Jtc Plc

Hello and welcome to the JTC PLC results presentation. My name is David and I'll be your host for today's event. Please note that this conference is being recorded and for the duration of the presentation your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done using the raise hand feature in the control panel on your screen. We will address as many questions as possible. When we come to answering your question, we will invite you to unmute and speak live to address our panellists. I will now hand you over to your presenters for today.

Good morning. Welcome to the presentation of JTC PLC's full year results for the year ended 31st December 2024. I'm Nigel O'Kane, the Group CEO, and presenting with me today is Martin Fotheringham, our Group CFO, together with Ian Johns and Kate Beecham, who head up private client and institutional client services divisions, respectively. If we can turn to slide one and the agenda. In the next 30 minutes or so, I'll present my CEO highlights for the year, and Martin will run through the financial review. I will then give an update on the trends in the M&A market as it relates to the Group and the opportunity provided by the City Trust acquisition, which is on track to close at the end of this quarter. Then Ian and Kate will review 2024 for their respective divisions and give some insight into the focus areas for this year. Then finally, I will summarise our key takeaways and my expectations for the Group in 2025. 2024 was the first year of our Cosmos era and JTC's 37th consecutive year of revenue and profit growth since inception. We have made an accelerated start to the era with a particularly busy year of M&A activity supported by good organic growth momentum. Our group revenue was up 18.6% and EBITDA was up 18.4%, delivered at an underlying EBITDA margin of 33.3% and within our established guidance range. We achieved another annual record for new business wins of £35.7 million, up 15.9% year on year. Our net organic growth was ahead of our new guidance at 11.3%, although lower than our purple patch of 2023. It is, however, our third best performance in percentage terms since IPO in 2018. reflecting good growth in what was a more difficult market, with gross growth of 16% and client attrition of just 4.7%, an improvement on last year's 5.1%. These results reflect continued strong growth and provide us with good impetus going into 2025, which as always, we balance with appropriate investment in group infrastructure as we scale. As you will hear from Ian and Kate later, both divisions made meaningful contributions, but it's fair to say the market was more difficult for the ICS practice, with a slower than anticipated reduction in the cost of capital during the year, which negatively impacted market sentiment, leading to fewer IPOs, a muted M&A market, and a reduction in fund launches as a consequence. To have produced 9.9% organic growth in this environment is of great credit to the ICS team. Conversely, PCS enjoyed another excellent year with very positive growth of 14% and record new business wins of £15.2 million. The accelerated start towards our Cosmos goals from an M&A perspective was another notable achievement in the year, with the announcement or completion of six acquisitions across both divisions and had an excellent blended acquisition multiple of 6.5 times EBITDA. Five of these deals, FRTC in Delaware, the Cayman-headquartered FFP, and the three primarily UK-based businesses, Blackheath, Hanway and Buck, have all completed and are integrated. The most notable acquisition, however, was the purchase from Citigroup of Cititrust, their global trust company business, making JTC the global leading independent trust company and building upon our position as the largest private trust company business in the US market. This transaction remains subject to closing formalities and we anticipate completion by the end of Q2 2025. I'll return to the significance of this transaction to the group later. As I've highlighted previously, we've been very successful in establishing our US platform, and it's one that presents an enormous opportunity, which has been underlined by the excellent performance in 2024 by both Sally Fund Services in ICS, who have doubled their AUM organically to $32 billion since the business was acquired in October 2021, and SDTC in PCS, with the US region contributing 32% of our revenues. With the addition of the U.S. element of City Trust this year, our run rate revenues for the U.S. should rise to £148 million post-completion, contributing 35% of group revenues and making it JTC's largest single market. This has been achieved by steady organic growth in the early years and more recently by acquisition at a blended multiple of circa 12 times EBITDA in a market that regularly has had deals transacting at 20 to 25 times. This provides us with a significant base in a relatively mature market. We are establishing a group presence in the U.S. in 2025 to manage our operational growth and assist in cementing our all-important group culture. The achievement of becoming a recognized institution in this market in a relatively short space of time and the prospect it creates cannot be overemphasized. As has become a tradition, I cannot complete my highlight comments without mentioning the top quality team we have at JTC. We're delighted to award the first tranche of £50 million of warehouse shares from our Employee Benefit Trust to our global workforce for their individual and collective achievements in the Galaxy era. This brings us to a total value of £450 million generated for employee owners since 1998. Our 2024 annual employee survey had an 89% response rate with over 80% of the team stating they feel valued as an employee owner. They understand our future growth plans and confirming that JTC is a positive workplace culture. When coupled with our group regretted attrition of only 4%, these are outstanding results and I'm excited as ever to lead our global team into the second year of our Cosmos era. Our unwavering commitment to employee ownership is now attracting global acclaim. This has been reflected of late in our being the recipient of awards specific to our approach. Having 2,300 owners rather than employees makes an enormous difference to the working environment and the organization's culture, ensuring the team are happy, valued, empowered, and highly motivated to improve our business every day. But now let's turn to slide four in the financial highlights. Our revenues have grown to £305.4 million, breaking £300 million for the first time, and underlying EBITDA was £101.7 million, our first year north of £100 million, delivered an underlying group EBITDA margin of 33.3%. As previously highlighted, our net organic growth was 11.3%. New business wins were a record 35.7 million, up 15.9%, as the group continues to benefit from excellent win rates of greater than 50% across both divisions for the third year in a row, implying that we win at least half the business we pitched for, an ongoing and outstanding performance in a very competitive market. The new business pipeline remained strong and stood at £49.8 million at year end and had increased to £55 million at the end of March. The lifetime value of work one was just under half a billion at a record £492 million, based on a 14.1 year average lifespan of our client book. a 16.8% increase on the 2023 figure of £421.1 million. This gives us visibility of over £2.3 billion of forward revenues from our existing client book, i.e. what the business would generate without the addition of any new mandates from this point forward. These figures, we believe, help demonstrate the long-term compounding value of the group. And finally, onto the total dividend, which for 2024 has been proposed at 12.54 pence per share, up from 11.17 pence in 2023. Now over to Martin for a deeper look at the financials.

Thank you, Nigel. I'm delighted to speak to another consistent set of results where we've seen our growth momentum carry into the Cosmos era. Our results for the year were in line with expectations when taking into account the weakening of the US dollar and a later than first anticipated completion date for the FFP acquisition. Our financial highlights are set out on slide 6, where we've delivered significant revenue growth of 18.6% whilst maintaining our profitability. We delivered on all of our key metrics, with a particular highlight being net organic growth of 11.3%, which was ahead of our revised guidance range of plus 10% per annum. This is also the third best annual result for organic growth since our IPO in 2018. Our underlying EBITDA margin dropped by 0.1 of a percentage point from 2023 and now reports at 33.3%. We reported a loss before tax of £7.4 million. The loss was due to the inclusion of the £36.4 million cost of the Galaxy EBT distribution. Underlying earnings per share increased by 12.1%. Cash conversion was ahead of guidance at an excellent 98%. Net debt increased by 59 million pounds and was driven by our drawdowns to finance the FRTC and FFP acquisitions. It was also a busy year for M&A with us completing five acquisitions with another confirmed but pending regulatory approval. At the year end, our underlying leverage of 1.79 times was comfortably within our medium term guidance range of 1.5 to 2 times underlying EBITDA. Our final dividend increased by 12.3% to 12.54 pence. And finally, our return on invested capital for the year was 12.6%, and there's more on this later. Moving on a slide, I'll be looking at our results in more detail, and we'll start with our revenue bridge. On a constant currency basis, our revenue growth was 20.2%. This was above our reported revenue growth of 18.6%, where we were impacted by the weaker US dollar during 2024. Gross new revenue was 38.7 million pounds, a decrease from 49.6 million pounds in 2023. Banking and treasury revenues provided a one-time organic growth increase in 2023. And we also had the full year impact of the Amaro contract. As we explained last year, these new organic revenues resulted in an exceptional increase to volume growth and the services are now embedded. Gross attrition was £11.4 million, which is 4.7% of annual revenues and is down from the 5.1% reported in the prior year. £7.6 million of this attrition was end of life and therefore 98.4% of non-end of life revenue was retained. Revenue recognised on new business wins in the year was 61%, an increase from 59% in 2023. Our new business pipeline at the period end was a healthy £49.8 million, with a strong Q4 for new business wins in 2024. Let's now move on to slide 8 and look at the first of our key metrics, net organic growth. At this point last year, we updated our medium term guidance range for the Cosmos era to be at least 10% net organic growth per year. And we're delighted to have delivered growth of 11.3% in 2024, with the three year average now at a record 14.4%. PCS recorded 14% net organic growth, down from an exceptional result in 2023. ICS recorded net organic growth of 9.9%, which was very pleasing when considering the macroeconomic environment and the delay in fund launches. You'll see that in 2024, our pricing growth was strong at 6.6%. This was because in 2024, we determined that our chargeout rates had fallen behind market and we responded accordingly. To conclude on revenue, let's look at the geographical profile on slide nine. All regions reported revenue growth in 2024. The US continues to deliver impressive levels of organic growth and has established itself as a leading growth region for us. It's now been our highest growth region for five successive years. As you can see from the chart, we've increased our US revenue base significantly over recent years, a product of strong organic growth, but also focused in strategic M&A activity. To recap on our journey, in 2018, when we IPO'd, our US region represented 4% of our revenue, and this now stands at 32%. Post regulatory approval for Citi, our US revenues will represent approximately 35% of revenues. We now move on to the EBITDA margin on slide 10. The underlying margin was 33.3%, which, whilst consistent with 2023, was a 10 basis point decrease. This remains within our medium term guidance range, and maintaining a consistent margin while delivering strong revenue growth will always be a focus for us. As we've said previously, there are many moving parts in the overall margin story. Margin improvements came from the positive impact of recent acquisitions, particularly in relation to SDTC and FRTC in PCS, as well as operational efficiencies from scale, process improvements and technology. Risk and compliance costs increased in the year, with a 30 basis point impact on margin, the impact being felt more heavily in ICS. This does not account for the chargeable time lost from the increased regulatory burden. We also continued to invest in growing our banking and treasury team, and this accounted for a further 30 basis points of margin in 2024. We remain committed to continued investment in the business, confident that this will bring improved long-term returns. Now focusing on cash conversion on slide 11. As you can see, cash conversion was 98%. a decrease from the exceptional 106% recorded last year, but still an excellent result. This continues to be driven by increased US exposure, where we see shorter working capital cycles, the uptake of our treasury services in 2023, where we see predictable and timely cash receipts, and as a result, net investment days were 71 days at the period end, consistent with the 72 days from the prior year. We continue to note that our business fundamentals remain unchanged, and for now we maintain our medium term guidance range for annual cash conversion of 85 to 90%. Next to look at is net debt and leverage on slide 12. At the end of 2023, our reported net debt was 123.3 million pounds. And by the end of 2024, it stood at 182.3 million pounds. an increase of 59 million pounds. This was driven in the main by net outflows for acquisitions of 80.1 million pounds where material outflows included. The payout in full for the Sally earn out for a value of 21.1 million pounds from our existing cash on the 10th of January, 2024. 42.7 million pounds for FFP, which was funded in large part by a $46.3 million drawdown in October. and £15.5 million for FRTC, which was part-funded by a £13.5 million drawdown in July. Excluding these acquisition-related cash flows, net debt decreased by £21.1 million, continuing to evidence our capability to deleverage through strong cash conversion and effective working capital management. Our reported leverage at 31st December 2024 was 1.79x underlying EBITDA and is in line with our medium term guidance range. Our leverage guidance of up to 2x underlying pro forma EBITDA remains. But as with prior deals, we will go up to 2.5x where we can see rapid subsequent deleveraging. as at 31 December 2024, the group had undrawn funds available of £125.9 million. We do have capital commitments in 2025 to finance, and with the city outflows around the corner, we're looking to increase our debt facilities, and we expect to complete on a private placement loan facility in the first half of 2025. Moving on to our return on invested capital slide, where we delivered a return on investment of 12.6% in 2024. This has improved by 30 basis points from 2023 and is well above our cost of capital. This return was particularly pleasing during a period of heightened acquisition activity. In 2023 we completed our largest acquisition to date with SDTC and we completed a further five acquisitions in 2024 with Citi expected to complete in mid 2025. 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 our returns but we consider both the immediate return on capital and also the long-term potential and strategic fit of our acquisitions. The lifetime value of clients, which represents the revenue that our client relationships will generate in the absence of new business, increased by 17.3% in 2023 to £2.3 billion. Since IPO, we've reported over a 700% increase from £0.3 billion in 2018 to £2.3 billion at the end of this year. The average client life cycle has decreased slightly to 14.1 years, which reflects the slightly shorter life cycles of the businesses acquired in 2024. To finish off, I'm going to cover our performance across the eras since our IPO. We've built a reputation for delivering in line with medium term guidance range, and we delivered 11.3% of net organic growth in 2024. This is the third best year since IPO. Delivering on high growth requires investment in infrastructure and personnel, and that is reflected within our underlying EBITDA margin. We reported a 33.3% margin in 2024, which was better than the Galaxy Era average of 33.1%. 2024 saw a 12.1% increase in our underlying EPS. ahead of our Odyssey era, but down on the exceptional growth seen in the Galaxy era. We remain confident in delivering against EPS targets, with our track record of consistency and resilience to macroeconomic factors. We've also delivered improved cash conversion across the eras, with 2024 reporting at 98%. We've made a solid start to Cosmos in 2024. And on that note, I'll hand back to Nigel.

Thank you, Martin. I will now take a quick look at the M&A market, the current industry trends as they affect the group, and provide a brief update on the opportunity provided by the City Trust acquisition, which we believe is changing perceptions and redefining the profile of the business across several key markets. We'll follow up with a focus on the performance of the business from a divisional perspective. As I mentioned earlier, on this occasion, we are joined by Ian Johns, Group Head of Private Client Services, and Kate Beecham, who heads the Institutional Client Services, who will review 2024 and the prospects for their respective divisions in 2025. But I will start off with a look at the current state and trends we see in the M&A market. The anticipated uptick in market sentiment in 2024 failed to materialise, and the predicted rebound for the global M&A market was consequently affected, despite the pent-up demand, with the key contributors being the uncertainty surrounding the cost of capital and the buyer universe being risk-off. In addition, sellers have anchored on valuations at the M&A market peak, and as a result have shown a preference for holding portfolio companies or rolling them into a continuation fund. In spite of this, we have managed to secure six deals and a fast start to Cosmos. This proves there are still deals to be done. We are finding that the reputation and credentials of the acquirer is now a more important factor. The JTC approach, which combines an honest dialogue and straightforward engagement, coupled with a platform that is attractive to both vendors and employees, is increasingly a compelling one for responsible sellers. In particular, we have proved ourselves as a reliable counterparty for bank lift-out deals, with a track record for protecting the reputation of the bank and the client experience, placing us as an off-taker of choice as the lighter operating model is sought by many financial institutions. In these deals, price is seldom the key driver, leaving a good opportunity for value creation on JTC's watch. More generally, deal pricing remains at a sensible level for motivated sellers, with greater values continue to be attributed to institutional over private client businesses, with some deal auctions reaching up to 20 times plus EBITDA in the fund space. The very recent acquisition of Centralis Luxembourg headquartered corporate services business by USP house HGGC transacted for a multiple of around 19 times pro forma 2025 outturn, being a case in point. Anecdotally, however, there does seem to be a better understanding of the growth opportunity that PCS businesses can provide in the private equity community, particularly when the message is developed to aid understanding of the institutional nature of the services provided to global financial institutions and large family offices. For our part, we remain committed to both markets with a natural hedge between them. with a continuing alignment of market requirements and an ability to pivot between each, which gives us rise to larger opportunities and enhances performance in any economic environment. We continue to follow our proven and disciplined approach. We will be concentrating on closing the City Trust transaction and progressing the integration process whilst we continue to monitor and be presented with new opportunities for both divisions with a strong preference for off-market deals, always with a view to finding the right businesses at the right prices. Assuming completion of Cititrust in Q2, we will have secured over £100 million of revenue at a blended multiple of 6.5 times EBITDA for our activity in 2024. A great return in a relatively quiet market. Without wanting to steal Ian's thunder, I'm aware that there is considerable interest in the significance to the group of the Cititrust transaction. The deal builds on our position as the largest independent trust company business in the US and the leader in the global market. It already has had a significant impact on our profile as thought leaders, in particular in the US, whilst increasing awareness of JTC and opening up what were more nascent but very important markets in the Middle East and Asia. The Citi credentials have been particularly important in this regard, and we have experienced excellent collaboration from the bank with a sense of a true partnership in the introduction to both potential and established clients, providing new distribution channels for JTC. As a result of this, our commercial work streams are well advanced and are giving rise to meaningful organic growth opportunities. Operationally, we've had a good access to the separation team and the high quality executives who are joining us and generally have made good progress towards readiness for the introduction of our new colleagues and the necessary operational work streams, including technology, risk and premises. Finally, we have significant opportunity for value creation on JTC's watch as we reshape the business into our own established and streamlined model. I've remarked previously that I feel that this has every chance to be our most exciting deal to date and we have witnessed nothing that would suggest otherwise at this stage. And I look forward to providing an update with more detail at the time of the interims post-completion. In a break from our normal approach, we thought our deeper dive this time should include commentary from the divisional heads, Ian Johns in Private Client Services and Kate Beecham in Institutional Client Services, providing insight into their respective divisions, a review of 2024 and an idea of what 2025 may hold.

Thank you, Nigel. I'm delighted to report on another excellent year for PCS in 2024, where we continue to build an industry-leading proposition in the global trust company market and capitalize on our status as the leading independent private trust company business in the United States. During the year, our revenue broke the 100 million pound barrier for the first time and increased from 92.8 million pounds to 124.5 million pounds, up 32.3%, and EBITDA up 35.2% from 34.3 million pounds to 46.4 million pounds. This was achieved at a strong margin of 37.3% at the top end of our guidance range, reflecting the consistency and the quality of the management, the benefit of ongoing investment and the seamless integration of our M&A expansion. In addition, net organic growth was outstanding at 14%, with particularly strong performances in the US, Cayman and Jersey. The U.S. opportunity is particularly exciting with the addition of First Republic Trust Company in Delaware in 2024 and the transformational acquisition of City Trust, which will complete at the end of quarter two, and for which Nigel has already covered in detail. And as you will have heard, the opportunity it brings is not limited to the U.S. only. The vision also continues to attract top talent, win industry awards, and to redefine the parameters for a world-class PCS offering. Now in my 13th year at JTC, and as we enter the second year of Cosmos, I've never been happier with the opportunities we have before us and the faith that I have in the PCS team and that we have assembled over many years, all of which provides a positive outlook for 2025 and beyond. And on that note, I'll hand over to Kate.

Thank you, Ian. I was very excited to relinquish my role as non-exec director of JTC PLC and to take on the executive role as the global head of the ICS division in September. The process has been seamless and it's been an immensely exciting transition for me. The strong group foundations, the quality of the division and my own understanding of the JTC business has enabled me to hit the ground running at an opportune time for us and to continue our evolution and enforce our strategic vision to be the partner of choice for clients in the global fund, corporate and employer solutions markets. As you've heard, in a difficult macro environment, the division has shown remarkable resilience and adaptability to achieve net organic growth of 9.9% in 2024. The division secured revenue of £180.9 million up 10.8% from £163.3 million and EBITDA growing to £55.3 million from £51.6 million up 7.2% during the year. delivered at a lower margin of 30.6%, which has been primarily due to further investment in our platform to improve the client experience, bring operational efficiencies and assist with risk mitigation. We have also been the beneficiaries of four M&A deals, adding Blackheath, the UK AFIM business, Hanway, expanding our UK institutional company secretarial service offering, and Buck, a multi-jurisdictional onshore employee benefit trust plan administrator, together with Cayman Headquartered FFP, which adds specialist fiduciary services, including restructuring and insolvency, with further offices in BVI and Dubai. You will recall FFP will sit alongside our newly established North Point practice, in which we anticipate capitalising on the changes we see in the complex regulatory environment to provide bespoke, unbundled services to a whole new cohort of businesses. I too have been blessed with an excellent team, and we look forward to increasing our market share and pushing forward with our plans to deliver several enhancements to the business, resulting in a successful 2025 and the rest of the Cosmos era.

Thank you, Kate and Ian. As you will have heard, very exciting times in both divisions, each with significant opportunities and contrasting challenges. What I do hope is clear is that we are in a very competitive space, success does not happen automatically, and that the balance between the divisions provides us with the opportunity for success every year, regardless of the wider macro environment. This is why we have had 37 years of uninterrupted growth and remain committed to having both divisions supported by the best and most experienced group operations team in the industry. The start of 2025 has been a particularly good one in terms of the opportunities we are seeing for both divisions and from several different regions and markets. A trend that is clearly emerging is the appetite for enhanced professionalised governance advice, structuring and the underlying services to deliver upon it. These opportunities are large and lucrative, but do tend to have a longer lead in time. The size, quantity, and quality of these opportunities leaves us with the strongest pipeline we've ever had at JTC and augurs well for the remainder of the Cosmos era. Ultimately, we continue to concentrate on being the best service provider and less on being the biggest. That may come yet in time, but not at a compromise on quality. And finally, onto our key takeaways. We've made a fast start organically and inorganically to the Cosmos era towards our goal of doubling the business from the end of 2023 in a three to four year period. The acceleration primarily coming from M&A activity where we've announced or completed six deals during the year. This combined with a strong financial performance where we once again beat our record new business wins, which were up 15.9%, adding future revenues of just below half a billion pounds. Transformational acquisition of Cititrust has established us as a market leading global independent trust company business. It has also consolidated our position as leading independent in the US market, as well as providing a platform for further growth in both the Middle East and Asia. As you have heard, the transaction is already bringing significant opportunities to the group for both divisions in several markets. Our US platform is now well established across both divisions and has given us the foundation that has produced great results during the year, with a strong base to further capitalise on the market opportunity. Looking at the early part of 2025, we have had a strong start and carried good momentum forward from the back end of 2024, and we expect the trend of strong net organic growth to continue. As alluded to earlier, we will spend time during the first part of this year to complete the City Trust deal and ensure that it fits seamlessly into our JTC model. We also continue to track several opportunities in our M&A pipeline across both divisions and our key target markets. Generally, we would expect to see an uptick in consolidation activity, assuming the cost of capital continues to stabilise at lower interest rates. As always, we will continue to invest for growth, ensuring our global platform is always fit for purpose and scalable. Once again, we maintain our guidance metrics, which we regard as prudent guardrails that define what sustainable success looks like for a business of our nature. So thank you for listening and for your ongoing support. We will now be happy to take your questions.

Good morning, thanks everybody. I can see some hands going up, so thank you. If we can, just sorry, just looking at the order they went up. I think the first hand went up from Michael Donnelly at Investex. If we can unmute Michael, please go ahead.

Very quickly then, on the FFP delay, can you quantify how many pounds of revenue that is that one assumes moves from FY24 into FY25? And secondly, is it possible that to say how much of the 14% organic growth in PCS came from the corporate services division.

Hi, Michael. It's Martin here. Can you hear me?

I can. Yes, thanks.

So on the FFP, it doesn't change anything in the 25 view of FFP. It wasn't about a shifting. It was just about a delayed cutoff or a delayed completion and the impact on cutoff. So it's a 24 only impact. 25 remains the same. And on private client, I don't have that information on how much of it is coming from corporate services.

I do think, however, Michael, I do think, however, you've hit on something there that is absolutely true. Increasingly, The work we do in the private client services division is corporate or for institutions by its nature. I think 50% of our book actually has provenance with large financial institutions. So it's to some degree PCS or private client services can be a bit of a misnomer. And so you're right, the corporate and institutional element of the private client practice is an important factor. Great.

Thank you. If we go to James Beard at Numis next, please.

Thanks. Good morning, guys. Can you hear me? Yes. Cool. Thank you. So two questions for me. Firstly, having delivered just over 6.5% pricing growth in FY24, can you give a feel as to the pricing backdrop as we move into 25 and your expectations for the price component of organic revenue growth this year? And then secondly, can you touch on your, apart from City Trust, your M&A priorities for FY25 and where the pipeline currently sits? Thank you.

Hi, James. I'll pick up on the pricing backdrop for 25. I think pricing will be lower than 6.6% that we saw in 24. I think it will be more like 3% to 4%. In 24, we did push the chargeout rates up because we felt we were slightly behind market. We haven't had to do that this year. So that will impact on that pricing number. So probably more like 3% to 4%. Do you want to pick up the M&A priorities, Nigel?

Yeah, sure. Good question, James. I think the reality is City Trust has obviously been our focus for the first half of the year. We do have two really interesting M&A opportunities in front of us, one in each division, which we, I think, every chance of being the preferred buyer in both cases, and we like them. One of the issues we've got at the moment is just understanding where the market is. So to use a phrase, we've got our foot on the ball just waiting for current environment to settle down into something where we can work out whether we're in the right price point and buying the right businesses.

Great. Thanks, James. If we can go to Dan Cowan, HSBC, please.

Good morning, guys. Can you hear me okay? Yes, you can. Fantastic. So first question is on organic growth and new business. That looks like quite an impressive growth in your new business quarter on quarter in the first quarter. I was just wondering year on year how that would look um and also how much of that new business is uh it comes into 2025 or is this sort of more 2026 growth story i've got a question on the ics division there's a second question can you talk a little bit around the investment in in infrastructure that you've that you've highlighted there please and how you'd expect margins to to develop um in the current year and beyond, please?

Sure. I mean, happy to pick up on the organic growth. Yeah, we had a decent start to the year, a good end to 24, really decent start to the year. We're probably seeing more strategic opportunities as opposed to individual fund wins, although we've had a decent run of those actually in 25, I think. You know, if I was talking a week or so ago, I'd say some of the caution that was around seems to have come off and people decided to get busier with what they're up to, you know, going forward with regard to that. But I do think that the opportunities we've seen, and it really plays into some degree the market, which is institutions looking for lighter operating models, looking for ways to stick to their core part of the business and JC's reputation for being able to do those things sort of exercises for them be that on an m a or in a strategic transformation as we call it uh environment we seem to have many more of those so you know some of that should reflect in 25 but 26 and 27 therefore look strong thereafter so longer leading times that's really the point dan but you know me fees in the millions for many many years to come if we're successful

On the margin point, Dan, so yes, ICS has been investing in infrastructure. I do think that we'll start to see an improvement in the margin in ICS through this year and then into future years. However, there'll be an offset against that in the PCS when they bring Citi in. Citi's a 10% margin business at the moment. That will bring their margin down. So My expectation is that the margin will stay at the bottom end. It might even be slightly under guidance, but it will be in that sort of area for the short term. And then maybe as we get through 26, 27, we should hopefully start to see the margin push back up subject to any other acquisitions that we may make.

Thanks, Dan. And if we can go to Vivek Raja at Surecap, please.

Hi, good morning, chaps. Can you hear me? Super. Thank you. Just one question, but a difficult question, I suppose. So the world order is changing. God knows where it ends up. Just wondered if you could sort of maybe weave some of the things you've said together, Nigel. You talked about the areas of strong demand that you're seeing at the moment in governance, and you've talked about strategic transformation opportunities amongst institutions is a sort of a keen area. I wonder if you could just sort of tie all this up and suggest where you think your business could lean into positively in terms of the the sort of changes in world order appreciating you know it's a moving moving moving piece there and which parts of your business maybe you're a little bit more anxious about um given what we've heard over the last few days thanks Thanks for that.

I mean, I think KTC is a great defensive growth model. So we've grown every one of our 37 years. So if I go backwards to go forwards to answer this, and, you know, through several sort of crises in the markets, as we've seen them over time, you know, pandemic, global financial crisis, Ukraine, and now Trump and X really. so we we feel confident that we're going to hit our our targets for the year and where will that come from as we've probably said to you before we're quite it's a it's a really nicely hedged business really so when it's in in an environment where there's negativity in the marketplace there's probably less fun launches and the like so new new business will probably be a little bit slower but i do think we tend to get more from our existing business when this happens because people are looking to reorganize refinance and because if you think of us a professional services firm when we're helping to arrange those things it'll shift so the shift will go from less new new probably into more from existing in this environment and specific to The big opportunities I was alluding to, they do play into the big institutions looking for lighter operating models, looking to stick with their core businesses, de-risking, reducing numbers, those sort of arrangements. And frankly, in the US market in particular, I think there's a shift from the banks being the owner of the trust market to professional services firm. And of course, we're now the largest in that market. And so a lot of things are arriving on our desk just by virtue of the Citi deal that we probably wouldn't have heard about otherwise. So we're seen as a small lead disruptor in that market in a positive sense. So yeah, so those are the things that immediately spring to mind. But I'd say new business um for the on the institutional side generally speaking if if in this sort of environment it's going to be difficult to to grow so we were delighted they did 9.9 last year frankly in in that environment super thank you is that okay for you vivek we can just unmute vivek just in case he's got a follow-on forgive me i was just i just wanted to say thank you to nozzle for his answer that was all thank you brilliant thank you can we go to um jay jacob barbstrong at steve for next please

Morning, guys.

Can you hear me okay? Apart from all the voice cracks. Two questions from me. Firstly, can you quickly talk about the competitive backdrop? You're still delivering win rates well above your historical levels. Is there still some disruption at some of the larger PE-backed players? And then secondly, and more quickly, hopefully, can you remind me of the mix of your client exposure between the PE funds and more public markets? Thank you.

Happy to do that. I think on the competitive backdrop, yeah, those win rates are almost getting embarrassingly high, if I can put it that way. And I think to some degree that there's an argument we should break it out a little bit further. There's certain markets where we're winning 100% of what we're going for, and others where, obviously, we're a little bit more competition. Europe's more competitive than the US, for example, because I think in the US... even conceptually, our businesses of our nature are less well known. And therefore, the fact you're having a conversation will probably mean that you're likely to get the mandate. So that's how I would look at that. Obviously, there's always more to be done with regard to that. But I do think you're right, though, to some degree, Jacob, there is still a bit of a some of that sort of race to scale issues that i've talked about before still exist in certain pockets of the market so i think we're benefiting from that as well even even in the more competitive markets and of course our competitors are slightly different depending on which market we're talking about and you know some of us are stronger than others and and you know different localities or different service lines on the ics mix i'd say we're primarily alternatives We do have, you know, sort of practices on the institutional side, but I would suggest think of us as alternative, alternative asset fund services more than institutional. I haven't got the figures, unfortunately, but that, that would, you know, it would be something like, I don't know, 85, 15, something that, that of that order.

That's great.

Thank you. Thanks, Jacob. I can see Dan Count hand up again. I'm not sure if you want to come back for another bite at it, but happy to pass to you if you want to ask another one.

Yes. Hello. Thanks for the opportunity to ask another question. I just was wanting to ask, please, on the commercial office. It's something you've You've highlighted in the last couple of years, and I'm also mindful of your comments earlier that it was a big contributor in 2020, in 2023. I was just wondering whether the office contributed to growth in 2024 and sort of around your comment of those services are now embedded. And the second part to the question, please, is... uh you know what what else have you got in the pipeline that might then uh materialize as a lift to organic growth in the uh uh in in coming years i know you've got a few things uh cooking away there so any any commentary around a commercial office will be um i think think of the commercial office in three pillars as growth performance innovation

I think we had, remember the purple patch I'd have talked about, Dan, back in the day, definitely the introduction of sort of tax and red compliance type reporting was a great win for us, as was the banking and treasury teams that we introduced. So those all came together pretty much at the same time. I think they delivered well. I think between them nearly sort of over 30 million of revenue. So I think that it's been a slightly, the team have probably concentrated a little bit more on some medium-term matters in the interim. So providing insights into business improvements. They've been instrumental in trying to get what we call our framework's internal reporting across the business, which is aimed at improving recoverability of our fees over a period in time. And I don't know if you remember, it's finance risk and management of both our people and our clients that's That's looked at there and that's beginning to get proper traction and improving, you know, incrementally on a day to day basis. I do commercial audits of particular books of business where we think we could be doing better so that they've done a, they've done a reasonable amount of work in that regard, sort of behind the scenes. So I can't point at a number and say that's. That's it. We're working on that perhaps for the future. And probably the other big thing they've been involved with this year is we're moving to a global billing model. And there's quite a lot of work to be done to implement that and move that across the group as a whole. So they've probably been involved in more the maintenance of the business and sort of medium term projects. So that doesn't mean they're not looking at custody. To your point, we've got the governance practice obviously rolling out that they need. We're instrumental in helping to put together with the ICS team and they're looking at pricing as well. So, you know, that's what they've been up to, but probably not headline grabbers like they were a year, year and a half ago.

Super. Thank you. Okay. I haven't got any more hands up at the minute. So if there are no further questions, bringing us nearly to time. Excellent. Thank you very much to everybody for dialing in and listening today. If you have any follow-up questions, do feel free to contact us. And thank you again for your time.