JTC CFO on being an entrepreneurial finance leader

When Martin Fotheringham joined JTC, a Jersey-based trust fund and corporate services company, five years ago he could not see himself working for a public company.

He had spent almost a decade as finance director of private equity-backed technical services group Moody International.

When he was hired as CFO of JTC, he assumed there would be more of the same. “I never saw myself as being a CFO of a listed company as I didn’t see listed businesses as particularly entrepreneurial,” he says.

But within three years of his arrival, JTC- which was founded on the Channel Island of Jersey in 1987- the firm’s private equity owners had launched an IPO. Just over two years from being listed, JTC’s share price has risen over 50 percent to give a market value of around £600m by the end of September.

The stellar performance of JTC’s share price throughout the period of the coronavirus epidemic reveals the strength of the firm’s business model based on corporate and administration services across a wide variety of structures.

“One of the great strengths of this business is that it just carries on. When you win a client it will typically be for a minimum of an eight year contract but it might actually be over 12 or 14 years. I think this is one of the things that the investors in the market are starting to appreciate,” says Fotheringham.

In the six months to 30 June JTC delivered EBITDA up 15.2 percent to £53.7m compared to the same period the previous year. When the interim results were announced in September, the firm’s CEO and founder Nigel Le Quesne said: “JTC’s robust performance during H1 is testament to the highly resilient nature of our business and the outstanding quality of our people.”

He also said at the time that the group had benefited from recent acquisitions of the Sanne private client business in Jersey and a tech enabled fund services business in the US called NES Financial. As well as headquarters in Jersey, JTC now has 23 offices across North America, the Caribbean, Europe, Africa and Asia.

It was partly the desire to run finance across an international business that brought Fotheringham to JTC, as well as the opportunity to help drive a fast growth business. “I wanted to be part of a company experiencing dynamic growth and to be dealing with some of the challenges that come with that,” he says.

But although an IPO was talked about “very loosely as an option” in early 2017, when it became a real proposition he soon got stuck into putting the group on a war footing. Describing the process as “a job and a half,” Fotheringham says that after Le Quesne confirmed in August that year it was going ahead, a March 2018 deadline was set.

Amongst tasks such as creating a prospectus and getting three years of historic accounts converted to IFRS reporting standards, it was seven months of “very, very long days and weekend working,” says Fotheringham, before the listing on March 14, 2018. It helped that the finance team was already working well and was able to continue “business as usual” through the process, says the Scot.

Since the listing, Fotheringham says he has concentrated on finessing the finance function so that it can deliver reports that are simple but informative, that aren’t just producing data for the sake of it. “So now we’re giving a lot of rich information in our monthly accounts, as a one page KPI sheet.

“The way that we are doing it shows all of the key metrics such as cash collection, margins, growth rates and revenues we are driving from new clients. All of that key data and more is captured in these KPIs.

“I think part of the skill is being able to put this information into a format that people can understand and use. Since we’ve been listed, we’ve definitely kicked on with this,” says Fotheringham.

Driven personality

Fotheringham says that a determination to develop the finance function at JTC stems from a driven personality, from a determination to succeed that started early in his career. “I’m told I’m very competitive. I don’t see myself that way, but then that’s just the way that I think you should be,” he adds.

After studying economics at Edinburgh University he worked at a succession of professional services firms- Deloitte, Binder Hamlyn and PwC, as well as corporate finance firm RMD.

Each provided unique insights, but at Deloitte there was international experience that piqued his enthusiasm for working in an internationally focused business. “I was able to work with people from different countries, which made it a little different, and I was working with entrepreneurs, or in organisations undertaking some form of transformation,” he says.

Fotheringham says he was able to engage with a wide variety of clients undertaking transformative deals, including the MBO of Priory Hospitals and Pearson’s acquisition of Dorling Kindersley. What struck him was the level of commitment to delivering the highest level of service. “I worked with people that were absolutely passionate about delivering a high-quality product,” he says.

That approach installed in him, he says, a keenness to look beyond the numbers. “There’s room in this world to look at things in lots of different ways. I think it’s quite important to be as open to different views as possible,” he adds.

Having that wider perspective was something Fotheringham was keen to bring to early corporate roles, at data giant Thomson Corporation and testing and inspection group Bureau Veritas. But he says he was also keen to learn from senior staff, “I could see how they behaved and conducted themselves,” he says.

What especially impressed Fotheringham were leaders who were able to inspire and bring out the best in their teams. “It’s about people, not just spreadsheets,” he says, adding that “If you can hire people that want to be challenged you can achieve a heck of a lot,” he adds.

At Moody International, where he joined as CFO, in the years before it was acquired by listed safety services provider Intertek he found he relished working in a private equity-owned business. To illustrate the demands of working for an owner seeking frequent and high quality information he says: “if you don’t cut it with private equity they will not trust you as they will lose confidence in you. So, there is a high degree of expectation.

“There’s a lot of stress associated with it. But, I guess I have a high level of expectation of myself,” he adds.

At Moody Fotheringham ran a finance function covering operations in  50 countries, with many different cultures to address. “Persuading someone in Japan to do something is very different to doing that in China or America or somewhere else in the world. So, understanding the cultural nuances traits and how to deal with people is vitally important in a role like that,” he says.

Growth story

When he arrived at JTC, by way of a brief role as director at maritime and shipping recruitment firm Seamariner, it was the result of spending time thinking what kind of business he wanted to commit to at that stage of his career.

“I wanted to find a business that I could help grow and develop. When I met Nigel I instantly realised  the company had lots of opportunity in front of it in terms of inorganic growth.

“The finance function would ideally be giving the business the information that it would need to really help facilitate change. I could also tell that Nigel was really entrepreneurial but also someone that really would let me get on and do the job and trust me to do the job,” says Fotheringham.

All these elements have been put to the test following the coronavirus outbreak. Within a week of lockdown, Fotheringham says the finance team was producing reports in granular detail of how the business was operating. “We could see how every individual in the business, in every jurisdiction was performing,” he says.

“We managed to pivot very quickly and I think that’s probably a testament to the fact that we understand the mechanics of the business really well. We’ve got the data organised in such a way that we can produce it quickly in whatever form we want,” he adds.

With enhanced lines of communication, Fotheringham says that finance is well placed to help drive rapid decision-making based on continually updated management information.

“I’ve always been keen to do video conferences and video calls, which is important given that I suspect we won’t all be jumping on planes with quite the degree of regularity in the near future,” he says.

In the meantime, most of the group’s staff will continue to work from home. “There’s no wholesale change required so it’s very much a case of just carrying on as we are,” he says.

Despite the challenges of coronavirus, Fotheringham says that JTC’s business model is likely to continue delivering strong growth. “I’m a bit embarrassed about saying that we’ve got an incredibly predictable business.

“We don’t want to be complacent and it won’t stop us always thinking about what are the things that impact on us. But we’ve got pretty good visibility on the numbers that show that 97.5 per cent of the revenue that was there this year will be there next year,” he adds.

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