Insurance broker Jardine Lloyd Thompson (JLT) reported a 10 per cent rise in underlying pre-tax profits to £104.8m last year, which was a stellar effort given the backdrop of softening rates and a £9.4m drop in investment income.
The group's core risk and insurance division lifted revenues by 16 per cent to £520m, thanks to organic growth of 6 per cent and a 2 per cent uplift from acquisitions, helping trading profit rise 22 per cent to £97m. The London Market speciality broking business reported 10 per cent organic revenue growth and a 34 per cent hike in trading profit, which was underpinned by a strong performance from aviation and aerospace activities. And JLT's employee benefit arm did well to maintain underlying revenues and profits, given the shakeout in the labour market and the fall in discretionary spending during the recession.
JLT reports encouraging signs of an improvement at employee benefits since the year-end and, with Thistle, the group is developing a third leg to the business - underwriting. The cost-cutting project that JLT has just embarked on should produce annualised costs savings of £14m a year, but as a result of the costs associated with this Numis Securities has cut its headline pre-tax profits forecast for 2010 from £117m to £112m, giving EPS of 36.8p (33.8p in 2009).
JARDINE LLOYD THOMPSON (JLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 503p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 502-503p | 12-MONTH HIGH: | 509p | LOW: 394p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 108p* | NET DEBT: | 17% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 454 | 71.2 | 22.0 | 20.5 |
| 2006 | 460 | 90.8 | 28.2 | 20.5 |
| 2007 | 473 | 95.2 | 33.7 | 20.5 |
| 2008 | 536 | 92.8 | 29.6 | 20.5 |
| 2009 | 613 | 102.0 | 33.3 | 21.0 |
| % change | +14 | +10 | +13 | +2 |
Ex-div: 7 Apr Payment: 4 May *Includes intangible assets of £252m, or 118p per share | ||||
