Good morning, everybody. Welcome to the presentation of JTC PLC's interim results for the period ended 30th of June 2019. For those of you we haven't met previously, I'm Nigel Le Quesne, the CEO of the group. Presenting with me today is Martin Fotheringham, our group CFO. Also here is David Vieira, our Chief Communications Officer. Over the next 30 minutes or so, we'll take a quick look at the CEO highlights before I pass on to Martin to pick up the more detailed financial review. I will take you through a deeper business review for the first half and our plans for the rest of the year. If I could ask you to hold your questions until the end of the presentation, where we have time set aside to answer any that you may have. Turning to the next slide and to summarize my quote.
We are pleased with our results for the half year. As anticipated, our momentum from 2018 is carrying forward into this year. Both of our divisions are contributing and performing well. We continue to look for acquisition growth opportunities and are pleased with the first quarter acquisition of Exceutive Partners in Luxembourg. We feel the business is in good shape through to the end of the year and beyond. As always, I'd like to thank our team for their ongoing dedication and support. If we could just move on to slide five. JTC has been around for over 30 years. We are a relatively new business to the listed environment. There are a number of fundamental pillars upon which the group has been built, which I feel worth reiterating in terms of stability, consistency and the robust nature of the business.
These include our having a 31-year history of successful revenue and profit growth, a well-established, scalable global platform supporting both acquisitional and organic growth, an experienced and entrepreneurial management team with a proven track record and a significant stake in the business. Most importantly, every staff member has ownership in the company. The question for us here at JTC is not whether we will grow, it is by how much. Turning to the half year highlights. I wrapped up my presentation of the 2018 results in April, suggesting that we were well-placed to deliver more of the same in 2019. It is precisely what we have seen, and we expect it to carry through to the year end. Taking each of the first half highlights in turn, we have delivered on the expectation of net organic growth in the 8%-10% range at 8.2%. That's 13.8% gross.
Our EBITDA margin expectation was in the range of 30%-35%, and this has been delivered at 30.6%. Importantly, as I mentioned before, both divisions have contributed positively. We've acquired Exceutive Partners in Luxembourg, which we see as a vital acquisition, adding strength to the existing team in a very important jurisdiction. Our steady investment in the platform has featured greater emphasis on technology this year, with upgrades to our workflow capabilities, including the incorporation of AI into group processes, leading to improvements in commercial and operational efficiencies with, for example, the introduction of an automated billing system and a global onboarding team and process. The role of the Chief Commercial Officer and the commercial team was established in April, and as expected, we are seeing opportunities for material and consistent improvements in the commercial performance of the group with tangible results beginning to filter through.
All of the above delivered by evolution and progressively through prudent and experienced management without a significant impact on the operational delivery or the margin of the group as a whole. Looking forward, as I've mentioned, we feel in general terms we're in good shape through to the year end and into 2020. On to the period-on-period CEO highlights, where we have seen revenues increase by 32% to GBP 46.6 million, underlying EBITDA growth of 35.2% to GBP 14.3 million, an improvement in the EBITDA margin from 29.9% to 30.6%. Our annualized new business wins in the first half are up 22.9% to GBP 5.9 million, and our organic new business pipeline is 22.2% higher at GBP 33.1 million. Incidentally, we've had an excellent third quarter with a further GBP 6 million of new business landed already. Finally, on to the dividend.
We aim to distribute 25% of our profits as dividends year on year on a one-third, two-third basis. As a result, we've declared an interim dividend of GBP 0.017 per share, which will be paid on the 25th of October. I'll now pass over to Martin for the financial review.
Thank you, Nigel. I guess the highlights for me for the first half of the year have been very good revenue growth. The margin has improved period on period. I think our philosophy we've always said is that we will grow steadily, sustainably. We won't chase every dollar. We won't chase every pound of margin we're building, as we always have done a business for the long term. I will apologize now for the impact of IFRS 16 and trying to understand the accounts. In the next couple of pages, hopefully we can try and just get to what the true underlying performance is so that you can see that. If you look at slide nine with the group income statement there. I think the highlights from that, as I've already said, revenue growth 32%. The net organic growth, which we'll look at in the following slide, is 8.2%.
The underlying EBITDA margin improved to 30.6%. I'm pleased that this period, the non-underlying costs are significantly down from the same period last year. You'll recall last year in half one, we had the IPO costs. We also had the one-off EBT capital distribution cost that ran through the P&L, which created quite a lot of noise. None of that through this year. It's a much easier story to get down to the underlying trading. IFRS 16, and the detail of that is included in note three on this slide. The impact of that is that the EBITDA reported is GBP 1.7 million higher period on period. However, depreciation is GBP 1.6 million higher. Ultimately, the total impact on PBT is GBP 300,000 adverse. From an EPS perspective, the adjusted underlying basic EPS is GBP 0.0782, an improvement on H1 last year.
As Nigel has said, our dividend of GBP 0.017 is declared. If we turn to page 10, we have here the revenue bridge, which we've looked at in previous periods as well in exactly the same format. What we can see is that the attrition in the period is GBP 3.3 million, which is 5.6%. That is lower than we've seen in previous periods. We're very pleased with that. What that means is that if we take the revenue brought forward, 99% of that has been retained going forward. From a net new organic LTM revenue basis, we have GBP 8.1 million in the period, which compares to GBP 9.9 million for the 12 months as at the end of December 2018. That figure's down and a little bit disappointing.
I think when we've met with you before, we've always said that where we think that we're potentially leaving a bit of value on the table is in the existing clients. The CCO role that Nigel's referred to is going to be really important to picking up that additional revenue. We started to see a little bit of that already. I think there's an awful lot more to go for. Typically, we would expect to see existing clients, that figure being higher than the new clients. I'd also point to in Q3, we've still got two weeks to go in Q3, and as Nigel said, we've had a very strong amount of new business wins. Already in this quarter, we've had higher new business wins than we did in the first half of the year. It's been the best quarter we've ever had.
That augurs extremely well for the organic growth going forward. If we move to slide 11, the adjusted underlying EBITDA. The EBITDA has improved in the period on period from 29.9 to 30.6. Within the two divisions, and this is the first time that we've been able to show this because we've got properly comparable data, you'll see that ICS has improved by 2.6% and PCS has come back by 2%. The ICS improvement, frankly, I think Nigel and I would say that we're a little bit disappointed. We think there's more to go at there. We continue to invest in people and processes and in our back office in South Africa. I think we feel that there's still opportunities there to improve the processes and to make that tighter. We continue to look at the options we have around that.
On the PCS side, we had a very strong margin in the first half of last year, at that time we said that we felt that the right thing to do for the business was to invest some of that for future growth. We've done that, we've invested in people, particularly around the business development and the growth side. What that's done, of course, is taken a little bit off the margin, it brought our efficiency back a bit. We believe that we're starting to see the benefit of that coming through in the new business wins. The Q3 new business wins, it's not just institutional, it's private client as well. We've got a really good momentum behind us there. I believe that there's opportunities within ICS to improve the profitability.
That's something that we're going to be working on hard and continue to focus on. The indirect costs have increased by GBP 2.6 million period on period, and half of that is to do with acquisitions. The remainder is the ongoing investment into the business and into the infrastructure. If I move to the balance sheet on slide 12, there's not too much that I would report here save for saying that clearly there's been an increase in goodwill and other intangibles as a result of the acquisition of Exequtive Partners, mirrored on the liability side by an increase in loans and borrowings. I'm pleased to say no impairment of goodwill. All of the acquisitions that we've made continue to perform in line with expectations. We've been really pleased to see a significant improvement in net investment days in the period.
As Nigel's referred to already, we've improved our billing process, particularly in the Private Client part of the business. What that's meant is that we've been able to get a lot of invoices out within one or two days, which had previously taken us some months to do. What that's meant is, of course, that we've accelerated cash collection, and you'll see the benefit of that through the cash conversion. Clearly, IFRS 16 also has an impact on the balance sheet, and you see a corresponding increase in property, plant, and equipment and other financial liabilities. With regard to cash flow on Slide 13, the key headline for us in the period is cash conversion is 101%.
That's significantly improved from this time last year, where we were 56%, but you would recall at that time that I explained that this was a legacy of the Bank of America acquisition that we made, whereby we were billing 6 monthly in arrears, and then it was a 3-month collection period. That has all now worked its way through the numbers. We're now on apples for apples in terms of cash collection. Our guidance on long-term cash collection is 85%-90%. I still believe that's the right number, and I expect in the second half of the year that the 100% will come back towards the top end of that range. I would still be hopeful that we will be better than slightly this year, based on improving the process. 85%-90% is still a very good number to be focusing on.
Please bear in mind that the cash balance shown does include GBP 2.7 million of EBT cash that isn't JTC's, but because of the need to consolidate that through our accounts, we have to show it within our cash balance. If you turn to Slide 14 in terms of the cash conversion and net debt, the top graph there shows you the historic cash conversion, adjusted cash conversion, sitting comfortably in that 85%-90%. We've had a very good period in H1. As I say, I expect that to come back in the second half of the year. From a net debt perspective, we've always guided that we will sit between 1.5 and 2 times on a pro forma basis. That continues to be our guidance.
We will look at opportunities that may take us above that if we believe that it's the right thing for financing that deal and it's the right thing for the business. We're not hidebound stick at two. We will consider going up to, say, two and a half times. On a normal ongoing basis, one and a half to two is where we expect to be. I'll hand back now to Nigel, and if there are any questions, I'm very happy to take those at the end.
Thank you, Martin. Now for the deeper dive into the business. A quick reminder, our dual growth strategy revolves around consistent organic growth year on year, complemented by growth from acquisition. Our organic growth is driven by the performance of our two fee earning divisions, which is Institutional Client Services and Private Client Services. Over the next few pages, we'll review their respective performance in the first half and take a look forward to the year end in each case. I'll start the review at group level, which encapsulates the collective performance of the two divisions, combined with the efforts of the group head office and operations. On the left-hand side of the slide, you'll see our group revenue growth and EBITDA performance with a contribution to each broken down by division.
It's worth noting that both of them have once again performed successfully in their own right. As I've said before, JTC remains committed to both markets and remain comfortable with how we're positioned in each. We've also included the latest split between our three service lines, which continue to indicate a preference of fund and corporate services over pure private wealth on a two-third, one-third basis. I'll discuss some of the macro market characteristics later on. In general terms, the landscape remains largely unchanged with business consolidation continuing in the industry and with the key drivers remaining strong for both our divisions and all three service lines. Notwithstanding some of the current uncertainties in the global landscape, we believe we are well-placed geographically and commercially to capitalize on greater complexity, regulation, and additional compliance burdens that will inevitably follow.
We continue to see acquisition opportunities for further consolidation across both divisions as the environment becomes more competitive for smaller participants while remaining largely fragmented. During the first half, we considered over 30 deals of different types and sizes. Have maintained our discipline of ensuring the business gives us more, i.e. the two plus two equals five approach. Given the amount of opportunities that there are in the market, we have honed our immediate search primarily to institutional businesses in locations where we know there are significant growth opportunities. As a result, we have concentrated our efforts on seeking out a meaningful institutional acquisition in the United States, where we have made good progress.
We've also targeted our search criteria to jurisdictions where we already have a presence but can see an opportunity for growth and make a material improvement to our current offering, as demonstrated by the Exequtive deal. One feature of 2019, and most likely beyond, has and will be our greater emphasis on technological development, both in terms of the group infrastructure and the client experience. This has and will be delivered by further development of our established technologies, combined with greater penetration of our workflow capabilities and incorporating the use of AI. To be clear, we see this as an evolution. It will be introduced progressively and will deliver improvement. We do not, however, anticipate a step cost change to the degree that it would adversely affect group margins. This is merely a change of focus and emphasis.
Looking forward, as I mentioned earlier, we anticipate delivery on both our net organic growth target and our EBITDA margin. We would anticipate an acquisition for the Institutional division. We will complete moves to new landmark offices in the key locations of London and Amsterdam. Finally, in July, we were delighted to welcome our Group Chief Operations Officer, Wendy Holley, to the PLC board. Wendy has been with the group for 12 years and plays a pivotal role in the progressive development of our operational platform and the integration of our acquisitions, as well as being a leading advocate for our shared ownership culture. Now turning to our divisions, starting with Institutional Client Services. This division has continued to perform well period on period with a 27.6% increase in gross revenue to GBP 25.4 million, and a 41% increase in adjusted EBITDA to GBP 7.1 million.
Revenue growth was once again strong for the division, with continued focus in the alternative asset classes. From an organic growth perspective, the annualized value of new business wins was up to GBP 3.2 million. The new business pipeline up 9% to GBP 22.1 million. What has been particularly pleasing is the new business wins in the third quarter, which has been particularly strong at approximately GBP 4.5 million, a feature of which the general size of the mandate trending towards larger engagements. Ultimately, we are pleased to see that the investment made in the industrialization of our business development and marketing team function in Institutional over the past 12 to 18 months coming to fruition.
Turning to the market characteristics, we see continued demand for alternative asset classes due to the low return environment, coupled with an increasing trend to outsourcing services and of late, the degree to which managers are prepared to do so, with more middle and back office functions being added to the outsourced proposition. Not just fund administration. The key is, as we see it, is to demonstrate subject matter expertise in the areas of complex regulation, where the high cost of potential failure is a driver to outsource, together with the deployment of appropriate technology to meet their reporting requirements. From a jurisdictional perspective, we see the USA as a key market where there is a greater opportunity for outsourcing, with market penetration estimated at 30% of the addressable market when compared with Europe and closer to 70%.
These together with potential winners from Brexit and other regulatory factors, which would include Luxembourg and potentially Ireland. We can also see the need for greater substance and jurisdiction for existing clients, led by the BEPS OECD Initiative, driving greater demand for wider assistance and creating the opportunity for greater share of wallet. Turning to the H1 highlights. John Jennings has settled in seamlessly the position vacated by Tony Whitney's move to Chief Commercial Officer. We continue to see our margin improvement, seek out margin improvements in the division, to take advantage of the talent and capability in the global service center in Cape Town, South Africa. We anticipate an uptick in the margin from H1 into H2, capitalizing on some of the investment in technology, new workflows, and processes.
We've had the addition of Exequtive Partners in Luxembourg, this combined with the upgrade in the Netherlands led by Van Doorne, the addition of the lift-out of Fisco and Oaktree, and the move to new premises, leaves the Benelux region in a much stronger position than 18 months ago with over 100 staff in the region. There's also been new senior hires bringing additional technical expertise coupled with business development capabilities in both London and Luxembourg, strengthening our offering in both. Turning to the second half, we've got great momentum from these new business wins in the third quarter. We have an expectation of an acquisition in this half of the year. We complete the move into new premises in London and Amsterdam, we see operational improvement from refinement of process and use of technology.
As John said there in his quote, he has reason to be pleased with his first six months in the role. Let's move to the Private Client Services division. PCS continues to be a great story for JTC, with period-on-period revenue up 37.7%, standing at GBP 21.2 million, and the adjusted EBITDA up by 30% to GBP 7.2 million. This performance is particularly pleasing given that we have always believed in the potential and long-standing value embedded within this part of the business. As anticipated and highlighted previously, the margin did decrease to 33.9% while remaining well within our range, as investments made in senior management, particularly the business development team, its function, and organization, together with the investment in the recently launched Private Office offering.
We've seen significant revenue growth as a result of the acquisition of Minerva Trust and the investment I have just alluded to, and it helped through the new business wins of GBP 2.7 million in the first half, which is an increase of 58.8% period on period, with an improved business pipeline of GBP 11 million against GBP 5.6 million in the equivalent period last year. Private Client Services has also had an excellent third quarter with around GBP 1.5 million of new business wins. From a market perspective, globalization trends and increasing global wealth provide positive structural tailwinds, with total client assets estimated to rise threefold over 20 years to $345 trillion by 2025. This coupled with a desire to be compliant across the world in an era of politicized regulatory change, together with a better understanding of the need for succession planning generally and across borders.
Further consolidation by acquisition also features as the ability to provide a global offering to internationally mobile families becomes more important. We also see the need to provide expert advice delivered with consolidated and value-added reporting available on a mobile platform as key. This led to our development of our award-winning Edge platform and Private Office offering, which continues to gain traction. In the first half, the division has benefited from the operational efficiencies that Martin alluded to in the period, including the introduction of automated billing processes, which will significantly improve cash conversion and debt cycle, and investment in process and automation to bring efficiency to our clients onboarding. With the introduction of Michael Halsey as MD, we have seen improvements from the Cayman Islands and Caribbean region, which will include a move in the second half to new prestigious offices.
Our strong new business pipeline is driven by the reputation of the experienced team in a consolidating market, which has been particularly good in the Channel Islands. In the second half, we expect further traction with the private office value offering, with the addition of Matthias Belz to head up the business line from Geneva, and the addition of another senior director based in Monaco and supported by a new managing director for Private Client Services in New York. On to our key takeaways. In the first half, we have delivered net organic growth of 8.2% and a margin of 30.6%, within expectations. We've acquired a great business in the important jurisdiction of Luxembourg. We've established a commercial department and are already identifying low-hanging fruit opportunities. We have placed emphasis on technological development and will continue to do so.
The second half we expect to deliver on growth and margin expectations, to make an acquisition for the Institutional division, most likely in the U.S. I think we're going to have a stronger and best ever half year for new business, and that technological emphasis will continue through. Ultimately, we expect progressive, strong delivery through to the end of 2019 on a no surprises basis.