Jardine Lloyd Thompson 's (JLT) chief executive, Dominic Burke, seemed confident when he closed out a post-results management call with a cheery "we're in good shape". You mightn't think so judging by the reported numbers, but the big dent to the bottom line is predominately due to £17.2m in costs from the set-up of the US specialty business.
On an underlying basis, pre-tax profit was still down 7 per cent to £89.2m, although that actually came in ahead of expectations, thanks to favourable foreign exchange benefits together with 8 per cent revenue growth from the specialty businesses, which accounts for over half of group turnover.
But it's JLT's rapid expansion in the US that is making Mr Burke excited. The period saw 200 new clients secured across the pond and revenues doubling from the comparable period last year. Management is confident this business will move into profit by 2019, but have updated expected costs from $80m to $100m to ensure the group can make the most of opportunities stateside.
Closer to home, operations were marred by muted demand from pension scheme trustees, due to new government regulations. This resulted in a 12 per cent fall in UK and Irish revenues within the employee benefits division, although the situation is thought to have stabilised.
Broker Panmure Gordon expects pre-tax profit of £147m for the December 2016 year-end, giving an adjusted EPS of 56.6p, compared with £155m and 51.2p in FY2015.
JARDINE LLOYD THOMPSON (JLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 997p | MARKET VALUE: | £2.18bn | |
| TOUCH: | 996-999p | 12-MONTH HIGH: | 1,074p | LOW: 770p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 134p* | NET DEBT: | 174% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 592 | 101 | 33.7 | 11.1 |
| 2016 | 619 | 55 | 15.1 | 11.6 |
| % change | +5 | -46 | -55 | +5 |
Ex-div: 1 Sep Payment: 3 Oct *Includes intangible assets of £631m, or 288p a share | ||||
