Catastrophe losses from such events as the Japanese earthquake may eventually force premium rates upwards - but that has yet to make a difference to insurance broker, Jardine Lloyd Thompson (JLT). Indeed, with these first-half figures, management flagged-up a "continued weak insurance market rating environment".
Still, JLT's main risk and insurance division, which generates 80 per cent of group revenue, grew its revenue 10 per cent, driven by emerging market growth in such regions as Asia and Latin America. JLT is keen to boost that emerging market exposure and, last month, announced the acquisition of 50.1 per of Chile's fourth largest insurance broker. But, it's a different story in mature markets - the continental European operation, for instance, struggled with "mixed" trading, amidst tough economic conditions. So, overall, the risk and insurance division's trading profit grew just 2 per cent to £76.7m.
The London Market unit also produced modest revenue growth, but trading profit declined due to investment in front-office staff and softer US premium rates. However, management expects an improved second-half outcome as new hires start to deliver.
Numis Securities expects full-year pre-tax profit of £143.2m, giving EPS of 46.2p (£119.4m and 41.7p for 2010).
JARDINE LLOYD THOMPSON (JLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 646p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 645-646p | 12-MONTH HIGH: | 714p | LOW :551p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 150p* | NET DEBT: | 35% | |
| Half-year to 30Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 376 | 70.0 | 27.1 | 8.8 |
| 2011 | 409 | 76.4 | 24.6 | 9.2 |
| % change | +9 | +9 | -9 | +5 |
Ex-div: 7 Sep Payment: 3 Oct *Includes intangible assets of £286m, or 132p a share | ||||
