Like most insurance brokers, Jardine Lloyd Thompson's fortunes will substantially reflect the direction of premium rates - when rates rise so will commissions and, therefore, earnings. And while rates aren't yet soaring for every business class, management points out that they are hardening for areas such as catastrophe, credit insurance and aviation risk. That helped the group's underlying trading profit to rise by a decent 24 per cent to £54.7m in the first half of 2009.
Much of that is being driven by an especially robust performance at the group's core risk & insurance division. Turnover there grew 9 per cent (at constant currencies) in the six month period to £266m, which included 6 per cent organic growth, and the unit's trading profit rose 26 per cent to £55.3m. Although the fairly small employee benefits operation had a tougher time as recessionary conditions meant weaker corporate spending, as well as reduced interest rate-related fees for administering pension scheme banking arrangements. Accordingly, turnover at the unit grew just 1 per cent to £43.1m, while the trading profit fell 11 per cent to £6.5m.
Numis Securities expects full-year pre-tax profits of £99.8m (2008: £92.8m), with EPS of 32.7p (29.6p: 2008).
| ORD PRICE: | 446p | MARKET VALUE: | £ 949m | |
| TOUCH: | 445-446p | 12-MONTH HIGH: | 529p | LOW: 388p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 103p | NET DEBT: | 27% | |
| Half-year to 30 Jun | Turnover (£m) | Pretax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2008 | 266 | 53.4 | 17.3 | 8.5 |
| 2009 | 310 | 61.3 | 20.0 | 8.5 |
| % change | +17 | +15 | +16 | - |
Ex-div:02 Sep Payment:05 Oct *Includes intangible assets of £223m, or 105p a share | ||||
