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More growth for JLT

RESULTS: Insurance broker Jardine Lloyd Thompson has delivered yet more decent growth - but premium rates are under pressure and the shares aren't the bargain they once were
July 30, 2013

Insurance broker Jardine Lloyd Thompson (JLT) reported more solid growth at the half-year stage - despite a softening premium rate backdrop, organic revenue grew 7 per cent year on year. Moreover, and after stripping out exceptional acquisition and restructuring costs, pre-tax profit jumped 7 per cent to £93.1m.

IC TIP: Hold at 894p

The core risk and insurance division, which generates three-quarters of group revenue, also grew organic revenue by 7 per cent to £372m, while divisional profit rose 3 per cent to £82.7m. That was helped by a robust performance in emerging markets - Asian revenue soared 16 per cent to £34.8m while Latin America generated a 12 per cent revenue hike. Meanwhile, the smaller employee benefits division is growing faster still - helped by bolt-on acquisitions, revenue there grew 21 per cent to £115m, while trading profit rose 16 per cent to £21.1m. The division's Asian and Latin American operation saw organic revenue rise by 25 per cent and 27 per cent, respectively, while Australian organic revenue jumped 80 per cent. The group's business transformation plan, which commenced in January, is also on track to deliver £12m of annualised savings from 2014.

Broker Numis Securities expects operating profit growth of 11 per cent for the full year, but flat pre-tax profit of £151m and adjusted EPS of 45.4p.

JARDINE LLOYD THOMPSON (JLT)

ORD PRICE:894pMARKET VALUE:£2bn
TOUCH:891-894p12-MONTH HIGH:925pLOW: 717p
DIVIDEND YIELD:2.9%PE RATIO:18
NET ASSET VALUE:150p*NET DEBT:66%

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201244282.426.19.6
201348785.127.010.1
% change+10+3+3+5

Ex-div: 4 Sep

Payment: 1 Oct

*Includes intangible assets of £341m, or 156p a share