Jardine Lloyd Thompson Group plc today announces results of the enlarged group following the merger of Lloyd Thompson Group plc and JIB Group plc effected on 6th February 1997.

Pro forma profit before tax after exceptional charges was £40.1 million for the twelve months to 30th June 1997, (1996 : £13.6 million for continuing operations and a loss of £31.0 million for total operations). The Group has declared a second interim dividend of 4.5p per share (net) payable on 17th November 1997.

Operational Highlights (continuing operations before exceptional items):

• turnover up 4% to £227.3 million (1996 : £219.4 million), reflecting continued new business gains offsetting unprecedented soft market conditions with a 7% increase at constant rates of exchange.
• operating profit up 21% to £23.7 million (1996 : £19.5 million) reflecting the initial benefits of merger rationalisation and continued expense control with a 38% increase at constant rates of exchange.
• profit before tax up 4% to £48.4 million (1996 : £46.6 million) reflecting the decreased investment income returns due to continued decline in interest rates and reduced investment balances.
• fully diluted earnings per share up 7% to 16.45p (1996 : 15.41p)

Ken Carter, Chief Executive, commented:
"Since completion of the merger between Lloyd Thompson Group and JIB Group in February 1997, we have integrated the London-based businesses and begun to realise benefits from the synergy of the two groups.

The compelling logic for the merger has been borne out in Jardine Lloyd Thompson's earliest days and will develop further in the years ahead. In Jardine Lloyd Thompson, we have a world-class broker, operating internationally, which is or can become a market leader in its selected areas of activity."

Enquiries:  

Ken Carter, Chief Executive George Stuart-Clarke, Finance Director	Jardine Lloyd Thompson	0171 528 4444
Rupert Younger Timothy Grey	Finsbury	0171 251 3801

REPORT TO SHAREHOLDERS

Following the merger of Lloyd Thompson Group and JIB Group which became effective in February 1997, I am pleased to report encouraging progress in both trading and financial results for the enlarged group achieved in the most difficult market conditions for many years.

The decision to change the year end of Jardine Lloyd Thompson from 30th June to 31st December has required the Company to adopt an accounting period of 18 months from 1st July 1996 to 31st December 1997. This in turn necessitated a number of changes to the form and content of the financial statements to be produced by the Company in 1997.

This second interim report in respect of both the twelve and six month periods ending 30th June 1997 has been prepared on the basis of merger accounting and shows the results of the two groups as though they had been combined throughout those periods.

In March 1998 we will produce final accounts, prepared on a similar basis, for the 18 months ending 31st December 1997. These accounts will also include pro-forma figures for the calendar year 1997 in order to facilitate comparison with earlier and subsequent years. Thereafter, we will revert to the normal pattern of interim results for the six months to 30th June and full year results to 31st December of each year.

For legal reasons connected with the change in the accounting period, an Annual General Meeting must be held prior to the publication of the accounts to 31st December 1997, and notice of the business for this meeting, to be held on 30th October 1997, will be sent to shareholders shortly.

Results

During the twelve months ended 30th June 1997, the operating profit (before exceptional items) of the enlarged group increased by 21% to £23.7 million, although as foreshadowed in our first interim statement this increase was largely offset by a further reduction in the level of investment income due to a combination of lower cash balances, lower interest rates and the strength of sterling. The resulting profit of £48.4 million before tax and exceptional items from continuing operations compares with £46.6 million for the corresponding period of 1996.

The profit before tax from continuing operations for the twelve months to 30th June 1997 was £40.1 million, compared to £13.6 million for the corresponding period in 1996. An exceptional charge of £8.3 million has been made in respect of merger and related reorganisation costs.

Turnover

Turnover for the twelve months increased by 4% to £227.3 million (1996 : £219.4 million), a satisfactory performance reflecting significant new business development achieved against a background of continued soft market conditions combined with the strengthening of sterling in the period. At a constant rate of exchange, the underlying volume increase was 7%.

Investment income

Investment income for the twelve months amounted to £20.3 million, a decrease of £3.8 million, or 16%, over the corresponding period in 1996. Of this decrease, some £1.1 million was due to lower achieved interest rates and the balance to a decline in the level of funds available for investment and the effect of exchange rates.

Expenses

Expenses for the twelve months ended 30th June 1997 increased by 2%. The merger related exceptional charge of £8.3 million is anticipated to increase to approximately £14 million (excluding surplus property provisions) by 31st December 1997 reflecting both costs relating to the transaction and reorganisation expenses following the merger. It is expected that in 1998 full year expense savings of around £6 million will arise: a small part of this figure will also accrue in 1997.

The Group has taken the decision to locate its London Market operations into Jardine House as a result of which it will be sub-letting surplus property. These arrangements, which are expected to be completed within the next nine months, will require additional one-off provisions to be made, but will result in significant subsequent annual savings in both accounting and cash terms.

The merger of two companies automatically raises the opportunity to eliminate certain expense duplication and management is focused on ensuring that the maximum expense savings are achieved, the full effect of which will come through in 1998.

Dividend

The Board has declared a second interim dividend of 4.5p per share (net) payable on 17th November 1997 to holders of ordinary shares on the register on 10th October 1997. The special dividend of 6.0p (net) paid in March 1997 and the first interim dividend of 6.25p (net) paid in May 1997 were payable to former Lloyd Thompson Group shareholders whereas the second interim dividend now declared (and all dividends subsequently) will be paid to all shareholders, including former JIB Group shareholders, on a pari passu basis.

The final dividend in respect of the eighteen months to 31st December 1997 will be paid in May 1998.

Operational Report

Results

The results for the twelve months ended 30th June 1997 are encouraging. The 4% increase in brokerage translates at constant exchange rates to an increase of 7%. The operating profit increase of 21%, which at constant exchange rates is 38%, is even more encouraging, although it is substantially offset by the reduction in investment income.

Turning to the results for the six months to 30th June 1997, the brokerage increase of 1% translates, at constant exchange rates, to an increase of 6%. The combined negative effect of extremely soft insurance markets and the strength of Sterling have offset the new business gains that have resulted from the merger. Notwithstanding this, the operating profit for continuing operations and before exceptional items has increased by 6% and, at constant exchange rates, by 23%, which we believe is a very acceptable achievement; reduced investment income has again taken its toll and in this period has more than offset the increase in the operating profit.

Merger related activity

The intense merger and acquisition activity within the insurance broking industry during the last 18 months has created many opportunities for Jardine Lloyd Thompson both with potential clients and with potential employees and it is our clear objective to make ourselves the preferred choice for both these groups.

Before they came together, both Lloyd Thompson and JIB placed their emphasis on servicing their clients with innovative and efficient solutions to their risk management problems; this focus on the client is fundamental to all parts of Jardine Lloyd Thompson's operations. The decisions that have been taken in structuring the Group, acquiring businesses and in developing strong niche positions have all been based on this client-centred philosophy.

Corporate developments

Since the merger was completed in February, the Group has introduced a management structure which maintains the best operational characteristics of the two previous companies. This structure has clear reporting lines, facilitates quick decision-taking and recognises the need for both vertical and horizontal communication. It will facilitate the potential to enhance Jardine Lloyd Thompson's business by combining London Market broking skills with an international network.

In the last few months we have integrated our London operations, rationalised our staff in those areas and largely integrated our management and financial systems; these systems changes and the attendant IT transitions are scheduled to be completed in the first half of 1998.

Since the merger was completed there have been a number of corporate developments. In May we acquired ACI, an American third party administrator to enhance Jardine Group Services' U.S. Affinity and Third Party Administration business and we have acquired the outstanding minority shareholding in Traveltest Limited allowing us to integrate our Shipowners' Protection and Indemnity ("P&I") activity. We have consolidated our Turkish Hull and P&I business by restructuring the joint venture - Lloyd Thompson Omni. Since 30th June we have sold our minority interest in Pinehurst Management Corporation, Bermuda and will concentrate our activities on the island through Triangle Holdings Limited.

Divisional review

Surplus capacity in virtually all our markets has led to dramatic price cutting by underwriters. Our planning anticipates these soft markets will continue to weaken in the near term and we do not anticipate any material benefit from a change of market direction for some time.

Against these market conditions I should like to comment on the performance of some of our major businesses during the last six months. Our London based international insurance business achieved modest brokerage growth with significant improvement specifically in Casualty, Construction, Energy and P&I, whereas our Aviation and Hull business has suffered due to the market conditions. Our North American based Wholesale and Underwriting Agency businesses showed good growth as a result of new business activity. In Reinsurance we suffered a reduction in brokerage in London, whereas the overseas operations in North America grew. In Asia Pacific brokerage grew slightly and we anticipate a demanding period ahead due to the present difficult economic situation in some of the smaller economies in Asia. Within our Specialty business we maintained our brokerage income. Overall the most encouraging sign is that throughout all our businesses we continued to gain significant new business, some of which was directly attributable to the merger.

SIACI, our French associate, has continued to trade well although conditions in the French market have, as elsewhere, deteriorated over the last year.

Management and employees

Through the rest of this year we shall complete the implementation of our post-merger plans, playing to our many and varied strengths with clients. At the time of announcing the merger we said that the benefits would show through in 1998 and the indications since February confirm that opinion. Whilst trading is difficult the commitment shown by everyone in the Group to realising our potential has been outstanding. I would like to pay tribute to all our staff who have risen to the occasion and accepted the challenges and opportunities which lie before us.

Prospects

The merger benefits of business enhancement will begin to be seen in 1998. Whilst the pace of new business development will continue, it is considered unlikely that insurance rates will harden; as a result expense control remains a priority.

The Group will continue to build on its strengths and follow its strategy of focusing on core business areas where the Group has or can develop market leadership. Good progress has been made since the merger and we remain committed to realising the full potential of our new group.

John Barton
Chairman

9th September 1997

Statement of Total Recognised Gains and Losses
Unaudited for the 12 months ended 30th June 1997

Reconciliation of Movement in Shareholders' Funds
Unaudited for the 12 months ended 30th June 1997

Consolidated Cashflow
Unaudited for the 12 months ended 30th June 1997

Notes to the Interim Report
For the twelve months ended 30th June 1997

1 Basis of Accounting

The combination of Lloyd Thompson Group plc and JIB Group plc has been accounted for as a merger. As a consequence, the results presented for the 12 months to 30th June 1997 have been prepared as if the two Groups were combined for the whole of the accounting period under review. Comparative information has been prepared on the same basis.

There has been a change of accounting policy in respect of the provision for run-off costs which were not previously provided for by JIB Group plc but were provided for by Lloyd Thompson Group plc. The accounting policy has been harmonised in line with market practice not to provide for such costs. The reversal of the Lloyd Thompson Group plc provision has been accounted for as a prior period adjustment. In addition, the Group now fully complies with the accounting requirements of Financial Reporting Standard 5 'Reporting the substance of transactions' which requires that assets and liabilities should not be offset, except in specific circumstances. This change had the effect of increasing both insurance broking debtors and creditors as at 30th June 1997 by £741,156,000. Restated for this change of accounting policy, insurance broking debtors and creditors as at 30th June 1996 are increased by £716,266,000 and at 31st December 1996 are increased by £700,032,000.

2 Segmental Information

3 Dividends

The second interim dividend is payable on 17th November 1997 to shareholders who are registered at the close of business on 10th October 1997. The provisional ex-dividend date will be 6th October 1997.

The JIB Group plc 1996 interim dividend, the Lloyd Thompson Group 1997 special dividend and 3.0p of the Lloyd Thompson Group 1997 interim dividend were paid as foreign income dividends.

4 Earnings per Share

Basic earnings per share for the twelve months to 30th June 1997 are calculated on the profit after taxation and minority interests of £21,463,000 (1996 : loss of £1,713,000 for continuing operations and a loss of £46,324,000 for total operations) and the weighted average number of shares in issue of 178,823,160 (1996 : 180,991,366).

Earnings per share for the twelve months to 30th June 1997, excluding exceptional items, are calculated on the profit after taxation and minority interests of £29,757,000 (1996 : £28,576,000 for continuing operations and £28,175,000 for total operations) and the weighted average number of shares in issue of 178,823,160 (1996 : 180,991,366).

In determining the weighted average number of shares in issue, the shares issued in respect of the merger between Lloyd Thompson Group plc and JIB Group plc have been treated as if they were issued at the beginning of the comparative period with any subsequent issues of shares being treated as if they had been issued by Jardine Lloyd Thompson Group plc. In addition, the weighted average number of shares has been calculated after excluding the Group's share of SIACI's interest in the share capital of Jardine Lloyd Thompson Group plc, but including the shares to be issued in respect of the acquisition of Nicolls Pointing Group Limited as though they had been issued at the date of acquisition. The shares held by the Trustees of the Employees' Share Ownership Plan Trust in respect of the Jardine Lloyd Thompson Group Restricted Share Scheme have also been excluded.

Fully diluted earnings per share for the twelve months to 30th June 1997, excluding exceptional items, are calculated on the profit after taxation and minority interests of £30,041,000 (1996 : £29,552,000 for continuing operations and £29,151,000 for total operations) and the weighted average of 182,632,014 (1996 : 191,780,394) ordinary shares of 5p each which would have been in issue during the twelve month period had all outstanding share options been exercised at 1st July 1996 or the date of grant if later.

Basic earnings per share for the six months to 30th June 1997, for continuing operations excluding exceptional items are calculated on the profit after taxation and minority interests of £16,313,000 (1996 : £16,779,000) and the weighted average number of shares in issue of 180,192,679 (1996 : 180,814,020).

Fully diluted earnings per share for the six months to 30th June 1997, for continuing operations excluding exceptional items, are calculated on the profit after taxation and minority interests of £16,455,000 (1996 : £17,263,000) and the weighted average of 184,001,533 (1996 : 191,603,048) ordinary shares of 5p each which would have been in issue during the six month period had all outstanding share options been exercised at 1st January 1997 or the date of grant if later.

5 Notes to the Consolidated Cashflow Statement

FRS 1 (revised 1996) "Cash flow statements"

The provisions of FRS 1 (revised 1996) have been adopted in these accounts and appropriate format changes/restatements of the accounts for the 12 months to 30th June 1996 and 30th June 1997 have been made.