For group finance director Charlie Rozes, Jardine Lloyd Thompson’s (JLT) half-year figures demonstrate “steady as she goes type performance”. The muted market reaction reflected this show of stability, with the shares rising modestly. Against a “continued tough trading environment”, JLT achieved 3 per cent organic revenue growth, with the group growth rate replicated at JLT’s risk and insurance business, which grew its top line to £541m, representing more than three-quarters of the group’s overall sales. The employee benefits business, on the other hand, fell behind because of difficulties in south-east Asian markets.
Asia was the worst-performing region for employee benefits, impacted by heightened regulation in Singapore which has slowed down the rate at which clients are coming on board. That said, marking a “significant opportunity” for JLT’s northern Asian business, management anticipates going onshore in China during the second half – a particularly important move, considering China’s intention to build its own capital market and prevent capital flight out of the country. Employee benefits in the UK and Ireland returned to profitability, and the business now has a significant pipeline of opportunities in wealth management and pension administration. The US risk and insurance business remained loss-making, with the costs of building the ‘US Specialty’ business weighing on returns. However, management is confident that this division will turn a profit by 2019, as investment losses taper.
Analysts at Panmure Gordon forecast pre-tax profit of £195m for FY2017, with EPS of 58.5p, against £135m and 51.4p in 2016.
JARDINE LLOYD THOMPSON (JLT) | ||||
ORD PRICE: | 1,185p | MARKET VALUE: | £ 2.60bn | |
TOUCH: | 1,183-1,185p | 12-MONTH HIGH: | 1,253p | LOW: 937p |
DIVIDEND YIELD: | 2.8% | PE RATIO: | 26 | |
NET ASSET VALUE: | 154p* | NET DEBT: | 159% | |
Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
30 Jun | (£m) | profit (£m) | share (p) | per share (p) |
2016** | 619 | 55.2 | 15.8 | 11.6 |
2017 | 690 | 99.2 | 32.4 | 12.2 |
% change | +11 | +80 | +105 | +5 |
Ex-div: | 24 Aug | |||
Payment: | 03 Oct | |||
*Includes intangible assets of £678m, or 310p per share**EPS has been re-stated to reflect a revised calculation, following changes to the terms ofseveral share-based staff compensation schemes |