Hello and welcome to the JTC plc full year results presentation. My name is Luke, 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 by 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 panelists. I will now hand over to your presenters for today.
Good morning, everyone. Welcome to the presentation of JTC plc's results for the year ended 31st of December 2022. I'm Nigel Le Quesne, the Group CEO, and presenting with me as usual is Martin Fotheringham, our Group CFO. If we can turn to slide 1 and the agenda. In the next 30 minutes or so, I will present my CEO highlights for 2022, and Martin will run through the financial review. We'll follow up with a more detailed business review of the period covering the macro-environment, industry trends, the group, and the two divisions. We'll then take an in-depth look at how JTC continues to generate strong growth in times of macro uncertainty, and more specifically, how our constant drive to innovate creates growth opportunities for the group.
Finally, onto our key takeaways for 2022 and an early indication of our performance to date in 2023, together with an outlook for the rest of the year. We'll open the forum up for questions. 2022 marked our 35th year at JTC, I'm delighted to report our 35th year of revenue and profit growth. In many ways, I believe it may have been our best ever. In spite of it being primarily a consolidation year with just the one small but strategically important acquisition of New York Private Trust Company in Delaware.
Particular highlights were the seamless integration of the seven institutional client services division acquisitions from 2021, the success in developing the Group Commercial Office to provide material benefits to the whole business, and the commencement of services to our largest ever new client win in the private client services division in the Q4. The fact that we can confidently predict that we will have doubled the size of the business from the end of 2020 and achieved our Galaxy plan by the end of this year, one to two years ahead of original estimates, is testament to the JTC team and the robust business we have built. To summarize, we have delivered 35 years of uninterrupted revenue and profit growth, and since our listing in early 2018, we will have doubled and then doubled the size of the business again by the end of this year.
As I've shared before, at JTC, the mindset is not whether we grow each year, it is by how much. With the drive for constant improvement, part of our cultural DNA and embodied in the approach we bring to work every day and evidenced by that track record. Turning specifically to 2022, we are pleased that once again we achieve results in line with or better than all of our well-established medium-term guidance metrics. We are particularly delighted to have delivered a headline GBP 200 million of revenue for the first time, up 35.6% from GBP 147.5 million in 2021. Underlying profit growth was 36.4% and was delivered at a group margin of 33%, up 0.2 percentage points year-over-year.
Our net organic growth was excellent at 12%, up 2.4 percentage points, with 18.4% gross growth and lower client attrition down 1.5 percentage points at 6.4% from the prior year. Our annualized new business wins also increased by 17.7% to a record GBP 24.6 million. Despite paying for the NYPTC acquisition in cash, we reduced our net debt in the year by 0.7x to 1.5x underlying EBITDA. As mentioned upfront, we've enjoyed great traction from our recently established Group Commercial Office in the year, with combined contributions from banking services and global tax compliance alone of around GBP 20 million.
You'll recall how the development of the banking platform and the global tax team have allowed us to add both additional revenues from our existing client base, but also become service lines in their own right that attract new clients to the group. Mentioned previously, with 2021 being a record year for M&A, with 7 deals completed, 2022 has seen a natural period of consolidation, with a focus on the smooth and thorough integration of the business acquired onto the JTC platform. In November, we were delighted to complete the acquisition of NYPTC based in Wilmington, Delaware, a key location for trust and corporate services in the U.S. market.
This acquisition, which completed an attractive multiple of 7 times earnings, has resulted in us becoming the first non-U.S., non-bank firm to hold a trust license in Delaware, a strategic and competitive advantage that we plan to leverage, particularly as we build out our U.S. corporate and domestic trust service offerings. The NYPTC deal moves us into a position where we are recognized among the top independent trust company groups in the U.S. when combined with our well-established presence in South Dakota, leaving us well-positioned to serve both the U.S. domestic and international private client markets and provide a wider range of corporate services. More generally, consolidation in our industry continues, although 2022 was a quieter year for M&A deals, driven by market sentiment and the increased cost of capital. Finding quality opportunities at appropriate pricing has, as a result, become more of a challenge.
JTC has always been a popular acquirer, however, and we have had historic success with off-market approaches. As a result, we continue to find and maintain a pipeline of active M&A opportunities that span both divisions. As always, we continue to apply our disciplined approach and well-established acquisition criteria to ensure that there is both a solid commercial and cultural fit with emphasis upon the need to drive long-term value for the group. Moving on to the divisions. The ICS division had an excellent 2022. Division increased revenue by 47.4% to GBP 136.7 million, and EBITDA by 53.5% to GBP 43 million at a margin of 31.5%.
Performance was driven by a combination of the recent acquisitions, the incremental improvements made to the division's operating model, and excellent net organic growth of 14.6%, with new business wins of a record GBP 17.2 million, an increase of 31% year-on-year. The recent standard acquisitions of the RBC CEES employer Solutions business in the Channel Islands and U.K., and the SALI Fund Services business in the U.S., has brought both additional banking revenues and more fund mandates respectively, as were anticipated at the time of the deals. In addition, they have also assisted in establishing both our core U.S. fund services business and new Global Employer Solutions platform, both of which will bring benefits to the group for many years to come. These are great examples of our 2 + 2 = 5 acquisition criteria in action.
The PCS division also had a strong year, without the benefit of M&A deals until November, with increased revenues of GBP 63.4 million, up 15.7%, and EBITDA of GBP 23 million, up 12.9%, at a strong margin of 36.3%. The division continues as a standout market leader in the global trust company industry, and as a result, outperforms market growth expectations year on year. The particular highlight of 2022 was the work undertaken to activate our biggest ever new business win for white label tax compliance and accounting services to a U.S.-based global bank, the so-called Project Amaro.
The mandate, which was secured in 2021, has been a complex one to onboard, led by the PCS team, but drawing on resources from the group, including the technology development team, the global tax compliance practice, and resources in 3 separate geographical locations, including some capabilities from the ICS division in Boston. The delivery was a true team effort, underlying the advantage of our ability to adapt to meet client needs and our diversified business offering. Mandate became revenue generating in Q4 at an annualized rate of $4 million and added an additional 2,500 new client entities to our platform. This, together with other similar long-term mandates, gave the PCS division a strong H2 of the year, and with the addition of NYPTC in November, has resulted in a particularly robust start to 2023.
Finally, I'd like to conclude my CEO highlights with a huge thank you to the market leading and dedicated JTC team for their ability to drive and deliver upon our ongoing success. I get enormous pride from leading our talented people and reporting our shared successes to the market. Now let's turn to slide 4 and the financial highlights. As already mentioned, our revenues grew to GBP 200 million, an important and historical landmark, and underlying EBITDA rose to GBP 66 million, delivered an underlying group EBITDA margin of 33%. Pleasingly, our net organic growth was 12%, well above guidance, and up from 9.6% in 2021. As mentioned, our annualized new business wins were a record GBP 24.6 million, up 17.7% year-on-year, and with good impetus continued into 2023.
The pipeline, which currently stands at GBP 50 million, remains strong. Win rates were excellent across both divisions in 2022, which at the end of the year stood at 53%, above the top end of our current target range of 35%-40% and implying we are winning more than half the business we pitch for. The lifetime value of work won in 2022 was a record GBP 237.7 million based upon the industry-informed average client lifespan of 10 years, an increase of 18.4% on the 2021 figure of GBP 200.8 million.
Having reviewed our own book, our approach to client care, acquisitions such RBC CEES and SALI, where longer mandates prevail, together with our increasing ability to win bigger and stickier new client mandates, the average life of the JTC book of clients we now estimate stands at 14 years. As a result, the LTV of work landed in 2022 is GBP 336.1 million when this metric is applied. Finally, on to the total dividend for 2022 is 9.98 pence per share, up 30.1% from 2021. Over to Martin for a deeper look at the financials.
As Nigel said, 2022 arguably was our best ever year, with growth in revenue, margin, and earnings per share. What I'd like to do in the next few slides is take you through the financials behind that and to give you a slightly deeper insight into what has been driving this exceptional performance. Nigel's already commented on many of the financial highlights that you see on slide seven, and noted the progress in revenue and EBITDA margin. I would also point out our above guidance cash conversion at 91%, as well as this 30.2% earnings per share improvement in the year.
I was pleased that even after buying NYPTC for $15 million at the end of 2022, which we funded from our own cash, we still decreased our net debt by GBP 8.5 million by the year-end and kept our leverage at the bottom of our guidance range. We move to slide 8, we see the 2022 revenue bridge. We have a continued trend of more work from existing clients, which is what we expect in times of subdued new fund activity. Gross new organic revenue was GBP 23.9 million, and GBP 13.5 million of that came from existing clients. Attrition was 6.4%, a reduction from 7.9% in 2021, and the 3-year average is now at 7.7%. Our largest ICS loss was a GBP 270,000 per year client.
To counter this, we grew the number of clients that generate more than GBP 500,000 per annum by 10 in the year. Taking the same lens to PCS, we added 16 clients generating more than GBP 100,000 per year, and we lost 1. We now have non-end of life revenue retained at 98.3%. We had GBP 24.6 million of new business wins in the period, and GBP 14.4 million of that has been recognized in the 2022 results, with GBP 10.2 million still to come in 2023. With regard to the pipeline, it was GBP 45.8 million at the end of 2022, a small drop from the GBP 47.9 million at the end of 2021. At the end of March 2023, it was over GBP 50 million.
Slide 9 is a new piece of analysis showing revenue broken out by geography. This illustrates our increasing geographic diversity and also the growth in the U.S.A. for us as a business. The U.S. has grown from 10.6% of overall revenue in 2021 to 19% in 2022. With GBP 38 million worth of revenue in 2022, we have 19% that comes from the U.S. You'll also see strong organic growth in all territories. The rest of the world is mainly coming from Cayman, and the U.K. and Channel Islands is primarily to do with some of the ancillary services that we're now starting to offer from the group that are helping us with organic growth. Things like banking services, treasury, tax, compliance, custody, etc. Slide 10 shows the trend in net organic revenue growth.
For both divisions, there's been a very strong upward momentum. Of the total group organic growth of 12%, 9% was volume-related and 3% was price-related. We saw at half year the ICS was 14.1% and above guidance, this has pushed on to 14.6% for the full year. At half year for PCS, it was low at 4%, we said that we expected to see that come back into range by the end of the year, you can see that this is what has happened at 8.7%. 2023 has started well, we're confident about the outlook for the rest of this year and expect net organic growth will be in excess of the 2022 result.
Our underlying EBITDA margin improved to 33%, as shown on slide 11. We're now at the bottom of the guidance range, having been outside of that range since mid-2021. There are a lot of moving parts in explaining margin movements. On the one hand, we benefit from operational improvement initiatives, such as Blueprint that was initiated a couple of years ago, as well as a contribution from higher margin businesses like SALI. Counteracting this are inflationary pressures and a small dilution in margin as a result of the high levels of organic growth. We estimate the impact in 2022 was a margin reduction of 0.3%.
On top of all of that, we continue to invest in our human capital and the long-term future of the business to help us take advantage of growth opportunities. This includes recognizing that new clients are typically less profitable at the outset of the relationship. Slide 12 is another new slide this year. I wanted to highlight that since IPO, we've grown our underlying earnings per share at a 17.3% CAGR. You'll no doubt recall that as our dividend policy is based upon the underlying earnings per share, the dividend has also benefited. We use underlying EBITDA margin to help us understand our trading performance. We recognize that earnings per share ultimately reflects all of the costs that the business bears.
The strong earnings per share growth is testament to our ability to consistently hit our guidance targets, our capital allocation decisions, having a business with high levels of recurring revenue, with long-term client relationships, being in an industry with good macroeconomic fundamentals, being highly cash generative. The earnings per share growth is also driven by our ability to identify and then buy and integrate good businesses that enhance our ever-expanding core business. Linked to this earnings per share growth, slide 13 illustrates how we've deployed cash and capital over the last three years. Our capital allocation strategy firmly prioritizes organic and inorganic growth. We invest in the business accordingly. We expect our growth to come 2/3 through acquisition and 1/3 organically.
In the last three years, we have had GBP 312 million of cash available to us, and of that, we've utilized 70% or GBP 220.4 million of that for acquisitions, of which there have been 12. Our post-tax return on invested capital is 11.7%, which is well ahead of our internal cost of capital. Going forward, we anticipate being able to sustain and indeed enhance this return on invested capital. You will recall that in 2021, we made our largest ever acquisition when we bought SALI. This business has performed exactly as we expected. We've made good progress with the cross-selling initiatives and particularly the drive to bring fund accounting work that was being outsourced over to JTC. Slide 14 shows that 2022 was a very good year for cash conversion.
We delivered 91% for the full year above our guidance range. This has helped us reduce our net investment days in the year by 5 days, it now stands at 110 days. As with previous years, we collect more cash in H1 due to our billing pattern. We've had a strong start to collections in 2023, and March 2023 itself is now the record at JTC for cash collected in a single month. Slide 15 shows how we've used the operating cash we generated in the year and how our net debt decreased in the year. As previously mentioned, we acquired NYPTC for $15 million at the end of 2022, despite this, our net debt fell by GBP 8.5 million over the 12-month period.
Our bank facility has GBP 69 million still available for drawdown, and there is also a GBP 50 million accordion facility available to us. The facility runs to October 2025, and we have the option to extend this by an additional 12 months, which we intend to exercise. Whilst the interest rate environment has been unpredictable at the present time, we remain 100% on floating rates, but we are considering our options. Finally, and with regard to leverage, as shown on slide 16, at this time last year, we were at 2.34x underlying EBITDA, and we told you that we expected to bring that down quite quickly by 0.75 of a turn as a result of cash collections expected in H1 of 2022. As you know, we did that.
In the latter part of the year, we bought NYPTC and therefore, from a reported leverage perspective, we have the impact of the debt on the calculation, but not the benefit of the EBITDA included in our year-end leverage, which was 1.59 times. 1.59 times is, however, well within our guidance range of 1.5-2 times. I'm comfortable that based upon this and the above that we have a strong balance sheet that is able to support our growth aspirations. With this, I hand back to Nigel.
Thank you, Martin. I will shortly provide some color into how we use insight and innovation to both increase the scope of the mandates for existing clients, resulting in a greater share of wallet and increased longevity, while attracting new clients to the business by the delivery of new service lines. Before that, we will look at industry trends and the performance of the business from a group and divisional perspective. The macro themes that we highlighted during the course of last year have remained constant as we enter 2023, making our 2022 outperformance even more impressive. The inflationary environment we've experienced has led to rising costs, most acutely felt at JTC in the form of wage inflation.
In this regard, I'm pleased to report that our latest pay awards have met the expectations of the JTC team, while at the same time, we have passed on the cost of service delivery to our clients in the form of increased charge-out rates and by contract indexation. As mentioned earlier, the M&A market experienced a slowdown in 2022 with negative market sentiment and the rise in cost of capital, creating a hiatus in deal flow rather than a repricing of quality deals. Nevertheless, the sector remains a consolidating one, and the prevailing view is that the pause is temporary. As a result, we've been pursuing more off-market opportunities, and we continue to have a healthy pipeline of options and the capacity to execute more M&A.
An industry feature that has been more evident of late, brought into focus by the general slowdown in M&A activity, is that the race to build scale in a consolidating market has led to challenges for some of the participants. These can manifest themselves in any or all of regulatory issues, significant staff and client turnover, over-leveraging through to business failure, often arising by virtue of a lack of investment in core infrastructure, some of the more indiscriminate acquisitions and hurried or little focus on integration. Whilst we do not celebrate the misfortune of others, we are often the net benefactors, bringing opportunities to JTC, which has been built for the long term and is a stable, well-organized, capitalized, and invested business, making us attractive to both potential employees and new clients alike.
Turning to the business itself, an ongoing trend and feature for 2022 has been the crossover between our two divisions, and indeed the central group functions in solving for our clients, which can be measured in several ways. For example, cross-sell activity from division to division, often facilitated by the Group Commercial Office, more than doubled in 2022 to GBP 6 million. The collaboration across the divisions in the group to deliver on larger mandates has featured strongly, with the Amaro mandate alluded to earlier being a case in point. The establishment of services initiated at group level with the catalyst, the Group Commercial Office, which have been delivered to the divisions, including the banking and global tax compliance services. We're often asked about our strategy of maintaining both ICS and PCS divisions with a market-perceived undervaluation of PCS prevalent.
It remains our strong view that having both divisions is the optimum structure for the business. Whilst in the current environment, ICS will grow more quickly, demonstrated by the contribution to new business in 2022, with ICS at 63% and PCS at 37%. The type and duration of relationships are often stickier and longer in the PCS division, and the costs of the central group infrastructure to support both is, of course, shared between them. More importantly, where one division service offering ends, the other often begins, and they are increasingly merging, with the type of service required more closely aligned.
For example, the two most significant mandates delivered in the PCS business last year were for institutions with underlying PCS service delivery required, i.e., an institutional solution in our Private Client Services Division. Having previously highlighted the resilience of the group in earlier presentations, you will have noted that there is more of an emphasis on growth in this deck. This growth is supported by a combination of key market drivers, where increased regulation, growing propensity to outsource, globalization and rising global wealth, all of which create an annual addressable market of $12 billion.
At JTC, we have an uninterrupted 35-year record of growth and profitability through several global crises, leveraging off the consistent experience and entrepreneurial stewardship of the business over the period, providing challenging targets for organic and inorganic growth and recurring revenues from an established, diversified client base and service suite, all delivered from a well-invested, scalable platform, ultimately delivering superior and uninterrupted results throughout the period. The growth of the business throughout our history has come from an ambitious and progressive mindset year on year, with an emphasis on insight and innovation and underpinned by our all-important group culture, which we explore further on the next slide. With the benefit of our industry experience and insight, we track market trends to both understand the direction of travel and to innovate and create services to meet emerging demands.
By using our ability to horizon scan and develop capabilities that are likely future requirements of our markets, to some degree we can both shape our future and that of the industry. As recent examples, I would reference our Private Office offering and Edge platform launched in 2019, which has more than doubled the size of our PCS client base that generates over GBP 100,000 in fees annually from 30 to 90 today. Our establishment of the banking platform delivering consolidated banking services from 2020 onwards, configured to provide revenues from treasury, foreign exchange and custody services, which delivered GBP 11 million of revenue in 2022, only its second complete year of existence.
More recently, the creation of the dedicated global tax compliance team in 2021 to provide FATCA, CRS and other tax reporting to our own client base, and now as a new service to third-party clients in a number of our jurisdictions. In 2022, global tax compliance revenues were circa GBP 9 million. Less developed but growing, we have been finessing both governance and sustainability service lines and have positive expectations for these over time. This year, we will formally launch our Strategic Transformation services offering. This is an articulation of a number of mandates we have landed in the last 3-4 years, where we have been chosen by some of the world's largest institutions to assist with a reorganization or divestment of a particular element of their business, driven primarily by a desire for a lighter operating model.
The likelihood of this is even more prevalent in difficult macro conditions by way of a sale or outsource of certain elements of their business, often driven by a change of focus or a de-risking exercise in an area where the in-house expertise is not or no longer available. Our ability to successfully execute M&A transactions in the space we have explored previously with deals with Kleinwort Benson in 2015, Bank of America Merrill Lynch in 2017, and RBC in 2021. Where the decision is to solve the challenge without a full divestment, we have often been able to pivot the narrative to the provision of Strategic Transformation services.
In this regard, without ever historically highlighting our abilities to provide these services to the wider market, we have delivered on several GBP 1 million-4 million annual mandates to global banks and international fund managers, law firms and trust companies. These mandates have delivered GBP 10 million since 2019, with a current annual run rate of over GBP 8 million, and are unique in as much as they are often delivered by a combination of skills and collaboration between the group function and both divisions, utilizing and maximizing the full capability of the resources at our disposal. This capability has been delivered without ever having any formal marketing or other collateral to explain these services. We have an expectation by doing so this year with a proactive targeting program, more will follow.
To underline this point, I'm pleased to report we have continued to see demand in the early part of this year in the form of 2 new engagements received in February and March. One from a global investment manager and the other an international trust company, with estimated fee potential of at least GBP 1.5 million per annum of long-term revenues in total. This ability to be nimble, to pivot and evolve our offering is one which has been inherent in JTC from the earliest time, and which goes some way to explaining some of our key differentiating factors in our ability to grow, develop and deliver a consistent growth story. Finally, on to our key takeaways. 2022 was arguably the group's best year ever, with exceptional growth in otherwise difficult markets.
This outstanding acceleration in the second year of the Galaxy era, we believe, will ensure that we achieve our Galaxy goal of doubling the business from the end of 2020 by the end of this year, some two years ahead of expectations, meaning we will have doubled the size of the group twice since listing in 2018. We were delighted to have hit the landmark of GBP 200 million in revenue for the first time and to deliver within or ahead of our well-established medium-term guidance. Organic growth was excellent, driven in large part by record new business wins. We have carried good momentum into this year and anticipate a strong organic growth trend in 2023, well ahead of guidance.
We were pleased to announce the NYPTC deal in November, an attractive multiple. We continue to see opportunities for further M&A across both divisions, primarily off-market. We are well-placed to undertake more this year. More generally, we have made a strong start to 2023 with very good momentum in both divisions. We look well set for another successful year.
Thank you for listening and for your ongoing support. We'll now be happy to take your questions.
Please now use the Raise Hand feature in the control panel for the opportunity to ask your question live.
Good morning. Thanks everybody for listening in. I can see a few hands raised. Could we go to David Brockton from Numis first, please?
Good morning, all. Hopefully you can hear me. I have two questions, please. Firstly, I think, you touched on the fact that the 12% organic growth was split 9% volume and 3% price. I'm just wondering if you can just touch on the sort of the ongoing benefits we could expect from contract indexation and rate increases through the new year, please. The second question relates to the banking platform and tax compliance practice that you've established. It's clearly making good progress. I just wonder if you can just touch on how broad that is in terms of existing clients of the business and how much more that could be expanded from the existing client base. Thanks.
Hi, David. Let me just pick up that first question on volume and price. As I said, 9% of that 12% this year has come from volume, 3% from price. Unlike a lot of our competitors, we didn't choose to put in a mid-year price rise to clients last year. I think we said before when we've been asked about this, that we're very careful about price rises with clients, and we don't want to take advantage just for the sake of it. This is a long-term business that we're building, and these are very long-term relationships. We have put through a significant salary increase this year. I think it averaged about 11% across the business. We're not planning on pushing that all through to clients, but I think it would be...
it wouldn't be unreasonable for us to push a good proportion of that through. My view would be that our volume going forward will probably be maybe 7%-8%, and that we probably would see something not dissimilar price-wise in terms of the organic growth. It does mean that from a margin perspective, it will keep us down towards the bottom end of the range. You know, where we see things is there's a great growth opportunity, and we really want to go after that because we think it's the right thing for the business longer term. We can get the margins back up in the fullness of time, in the short term, the priority is to get good growth at good margins. On the banking and tax, Nigel, do you wanna pick that one up?
Yeah. David, sorry, just remind me, which direction you're going with that? Yeah.
I was just interested to understand the opportunity to keep expanding that with the existing client base. You know, you've clearly grown it strongly so far, but I'm just wondering how broad the opportunity is and how much bigger it could be as you market it in more across the existing clients. Thanks.
Yeah. Thanks, David, and thanks for repeating that. Yeah, I think there is far more to go for with regard to this. Obviously, as we make acquisitions over time, there's obviously opportunities to apply that to the M&A sort of... and how we look at M&A deals actually. It's fair to say that we haven't really leveraged this outside of Jersey and Europe in particular. I think there is much more for us to go for in the U.S. We've got some banking revenues there, but definitely more to go for, and probably, you know, just more of a tightening up of what we can and can't do with it over time. Really pleased with it. It's probably fair to say it's a pretty conservative, you know, relative to the interest rates rises.
We take a pretty conservative view on it. We just turn it into really a win for clients 'cause they get better rates, better FX, better deposit rates, and so on. A win for JTC in as much as we're now getting paid for doing a lot of the heavy lifting with regard to providing these banking related services, AML and the like. Really a win for the banks because they get, you know, single large deposits. They're more in the wholesaler mode. Very simple for them to administer. It's one of those things in life that seems to work all round.
Thanks.
Super. Thanks very much. In terms of others with, please do use the raise hand feature if you'd like to ask a question. There's a couple more on there at the moment I can see, but stick that in if you'd like to go. Can we go to Vivek Raja next, please?
Hi. Good morning, gents. Can you hear me okay?
Yes.
Super. Thanks. I had a couple of things I wanted to explore, please. The first on margin, second on M&A. Martin, thanks for your comments on the margin. I appreciate sort of the likely direction as you're sort of investing in your client relationships, to some extent, which suppresses the margin sort of evolution. I just wondered, you talked about, in your sort of, in your prepared comments on Blueprint efficiency.
I just wondered if you could just talk about any of the other sort of efficiency measures running across the business that you've got going at the moment to mitigate some of the sort of margin headwind, you know, if you could quantify some of the potential savings you could make across the business. The second thing I wanted to ask about was M&A. I appreciate you're sort of looking more at off-market opportunities, which I suppose becomes more relevant as JTC gets bigger and you're a good acquirer in that sense. I'm just wondering what's happening to sort of prices at the moment, whether much has changed since you last commented on this subject.
What vendors are expecting in terms of prices, how much competition you're seeing from private equity right now? Thanks.
Hi, Vivek. I'll pick up the piece on the on the margin. Yes, Blueprint, we've had efficiency from that. I think we're always looking to make the business better, and I think the initiative that we're really pushing now is something that we refer to as DBS internally which is effectively trying to put out an operating model right across the business so that it doesn't matter which office you're in, you have the same way of sort of looking at the business and of running the business. I recognize that there are obviously, regional flavors and jurisdictional flavors that you need to take into account.
We think that by having one way of doing it, irrespective of whether you're private client, funds, corporate, whether you're in the U.S. or Jersey or Cayman or, you know, the Emirates, doesn't really make any difference. It's the same business. We think by looking at it that way, and this is something that the Group Commercial Office is particularly helping us with, looking at it that way, that will help with margin improvements. Primarily, I think the sense always is that there are times that we possibly leave some revenue on the table. Sometimes that's conscious, but there's times that that's not conscious, and we'd like to just tighten up some of that. I think that's where we see margin improvement coming in time.
This is, again, this is quite a cultural thing just to instill. I think that will take a little bit of time to bed in and to get the benefit from. Given where we are with, you know, the growth opportunity, my sense would be that it'll take some time for that to come through and that the margin will not probably tick up significantly in the short term. It'll stay around the 33 number and then, you know, over time we might see it starting to move up from there. On the M&A, Nigel, do you wanna...?
Yeah, I can absolutely happy to pick that up. Just on the margin, just to supplement what Martin said. We tend to use this 33%-38% as guardrails. It's not. It really is all to do with how much we're investing back in the business when you're at the lower end relative to the higher end. I just always think it's worth us saying that. It's complicated. There's different elements at different times. Obviously, wage inflation this year. Risk and regulation spend has been higher. We get other benefits, for example, banking and other acquisitions have given us sort of the higher margin businesses to go at. We should always be within those guardrails. I guess that's the first thing. On M&A pricing, I think we're in an interesting...
We're in a hiatus, as I'd call it, of activity because of the sort of market sentiment and cost of capital playing a role in that. I think in general terms, there's less deals in the market. We're doing fine because we're quite good at chiseling out sort of off-market opportunities. In terms of pricing more generally, very good businesses are not really going through processes, so they've been taken off the market for a little while, pending a return to normal, with whether it's a new normal or not. I think it's an interesting time right now, but generally speaking, prices may soften a little bit. Quality businesses, I think we're still gonna be going back to where we were around 2021.
Super. Thank you. The next person we've got with their hand up is Daniel Cowan. We'll go to you, Dan.
Good morning. You touched on earlier, some of the sort of backdrop of competitive situation. I was just wondering if you can perhaps just expand on that. You know, how you see the competitive backdrop developing this year, and over the sort of short, medium term. What are you seeing in terms of, you know, competitive behavior? You know, where are the stresses, where are the opportunities be?
Good question, Dan. I think what we've seen, possibly, driven by that sort of hiatus in the market, is some of the more difficult things about running a business, you know, a global business of this size and with a huge amount of consolidation going on. Certain things have come home to roost. We've seen regulatory fines, I'm sure you're aware of. Business failures. We've seen movement of both people, talent, and client books over time, and arguably some businesses over-leveraged as well. What I'm delighted about to say is we're relatively stable amongst those sort of problem areas. You know, we should be a benefactor from that, and we're actually seeing some of that in the market at the moment.
I think some of that driving for scale for the sake of it, I think is, you know, beginning to look a bit more questionable now. As I say, we've always sort of concentrated on being the best rather than the biggest in our space. You know, over time, I think that seems to be proving to be the right way to go about it.
Super. Thank you. I don't have any more hands raised at this time. Thank you very much. Appreciate everybody dialing in.