Jardine Lloyd Thompson’s (JLT) 'global transformation programme' appears to be coming along well – and is on track to deliver annualised benefits of £40m by 2020, albeit at a £45m one-off cost. Over the six months to June, the programme achieved cost savings of £6.1m.
This scheme was designed to streamline JLT’s operational processes – offering global consistency and eliminating duplicated costs. Accordingly, JLT has restructured into three divisions: reinsurance, speciality and employee benefits. Single-digit organic revenue growth within each of these businesses over the first half contributed to a group-level improvement of 4 per cent.
Within speciality, sales rose 4 per cent organically, while underlying operating profits rose 13.5 per cent to £68.3m – buoyed partly by a continued reduction of net investment losses in the US, from $17m (£12.9m) to $11m year-on-year. Bosses expect US specialty to become profitable in 2019. Meanwhile, reinsurance’s sales rose 6 per cent organically, while underlying operating profits climbed 12.1 per cent.
By contract, employee benefits’ performance was relatively lacklustre, with a 14 per cent decline in underlying operating profits stemming largely from the introduction of accounting standard IFRS 15, which shifted the timing of profits.
Broker Numis forecasts pre-tax profits of £176m and EPS of 52.1p for 2018 (2017: £177m and 52.7p).
| JARDINE LLOYD THOMPSON (JLT) | ||||
| ORD PRICE: | 1,384p | MARKET VALUE: | £ 3.03bn | |
| TOUCH: | 1,384-1,386p | 12-MONTH HIGH: | 1,468p | LOW: 1,128p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 148p* | NET DEBT: | 174% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 692 | 98.3 | 31.9 | 12.2 |
| 2018 | 713 | 89.5 | 28.1 | 12.7 |
| % change | +3 | -9 | -12 | +4 |
| Ex-div: | 23 Aug | |||
| Payment: | 03 Oct | |||
| *Includes intangible assets of £717m or 328p per share**Restated 2017 numbers | ||||
