With a number of big catastrophes having struck this year, including the Chilean earthquake and the Deepwater Horizon rig disaster, the resulting losses could help firm-up premium rates. But insurance broker Jardine Lloyd Thompson (JLT) hasn't seen much evidence of that yet - with the exception of the aviation and offshore energy markets, management say rates still look fairly soft. Still, that hasn't held JLT from delivering a 22 per cent hike in underlying trading profit to £70.7m.
That, says management, reflects a focus on growing market share and customer retention. Indeed, JLT's main risk & insurance business grew revenue 16 per cent in the six-month period and increased trading profits by 30 per cent to £75.2m. The employee benefits operation is growing fast, too, helped by bolt-on deals - recent acquisitions include HSBC Actuaries and Consultants in December and iimia Wealth Management in January. That has helped the unit's trading profit to grow 45 per cent to £9.1m. Management reckon further such bolt-on deals are possible - JLT has also bought a 20 per cent stake in Austrian broker GrECo.
Numis Securities expects full-year pre-tax profit of £112m and adjusted EPS of 41.7p (from £102m and 34.1p in 2009), rising to £147m and 48.3p, respectively, in 2011.
JARDINE LLOYD THOMPSON (JLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 580p | MARKET VALUE: | £1,255m | |
| TOUCH: | 579-580p | 12-MONTH HIGH: | 598p | LOW: 421p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 116p* | NET DEBT: | 39% | |
| Half-year to 30 Jun | Turnover (£m) | Pretax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2009 | 310 | 61.3 | 20.0 | 8.50 |
| 2010 | 376 | 70.0 | 27.1 | 8.80 |
| % change | +21 | +14 | +36 | +4 |
Ex-div: 1 Sep Payment: 4 Oct *Includes intangible assets of £267m, or 124p a share | ||||
