A restructuring process at Jardine Lloyd Thompson (JLT) will see the insurance broker split into three divisions: reinsurance, specialty and employee benefits. This two-year overhaul has been billed as a way to “facilitate closer global coordination and enhance client delivery”, and will cost £45m over 2018 and 2019. For that outlay, annualised cost savings of £40m are expected by 2020. The strategy launches from a stable foundation, with improving revenues in 2017 buoyed by 5 per cent organic growth. Lower exceptional items allowed this momentum to continue further down the income statement.
JLT currently reports on two businesses: risk and insurance, and employee benefits. The former comprises around three-quarters of total revenues. Here, international specialty sales (excluding Europe) rose by an impressive 21 per cent to £449m at constant currency rates, with organic growth hitting 8 per cent.
Meanwhile, employee benefits saw 4 per cent organic growth while strong performance in the UK & Ireland was dampened by international numbers described as “mixed”. Indeed, UK and Ireland operating profit climbed 40 per cent to £17.2m while the margin climbed by two percentage points.
Consensus forecasts are for adjusted EPS of 70p in 2018, up from 58p in 2017.
| JARDINE LLOYD THOMPSON (JLT) | ||||
| ORD PRICE: | 1,334p | MARKET VALUE: | £ 2.9bn | |
| TOUCH: | 1,332-1,336p | 12-MONTH HIGH: | 1,468p | LOW: 1,022p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 173p* | NET DEBT: | 127% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 0.98 | 155 | 46.6 | 27.2 |
| 2014 | 1.10 | 160 | 47.9 | 28.9 |
| 2015 | 1.16 | 155 | 48.6 | 30.6 |
| 2016 | 1.26 | 135 | 38.6 | 32.2 |
| 2017 | 1.39 | 182 | 56.1 | 34.0 |
| % change | +10 | +35 | +45 | +6 |
| Ex-div: | 02 Apr | |||
| Payment: | 08 May | |||
| *Includes intangible assets of £687m, or 314p a share | ||||
