Good morning, everybody, welcome to presentation of JTC plc's first annual results for the year ended 31st of December 2018. For those of you I haven't met previously, I'm Nigel Le Quesne , CEO of the group. Presenting with me today is Martin, on my right, who's our Chief Financial Officer. We're also joined by David here, who's our Chief Communications Officer and has responsibility for investor relations. After an introduction and a brief look at the CEO highlights, I'll pass on to Martin to pick up the financial review, I'll take you through a deeper business review, summary, and outlook slides. If we can have questions at the end of the session, please, that'd be great. Good morning, Dave.
Starting quickly with a quote from the RNS, to paraphrase that longer quote, very pleased with our 2018 results with good contributions from both of our divisions, we have a positive outlook for 2019. You'll recall out of the interims that the natural impetus of JTC hinged off a history of constant revenue and profit growth in our first 30 years, creating an environment to expect progress year-on-year. The only question being not whether we will grow, but by how much. This together with a two-pronged growth strategy by way of organic growth and growth by acquisition, delivered on a scalable platform for supporting delivery in both. It drives momentum for new business flows, opportunities for acquisitions, and appropriate investment in people and infrastructure.
All of which is underpinned by Ownership for All, where every staff member has a stake in the business, creating a true differentiator for JTC. That all adds up to strong, sustainable, and consistent results. Let's turn to 2018 and take a look at how this played out in our first full year results as a PLC. Key message I'd like you to take away from today is we've been very pleased with 2018. Taking some of those highlights Sorry, David, back one slide.
That's fine.
Taking some of those highlights, obviously the listing of the business was a huge and historic event for the group and testament to 30 years of hard work. Our 31st year was again a successful one, with 2018 arguably in actual terms our best year ever, with profits almost doubling on a pro forma basis when the full year effect of the acquisitions of 2017 and 2018 are factored in. Most pleasingly, we had indicated a return to an EBITDA margin of around 30%, which was achieved. We've added significantly to our group capability in terms of talent, geographies, and services, and we have successfully delivered our Ownership for All program into the listed environment, organizing ourselves to ensure that the concept of shared ownership continues in the PLC world.
Taking each of our business growth drivers in turn, we have delivered 17.6% of growth or 8.7% of net organic growth, if you prefer. We've completed two deals, Van Doorn and Minerva since IPO, and a third late last month with the very recent announcement of the Exequtive transaction in Luxembourg. We fully integrated the businesses acquired in 2017. We are pleased with the progress made in integrating those made in 2018, and we're looking forward to starting the process with the Exequtive team this year. We've seen very strong new business flows, particularly in the second half of 2018. The pipeline up 25% year on year. As well as the Exequtive transaction in Luxembourg, we continue to have a very strong pipeline of new acquisition opportunities with more activity possible perhaps in the second half of this year.
We have made a number of senior hires and launched our Lion Leadership program designed to ensure we create our own future leaders and allow ongoing development of the business by evolution. This is, of course, all underpinned by all employees being owners of the business. I have to say, having shared our recent group offsite, I've never been happier with the quality and the depth of the team and the palpable enthusiasm to succeed in 2019 and beyond. Simply put, we did what we said we would do in 2018 and quite a bit more. On to the results. This has all manifested itself in revenue growth of 29.3% from 2017 to 2018, from GBP 59.8 million to GBP 77.3 million. An underlying EBITDA growth of GBP 9.4 million year on year, from GBP 14.4 million to GBP 23.8 million. A rise of over 60%.
An underlying EBITDA margin improvement from 24.1% to 30.9% year on year, which is a great effort and sets a benchmark for us this year. With annualized new business wins of GBP 9.7 million in 2018, pipeline of GBP 32 million, and GBP 2.7 million of which is one pending onboarding. As indicated previously, we are proposing to pay a final dividend of GBP 0.02 per share, taking the total dividend for the nine to 10 month period to GBP 0.03. I'll now pass to Martin for the financial review.
Thank you, Nigel. Good morning, everyone. Slide eight of the deck that you have, there is a quote there from me that I suppose I would really just summarize that in four things. Very pleased with the EBITDA margin improvement. That was the primary aim for us as a business this year, to recover that to over 30%. With the organic growth, you'll see that it strengthened in the second half of the year. The cash conversion for the full year has been strong. It was lower at half year. We explained that, and I think that as we guided, that has come to pass. Fourthly, we're ahead of consensus. Of the six slides that follow, there's a degree of granularity about it. There's some enhancement from some of the reporting that we did at half year. Hopefully, that will help you understand more about our business as well.
The group income statement is set out on page nine. I'm conscious that this year's result, it being our first year post-IPO, that there's quite a lot of noise in the figures with IPO costs and EBT distributions, et cetera. What we've done here is identified the non-underlying items so that we can have a good view of what the underlying business looks like. As Nigel's mentioned, we had revenue growth of 29.3% in the year, which was split 8.7% organic and 20.6% was from the acquisitions. We did incur GBP 18.6 million of non-underlying costs, which are set out in note one just below the table. The biggest part of that being the EBT capital distribution. The margin returns to north of 30%. The full year was 30.9%. If you recall, at mid-year, we were at 29.9%.
One of the features of being a PLC is that you carry costs every year as being a PLC. We estimate there are approximately GBP 1 million of ongoing costs that are through the underlying cost of the business, and will repeat year-on-year. Just to be clear, that's separate to the GBP 1 million that was incurred that was one-off IPO costs. We set out the underlying adjusted diluted EPS here at GBP 0.184, which compares favorably with 2017 at GBP 0.138. There's a detailed explanation of that in the RNS and in the annual report, which seeks to make the comparability with the EPS with what the analysts, you guys and your teams have been setting as targets. As Nigel has mentioned, dividend grows as GBP 0.02 per share, that's in line with forecasts. Turning the page and going into a bit more detail on the revenue bridge.
You will recall that at half year, we provided a revenue bridge. We split the revenue build-up into attrition and growth. Within attrition, we identified it as being regraded and non-regraded. That led to quite a lot of discussion and questions about, well, what's regraded and what's not regraded? We took it that away and decided that in fact, we needed to give greater clarity on that. What we did was that we went back through the attrition, and we identified it into three distinct buckets. The biggest bucket is where a structure or a trust or a client, the service you're giving them comes to end of life. That comprises GBP 4 million out of GBP 5 million worth of the attrition that we saw in the last 12 months. There's two other main buckets.
One where the client leaves service provider. That can be because of service issues, it could be because of pricing, it could be because of you're unable to provide them with maybe the jurisdictional cover that they require. The other part of the attrition comes from JTC deciding that we want to exit the client because that client doesn't meet our risk criteria or we have an issue with them in terms of them paying the appropriate fees for the work that we're doing. If you take the non-end of life revenue, you take the proportion of revenue drop forward, you can see that 98.2% of revenue repeats or recurs from that cohort of clients on an annual basis. With regard to new work won, GBP 9.9 million went through the numbers this year, of which GBP 5.5 million came from existing client relationships and GBP 4.4 million was from new clients.
GBP 13 million of revenue came from acquisitions. There's a small table there that breaks down how that breaks down by each acquisition. As Nigel has mentioned, the new business pipeline is strong at the end of 2018, and it continues to grow in 2019. We're particularly pleased that two of the acquisitions that we acquired in 2018, Minerva and Van Doorn, we both see good cross-selling opportunities. Those cross-selling opportunities weren't factored into our valuations of those businesses when we bought them. With Minerva, they have a very strong treasury team that generates significant treasury income, and we believe that applying that team to the book in the rest of the business at JTC, there's a potential for somewhere between GBP 250,000 and GBP 500,000 worth of additional revenue. Van Doorn are an interesting business. They are incredibly dynamic pair of individuals that run that with a great team behind them.
They're a corporate services business which typically fits within our ICS practice. They've been part of JTC for six months. Already in that time they've identified, referred, and we've won a private client mandate that's worth GBP 260,000 a year. That's a great cross-sell when we can get that type of suite. The following slide is a breakdown as you can know we're again with from the half year on the underlying EBITDA bridge. Basically, going from GBP 14.4 million to GBP 23.8 million. GBP 13.7 million of the improvement came at gross margin level, which was broadly split between the PCS division and ICS division. The ICS division, in fact, slightly better on the efficiency, which is a reflection of the improvement that comes through from using the Global Service Centre in South Africa. I think it's fair to say that we anticipate there being more improvement to come there.
The private client business did a great job on right-sizing the business, taking into account the BAML acquisition. Did that very early in the year. In the latter half of the year, have really turned their attention to building resource and the team from a business development perspective, we've seen some good traction on that in terms of the pipeline. With regard to balance sheet and working capital, I will summarize balance sheet on page 12. It's worth pointing out that the EBT is consolidated into the 2018 results. As I reported at half year, what that means is that JTC is sitting with cash in its accounts that it doesn't actually own. You should disregard GBP 6.1 million of cash out of the GBP 32.5 million.
The capital structure that was in place pre-IPO has obviously all been cleared out. The investor loan notes, the pre-IPO debt has been cleared out. We have a facility now where we have facilities up to GBP 100 million. Taking into account the Exequtive Partners transaction, we are just under GBP 90 million drawn on that. I will talk about leverage and debt later on. At the year-end, we have deferred consideration of GBP 8.2 million. Of that, since the year-end, EUR 5.5 million has been paid to the Van Doorn team to fully net their earn-outs. EUR 1 million has been paid to New Amsterdam, which was the final installment of their earn-out. The majority of the balance that's left is for Minerva, which is GBP 2 million, and that will be paid in the next three to four months.
One other thing to bear in mind is that when the IPO took place, GBP 15.5 million approximately was realized in value for the EBT. Of that, GBP 2.6 million of that was reinvested into JTC shares on behalf of the staff. This is all part of ensuring that everybody is an owner in the business. With regard to cash flows, slide 13 sets out the summary position there with some highlights. I think the main thing I would like to draw attention to is the free cash conversion, which moved from 56% at half year to 80% full year. That is a result of the Bank of America Merrill Lynch transaction, whereby at half year, I explained that we only had three months worth of revenue but nine months worth of revenue and three months worth of cash.
By the year-end, we have 12 months worth of revenue and nine months worth of cash. There's still a small amount of unwind to come there. The interim dividend amounted to GBP 1.1 million. The final dividend will be GBP 2.2 million that we are looking to retain. If you turn to slide 14, it's the final one of this section, but it's a little bit more detail on cash conversion and on net debt. As I mentioned, at the year-end, we had 80% cash conversion. If you look at the trend over the last three years, it's gone 91%, 85%, 80%. If you adjust for the Bank of America situation, the figure would have been 89%.
We've had very strong cash collection in the first quarter of the year as the cash has come in from that transaction in line with the billing arrangements that we have with BAML and their clients. I would expect that going forward, that we should be in the range of 85%-90% on cash conversion every year. With regard to leverage, at year-end, we were at 1.9x, just under 2x 2018 EBITDA, which is lower than 2017 under private equity structure, where we were at 3x, and indeed before that, we've been up closer to 4x. Pro forma net debt, including Exequtive Partners, is at 2x. If we do no deals this year, later on this year, I anticipate we'll be somewhere about 1.2x net debt by the year-end. Target is a range of 1.5x-2x.
If we identify a deal that we felt was worth pursuing and we could see a cash generation coming through consistent with the way our business runs, I think we'd be comfortable to spike that to 2.5x. That's the finance section from me. I'm going to hand back to Nigel now.
Thanks, Martin. For a bit of a deeper dive into the business itself. As I said before, we've got this two-pronged attack to growth, which is organic and by acquisition. We'll look at the performance of the two fee-earning divisions in a little while, but start perhaps at group level with a view encapsulating collective performance and head office group initiatives. On the left-hand side, we have the revenue growth, EBITDA performance and business pipeline, which we talked about earlier. We shade them to reflect the relative performance of each division when viewed holistically. What is worthy of note is both have been very successful in their own right. That means JTC remains committed to both markets and are very comfortable with how we are positioned to take advantage of opportunities as they present themselves across both divisions and all three of our service lines.
Whilst on the service lines, you can see there's now a preference for corporate and fund services over private wealth, 68% to 32%. I think on a run rate basis, that's more like 70/30% for us with the Bank of America deal still slightly skewing the numbers in relation, because it was a pure private wealth deal, and our natural home is probably 75/25%. I'll pick up on the macro drivers separately in the divisions. Suffice to say here that market drivers across the sector remain strong and are similar in each division to those highlighted on previous occasions. From a group perspective, as indicated earlier, the market will continue to consolidate as it remains fragmented. JTC continues to have a significant amount of acquisition opportunities as a destination of choice for many.
On a more holistic basis, we are a global business, as a result, we're going to be well-insulated from unhelpful legislation or political headwinds. With global clients, a diverse offering, and an international footprint. We have a natural balance to the challenge and opportunities that come our way. Indeed, it'd be fair to say that often change is good for our industry. We're well-placed to capitalize on greater complexity, red tape, and additional compliance in that inevitably feature. Our experience has also been that in a general downturn, the business remains resilient. From a 2018 perspective, I've covered most of the bullets on the slide already. The one I think worthy of further elaboration is the enhancements to the senior group management talent, our wider offering, and our geographical spread.
We've added to the senior team significantly from internal promotions, hiring, and by acquisition with a new chief risk officer, head of the U.S. for Institutional Client Services, and new country heads in the U.K. and the Netherlands. We've widened our services with the launch of the private office offering and our new depository license in Luxembourg and have new offices in Dubai and Mauritius and have added scale in the Netherlands. As importantly, the mix of the senior team has widened our appeal in nascent markets in the Middle East, Indian subcontinent, and East Africa. From the 2019 outlook, I would pick up on the new Chief Commercial Officer role designed to assist the group heads with the commercial output of their respective divisions and allow them to capitalize on cross-divisional opportunities, both top line and in cost controls.
This position has been filled internally by Tony Whitney with effect from the beginning of this month, who was formerly the group divisional head of the institutional division. This will allow us to capitalize on Tony's 20-plus years with the business and his work at various times in all three service lines and in both divisions. He is uniquely placed to fulfill the requirements of the role and add some proper value here. Tony will be succeeded as group head of institutional by Jon Jennings, our current MD for the U.K., which he will continue to manage as well and take global responsibility for the division. We have spoken at length on our view, our approach as a group in the past, including our history, strategy, and pipeline.
We currently find ourselves with several opportunities for lift-outs of smaller teams or client books, bolt-ons, and transformational deals. These are constantly monitored around our criteria, we complete on probably less than 5% of the opportunities that present themselves. It's a case of really for us of what not to do. In regards to our most recent activity, we are delighted to have acquired the Exequtive business in Luxembourg, a corporate services business with a very strong senior management team of five and a total staff of 28. For JTC, this is a great new senior management team, increasing our bench strength enormously for a very culturally aligned business in a key jurisdiction, which gives us about 80 people there on the ground now. Turning to ICS. It was a great year for the division.
Key metric of margin improvement was hit, as Martin alluded to, we've got more to go for there, particularly out of South Africa. The new business flows were strong, the team makeup is excellent. From a financials perspective, they enjoyed revenue growth from GBP 36.1 million to GBP 43.4 million, a 20.2% increase. EBITDA growth from GBP 8.1 million to GBP 12.5 million, an increase of 54.3%, and EBITDA margin improvement of 6.3% year-on-year. The division had annualized new business wins of GBP 6 million at the end of the year, a pipeline of GBP 22.2 million, GBP 1.8 million of which was won pending onboarding.
From a market characteristics perspective, we continue to see global trends towards outsourcing into alternative assets and indeed inside the alternative asset sector itself and a preference for a multi-service global provider with ideally one senior relationship point and consistency of delivery. On the 2018 highlights, I have little to add other than to mention the exemplary client testimonials received by the division during the course of our ambassador program, underlining that our commitment to client service excellence is as strong as ever. Onto the 2019 outlook. Tony is handing over the reins to Jon Jennings with the division in good shape, and will remain close enough to assist in the delivery of the 2019 objectives. Some acquisition activity may follow in the second half of the year.
In the U.S., our search for an institutional platform is still current, but we will not overpay unnecessarily for a suboptimal business. As a result, we have some ideas of how best to achieve a U.S. presence in the medium term. In 2019, we should expect a successful integration in Luxembourg with new impetus from the jurisdiction to match that of their colleagues in the Netherlands. As alluded to, continued operational improvement from the Global Service Centre in South Africa. On to the Private Client Services division. This was a very good year for PCS with a, as mentioned, significant margin improvement. The organic growth was tougher than in the institutional side of the business, but improved significantly with greater focus in the second half of the year and some investment from the business development team and the launch of our private office.
Turning to the financials, we've got revenue growth from GBP 23.7 million to GBP 33.9 million, a 43% increase. EBITDA growth from GBP 6.3 million to GBP 11.3 million, 79% increase, and EBITDA margin improvement of 6.9% year-on-year. The division's new business wins of GBP 3.7 million had a pipeline of GBP 9.9 million at the year-end, GBP 900,000, which was one pending onboarding. Market characteristics have continued as before. Ultra high net worth and high net worth communities, increasingly internationally mobile and active in business with increased interest in alternatives as an asset class. A need for the provision of an holistic service to stay ahead of regulatory complexity and global compliance as a priority.
This, coupled with the need for wealth preservation and legitimate privacy, remain key factors in the desire for cross-border coordinated services, ideally from a single service provider in a manager of the manager's role. Worthy of note from 2018, the excellent job rightsizing the Bank of America global trust business that Martin alluded to, the launch of the private office, which I mentioned before, and as with Institutional Client Services, excellent feedback from our ambassador program. Looking at 2019, we look to complete the Minerva integration, which was largely done as I speak, develop the Bank of America cross-sell opportunities as they come along, continue to work to improve our operational and commercial output. Which is a very strong team doing that in Private Clients. Focus on the pipeline growth for new business and onboarding of new business where we have a new approach and a team lead there.
Capitalize on new leadership in the Cayman Islands, where we have also just established a trust license. The potential for some acquisition activity, but to a lesser degree than in the institutional side, part of the business. I mentioned in September when presenting the interims that all of our team, fee earners or otherwise, play their part in the commercial success of the business. We used this slide previously to demonstrate the underlying strength of the group and highlight the efforts of the whole business. The slide is back, picking up some of the same, but with some new statistics to demonstrate our risk professional strength, diversity, and social conscience. That's our risk mitigation, by the way. Starting back at number 1.
One PI claim of less than GBP 200,000 in its 31-year history demonstrates a well-run, well-organized business with a refined ability to mitigate risks as they arise. We've got employee turnover of 8%, which demonstrates we value our employees through Ownership, the JTC Academy, JTC Gateway, and JTC wellness programs. Look to keep staff equities around 25% of the whole, protecting our key commercial advantage. We are well diversified with only 14% of revenue deriving from our top 10 clients and clients from over 100 countries around the world. We support local charities in all 20 of our locations. We are experts, 70% professionally qualified or part qualified. 2018 was arguably our best year ever, as I said before, with 90% increase of pro forma EBITDA from 2017 actuals.
Finally, we are committed to staff ownership as 100% of our employees are shareholders, making us stronger together. On to the key takeaways from 2018. We delivered growth and profitability at improved margins in both divisions. We delivered growth of 17.6% or net organic growth of 8.7%. We won GBP 9.7 million of new business organically. We made two accretive acquisitions, integrated the 2017 acquisitions well, all adding up to making 2018 our best year ever. Looking forward to 2019, what might we expect? We're going to target net organic growth in the range of 8%-10% or 17%-20% at a growth level. Target EBITDA margin in the range of 30%-35%. Aim to improve commercial and operational efficiencies with the assistance of the new Chief Commercial Officer and his team.
Should anticipate more accretive acquisition activity in the second half of the year. As a result, we are well-placed to deliver more of the same, which is very good news for all of our stakeholders.