Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on JTC. We currently have 13 research reports from 1 professional analysts.
What’s new: JTC has agreed to acquire NES Financial (“NESF” website https://nesfinancial.com), a US tech-enabled, market leading provider of specialist fund administration services for a max consideration of 21.7m JTC shares and US$0.25m in cash (i.e. £93.3m at 430p a JTC share) At completion, expected in 2Q20, initial consideration of 7.45m JTC shares (US$40m or £32m at 430p) and US$250,000 in cash will be paid to external shareholders and NESF management (Ms Alton and Messrs Halloran, Thomas, Joubert, Richards, and Hart), these managers and 52 other NESF employees will join JTC‘s ISC division, with Mr Halloran becoming Global Head of Technology Strategy and joining the Exec Board. Additional consideration of 14.25m JTC shares based on achievement of underlying EBITDA targets over the next 2 years, with max being 12.5x US$9.3m. JTC expects “integration to be relatively swift”.
What’s new: JTC has agreed to acquire the assets, contracts and employees of SANNE Group’s Jersey based private client business (2019 revenue: c £5.3m) for a maximum of £12m paid in cash on completion. SANNE’s private client business was established in 1988 and has “a strong reputation for the expertise of its staff and the quality of service delivery”. The consideration is variable based on the satisfactory migration of clients to JTC. JTC expects “integration to be relatively swift” post regulatory approvals. Nigel Le Quesne, Founder and CEO of JTC, said: “We are delighted to welcome SANNE’s private client team and clients to JTC. … we look forward to using our extensive acquisition experience to ensure a positive and seamless transition for both clients and new colleagues.”
JTC’s trading update confirms that full year results on 1 April will show “revenue was “within the range of analyst expectations, with organic growth within the 8-10% company guidance. Adjusted EBITDA was also in line with consensus expectations with a further year-on-year improvement in EBITDA margin.” In addition the update reveals: -New business increased to £14.9m (FY2018: £9.7m); -Exequtive Partners acquired in March 2019 has integrated well; -Banking facilities have been increased to £150m (previously £100m).
32.0% rise in revenue to £46.6m (1H18: £35.3m; FY18 29% rise to £77.3m): +23.8% from acquisitions and net organic growth of +8.2%; EBITDA margin of 30.6% (1H18: 29.9%; FY18: 30.8%) with strong performance from both Institutional “ICS” and Private Client Services “PCS” divisions; 35.2% rise in adj underlying EBITDA to £14.3m (1H18: £10.5m; FY18: £23.8m) Cash conversion (underlying) of 101% (1H18: 56%; FY18: 80%); Net debt of £60.9m (June 2018: £23.7m)
JTC has published a trading update which confirms. Both divisions performed well throughout the first six months. Interim results will be in line with management guidance. Opportunities for both organic and inorganic growth in 2H and beyond
JTC Group (“JTC”) has published results for 2018 which exceed consensus and Zeus Capital’s expectations (see Exhibit 3). 29.3% rise in revenue to £77.3m (1% above Zeus forecast: £76.5m); - 8.7% organic (Zeus forecast 8.0%) and 20.6% inorganic; 65.3% increase in adj EBITDA to £23.8m (Zeus forecast: £23.7m); - Underlying EBITDA margin of 30.9% (Zeus forecast: 31.0%); 69.8% rise in adj operating profit to £21.9m (Zeus forecast: £21.9m); 95.1% rise in adj PBT to £20.1m (Zeus forecast: of £20.0m); 33.1% rise in adj diluted EPS to 18.4p (10% above Zeus forecast: 16.7p); 2.0p final DPS making a total of 3.0p (in line with Zeus forecast: 3.0p) £48.7m net debt (2.6% below Zeus forecast: £50.0m); Work won in 2018 increased 9.0% YoY to £9.7m, while annualised value of the new business pipeline increased 25% to £32.0m.
JTC Group (“JTC”) has announced the acquisition of Exequtive Partners SA (“EP”) for an initial consideration of €25m (absolute cap of €34m) from its principals, who will all join JTC with immediate effect. The 28 EP employees will join JTC’s existing Institutional Client Services team in Luxembourg. The consideration will be satisfied by €18.3m cash and the issue of 1.9m new ordinary shares. The earnout, if payable, will be paid 70% cash and 30% shares based on EP’s performance on a sliding scale against revenue and EBITDA targets.
JTC Group (“JTC”) has released a trading update for the year to 31 December 2018, which confirms that: “JTC has maintained good momentum through the second half of the year and continues to deliver on the strategic and financial initiatives outlined at IPO. As a result, the Board continues to expect that full year results will be in line with management expectations.”
This morning, JTC Group (“JTC”) announces its interim results: Revenue rose 25.2% YoY to £35.3m (1H17: £28.2m); Underlying EBITDA rose 56.7% to £10.5m (1H17: £6.7m); Underlying EBITDA margin improved 6.3pp to 29.9% (1H17: 23.6%); Underlying diluted EPS of 7.29p per share uses an average of 91m shares.
This morning, JTC Group (“JTC”) announced that it has entered into a conditional agreement to acquire Minerva, a Jersey based private client, corporate, fund and treasury services business with a 40-year track record. In summary: The acquired business, adds a new office in Dubai UAE to JTC’s Global Platform and additional scale in Jersey, London, Geneva, Singapore and Mauritius; £28m initial consideration will be payable 60% cash and 40% shares (£30m maximum consideration is based on Minerva’s performance in the 6 months post completion, is subject to revenue target and EBITDA margin of >30%); Minerva’s revenue and underlying EBITDA for the last 12 months was £13m and £3.5m respectively (i.e. initial consideration is 8x LTM EBITDA); JTC expects the acquisition to be immediately earnings enhancing and completion, subject to regulatory approvals, by November 2018.
This morning, JTC Group (“JTC”) announced that it has entered into a conditional agreement to acquire a business from International Capital Group. In summary: The acquired business, Van Doorn, is a fast growing, boutique provider of corporate & related fiduciary services based in Amsterdam, the Netherlands; Initial consideration of €16m is payable 69% in cash and 31% in new JTC shares; any earnout is payable in cash during 2019 based on Van Doorn’s performance in the year ended 31 December 2018; In 2017 Van Doorn made €1.2m of EBITDA and normalised EBITDA for 2018 is expected to be c. €2.4m (i.e. max multiple is just under 9x EBITDA); JTC expects the acquisition to be immediately earnings enhancing and completion, subject to regulatory approvals, by October 2018.
Ahead of Tuesday 18 September, when JTC Group (“JTC”) reports its maiden interim results to 30 June 2018, it has released a trading update which confirms: JTC has performed well throughout the first half of the year; Steady progress has been made on all strategic initiatives outlined at the IPO; Performance has been in line with the Board’s expectations The Board sees opportunities for both organic and inorganic growth in the second half of the year and beyond.
Research Tree provides access to ongoing research coverage, media content and regulatory news on JTC. We currently have 13 research reports from 1 professional analysts.
|02Apr20 07:00||RNS||Acquisition of NES Financial|
|31Mar20 07:00||RNS||Timing of Publication of Annual Results and AGM|
|24Mar20 07:00||RNS||FCA moratorium - Delay to publication of results|
|20Mar20 16:47||RNS||Second Price Monitoring Extn|
|20Mar20 16:39||RNS||Price Monitoring Extension|
|16Mar20 07:00||RNS||Acquisition of SANNE Group private client business|
|23Jan20 07:00||RNS||Trading Update|
Belvoir’s FY 2019 results were strong, with adj. EPS up 13% (13.6p vs our forecast 13.0p) and strong cash generation. COVID-19 will affect property sales in FY 2020 but lettings (61% of 2019 gross profit) will be more resilient, helped by the Government’s measures to support employment and incomes. Management has reacted quickly, reducing costs and putting plans in place to support franchisees. We now forecast a ‘lost year’ in FY 2020, assuming five months of no sales activity, a significant reduction in financial services and a reduction in lettings fees, partly offset by a £1.5m cost reduction. The capital light franchise model, inherent high levels of cash generation and no final dividend for 2019 mean we forecast gross cash of £2.0m at December 2020, down from £3.6m. Belvoir is in good financial shape to weather the storm and support its franchisees before returning to normal activity. The success of the strategy was again evidenced by a strong start to 2020 prior to COVID-19.
Companies: Belvoir Lettings
Alpha has released an update today, which highlights the impacts of the recent global lockdown and extreme FX volatility on the trading and working capital of their clients. We have reduced this year’s revenue forecast by 14% and EPS by 24%. We show the Company has sufficient capital to hit these revised forecasts and importantly has a business model, capital structure, technology platform and client proposition to continue to take share and return to high-growth when economies normalise.
Companies: Alpha Fx Group
The scaling of Duke's royalty portfolio was progressing as expected up to March 2020, with record cash receipts that month. Due to Covid-19 and the UK's economic shutdown, macro conditions have worsened and become highly uncertain. This is likely to see some royalty partners' future cash royalties decline, which in turn, will negatively impact FV's in the FY20E results. Duke's high margin and cash generative nature ensures it is well placed to trade through these challenges. Given the degree of uncertainty in outlook, we remove forecasts and put our recommendation Under Review and await further clarity on the portfolio.
Companies: Duke Royalty
The Coronavirus pandemic is a human tragedy of vast proportions – as well as the terrible human toll, COVID-19 has led to economies across the globe going into physical lockdown and financial freefall. Entire populations are adapting to the “stay at home” edict, to safeguard the vulnerable – and some of these changes will lead to long-lasting or perhaps permanent changes in the way we live or work. This note describes some of our client companies whose business models are well adapted to these changes, or who might see a change in long-term structural demand.
Companies: AMO BGO FDM GAMA KAPE LOOP TERN ZOO
Appreciate saw trading in line with expectations until the end of February, but the closure of fulfilment locations in response to COVID-19 has seen a substantial drop in billings in the past week. Management is withdrawing its guidance, but will provide an update in the second half of April. Meanwhile, the interim dividend (£2m) will not be paid and the FY dividend will be reviewed in June (c. £4m). We see the net cash balance sheet as strong enough to weather the storm. The company’s digital first strategy will accelerate and help to mitigate the pressure on physical vouchers. We will review our estimates in April, but we think that a CY20E EV/EBIT of 3.8x on existing numbers more than reflects the downside risks.
Companies: Appreciate Group
We believe that NSF’s response to the current pandemic is in the interests of all its stakeholders. The operational shift towards remote working helps protect its staff whilst enabling its clients to continue to access the services they need. Similarly, its decision to reduce lending and focus on its existing clients and those most in need, is the prudent thing to do. These actions, combined with the high risk-adjusted margins on its existing loan book should enable the group to generate positive cash flow, even allowing for an increase in impairment during the current period of economic uncertainty. This should leave the group in a stronger position to serve its clients and win share when the current government restrictions are lifted. As a result, of this medium-term outlook we reiterate our BUY rating.
Companies: Non-Standard Finance
Covid-19's future impact is likely to overshadow FY19A results which delivered YoY growth, despite imposition of the tenant fee ban and the backdrop of a subdued lettings/sales market. With franchisee premises and the UK housing market now closed, FY20E trading will be materially affected and growth strategies (financial services, assisted acquisitions) are now on hold. The group will fall back on its recurring lettings revenue, streamlined cost base and debt-free balance sheet to seek profitable trading and positioning for a market rebound in FY21E. Given uncertainty as to Covid-19's duration and severity, we put our recommendation Under Review and withdraw forecasts awaiting further clarity.
Companies: Property Franchise Group
Companies: AVO AGY ARBB ARIX BUR CMH CLIG DNL GDR HAYD PCA PIN PHP RE/ RECI RMDL STX SHED VTA
FY Results – Significant strategic progress and well positioned for 2020 Digitalbox is an AIM-quoted digital publishing company, currently owning two distinct digital media assets and with a scalable platform to grow through acquisitions. This morning's FY2019 results evidence the substantial progress the company made in 2019 at both a financial and operating level and with a very robust balance sheet to capitalise on future M&A opportunities. The company reported revenue of £2.24m and a reported adjusted EBITDA of £0.53m, which after adjusting for prepaid costs from 2018 with respect to Facebook marketing cost, yields an EBITDA of £0.63m. Whilst key operating KPI's for 2019 were very strong y-o-y, and Q1:2020 is said to have traded ‘ahead of management expectations', increased traffic to their assets will likely be offset by increased pressure in advertising spend in 2020. As such, we prudently reduce our FY2020E and FY2021E adjusted PBT estimates by 35% and 22% to £0.59m and £0.74m respectively. Revenue and profitability is H2 weighted, and thus it is possible that the company might experience positive momentum in advertising spend, but it's too early to call. Assuming a 10x FY2020E EV/EBITDA multiple, we see fair value at 9.3p.
U+I has confirmed the disposal of its share in the Harwell Campus, delivering development and trading gains of c.£11m. Crucially, these should fall in to FY20, subject to discussions with auditors. The >£40m cash realised from the sale compares to a £10m investment six years ago. An adjoining building on the Harwell Campus has also been sold ahead of book value, for £7.5m. We prudently leave any forecasts unchanged at this uncertain time. A post-close trading update with more detail will be given on 15 April. The shares now trade at a 72% discount to NAV, vs the UK sector at a 15% discount.
Companies: U&I Group
Numis expects to report H120 revenues c 10% higher than in H119 with revenue from investment banking slightly down and equities ahead on the back of increased market volatility. Given the impact of the pandemic we have provided indicative scenarios rather than a point estimate for FY20. Numis is strongly capitalised and has net cash of over £84m. Looking beyond the current dislocation, it is well positioned to serve its corporate client base in a period in which the need for fresh equity and a revival in corporate transactions could drive a sharp recovery in activity.
Companies: Numis Corporation
Gross profits up 50%: As with all litigation funders, we focus on the gross profits as this reflects the net gain on investments. Pleasingly, GP was 50% ahead of the comparable period following settlements of cases and, mainly, developments in ongoing matters (fair value uplifts). Whilst realised GP fell from c.£2.2m to c.£1.0m, Management expects increased cash realisations in H2 given the 32 live cases that are in advanced settlement stages. Indeed, Manolete has received an additional £0.8m of settlements since the period close. As at 7 November 2019, ROIC remains at a market leading 159% (last reported 180%), which could be skewed upwards in H2 should these advanced cases settle favourably.
Companies: Manolete Partners
Aviva announced an operating profit of £3,184m (up 6% yoy) and an IFRS profit after tax at £2,663m, better than expected. The main source of operating earnings improvement was the reduction in net expenses in the UK digital business by £165m regarding 2018. The cash remittance reached £2,597m, and the insurer is on the right track to deliver one of the key 2022 targets: remitting £8.5-9bn over 2019-22. We keep our positive opinion on the stock.
Companies: Aviva Plc
Favourable trading conditions have led to Plus500 issuing its second trading update in less than a month. Not only has the recent surge in volatility resulted in a significant increase in client activity, the strength of the group’s platform and brand has helped it deliver stronger user growth during Q1’20. The combination of the strong financial and operational performance sees us upgrade our FY20 PBT estimate by 52%. Despite the clear opportunity for the company to continue to win market share and deliver profitable growth, the shares trade on just 6.6x CY21 earnings. As a result, we reiterate our BUY rating and increase our TP to 1450p (from 1000p).