 | - |
| Buck | 15.4 | 31 October 2035 | 11 years | 480 | - |
| FFP | 15.5 | 14 November 2029 | 5 years | 25,552 | - |
| Total | 156,739 | 135,300 |
(A) Customer relationships acquired in a business combination
Customer relationship intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date. During the year, the Group recognised customer relationship intangible assets as follows: Blackheath £0.15m, Hanway £0.5m, FRTC £8.0m, Buck £0.5m and FFP £26.0m. The UEL and carrying amounts at 31 December 2024 are shown in the previous table.
Key assumptions in determining fair value
The fair value at acquisition was derived using the multi-period excess earnings method ("MEEM") financial valuation model. Management consider the following key assumptions to be significant for the valuation of new customer relationships:
· the discount rate applied to free cash flow; and
· annual client attrition rate.
Management have assessed the sensitivity of key assumptions used in the valuation of new customer relationships acquired during the year and concluded that, with the exception of FFP, any reasonable change to these would not result in a significant change to the fair value.
Sensitivity analysis
The following table shows in £'000 the impact that reasonable changes in the UEL/Attrition rate % and discount rate would have on the valuation of the customer relationship for FFP:
| UEL / Attrition rate % | |||
| Discount rate | 5.6 years / 27.5% |
5 years / 30.0% |
5.4 years / 32.5% |
| 14.5% | 2,290 | 158 | (3,158) |
| 15.0% | 2,132 | - | (3,316) |
| 15.5% | 1,895 | (237) | (3,474) |
In addition to the reasonable changes in UEL/Attrition rate % and discount rate, a movement of 4.2pp in the estimated annual EBIT margin would result in a £2.3m change in the valuation of the customer relationship.
(B) Customer relationships acquired separately
On 6 March 2024, the Group acquired a new customer relationship from Cayman National Fund Services Ltd ("CNFS"). The Group made an initial payment of £0.12m ($0.15m) and the remaining balance of £0.4m ($0.5m) was paid on 20 March 2025, following successful achievement of revenue targets. The fair value of the customer relationship acquired equates to the consideration due.
17.2. Brand intangible assets
The fair value at acquisition was derived using a relief from royalty methodology. Management consider the key assumptions in this model to be the UEL and the royalty rate applied to projected revenue growth.
On 15 November 2024, the Group recognised a brand intangible asset for FFP of £0.7m ($0.9m) (see note 15.5). The UEL of five years was based on Management's expectation, as well as UELs observed for benchmark transactions.
17.3. Impairment of other intangible assets
Consideration was given to many indicators, including the current macroeconomic environment and its potential impact on financial performance. Management concluded that there were no indicators of impairment present at 31 December 2024.
18. Trade receivables
The ageing analysis of trade receivables with the loss allowance is as follows:
| 2024 | Gross £'000 |
Loss allowance £'000 | Net £'000 |
| <30 days | 21,900 | (363) | 21,537 |
| 30 - 60 days | 8,842 | (643) | 8,199 |
| 61 - 90 days | 3,565 | (102) | 3,463 |
| 91 - 120 days | 2,075 | (169) | 1,906 |
| 121 - 180 days | 2,654 | (389) | 2,265 |
| 180> days | 12,853 | (5,132) | 7,721 |
| Total | 51,889 | (6,798) | 45,091 |
| 2023 | Gross £'000 |
Loss allowance £'000 |
Net £'000 |
| <30 days | 12,633 | (216) | 12,417 |
| 30 - 60 days | 5,019 | (376) | 4,643 |
| 61 - 90 days | 2,976 | (247) | 2,729 |
| 91 - 120 days | 1,532 | (142) | 1,390 |
| 121 - 180 days | 2,236 | (307) | 1,929 |
| 180> days | 14,088 | (5,125) | 8,963 |
| Total | 38,484 | (6,413) | 32,071 |
The movement in the allowances for trade receivables is as follows:
| 2024 £'000 |
2023 £'000 |
|
| Balance at the beginning of the year | (6,413) | (5,645) |
| Credit impairment losses in the consolidated income statement | (2,659) | (2,934) |
| Amounts written off (including unused amounts reversed) | 2,274 | 2,166 |
| Total allowance for doubtful debts | (6,798) | (6,413) |
The loss allowance includes both specific and expected credit loss ("ECL") provisions. To measure the ECL, trade receivables are grouped based on shared credit risk characteristics and the days past due. The ECLs are estimated collectively using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtor's financial position (this includes unlikely to pay indicators such as liquidity issues, insolvency or other financial difficulties) and an assessment of both the current as well as the forecast direction of macroeconomic conditions at the reporting date. Management have identified gross domestic product and inflation in each country the Group provides services in to be the most relevant macroeconomic factors. Management have considered these factors, as well as the impact of climate-related changes on customers, and are satisfied that any impact is not material to the ultimate recovery of receivables, such is the diversification across the book in industries and geographies. The loss allowance at 31 December 2024 is in line with previous trading and supports this conclusion. See note 34.2 for further comment on credit risk management.
ECL provision rates are segregated according to geographical location and by business line. The Group considers any specific impairments on a by-client basis rather than on a collective basis. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the consolidated income statement as a credit impairment loss. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against credit impairment losses.
19. Work in progress ("WIP")
| 2024 £'000 |
2023 £'000 |
|
| Total | 15,492 | 11,710 |
| Loss allowance | (113) | (95) |
| Net | 15,379 | 11,615 |
WIP relates to variable fee contracts and represents the net unbilled amount expected to be collected from clients for work performed to date. It is measured at the chargeable rate agreed with the individual clients, adjusted for unrecoverable amounts less progress billed and ECL. As these financial assets relate to unbilled work and have substantially the same risk characteristics as trade receivables, the Group has concluded that the expected loss rates for trade receivables of <30 days is an appropriate estimation of the ECL.
Sensitivity analysis
The total carrying amount of WIP (before ECL allowances) is £15.5m (2023: £11.7m). If Management's estimate of the recoverability of the WIP (the amount expected to be billed and collected from clients for work performed to date) is 10% lower than expected on the total WIP balance, due to adjustments for unrecoverable amounts, revenue would be £1.5m lower (2023: £1.2m lower).
20. Accrued income
| 2024 £'000 |
2023 £'000 |
|
| Total | 28,236 | 26,609 |
| Loss allowance | (32) | (35) |
| Net | 28,204 | 26,574 |
Accrued income relates to pre-set (fixed), cash management, and NAV-based fees across all service lines and represents the billable amount relating to the provision of services to clients that has not been invoiced at the reporting date. Accrued income is recorded based on agreed fees billed in arrears less ECL. As these financial assets relate to unbilled work and have substantially the same risk characteristics as trade receivables, the Group has concluded that the expected loss rates for trade receivables of <30 days is an appropriate estimation of the ECL.
21. Cash and cash equivalents
| 2024 £'000 |
2023 £'000 |
|
| Cash and cash equivalents | 89,232 | 97,222 |
| Total cash and cash equivalents | 89,232 | 97,222 |
For the purpose of presentation in the consolidated statement of cash flow, cash and cash equivalents includes cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.
Cash and cash equivalents are subject to the impairment requirements of IFRS 9 but, as balances are held with reputable international banking institutions, they were assessed to have low credit risk and no loss allowance is recognised.
The cash and cash equivalents disclosed above and in the statement of cash flows includes cash allocated against regulatory and capital adequacy requirements of £24.5m (see note 36.4). These deposits vary by jurisdiction and, therefore, are not available for general use by the other entities within the Group.
22. Tangible assets
The movements of all tangible assets, which include property, plant and equipment and right-of-use assets, are as follows:
| Computer equipment £'000 |
Office furniture and equipment £'000 |
Leasehold improvements £'000 |
Total Property, plant and equipment £'000 |
Total Right-of-use assets1 £'000 |
|
| Cost | |||||
| At 1 January 2023 | 4,629 | 3,231 | 10,213 | 18,073 | 60,452 |
| Additions | 424 | 406 | 1,770 | 2,600 | 4,482 |
| Additions through business combinations | 62 | 38 | 616 | 716 | 2,735 |
| Disposals | (278) | (271) | - | (549) | (1,454) |
| Exchange differences | 34 | 415 | 395 | 844 | (828) |
| At 31 December 2023 | 4,871 | 3,819 | 12,994 | 21,684 | 65,387 |
| Additions | 856 | 774 | 3,304 | 4,934 | 12,744 |
| Additions through business combinations | 2 | - | 200 | 202 | 883 |
| Disposals | (220) | (161) | (334) | (715) | (2,693) |
| Exchange differences | (16) | (15) | (14) | (45) | (663) |
| At 31 December 2024 | 5,493 | 4,417 | 16,150 | 26,060 | 75,658 |
| Accumulated depreciation | |||||
| At 1 January 2023 | 3,487 | 1,452 | 3,954 | 8,894 | 20,066 |
| Charge for the year | 523 | 598 | 1,296 | 2,418 | 5,844 |
| Disposals | (208) | (261) | - | (469) | (186) |
| Exchange differences | 66 | 481 | 422 | 969 | (122) |
| At 31 December 2023 | 3,868 | 2,270 | 5,672 | 11,812 | 25,602 |
| Charge for the year | 561 | 587 | 1,435 | 2,583 | 7,461 |
| Disposals | (220) | (156) | (278) | (654) | (2,441) |
| Exchange differences | (21) | (6) | 13 | (16) | (311) |
| At 31 December 2024 | 4,188 | 2,695 | 6,842 | 13,725 | 30,311 |
| Carrying amount | |||||
| At 31 December 2024 | 1,305 | 1,722 | 9,308 | 12,335 | 45,347 |
| At 31 December 2023 | 1,003 | 1,549 | 7,322 | 9,874 | 39,785 |
1 Right-of-use assets have been disclosed separately from property, plant and equipment on the consolidated balance sheet, this reclassification has been applied consistently to the prior year comparatives.
23. Other assets
| 2024 £'000 |
2023 £'000 |
|
| Non-current | ||
| Costs to obtain or fulfil a contract 1 | 2,429 | 2,367 |
| Prepayments | 431 | 614 |
| Total other non-current assets | 2,860 | 2,981 |
| Current | ||
| Prepayments | 7,128 | 5,237 |
| Other receivables 2 | 2,642 | 2,685 |
| Loan receivable from a third party | 1,556 | 1,496 |
| Costs to obtain or fulfil a contract 1 | 782 | 656 |
| Tax receivables | 879 | 1,006 |
| Total other current assets | 12,987 | 11,080 |
1 Current and non-current assets recognised from costs to obtain or fulfil a contract include £2.0m for costs to obtain a contract (2023: £1.9m) and £1.0m for costs incurred to fulfil a contract (2023: £1.1m). The amortisation charge for the year was £1.1m (2023: £1.1m). Management review assets recognised from costs to obtain or fulfil a contract and have concluded that there was no impairment at 31 December 2024.
2 Other receivables are subject to the impairment requirements of IFRS 9 and they were assessed to have low credit risk, and no loss allowance is recognised.
24. Investments
The following table details the associate and investments held by the Group at 31 December 2024. The entities listed have share capital consisting solely of Ordinary shares, which are held directly by the Group. The country of incorporation is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held.
| % of ownership interest | Carrying amount | ||||||
| Name of entity | Country of incorporation |
Nature of relationship |
Measurement method |
2024 % |
2023 % |
2024 £'000 |
2023 £'000 |
| Kensington International Group Pte. Ltd | Singapore | Associate 1 | Equity method | 42 | 42 | 2,740 | 2,310 |
| Harmonate Corp. | United States | Investment 2 | Cost | 11.2 | 11.2 | 798 | 805 |
| FOMTech Limited | United Kingdom | Investment 3 | Cost | 0.2 | 0.2 | 250 | 250 |
| Total investments | 3,788 | 3,365 |
1 Kensington International Group Pte. Ltd ("KIG") provides corporate, fiduciary, trust and accounting services and is a strategic partner of the Group, providing access to new clients and markets in the Far East.
2 Harmonate Corp. ("Harmonate") provides fund operation and data management solutions to the financial services industry.
3 FOMTech Limited and its subsidiaries operates a FinTech platform that specialises in venture capital funding.
The summarised financial information for KIG, which is accounted for using the equity method, is as follows:
| Summarised income statement | 2024 £'000 |
2023 £'000 |
| Revenue | 8,845 | 7,554 |
| Gross profit | 7,181 | 6,313 |
| Operating expenditure | 5,196 | 5,753 |
| Total comprehensive income for the year | 847 | 114 |
| Summarised balance sheet | 2024 £'000 |
2023 £'000 |
| Non-current assets | 514 | 650 |
| Current assets | 8,732 | 6,944 |
| Current liabilities | (4,000) | (3,365) |
| Closing net assets | 5,246 | 4,229 |
| Reconciliation of summarised financial information | 2024 £'000 |
2023 £'000 |
| Opening net assets | 4,229 | 4,264 |
| Total comprehensive income for the year | 847 | 114 |
| Foreign exchange differences | 170 | (149) |
| Closing net assets | 5,246 | 4,229 |
| Group's share of closing net assets | 2,218 | 1,788 |
| Goodwill | 522 | 522 |
| Carrying value of investment in associate | 2,740 | 2,310 |
| Impact on consolidated income statements | 2024 £'000 |
2023 £'000 |
| Balance at 1 January | 2,310 | 2,325 |
| Share of profit/(loss) of equity-accounted investee | 430 | (15) |
| Balance at 31 December | 2,740 | 2,310 |
25. Loans and borrowings
This note provides information about the contractual term of the Group's interest-bearing loans and borrowings, which are measured at amortised cost.
| 2024 £'000 |
2023 £'000 |
|
| Non-current | ||
| Bank loans | 271,552 | 220,531 |
| Total loans and borrowings | 271,552 | 220,531 |
The terms and conditions of outstanding bank loans are as follows:
| Facility | Currency | Initial termination date | Interest rate | 2024 £'000 |
2023 £'000 |
| Term facility | GBP | 4 December 2026 | SONIA + 1.65% margin | 100,000 | 100,000 |
| Revolving credit facility | GBP | 4 December 2026 | SONIA + 1.65% margin | 137,163 | 123,662 |
| Revolving credit facility | USD | 4 December 2026 | SONIA + 1.65% margin | 36,898 | - |
| Total principal value Issue costs |
274,061 (2,509) |
223,662 (3,131) |
|||
| Total bank loans | 271,552 | 220,531 |
On 6 October 2021, the Group entered into a multicurrency loan facility agreement (the "original facilities agreement") with an initial termination date of 6 October 2024. On 4 December 2023, an amendment and restatement agreement (the "A&R agreement") relating to the original facilities agreement increased the total commitment to £400m and extended the initial termination date to 4 December 2026, with an option for two further extensions available to 30 June 2027 and 30 June 2028, respectively.
On 26 July 2024, the Group drew down £13.5m to partly fund the acquisition of FRTC. On 29 October 2024, the Group utilised the multicurrency facility and drew in US dollars (£35.7m, $46.3m) to contribute towards the cash consideration for FPP.
At 31 December 2024, the Group had available £125.9m of committed facilities currently undrawn (2023: £176.3m).
The cost of the facility depends upon a covenant tested on net leverage, this being the ratio of total net debt to underlying EBITDA (for the last twelve months ("LTM") at average exchange rates and adjusted for pro-forma contributions from acquisitions), for a relevant period as defined in the A&R agreement.
The interest rate applied to loan facilities is determined using SONIA plus a margin based on net leverage calculations. At 1 January 2023, the margin was 1.65%; this reduced to 1.15%, effective from 29 September 2023, and increased to 1.65% on 4 December 2023. The margin remained at 1.65% throughout 2024.
On 4 December 2023, the Group entered into a two year interest rate swap at a fixed interest (excluding margin) of 4.237% on £180m of its drawn debt facilities. For more information on the Group's hedging strategy, see note 33.
The movement in bank facilities is as follows:
| At 1 January 2024 £'000 |
Drawdowns £'000 |
Repayment £'000 |
Amortisation release £'000 |
Foreign exchange £'000 |
At 31 December 2024 £'000 |
|
| Principal value | 223,662 | 49,187 | - | - | 1,212 | 274,061 |
| Issue costs | (3,131) | (720) | - | 1,342 | - | (2,509) |
| Total | 220,531 | 48,467 | - | 1,342 | 1,212 | 271,552 |
| At 1 January 2023 £'000 |
Drawdowns £'000 |
Repayment £'000 |
Amortisation release £'000 |
Foreign exchange £'000 |
At 31 December 2023 £'000 |
|
| Principal value | 155,662 | 118,000 | (50,000) | - | - | 223,662 |
| Issue costs | (2,040) | (1,896) | - | 805 | - | (3,131) |
| Total | 153,622 | 116,104 | (50,000) | 805 | - | 220,531 |
At 31 December 2024, arrangement and legal fees amounting to £6.0m have been capitalised for amortisation over the term of the loan (2023: £5.3m).
The Group has complied with the financial covenants of its borrowing facilities during the 2024 and 2023 reporting periods (see note 35.2).
Under the terms of the facility, the debt is supported by guarantees from JTC PLC and its other applicable subsidiaries deemed to be obligors, and in the event of default, demand could be placed on these entities to settle outstanding liabilities.
For the majority of the borrowings, the fair values are not materially different from their carrying amounts, since the interest payable on those borrowings is close to current market rates or the borrowings are short term in nature.
26. Contingent consideration
Contingent consideration payables are discounted to NPV, split between current and non-current, and are due as follows:
| Acquisition | Note | 2024 £'000 |
2023 £'000 |
| SDTC 1 | 25,158 | 45,989 | |
| perfORM | - | 3,805 | |
| Total non-current contingent consideration | 25,158 | 49,794 | |
| SDTC 1 | 26,486 | 1,536 | |
| FFP | 15.5 | 30,450 | - |
| perfORM 2 | 6,558 | - | |
| Hanway | 15.2 | 1,465 | - |
| CNFS | 17.1(B) | 398 | - |
| SALI 3 | - | 24,644 | |
| Sterling 4 | - | 726 | |
| Total current contingent consideration | 65,357 | 26,906 | |
| Total contingent consideration | 90,515 | 76,700 |
1 A total of up to £54.7m ($70.0m) is payable, subject to meeting revenue targets for the calendar years 2024 and 2025. Based on Management's assessment of the forecast for the remaining period, it is estimated that the contingent consideration payable will be met in full. The estimated contingent consideration has been discounted to its present value of £51.6m ($64.8m) and is payable in a 73.5%/26.5% ratio of cash and JTC PLC Ordinary shares.
2 The earn-out for perfORM is calculated based on a multiple of their underlying EBITDA for the year ended 31 December 2024. This is payable in an equal split of cash and JTC PLC Ordinary shares; the 50% payable in shares is liability-classified contingent consideration as this is settled by a variable number of shares. In accordance with IAS 32, Management are required to update the fair value at each reporting date.
To update the fair value of the JTC PLC Ordinary shares payable, the Monte Carlo simulation was updated and this increased the share price applied to £9.94 (2023: £8.47). The simulation is based on JTC's share price at 31 December 2024, factoring in historical volatility and projected dividend payments, and is then discounted using an appropriate risk-free rate.
At the acquisition date, Management forecast the underlying EBITDA for perfORM and estimated that £4.48m would be due. At 31 December 2024, Management revisited their forecast of underlying EBITDA and estimate that £6.8m will be due. Based on this, the number of Ordinary shares to be issued was reassessed by Management to be 382,166 (2023: 282,854).
The estimated contingent consideration has been discounted to its present value of £6.6m, resulting in a loss on revaluation of contingent consideration of £2.0m (2023: loss of £0.17m).
3 On 10 January 2024, having successfully met earn-out targets for the two year period following acquisition, the earn-out for SALI was settled in full with cash (£21.1m) and the issue of 465,516 JTC Ordinary shares (see note 31.1).
4 On 1 February 2024, the contingent consideration was paid in full settlement of all obligations due.
27. Trade and other payables
| 2024 £'000 |
2023 £'000 |
||
| Trade payables | 2,917 | 1,255 | |
| Other taxation and social security | 1,454 | 1,127 | |
| Other payables | 5,486 | 4,333 | |
| Accruals | 18,239 | 13,276 | |
| Total trade and other payables | 28,096 | 19,991 |
For current trade and other payables, due to their short-term nature, Management consider the carrying value of these financial liabilities to approximate to their fair value.
28. Lease liabilities
| 2024 £'000 |
2023 £'000 |
||
| At 1 January | 44,041 | 44,894 | |
| Additions | 13,479 | 4,482 | |
| Additions through business combinations | 883 | 2,735 | |
| Disposals | - | (1,039) | |
| Accretion of interest | 1,956 | 922 | |
| Payments | (8,549) | (7,513) | |
| Exchange differences | (481) | (440) | |
| At 31 December | 51,329 | 44,041 |
| Analysis of total provisions: | 2024 £'000 |
2023 £'000 |
|
| Non-current | 44,647 | 37,924 | |
| Current | 6,682 | 6,117 | |
| Total lease liabilities | 51,329 | 44,041 |
The Group has lease contracts for the rental of buildings for office space and also for various items of office furniture and equipment. The Group makes business decisions that affect their lease contracts and those containing renewal and termination clauses are reassessed to determine whether there is any change to the lease term. Management have an ongoing programme of review and have not identified any leases with an extension option that would have a significant impact on the carrying amount of lease assets and liabilities. Where the Group has issued an early termination notice, the net present value of the liability and carrying value of the right-of-use asset has been reassessed based on the new expected termination date.
29. Deferred tax
The deferred tax (assets) and liabilities recognised in the consolidated financial statements are set out below:
| 2024 £'000 |
2023 £'000 |
||
| Deferred tax (assets) | (1,012) | (266) | |
| Deferred tax liabilities | 6,510 | 9,474 | |
| 5,498 | 9,208 | ||
| Intangible assets | 14,876 | 9,167 | |
| Other origination and reversal of temporary differences | (9,378) | 41 | |
| 5,498 | 9,208 |
The movement in the year is analysed as follows:
| 2024 £'000 |
2023 £'000 |
||
| Intangible assets | |||
| Balance at 1 January | 9,167 | 11,097 | |
| Recognised through business combinations | 133 | - | |
| Recognised in the consolidated income statement | 5,542 | (1,694) | |
| Foreign exchange (to other comprehensive income) | 34 | (236) | |
| Balance at 31 December | 14,876 | 9,167 | |
| Other origination and reversal of temporary differences | |||
| Balance at 1 January | 41 | (56) | |
| Recognised in the consolidated income statement | (9,229) | 97 | |
| Foreign exchange (to other comprehensive income) | (190) | - | |
| Balance at 31 December | (9,378) | 41 |
At 31 December 2024, the total unrecognised deferred tax asset in respect of brought-forward losses was approximately £3.6m (2023: £2.1m). All tax losses carry no expiry, with the exception of Luxembourg (£1.2m), which has an expiration of 17 years. These deferred tax assets have not been recognised, on the basis that their future economic benefit is not probable.
A deferred tax liability has not been recognised in respect of temporary differences associated with investment in subsidiaries of £1.9m.
The movement in deferred tax for intangible assets is primarily attributable to US tax-deductible amortisation creating a temporary difference between the carrying amount and tax base of goodwill and other intangible assets arising from business combinations. The movement in deferred tax for other timing differences is primarily attributable to the recognition of deferred tax assets in the US, which are expected to be offset against future taxable profits.
30. Other liabilities
| 2024 £'000 |
2023 £'000 |
||
| Non-current | |||
| Provisions | 2,740 | 2,200 | |
| Employee benefit obligations | 895 | 815 | |
| Contract liabilities | 314 | 492 | |
| Total other non-current liabilities | 3,949 | 3,507 | |
| Current | |||
| Provisions | 277 | 372 | |
| Current tax liabilities | 3,268 | 5,346 | |
| Contract liabilities | 856 | 873 | |
| Total other current liabilities | 4,401 | 6,591 |
30.1. Provisions
Provisions relate to leasehold dilapidation provisions that are expected to arise on leasehold premises contracts held by the Group. The balance will be utilised on vacation of the premises.
| Dilapidations | |||
| 2024 £'000 |
2023 £'000 |
||
| At 1 January | 2,572 | 2,153 | |
| Additions | 399 | 277 | |
| Additions through business combinations | 191 | 409 | |
| Release of unutilised provided amount | (291) | (230) | |
| Unwind of discount | 74 | 40 | |
| Amounts utilised | (5) | - | |
| Impact of foreign exchange | 77 | (77) | |
| At 31 December | 3,017 | 2,572 |
| Analysis of total provisions: | 2024 £'000 |
2023 £'000 |
|
| Non-current | 2,740 | 2,200 | |
| Current | 277 | 372 | |
| Total | 3,017 | 2,572 |
31. Share capital and reserves
31.1. Share capital and share premium
The Group's Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of Ordinary shares are recognised as a deduction from equity, net of any tax effects.
| 2024 £'000 |
2023 £'000 |
||
| Authorised | |||
| 300,000,000 Ordinary shares (2023: 300,000,000 Ordinary shares) | 3,000 | 3,000 | |
| Called up, issued and fully paid | |||
| 168,753,026 Ordinary shares (2023: 165,521,678 Ordinary shares) | 1,688 | 1,655 |
Ordinary shares have a par value of £0.01 each. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at shareholders' meetings of JTC PLC.
| Movements in Ordinary shares | Note | No. of shares (thousands) |
Par value £'000 |
Share premium £'000 |
| At 1 January 2023 | 149,061 | 1,491 | 290,435 | |
| Shares issued for equity raises | 8,857 | 88 | 61,912 | |
| PLC EBT issue | 1,580 | 16 | - | |
| Acquisition of SDTC | 5,978 | 60 | 41,359 | |
| Acquisition of Segue | 46 | - | 360 | |
| 16,461 | 164 | 103,632 | ||
| Less: Cost of share issuance | - | - | (1,853) | |
| Movement in the year | 16,461 | 164 | 101,778 | |
| At 31 December 2023 | 165,522 | 1,655 | 392,213 | |
| PLC EBT issue 1 | 1,660 | 17 | - | |
| Acquisition of SALI | 26 | 466 | 5 | 3,693 |
| Acquisition of Blackheath | 15.1 | 18 | - | 147 |
| Acquisition of FFP | 15.5 | 1,087 | 11 | 10,689 |
| 3,231 | 33 | 14,529 | ||
| Less: Cost of share issuance | - | - | (94) | |
| Movement in the year | 3,231 | 33 | 14,435 | |
| At 31 December 2024 | 168,753 | 1,688 | 406,648 |
1 On 30 May 2024, the Company issued an additional 1,660,056 Ordinary shares to the Company's Employee Benefit Trust ("PLC EBT") in order for PLC EBT to satisfy anticipated future exercises of awards granted to beneficiaries.
31.2. Own shares
Own shares represent the shares of the Company that are unallocated and currently held by PLC EBT. They are recorded at cost and deducted from equity. When shares vest unconditionally, are cancelled or are reissued, they are transferred from the own shares reserve at their cost. Any consideration paid or received for the purchase or sale of the Company's own shares is shown as a movement in shareholders' equity.
| Note | No. of shares (thousands) |
PLC EBT £'000 |
|
| At 1 January 2023 | 2,957 | 3,697 | |
| PSP awards | (200) | - | |
| DBSP awards | (48) | - | |
| Other awards | (89) | - | |
| Acquisition of INDOS | (212) | - | |
| PLC EBT issue | 1,580 | 15 | |
| Purchase of own shares | 29 | 200 | |
| Movement in year | 1,060 | 215 | |
| At 31 December 2023 | 4,017 | 3,912 | |
| EIP awards | 6.1 | (2,354) | - |
| PSP awards | 6.2 | (250) | - |
| DBSP awards | 6.3 | (61) | - |
| Other awards | 6.4 | (147) | - |
| PLC EBT issue | 31.1 | 1,660 | 17 |
| Purchase of own shares | 176 | 1,831 | |
| Movement in year | (976) | 1,848 | |
| At 31 December 2024 | 3,041 | 5,760 |
31.3. Other reserves
Capital reserve
This reserve is used to record the gains or losses recognised on the purchase, sale, issue or cancellation of the Company's own shares, which may arise from capital transactions by the Group's employee benefit trusts, as well as any movements in share-based awards to employees (see note 6).
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
Other reserve
Other reserve includes the cash flow hedge reserve, which is used to recognise the effective portion of gains or losses on derivatives designated and qualifying as cash flow hedges (see note 33).
Retained earnings
Retained earnings includes accumulated profits and losses.
32. Dividends
The following dividends were declared and paid by the Company for the year:
| 2024 £'000 |
2023 £'000 |
||
| Final dividend for 2022 of 6.88p per qualifying ordinary share | - | 10,240 | |
| Interim dividend for 2023 of 3.5p per qualifying ordinary share | - | 5,785 | |
| Final dividend for 2023 of 7.67p per qualifying ordinary share | 12,429 | - | |
| Interim dividend for 2024 of 4.3p per qualifying ordinary share | 7,067 | - | |
| Total dividend declared and paid | 19,496 | 16,025 |
33. Derivative financial instruments
The Group holds the following derivative financial assets/(liabilities), which are presented in the consolidated balance sheet:
| 2024 £'000 |
2023 £'000 |
||
| Interest rate swaps - cash flow hedges | 341 | (749) | |
| Total derivative financial instruments | 341 | (749) |
| Note | 2024 £'000 |
2023 £'000 |
|
| Gain/(loss) recognised on revaluation of cash flow hedges | 2,800 | (615) | |
| Gain reclassified from other comprehensive income to the profit or loss | 12 | (1,710) | (134) |
| Total gains/(losses) recognised on derivative financial instruments | 1,090 | (749) |
The Group holds three interest rate swap contracts, which commenced on 4 December 2023 and expire on 4 December 2025, with a blended swap rate of 4.237% (excluding margin). Each of the contracts cover a notional amount of £60.0m, and as at 31 December 2024, the Group held 66% (2023: 80%) of fixed rate debt and 34% (2023: 20%) of floating rate debt, based upon its total borrowings of £274.1m (2023: £223.7m).
Hedge accounting
The Group exercised the option to use hedge accounting for the two year interest rate swap on its loans and borrowings, in accordance with IFRS 9 'Financial Instruments'.
The Group designates certain derivatives held for risk management as hedging instruments in qualifying hedging relationships. On initial designation of the hedge, the Group formally documents the relationship between the hedging instruments and hedged items, including the risk management objective, the strategy in undertaking the hedge and the method that will be used to assess the effectiveness of the hedging relationship.
The Group makes an assessment, both at the inception of the hedge relationship and on an ongoing basis, as to whether the hedging instruments are expected to be highly effective in offsetting the movements in the fair value of the respective hedged items during the period for which the hedge is designated.
Cash flow hedges
In accordance with its risk management strategy, the Group entered into interest rate swap contracts to manage the interest rate risk arising in respect of the floating interest rate exposures on its borrowings.
The Group assessed prospective hedge effectiveness by comparing the changes in the floating rate on its borrowings with the changes in fair value of allocated interest rate swaps used to hedge the exposure.
The Group has identified the following possible sources of ineffectiveness:
· the use of derivatives as a protection against interest rate risk creates an exposure to the derivative counterparty's credit risk that is not offset by the hedged item;
· different amortisation profiles on hedged item principal amounts and interest rate swap notionals;
· for derivatives, the discounting curve used depends on collateralisation and the type of collateral used; and
· differences in the timing of settlement of hedging instruments and hedged items.
Management have concluded that there are no sources of ineffectiveness.
34. Financial risk management
The Group is exposed through its operations to the following financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.
The Group is exposed to risks that arise from the use of its financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.
There have been no material changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods, unless otherwise stated in this note.
General objectives, policies and processes
The Board has overall responsibility for determining the Group's financial risk management objectives and policies and, whilst retaining ultimate responsibility for them, it delegates the authority for designing and operating processes that ensure effective implementation of the objectives and policies to Management, in conjunction with the Group's finance department.
The financial risk management policies are considered on a regular basis to ensure that these are in line with the overall business strategies and the Board's risk management philosophy. The overall objective is to set policies to minimise risk as far as possible without adversely affecting the Group's financial performance, competitiveness and flexibility.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
| Note | 2024 £'000 |
2023 £'000 |
|
| Financial assets - measured at amortised cost | |||
| Trade receivables | 18 | 45,091 | 32,071 |
| Work in progress | 19 | 15,379 | 11,615 |
| Accrued income | 20 | 28,204 | 26,574 |
| Other assets | |||
| Other receivables | 23 | 2,642 | 2,685 |
| Loan receivable from a third party | 23 | 1,556 | 1,496 |
| Cash and cash equivalents | 21 | 89,232 | 97,222 |
| 182,104 | 171,663 | ||
| Financial assets - measured at fair value | |||
| Derivative financial assets | 33 | 341 | - |
| 341 | - | ||
| Financial liabilities - measured at amortised cost | |||
| Loans and borrowings | 25 | 271,552 | 220,531 |
| Contingent consideration | 26 | 86,716 | 74,798 |
| Trade and other payables | 27 | 28,096 | 19,991 |
| Lease liabilities | 28 | 51,329 | 44,041 |
| 437,693 | 359,361 | ||
| Financial liabilities - measured at fair value | |||
| Derivative financial liabilities | 33 | - | 749 |
| Contingent consideration | 26 | 3,799 | 1,902 |
| 3,799 | 2,651 |
Management considered the following fair value hierarchy levels in line with IFRS 13.
Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability, either directly or indirectly
Level 3 - Inputs are unobservable inputs for the asset or liability
Management concluded that the interest rate swap was classified under Level 2, calculated as the present value of the estimated future cash flows based on observable yield curves, and the liability-classified contingent consideration was classified under Level 3, as per the valuation methodology outlined in note 26.
34.1. Market risk
Market risk arises from the Group's use of interest-bearing, tradable and foreign currency financial instruments. It is the risk that changes in interest rates (interest rate risk) or foreign exchange rates (currency risk) will affect the Group's future cash flows or the fair value of the financial instruments held. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Foreign currency risk management and sensitivity
Foreign currency risk arises when individual Group entities enter into transactions denominated in a currency other than their functional currency. The Group's policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency with the cash generated from their own operations in that currency. Where Group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in the required currency will, where possible and ensuring no adverse impact on local regulatory capital adequacy requirements (see note 35.3), be transferred from elsewhere in the Group.
In order to monitor this policy, Management periodically analyse cash reserves by individual Group entities and in major currencies, together with information on expected liabilities due for settlement. The effectiveness of this policy is measured by the number of resulting cash transfers made between entities and any necessary foreign exchange trades. The Group has utilised its multicurrency bank facility to assist with the funding of US-based acquisitions (see note 25).
The Group's exposure to the risk of changes in exchange rates relates primarily to the Group's operating activities when the revenue or expenses are denominated in a different currency from the Group's functional and presentation currency of pounds sterling ("£"). For trading entities that principally affect the profit or net assets of the Group, the exposure is mainly from the Euro and US dollar.
Management consider this policy to be working effectively but continue to regularly assess if foreign currency hedging is appropriate.
As at 31 December 2024, the Group's exposure to the Group's material foreign currency-denominated financial assets and liabilities is as follows:
| Net foreign currency assets/(liabilities) | £ | Euro | US dollar | |||
| 2024 £'000 |
2023 £'000 |
2024 £'000 |
2023 £'000 |
2024 £'000 |
2023 £'000 |
|
| Trade receivables | 19,459 | 18,661 | 2,653 | 2,894 | 22,341 | 10,021 |
| Work in progress | 12,966 | 8,894 | 1,422 | 1,441 | 1,352 | 875 |
| Accrued income | 12,014 | 13,820 | 2,553 | 2,314 | 12,724 | 10,326 |
| Other receivables | 1,118 | 1,243 | 376 | - | 2,507 | 2,776 |
| Cash and cash equivalents | 15,321 | 12,102 | 18,271 | 15,534 | 53,499 | 67,669 |
| Trade and other payables | (13,939) | (5,083) | (3,415) | (7,529) | (9,568) | (6,202) |
| Loans and borrowings | (237,162) | (223,662) | - | - | (36,898) | - |
| Contingent consideration | (8,023) | (3,625) | - | - | (82,493) | (72,894) |
| Lease liabilities | (28,742) | (24,966) | (7,030) | (9,168) | (13,187) | (7,093) |
| Total net exposure | (226,988) | (202,616) | 14,830 | 5,486 | (49,723) | 5,477 |
For the year ended 31 December 2024, mainly due to the Euro and United States dollar foreign currency exchange rate movements, the Group have recognised the following:
· a foreign exchange gain of £6.2m in other comprehensive income (2023: £7.0m loss) upon translating our foreign operations to our functional currency.
· a foreign exchange loss of £1.1m (2023: £9.6m loss) in the consolidated income statement upon the retranslation of monetary assets and liabilities denominated in foreign currencies (see note 11).
The following table illustrates the possible effect on comprehensive income for the year and net assets arising from a 20% strengthening or weakening of UK sterling against other currencies.
| Strengthening/ (weakening) of UK sterling 1 |
Effect on comprehensive income and net assets | ||
| 2024 £'000 |
2023 £'000 |
||
| Euro | +20% | (2,472) | (914) |
| US dollar | +20% | 8,287 | (913) |
| Total | 5,185 | (1,827) | |
| Euro | (20%) | 3,707 | 1,371 |
| US dollar | (20%) | (12,431) | 1,369 |
| Total | (8,724) | 2,740 |
1 Holding all other variables constant
Interest rate risk management and sensitivity
The Group is exposed to interest rate risk as it borrows funds at floating interest rates. The interest rate applied to loan facilities is determined using SONIA, plus a margin based on net leverage calculations. The Group manages the interest rate risk by holding three interest rate swap contracts (see note 33) and maintaining an appropriate leverage ratio (ensuring that the interest rate is kept as low as possible).
Sensitivity analysis
An increase/decrease of 100 basis points in interest rates on loans and borrowing with floating interest rates would have decreased/increased the profit and loss before tax by £0.8m (2023: increase/decrease by 100 basis points, +/-£1.6m). This analysis assumes that all other variables remain constant.
The Group's exposures to interest rates on financial assets and financial liabilities are detailed in note 34.3.
34.2 Credit risk management
Credit risk is the risk of financial loss to the Group should a customer or counterparty to a financial instrument fail to meet its contractual obligations. The Group's principal exposure to credit risk arises from contracts with customers and, therefore, the following financial assets: trade receivables, work in progress and accrued income (together, "customer receivables").
The Group manages credit risk for each new customer by giving consideration to the risk of insolvency or closure of the customer's business, current or forecast liquidity issues and general creditworthiness (including past default experience of the customer or customer type).
Subsequently, customer credit risk is managed by each of the Group entities, subject to the Group's policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are monitored and followed up continuously. Specific provisions incremental to ECL are made when there is objective forward-looking evidence that the Group will not be able to bill the customer in line with the contract or collect the debts arising from previous invoices. This evidence can include the following: indication that the customer is experiencing significant financial difficulty or default, probability of bankruptcy, problems in contacting the customer, disputes with a customer, or similar factors.
Management gives close and regular consideration to the potential impact of the macroeconomic environment and any climate-related risks upon the customer's behaviours and ability to pay. This analysis is performed on a customer-by-customer basis. Such is the diversification across the book in industries and geographies that any impact is not considered to be material to the recoverability of customer receivables. For more commentary on this, the ageing of trade receivables and the provisions thereon at the year end, including the movement in the provision, see note 18.
Credit risk in relation to other receivables and loan receivables from third parties are considered for each separate contractual arrangement, and the risk of the counterparty defaulting is considered to be low.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. Cash and cash equivalents are held mainly with banks that are rated 'A-' or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd for long-term credit rating.
Credit risk exposure
Trade receivables, work in progress and accrued income result from the provision of services to a large number of customers (individuals and corporate), spread across different industries and geographies. The gross carrying amount of financial assets represents the maximum credit exposure and as at the reporting date, this can be summarised as follows:
| Loss | Loss | |||||
| Total | allowance | Net | Total | allowance | Net | |
| 2024 £'000 |
2024 £'000 |
2024 £'000 |
2023 £'000 |
2023 £'000 |
2023 £'000 |
|
| Trade receivables | 51,889 | (6,798) | 45,091 | 38,484 | (6,413) | 32,071 |
| Work in progress | 15,492 | (113) | 15,379 | 11,710 | (95) | 11,615 |
| Accrued income | 28,236 | (32) | 28,204 | 26,609 | (35) | 26,574 |
| Other assets | ||||||
| Other receivables | 2,642 | - | 2,642 | 2,685 | - | 2,685 |
| Loan receivable from third party | 1,556 | - | 1,556 | 1,496 | - | 1,496 |
| Cash and cash equivalents | 89,232 | - | 89,232 | 97,222 | - | 97,222 |
| 189,047 | (6,943) | 182,104 | 178,206 | (6,543) | 171,663 |
34.3. Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages liquidity risk to maintain adequate reserves by regular review around the working capital cycle, using information on forecast and actual cash flows.
The Board is responsible for liquidity risk management and it has established an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. Regulation in most jurisdictions also requires the Group to maintain a level of liquidity in order that the Group does not become exposed.
Liquidity tables
The table below detail the Group's remaining contractual maturity for its financial liabilities with agreed repayment years. The tables have been drawn up based on the undiscounted cash flows of financial liabilities, based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rates at the consolidated balance sheet date. The contractual maturity is based on the earliest date on which the Group may be required to pay.The total contractual cash flows are as follows:
| 2024 | <6 months £'000 |
6 - 12 months £'000 |
1 - 3 years £'000 |
3 - 5 years £'000 |
5 - 10 years £'000 |
>10 years £'000 |
Total contractual cash flow £'000 |
| Loans and borrowings 1 | 8,568 | 8,710 | 304,741 | - | - | - | 322,019 |
| Trade payables and accruals | 27,108 | - | - | - | - | - | 27,108 |
| Contingent consideration | 50,314 | 149 | 20,923 | - | - | - | 71,386 |
| Lease liabilities | 4,460 | 4,088 | 15,484 | 12,467 | 17,846 | 8,200 | 62,545 |
| Total | 90,450 | 12,947 | 341,148 | 12,467 | 17,846 | 8,200 | 483,058 |
| 2023 | <6 months £'000 |
6 - 12 months £'000 |
1 - 3 years £'000 |
3 - 5 years £'000 |
5 - 10 years £'000 |
>10 years £'000 |
Total contractual cash flow £'000 |
| Loans and borrowings 1 | 7,292 | 7,372 | 253,457 | - | - | - | 268,121 |
| Trade and other payables | 19,896 | - | - | - | - | - | 19,896 |
| Contingent consideration | 25,465 | - | 59,342 | - | - | - | 84,807 |
| Lease liabilities | 3,888 | 3,888 | 13,136 | 10,887 | 14,012 | 5,931 | 51,742 |
| Total | 56,541 | 11,260 | 325,935 | 10,887 | 14,012 | 5,931 | 424,566 |
1 This includes the future interest payments not yet accrued and the repayment of capital upon maturity.
35. Capital management
35.1. Risk management
The Group's objective for managing capital is to safeguard the ability to continue as a going concern, while maximising the return to Shareholders through the optimisation of the debt and equity balance, and to ensure capital adequacy requirements are met for local regulatory requirements at entity level.
The managed capital refers to the Group's debt and equity balances; for quantitative disclosures, see note 25 for loans and borrowings and note 31 for share capital. For the Group's risk management and strategy regarding interest rate and foreign exchange risk, see note 34.1.
35.2. Loan covenants
The Group has bank loans that require it to meet leverage and interest cover covenants. In order to achieve the Group's capital risk management objective, the Group aims to ensure that it meets the financial covenants attached to bank borrowings. Breaches in meeting the financial covenants would permit the lender to immediately recall the loan. In line with the loan agreement, the Group tests compliance with the financial covenants on a bi-annual basis.
Under the terms of the loan facility, the Group is required to comply with the following financial covenants:
· Leverage (this being the ratio of total net debt to underlying EBITDA (for LTM at average exchange rates and adjusted for pro-forma contributions from acquisitions) for a relevant period) must not be more than 3:1.
· Interest cover (this being the ratio of underlying EBITDA to net finance charges) must not be less than 4:1.
The Group has complied with all financial covenants throughout the reporting period and the Board is satisfied that there is sufficient headroom in our banking covenants.
35.3. Capital adequacy
Individual regulated entities within the Group are subject to regulatory requirements to maintain adequate capital and liquidity to meet local requirements; all are monitored regularly to ensure compliance. There have been no breaches of applicable regulatory requirements during the reporting period.
36. Cash flow information
36.1. Cash generated from operations
| 2024 £'000 |
2023 £'000 |
|
| Profit from operating activities | 18,941 | 52,650 |
| Adjustments: | ||
| Depreciation of right-of-use assets | 7,461 | 5,844 |
| Depreciation of property, plant and equipment | 2,583 | 2,418 |
| Amortisation of intangible assets and assets recognised from costs to obtain or fulfil a contract | 20,075 | 16,878 |
| Share-based payments | 2,480 | 2,716 |
| EIP share-based payments | 34,506 | - |
| Share of (profit)/loss of equity-accounted investee | (430) | 15 |
| Operating cash flows before movements in working capital | 85,616 | 80,521 |
| Net changes in working capital: | ||
| (Increase)/decrease in receivables | (15,306) | 164 |
| Increase in payables | 13,400 | 4,040 |
| Cash generated from operations | 83,710 | 84,725 |
36.2. Non-underlying items within cash generated from operations
| 2024 £'000 |
2023 £'000 |
|
| Cash generated from operations | 83,710 | 84,725 |
| Non-underlying items: | ||
| Acquisition and integration costs | 14,810 | 5,799 |
| Office start-ups | 585 | 612 |
| Other | 177 | 44 |
| Total non-underlying items within cash generated from operations | 15,572 | 6,455 |
| Underlying cash generated from operations | 99,282 | 91,180 |
36.3. Financing activities
Changes in liabilities arising from financing activities:
| Lease liabilities <1 year £'000 |
Lease liabilities > 1 year £'000 |
Borrowings <1 year £'000 |
Borrowings > 1 year £'000 |
Total £'000 |
|
| At 1 January 2023 | 4,292 | 40,602 | - | 153,622 | 198,516 |
| Cash flows: | |||||
| Acquired on acquisition | 554 | 2,230 | - | - | 2,784 |
| Drawdowns | - | - | - | 118,000 | 118,000 |
| Repayments | (28) | (7,482) | - | (50,000) | (57,510) |
| Other non-cash movements 1 | 1,299 | 2,574 | - | (1,091) | 2,782 |
| At 31 December 2023 | 6,117 | 37,924 | - | 220,531 | 264,572 |
| Cash flows: | |||||
| Acquired on acquisition | 9 | 1,096 | - | - | 1,105 |
| Drawdowns | - | - | - | 49,187 | 49,187 |
| Repayments | (122) | (8,427) | - | - | (8,549) |
| Other non-cash movements 1 | 678 | 14,054 | - | 1,834 | 16,564 |
| At 31 December 2024 | 6,682 | 44,647 | - | 271,552 | 322,879 |
1 Non-cash movements include the capitalisation and amortisation of loan arrangement fees, foreign exchange movements, additions and disposals of lease liabilities relating to right-of-use assets and the unwinding of NPV discounts.
36.4. Net debt
| 2024 £'000 |
2023 £'000 |
|
| Bank loans | 271,552 | 220,531 |
| Cash allocated against regulatory and capital adequacy requirements 1 | 24,535 | 11,827 |
| Less: cash and cash equivalents | (89,232) | (97,222) |
| Total net debt | 206,855 | 135,136 |
1 Represents the minimum cash balance to be held to meet regulatory capital requirements.
37. Subsidiaries
In the opinion of Management, the Group's subsidiaries which principally affect the profit or the net assets of the Group at 31 December 2024 are listed below. Unless otherwise stated, the Company owns 100% of share capital consisting solely of Ordinary shares, and the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation is also their principal place of business.
Where shareholding and voting rights are less than 100%, Management have considered the circumstances of each subsidiary shareholding and any specific agreements in support and have concluded that the subsidiaries should be consolidated (as per the accounting policy in note 2), with the interest attributed in full to the Company and no minority interest recognised. Please see specific comments below the table.
| Name of subsidiary | Country of incorporation and place of business | Activity | % holding |
|---|---|---|---|
| JTC Group Holdings Limited | Jersey | Holding | 100 |
| JTC Group Limited | Jersey | Head office | 100 |
| JTC (Jersey) Limited | Jersey | Trading | 100 |
| JTC Employer Solutions Limited | Jersey | Trading | 100 |
| JTC Fund Solutions (Jersey) Limited | Jersey | Trading | 100 |
| JTC (Austria) GmbH | Austria | Trading | 100 |
| JTC (Bahamas) Limited | Bahamas | Trading | 100 |
| JTC (BVI) Limited | BVI | Trading | 100 |
| FFP (BVI) Limited 1 | BVI | Trading | 100 |
| JTC (Cayman) Limited | Cayman Islands | Trading | 100 |
| JTC Fund Services (Cayman) Ltd | Cayman Islands | Trading | 100 |
| FFP (Holdings) Limited 1 | Cayman Islands | Trading | 100 |
| FFP (Cayman) Limited 1 | Cayman Islands | Trading | 100 |
| FFP Limited 1 | Cayman Islands | Trading | 100 |
| JTC Corporate Services (DIFC) Limited | Dubai | Trading | 100 |
| JTC (Deutschland) GmbH 1 | Germany | Trading | 100 |
| JTC Fund Solutions (Guernsey) Limited | Guernsey | Trading | 100 |
| JTC Global AIFM Solutions Limited | Guernsey | Trading | 100 |
| JTC Registrars Limited | Guernsey | Trading | 100 |
| JTC Employer Solutions (Guernsey) Limited | Guernsey | Trading | 100 |
| JTC Share Plan Trustees (Guernsey) Limited (formerly Buck Trustees (Guernsey) Ltd) 1 |
Guernsey | Trading | 100 |
| JTC Corporate Services (Ireland) Limited | Ireland | Trading | 100 |
| JTC Fund Solutions (Ireland) Limited | Ireland | Trading | 100 |
| JTC Global AIFM Solutions (Ireland) Limited | Ireland | Trading | 100 |
| INDOS Financial (Ireland) Limited | Ireland | Trading | 100 |
| JTC Trustees (IOM) Limited | IoM | Trading | 100 |
| JTC Luxembourg Holdings S.à r.l. | Luxembourg | Holding | 100 |
| JTC (Luxembourg) S.A. | Luxembourg | Trading | 100 |
| JTC Global AIFM Solutions SA | Luxembourg | Trading | 100 |
| JTC Corporate Services (Luxembourg) SARL | Luxembourg | Trading | 100 |
| JTC Signes Services SA | Luxembourg | Trading | 100 |
| Exequtive Services S.à r.l. | Luxembourg | Trading | 100 |
| JTC Fiduciary Services (Mauritius) Limited | Mauritius | Trading | 100 |
| JTC (Netherlands) B.V. | Netherlands | Trading | 100 |
| JTC Holdings (Netherlands) B.V. | Netherlands | Holding | 100 |
| JTC Institutional Services Netherlands B.V. | Netherlands | Trading | 100 |
| JTC Fund and Corporate Services (Singapore) Pte. Limited | Singapore | Trading | 100 |
| JTC Fund Solutions RSA (Pty) Ltd | South Africa | Trading | 100 |
| JTC (Suisse) SA | Switzerland | Trading | 100 |
| JTC Trustees (Suisse) Sàrl | Switzerland | Trading | 100 |
| JTC Group Holdings (UK) Limited | UK | Holding | 100 |
| INDOS Financial Limited | UK | Trading | 100 |
| JTC Fund Services (UK) Limited | UK | Trading | 100 |
| JTC Trust Company (UK) Limited | UK | Trading | 100 |
| JTC (UK) Limited | UK | Trading | 100 |
| JTC UK (Amsterdam) Limited | UK | Holding | 100 |
| JTC Registrars (UK) Limited | UK | Trading | 100 |
| perfORM Due Diligence Services Limited | UK | Trading | 100 |
| JTC GAS UK LLP (formerly Blackheath Capital Management LLP) 1 | UK | Trading | 100 |
| Hanway Advisory Limited 1 | UK | Trading | 100 |
| Employer Solutions (UK) Limited | UK | Trading | 100 |
| JTC USA Holdings, Inc. | US | Trading | 100 |
| JTC Miami Corporation 2 | US | Trading | 50 |
| JTC Trust Company (South Dakota) Ltd | US | Trading | 100 |
| Essential Fund Services, LLC | US | Trading | 100 |
| SALI Fund Management, LLC | US | Trading | 100 |
| JTC Americas Holdings, LLC | US | Holding | 100 |
| JTC Americas TrustCo Holdings, LLC | US | Holding | 100 |
| Segue Partners, LLC | US | Trading | 100 |
| JTC Trust Company (Delaware) Limited | US | Trading | 100 |
| TC3 Group Holding, LLC | US | Holding | 100 |
| South Dakota Trust Company, LLC | US | Trading | 100 |
| JTC Trustees (Delaware) LLC (formerly First Republic Trust Company of Delaware, LLC) 1 | US | Trading | 100 |
1 These entities were either incorporated or acquired during the year.
2 JTC Miami Corporation is 50% owned by an employee as part of their residential status in the US. The employee has signed a declaration of trust to confirm that they hold the shares in trust for JTC, would vote as directed and would not seek to benefit from dividends or profit. Management,therefore, consider it appropriate to attribute 100% of the interest to JTC and no minority interest is recognised.
JTC PLC has the following dormant UK subsidiaries that are exempt from filing individual accounts with the registrar in accordance with s448A of the Companies Act 2006: PTC Securities Limited, Stratford Securities Limited, St James's Securities Limited, JTC Fiduciary Services (UK) Limited, JTC Trustees (UK) Limited, PTC Investments Limited, Castle Directors (UK) Limited, JTC Securities (UK) Limited, JTC Corporate Services (UK) Limited, JTC Trustees Services (UK) Limited and JTC Directors (UK) Limited.
38. Contingencies
The Group operates in a number of jurisdictions and enjoys a close working relationship with all of its regulators. It is not unusual for the Group to find itself in discussion with regulators in relation to past events. With any such discussions, there is inherent uncertainty in the ultimate outcome, but the Board currently does not believe that any such current discussions are likely to result in an outcome that would have a material impact upon the Group.
39. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
39.1. Key management personnel
The Group has defined key management personnel as Directors and members of senior management who have the authority and responsibility to plan, direct and control the activities of the Group. The remuneration of key management personnel in aggregate for each of the specified categories is as follows:
| 2024 £'000 |
2023 £'000 |
|
| Salaries and other short-term employee benefits | 3,377 | 3,136 |
| Post-employment and other long-term benefits | 121 | 119 |
| Share-based payments | 1,836 | 1,624 |
| EIP share-based payments | 309 | - |
| Total payments | 5,643 | 4,879 |
39.2. Other related party transactions
The Group's associate, KIG (see note 24), has provided £1.1m of services to Group entities during the year (2023: £0.6m).
39.3. Ultimate controlling party
JTC PLC is the ultimate controlling party of the Group.
40. Consideration of climate change
As set out in the TCFD disclosures on pages 52 to 59 of the Annual Report, climate change has the potential to give rise to a number of transition risks, physical risks and opportunities.
In preparing the consolidated financial statements, Management have considered the impacts and areas that could potentially be affected by climate-related changes and initiatives. No material impact was identified on the key areas of judgement or sources of estimation uncertainty for the year ended 31 December 2024. Items that may be impacted by climate-related risks and that were considered by Management were the recoverability of trade receivables (see note 18) and the cash flow forecasts used in the impairment assessments of goodwill (see note 16).
Whilst Management consider that there is no material medium-term impact expected from climate change, they are aware of the ever-changing risks related to climate change and will ensure the regular assessment of risks against judgements and estimates when preparing the consolidated financial statements.
41. Events occurring after the reporting period
There were no material subsequent events to disclose other than those already noted in the consolidated financial statements.
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