| To : Business Editor | 13th March 1996 For immediate release |
JIB GROUP PLC 1995 PRELIMINARY ANNOUNCEMENT
OF RESULTS
The following press was issued today by
the Company's subsidiary undertaking, JIB Group plc.
For more information please contact:
| Ludgate Asia Limited Martin Spurrier |
(852) 2543 5413 (office) |
Enquiries
| JIB Group plc John Barton chief executive Nick Cosh finance director |
0171 528 4444 Direct Line: 0171 528 4167 Direct Line: 0171 528 4172 |
Preliminary Results for the year ended
31st December, 1995
Results
Consolidated profit before tax for the year
ended 31st December, 1995 for JIB's continuing operations amounted
to £21.3 million compared with the published profit of £24.4
million in 1994. Earnings per share for continuing operations
were 10.1p compared with the published figure of 11.5p in 1994.
After a charge for writing-off reinstated goodwill of £73.1
million, losses from discontinued operations in the United States
and other exceptional items, the consolidated loss before tax
was £49.6 million. The directors recommend an unchanged
final dividend of 5p per share (net) payable on 13th May, 1996
to shareholders on the register on 11th April, 1996. The Company
paid an interim dividend of 2.5p on 13th November, 1995, making
the total dividends 7.5p recommended by the directors in respect
of 1995 (1994: 7.5p).
Annual Review
1995 has been a year of change for JIB Group
which has seen a withdrawal from under-performing areas to concentrate
on JIB's core growth businesses. These changes have taken place
against a background of extremely competitive markets where low
interest rates, slower economic expansion and weakness of the
US dollar put pressure on insurance brokers' margins.
The sale of our corporate retail offices
in the United States, the restructuring of our UK insurance broking
operations, the anticipated costs of the Lloyd's settlement and
a review of certain subsidiary companies' goodwill has resulted
in the reinstatement and write-off through the profit and loss
account of goodwill of £73.1 million, together with other
exceptional costs of £9.9 million. However, the Group now
has a lower cost base which gives the real prospect of improved
margins in 1996. Sales during the year produced a surplus of
£13.2 million net of provisions for remaining liabilities
but before goodwill write-off.
In the United States we sold our corporate
retail office network which represented approximately half of
JIB's business in North America and made no contribution to profits
in 1994. Our remaining US operations are speciality businesses
all of which have grown well both in revenue and profitability
over the past five years and have good prospects for the coming
year with a number of significant new accounts won in the latter
part of 1995.
In the United Kingdom, the merger of the
wholesale and retail operations has led to a significant reduction
in the overall cost base going into 1996. The competitive environment
in the UK has intensified in many market sectors, the marine,
energy and UK corporate business being the worst affected. Nevertheless,
some areas of specialisation have shown promising growth - affinity
group business, fine arts and construction have all increased
their market share and profitability during the year.
Our Asia Pacific operations continue to
achieve a satisfactory level of growth in revenues. However,
profits in 1995 were held back by the cost of upgrading systems
and investing in the development of emerging markets. The offices
in Indonesia, Singapore and Thailand all had a good year and now
make a significant contribution to the region's profitability.
The Australian operation had an excellent year in both local
government and corporate insurance broking. The introduction
of self retained risk pools for local government clients has been
a success and these pools are now operating in most States in
Australia.
Our reinsurance division had a mixed year.
In London, income was lower because of a consolidation of underwriting
capacity, particularly in the marine market. The international
offices continue to do well, producing good levels of new business
although the loss of a major account in the USA has led to overall
revenues and profits falling below the level of 1994. The reinsurance
industry is experiencing a major structural change which is reflected
in the 1995 results and will continue into 1996. Overheads have
been reduced to accommodate these new conditions and we anticipate
some margin growth in 1996.
SIACI, JIB's French associate, again produced
good results in a competitive French market. SIACI has made two
successful acquisitions in the last two years and is planning
a further two in 1996. These are smaller businesses which bring
additional skills to the group and widen the scope of SIACI's
business.
The problems at Lloyd's are now coming to
a head with the reconstruction and renewal proposals going to
Names in the first half of 1996. These proposals are extremely
important for the London market and if they are accepted by Names
we should see the insurance environment in London improve considerably
during the course of this year.
JIB merged its ongoing members' agency with
Anton Members' Agency during the year and retains a 23.75% interest
in the combined business. Jardine (Lloyd's Underwriting Agents)
Limited, a JIB subsidiary now in run-off, retains the liability
for its past litigation. If the Lloyd's settlement is approved
it should largely solve the litigation issues surrounding JIB's
members' agency.
Prospects
In the developed world, competition, low
interest rates and slow economic growth continue to challenge
the insurance broking industry, as do changing client expectations
and an increasing trend towards buying broking services on a more
selective basis. In the world's most dynamic economic region,
Asia, JIB Group has a very strong base which it is continuing
to develop.
JIB will continue to specialise in those
areas of the market which give a base for future growth. This
strategy along with the cost reductions effected in the past year
give the Group the real prospect of improved margins in 1996.
Rodney Leach
Chairman
13th March, 1996
2. The charge to taxation includes taxation of £4,269,000 (1994: £3,170,000) in respect of overseas subsidiary profits and £1,497,000 (1994: £1,164,000) in respect of associated company profits.
3. Earnings per share are calculated on the profit after taxation and minority interests of £13,108,000 for continuing operations and the loss after taxation and minority interests of £57,830,000 for total operations for the year ended 31st December, 1995 (1994: Profit £14,970,000) and on the weighted average number of shares in issue of 129,638,896 for the year ended 31st December, 1995 (1994: 130,398,828).
4. The results have been prepared in accordance with the historical cost convention and applicable accounting standards.
5. The financial information contained in this preliminary announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The results for the year ended 31st December, 1995 are unaudited and statutory accounts in respect of that year have not yet been delivered to the Registrar of Companies.
6. Statutory accounts for the year ended 31st December, 1995 will be posted to shareholders no later than 1st April, 1996 and delivered to the Registrar of Companies following the Annual General Meeting on 23rd April, 1996.
7. Copies of the preliminary results press release (and the statutory accounts when available) may be obtained from the Secretary, JIB Group plc, Jardine House, 6 Crutched Friars, London EC3N 2HT.
8. The shareholders entered in the Register of Members at 4pm on 11th April, 1996 will be entitled to the proposed final dividend of 5p per share which will, subject to approval at the Annual General Meeting to be held on 23rd April, 1996, be payable on 13th May, 1996.
9. The ex-dividend date for the shares will
be 1st April, 1996.
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