JTC

JTC PLC's 2024 results present a mixed picture. On the positive side, the company achieved strong revenue growth of 18.6%, reaching £305.4m, with net organic growth of 11.3%. The underlying EBITDA margin remained stable at 33.3%, and cash conversion was robust at 98%. The company also increased its dividend by 12.3% to 12.54p per share, demonstrating confidence in its financial position. However, these positives are offset by significant concerns. The company swung to a loss before tax of £7.4m, compared to a profit of £24.3m in the previous year. This substantial decline in profitability is a major red flag. Additionally, net debt increased to £206.9m from £135.1m, which could potentially strain the company's financial flexibility. While JTC completed several acquisitions during the year, which could drive future growth, these also present integration risks and have contributed to the increased debt load. The company maintains its medium-term guidance and reports strong momentum into 2025, which is encouraging. However, the inability to translate revenue growth into profit is a significant concern. Given these mixed signals, with strong top-line growth but deteriorating bottom-line performance, a neutral stance seems most appropriate.