| To: Business Editor | 1st August 2000 For immediate release |
Jardine Lloyd Thompson Group plc
Interim Report 2000 Highlights
The following press release was issued today by the Company's 33%-owned associate, Jardine Lloyd Thompson Group plc.
For further information, please contact:
| Forrest International Limited | Tel: (852) 2522 6475 |
| David Dodwell / Leslie Fung |
| 1st August 2000 |
Jardine Lloyd Thompson Group plc today announces the interim results for the Group for the six months ended 30th June 2000. These strong results reflect the Group's continued growth through new business wins and the leading position it holds within its chosen markets.
Highlights (before exceptional items):
Ken Carter, Chief Executive, commented:
"This has been another outstanding period for JLT. Discounting acquisitions, disposals and currency effect, growth in brokerage and trading profit was 11% and 16% respectively, maintaining continuous growth at every reporting period for the past three years. The year started with some exciting initiatives - in America, the joint venture with The Blackstone Group to create Capital Risk Group and the launch of JLT InterActive, and in the UK, the acquisition of Burke Ford Group. Our market position and the more favourable economic and trading environment are expected to deliver further benefits."
Enquiries:
| Ken Carter, Chief Executive | Jardine Lloyd Thompson | 020 7528 4444 |
| George Stuart-Clarke, Finance Director | | |
| Timothy Grey - greyt@finsbury.com | Finsbury | 020 7251 3801 |
| Anna Englefield - englefielda@finsbury.com | ||
FULL RELEASE FOLLOWS:
CHAIRMAN'S STATEMENT
Report to Shareholders
Results and Dividend
I am very pleased to report JLT's continuing strong performance for the six months ended 30th June 2000. The Group's brokerage has grown to £137.9 million, an increase of 9% and pre-tax profit, excluding exceptional items, has risen to £35.4 million, an increase of 7% compared to the same period last year. This growth has been achieved against a background of keen competition and reflects JLT's leading position in its chosen markets.
The Board has declared an interim dividend of 6p net per share which will be paid on 16th October 2000. This is an increase of 9% over last year's equivalent dividend.
This half year has been a busy time for both divisions of the Group in terms of business expansion. Since last reporting, JLT Risk Solutions has announced an important joint venture with The Blackstone Group in New York to create Capital Risk Group and has launched a new risk financing and captive management practice in London, Bermuda and Guernsey. In Corporate Risks & Services, we have acquired Burke Ford Group, a UK Retail and Employee Benefits broker and in July we announced our first e-commerce development in America - JLT InterActive.
As well as attracting new business partners, JLT has continued to attract leading professionals into the business, thereby enhancing the company's asset base - its people.
Operational Review
Group turnover of £137.9 million increased 9% over the same period in 1999. Trading Profit - defined as turnover less expenses - was £23.2 million, an 8% increase over 1999. This growth in brokerage and trading profit maintains the continuous record of improvement at every reporting period during the last three years. When calculated after adjustments for currency effect, disposals and acquisitions, growth in brokerage and trading profit was 11% and 16% respectively over the comparative period last year.
JLT Risk Solutions has continued to achieve substantial progress, increasing brokerage by 12% to £67.3 million. Significant new business was achieved in both traditional activities and alternative risk transfer ("ART").
The results reflect strong performances from Casualty, Construction, Energy, Marine & Aviation and Reinsurance. Our ART business continued the impressive growth trend recorded in 1999.
The recently announced joint venture with The Blackstone Group to create Capital Risk Group in America provides Risk Solutions with a unique platform to develop ART and specialist business within the USA. Capital Risk Group is already generating income and plans are well developed to expand this initiative over the next eighteen months. The newly launched risk financing and captive management business has started well.
JLT Corporate Risks & Services reported brokerage income of £70.6 million, an increase of 7%.
In Corporate Risks, brokerage grew to £36.5 million, an increase of 17%. During this period the UK operations were strengthened by the acquisition of Burke Ford and the enlarged JLT UK Group is owned 81% by the Group. This acquisition, which accounted for 3% of the brokerage growth noted above, provides a stronger base for our UK business and will assist our plans to improve operating margins. The acquisition is expected to contribute to profits in the second half of this year.
New business was won throughout Corporate Risks with strong performances from UK, Asia, Australia, Brazil and Canada.
Plans to improve operating margins are showing early success. We have begun a process efficiency programme and anticipate improved profit ratios to be achieved over the next eighteen months.
Our French associate, SIACI, again achieved growth in both revenue and profits.
In Services, brokerage was £34.1 million, a reduction of 2%. After adjustment for disposals made in the first half year, brokerage grew by 5%.
All territories grew except for the USA, with a particularly strong performance from our UK employee benefits business.
In July we announced the launch of JLT InterActive, an internet based service for affinity groups, providing web based membership services. Initially launched in USA, this concept has global appeal and can be expanded into other territories where there is a strong demand for internet based solutions.
Exceptional Items
The net non-operating exceptional charge of £13,000 relates to the sale of a number of smaller businesses and reflects our continuing policy of disposing of activities which are not an integral part of Group strategy.
Prospects
The strong brokerage increase achieved in the first half reflects a good stream of new business wins and the continued focus of the Group on sustainable growth opportunities. Parts of the insurance market are hardening and based on recent underwriting results from many insurers, we are confident that this trend will continue, notwithstanding the ongoing surplus of capital in the market. This, combined with the weakening of sterling against the dollar and the upward trend in interest rates, is creating a positive environment for earnings growth.
We are very encouraged by our continued success in attracting high quality professionals to the Group. Our traditional business is expanding, our leading position in ART continues to strengthen and we continue to work on improving our profit margins.
In summary, the conditions appear favourable for the sustained delivery of real growth to our shareholders.
John Barton
Chairman
1st August 2000
Jardine Lloyd Thompson Group plc
Consolidated Profit and Loss Account
Unaudited results for the six months ended 30th June 2000
Jardine Lloyd Thompson Group plc
Consolidated Balance Sheet
Unaudited as at 30th June 2000
Jardine Lloyd Thompson Group plc
Statement of Total Recognised Gains and Losses
Unaudited for the six months ended 30th June 2000
Reconciliation of Movement in Shareholders' Funds
Unaudited for the six months ended 30th June 2000
Jardine Lloyd Thompson Group plc
Consolidated Cashflow Statement
Unaudited for the six months ended 30th June 2000
Jardine Lloyd Thompson Group plc
Notes to the Interim Report
For the six months ended 30th June 2000
1. Basis of Accounting
The unaudited results for the six months ended 30th June 2000 have been prepared under the historical cost convention using the accounting policies adopted in respect of the year ended 31st December 1999. The 30th June 1999 comparative balance sheet has been restated to reclassify £23,269,000 from creditors, amounts falling due within one year to provisions for liabilities and charges following the introduction of FRS12.
The financial information for the year ended 31st December 1999 relating to the Group set out above has been extracted from the audited accounts of the Company for that period. Such financial information does not constitute statutory accounts of the Company for that period within the meaning of section 240 of the Companies Act 1985. Consolidated statutory accounts for the Company for that period, upon which the auditors have given an unqualified report and which did not contain any statement under section 237 of the Act, have been delivered to the Registrar of Companies.
2. Segmental information
Turnover
Profit on ordinary activities before taxation
Interest payable and similar charges includes £397,000 (1999: £434,000) in respect of the unwinding of provision discounting.
3. Exceptional items
4. Taxation on profit on ordinary activities
5. Dividend
The interim dividend of 6.0p per share (1999: 5.5p) is payable on 16th October 2000 to shareholders who are registered at the close of business on 15th September 2000. The provisional ex-dividend date will be 11th September 2000.
6. Earnings per Share
i) Basic earnings per share are calculated by dividing the profit after taxation and minority interests by the weighted average number of shares in issue.
ii) Diluted earnings per share are calculated by dividing the profit after taxation and minority interests by the adjusted weighted average number of shares in issue.
iii) Basic earnings per share, excluding exceptional items are calculated by dividing the adjusted profit after taxation and minority interests by the weighted average number of shares in issue.
iv) Diluted earnings per share, excluding exceptional items are calculated by dividing the adjusted profit after taxation and minority interests by the adjusted weighted average number of shares in issue.
The weighted average number of shares in issue has been calculated after excluding the Group's share of SIACI's interest in the share capital of Jardine Lloyd Thompson Group plc together with the shares held by the Trustees of the Employees' Share Ownership Plan Trust in respect of the Jardine Lloyd Thompson Group Restricted Share Scheme.
7. Notes to the Consolidated Cashflow Statement
(a) Net Cash inflow from operating activities
(b) Analysis of changes in financing during period
(c) Analysis of net funds
(d) Acquisitions
Assets and liabilities of businesses acquired
The acquisition of Burke Ford Group involved the former executives of Burke Ford acquiring a 19% minority in the UK and Irish Corporate Risks and Services business which is subject to an earn out arrangement exercisable in 2006. This has been accounted for as deferred consideration arising on the acquisition of Burke Ford.
(e) Disposals
All proceeds were received in cash.
8. Millennium
Although it is recognised that the impact on IT systems of Y2K may be felt not only on 1st January but also during the succeeding months, both the date change itself and 29th February passed uneventfully with no adverse consequences for the Group.
9. The interim report will be posted to shareholders on 4th August 2000 and will be available to the public upon request to the Company Secretary at 6 Crutched Friars, London EC3N 2PH.
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