TIDMJLT
RNS Number : 4157B
Jardine Lloyd Thompson Group PLC
04 March 2014
Jardine Lloyd Thompson Group plc
Preliminary Results for the year ended 31st December 2013
(unaudited)
Jardine Lloyd Thompson Group plc ("JLT" or "the Group")
announces its preliminary results for the year ended 31st December
2013.
Financial Highlights
-- Total revenue up 11% to GBP979.2m
-- Strong organic revenue growth of 8.5%
-- Underlying PBT increased by 13% to GBP177.4m
-- Reported PBT up 2% to GBP154.6m
-- Underlying diluted EPS up 13% to 54.5p
-- Reported diluted EPS 46.4p (2012: 46.5p)
-- Underlying profit margin up 70 basis points to 18.9%
-- Increased total dividend of 27.2p up by 6.7%
Operational and Strategic Highlights
-- Organic revenue growth has increased to 8.5% from the 7%
reported in each of the previous 3 years
-- Good performances from Reinsurance, Asia, Latin America and Employee Benefits
-- Continued investment for growth
- 10 acquisitions made for a total consideration of GBP200m
- 1,500 new joiners takes JLT's total employee numbers to over 9,100
-- Business Transformation Programme on track to deliver GBP12m of recurring savings for 2014
Dominic Burke, Chief Executive, commented:
"We are pleased to deliver another strong set of results,
building on the progress and momentum of previous years, as we
continue to execute our clearly defined strategy. Although the
external operating and competitive environment remains challenging,
JLT's distinctive culture, clear strategy and expanding platform
give us real confidence in our ability to deliver year-on-year
financial progress."
Enquiries:
Jardine Lloyd Thompson
Dominic Burke, Chief Executive Group plc 020 7309 8145
Mike Reynolds, Finance Director 020 7528 4375
Paul Dransfield, Corporate Communications 020 7528 4933
Tom Burns
Dania Saidam Brunswick Group LLP 020 7404 5959
A presentation to investors and analysts will take place at
9.00am today at The St Botolph Building, 138 Houndsditch, London,
EC3A 7AW. A live webcast of the presentation can be viewed on the
Group's website www.jltgroup.com.
FULL RELEASE FOLLOWS
________________________________________________________________________________
PRELIMINARY STATEMENT
JLT has again delivered strong results for 2013, building on the
progress and momentum of previous years, with organic revenue
growth increasing to 8.5% from the 7% reported in each of the
previous three years.
The 2013 results are summarised in the tables below:
GBPm Total Revenue Trading Profit Trading Margin
2013 Growth CRE Organic 2013 CRE 2012 2013 CRE 2012
------ ------- ----- -------- -------- ----------- -------- ------ ------ -------------------------------------
Risk &
Insurance 723.9 7% 8% 7% 149.9 152.2 139.7 21% 21% 21%
Employee
Benefits 255.3 25% 26% 14% 55.8 55.6 43.3 22% 22% 21%
Central
costs - - - - (20.3) (20.4) (22.8) - - -
------ ------- ----- -------- -------- ----------- -------- ------ ------ -------------------------------------
979.2 11% 12% 8.5% 185.4 187.4 160.2 18.9% 18.9% 18.2%
------ ------- ----- -------- -------- ----------- -------- ------ ------ -------------------------------------
GBPm 2013 2012
------------------ -------------------
Underlying trading profit 185.4 160.2
Associates 8.1 8.3
Underlying net finance costs (16.1) (12.1)
Underlying profit before taxation 177.4 156.4
Exceptional items (22.8) (4.9)
Profit before taxation 154.6 151.5
Underlying tax expense (46.8) (40.8)
Tax on exceptional items 5.0 1.1
Non-controlling interests (10.8) (9.6)
------------------ -------------------
Profit after taxation and
non-controlling interests 102.0 102.2
------------------ -------------------
Underlying profit after taxation
and
non-controlling interests 119.8 106.0
Diluted earnings per share 46.4p 46.5p
Underlying diluted earnings per
share 54.5p 48.2p
Notes:
CRE: Constant rates of exchange.
Organic growth is based on total revenue excluding the effect of
currency, acquisitions, disposals and investment income. Total
revenue comprises fees, commissions and investment income.
Underlying results exclude exceptional items.
2012 comparatives have been restated to reflect the impact of
IAS 19 (Revised).
Total revenue increased by 11% to GBP979.2 million or 12% at
constant rates of exchange (CRE), comprising 8.5% organic growth
and 4% from acquisitions, offset by foreign exchange and investment
income movements. Total revenue and underlying trading profit
include investment income on fiduciary funds of GBP4.5 million
(2012: GBP5.7 million).
Underlying trading profit increased by 16% to GBP185.4 million,
or 17% at CRE and the underlying trading margin increased from
18.2% to 18.9%, notwithstanding continued investment across the
Group.
Underlying profit before tax was GBP177.4 million, 13% ahead of
2012, while reported profit before tax was GBP154.6 million
compared to GBP151.5 million in the prior year, an increase of 2%.
This is after charging net exceptional costs of GBP22.8 million,
primarily relating to the Business Transformation Programme,
acquisition and integration costs and the costs in relation to our
move to new premises in London.
The tax charge was GBP41.8 million, or GBP46.8 million on an
underlying basis. The underlying effective tax rate for 2013 was
26%, unchanged on 2012.
Profit after tax and non-controlling interests was GBP102.0
million (2012: GBP102.2 million) and reported diluted earnings per
share was 46.4p (2012: 46.5p).
Underlying profit after tax and non-controlling interests
increased by 13% to GBP119.8 million and underlying diluted
earnings per share increased by 13% to 54.5p.
Dividends
Subject to shareholder approval, the final dividend will be
increased to 17.1p per share for the year to 31st December 2013
(2012: 15.9p) and will be paid on 1st May 2014 to shareholders on
the register at 4th April 2014. This brings the total dividend for
the year to 27.2p per share, compared to 25.5p for the prior year,
an increase of 6.7%.
OPERATIONAL REVIEW
Risk & Insurance
The total revenue in our Risk & Insurance division increased
by 7% to GBP723.9 million, this represented an 8% increase at CRE,
with organic growth of 7%. Trading profit increased by 7% to
GBP149.9 million for the year, with an unchanged trading margin of
21%.
Total Revenue Trading Profit Trading Margin
GBPm 2013 Growth CRE Organic 2013 CRE 2012 2013 CRE 2012
------- --------- -------- --------- ------ ------ ------ ------- ----- ----------
JLT Specialty 244.8 4% 3% 4% 51.2 51.2 46.8 21% 21% 20%
Australia
& NZ 124.5 (2%) 4% 5% 37.1 39.4 36.9 30% 30% 29%
Lloyd &
Partners 83.7 5% 6% 6% 18.3 18.6 17.6 22% 22% 22%
JLT Towers
Re 76.8 43% 43% 25% 11.3 11.0 7.4 15% 14% 14%
Asia 67.1 13% 13% 9% 10.4 10.2 9.1 15% 15% 15%
Latin America 55.5 10% 14% 14% 17.2 17.6 15.7 31% 31% 31%
Thistle
UK 34.9 2% 2% 1% 2.4 2.4 4.0 7% 7% 12%
Canada 25.8 (8%) (8%) (7%) 1.5 1.3 2.5 6% 5% 9%
Insurance
Mgt. 8.0 15% 14% 4% 0.6 0.6 0.6 7% 7% 9%
South Africa 2.8 63% 89% 89% (0.1) (0.1) (0.9) (2%) (2%) (53%)
723.9 7% 8% 7% 149.9 152.2 139.7 21% 21% 21%
------- --------- -------- --------- ------ ------ ------ ------- ----- ----------
JLT Specialty delivered a good performance with revenues of
GBP244.8 million in 2013, and organic growth of 4%. As was
highlighted at the time of the interim results, this business did
see a shift in its revenues into the second half of the year.
Trading profit increased to GBP51.2 million, an uplift of 9%,
with an improvement in the trading margin from 20% to 21%, despite
a 4% increase in its headcount. Particularly pleasing was the
continued strong results from specialties such as Aviation and
Financial Lines which are areas where the business has targeted
investment as part of its growth strategy.
Australia & New Zealand achieved revenue growth of 4% at CRE
with organic growth of 5%. Reported revenues however reduced by 2%
when compared to the previous year due to the fall in the value of
the Australian Dollar against Sterling, particularly in the second
half of the year. The business increased its trading margin to 30%,
compared to 29% in 2012.
During the year its market leading Public Sector business
continued its strong progress, with the investments made in
attracting talent from across the industry in the Group's core
specialties such as Energy, Mining and Construction starting to
make an increasing contribution.
Lloyd & Partners, the Group's specialist wholesale broker,
achieved strong revenue growth of 5%, or 6% at CRE, all of which
was organic, with trading profit increasing by 4%. As predicted at
the time of the interim results this business also saw the movement
of certain income into the second half.
The business has benefited from an improving US economy and
continued demand for its specialist London Market placement
capabilities and industry expertise. The trading margin was
maintained despite a continued investment in people, with employee
numbers increasing by some 5%.
JLT Towers Re was created in late 2013, following the Group's
acquisition of Towers Watson's reinsurance broking business and its
subsequent merger with JLT Re.
The net purchase consideration was US$250 million. Revenues for
the acquired business for the year ended 30th June 2013 were US$166
million and profit before tax was US$26 million. Due to the
structure of the transaction it was not possible to produce a
meaningful comparative for the year to December 2013 for the
business.
This transaction did not complete until 6th November so for the
purposes of this announcement the results of each business are
shown separately.
Total Revenue Trading Profit Trading Margin
GBPm 2013 Growth CRE Organic 2013 CRE 2012 2013 CRE 2012
----- ------- ---- -------- ---------------- ------ ----- ------ ------------------------------ -----
JLT Re 66.9 25% 24% 25% 11.7 11.4 7.4 17% 17% 14%
Towers
Watson
Re 9.9 - - - (0.4) (0.4) - (4%) (4%) -
76.8 43% 43% 25% 11.3 11.0 7.4 15% 14% 14%
----- ------- ---- -------- ---------------- ------ ----- ------ ------------------------------ -----
JLT Re had a strong year with revenues of GBP66.9 million, an
increase of 25% over the previous year, with organic growth also of
25%. This strong result reflects the increasing benefits of the
investments made over recent years in building out the geographic
reach and capabilities of this business. The contribution shown for
Towers Watson Re reflects the 8 week period between completion of
the acquisition and the year end and was in line with our
expectations.
As we mentioned when we announced the Towers Watson Re
transaction, it is our intention to invest significantly in this
business over the next few years. Consequently we expect the
trading margin in JLT Towers Re to reach Group average levels over
time.
Given traditional reinsurance renewal dates, the Towers Watson
Re acquisition will result in the first half of the year delivering
a higher proportion of the Group's revenues and profits than it has
historically.
Asia delivered revenue growth of 13% to GBP67.1 million, of
which organic growth was 9%. Trading profit improved by 14% to
GBP10.4 million, with the trading margin remaining unchanged at
15%.
The business has continued to invest in people and acquisitions
both to embed specialty capabilities in local markets and expand
SME and Affinity operations across the region. Staff numbers have
increased by 18% in the year as the business seeks to continue to
leverage JLT's strong brand and client base and benefit from
increasing levels of prosperity and insurance penetration across
Asia.
Latin America had a strong year, achieving revenue growth of 10%
to GBP55.5 million despite mixed economic conditions. This
represented an increase of 14% at CRE, all of which was organic.
Trading profit increased to GBP17.2 million with an unchanged
trading margin of 31%.
This performance was delivered by strong growth in Construction,
Energy and Mining as the business has continued to benefit from
increased investment in those specialty lines that remain among the
more dynamic sectors in the region. There continue to be
significant opportunities in the region to make bolt-on
acquisitions and investments to strengthen the business's specialty
offering and broaden its distribution capability.
Employee Benefits
Employee Benefits delivered strong results with total revenue
for the year of GBP255.3 million, an increase of 25%, with organic
growth of 14%. Trading profit increased by 29% to GBP55.8 million
with a trading margin of 22% compared to 21% for the prior year.
This division now represents 26% of JLT's total revenue.
Total Revenue Trading Profit Trading Margin
GBPm 2013 Growth CRE Organic 2013 CRE 2012 2013 CRE 2012
------ ------- ---- -------- ------ ----------- ----- ----- ------- --------
UK & Ireland 172.1 18% 18% 4% 32.2 32.2 28.0 19% 19% 19%
Asia 55.4 45% 43% 38% 18.6 18.2 11.7 34% 33% 30%
Latin America 18.1 42% 47% 47% 4.3 4.4 2.3 24% 24% 18%
Australia
& NZ 7.6 49% 59% 59% 1.1 1.1 1.3 14% 14% 26%
Canada 1.9 13% 16% 12% - - - (1%) (1%) (1%)
South Africa 0.2 - - - (0.4) (0.3) - - - -
------ ------- ---- -------- ------ ----------- ----- ----- ------- --------
255.3 25% 26% 14% 55.8 55.6 43.3 22% 22% 21%
------ ------- ---- -------- ------ ----------- ----- ----- ------- --------
UK & Ireland Employee Benefits made significant progress
building on their position as one of the leading players in the
Defined Benefit and Defined Contribution pension administration and
consultancy markets.
Revenues grew to GBP172.1 million, an increase of 18%. Trading
profit increased by 15% to GBP32.2 million, with the trading margin
remaining unchanged at 19%. On an underlying basis, organic growth
was very satisfactory given the challenging economic and trading
conditions with which this business has had to contend.
The results also included the first full year's contribution of
Alexander Forbes Consultants & Actuaries. This acquisition has
now been successfully integrated with the retention of all of its
significant clients. The business is expected to make continued
progress as it benefits from the impact of further regulatory
changes and expanding its service offering.
Asia Employee Benefits achieved very strong revenue growth of
45% to GBP55.4 million, of which 38% was organic. These results
included the contribution of two Indonesian healthcare businesses
which we acquired in 2013 and merged to create one of the leaders
in the Indonesian healthcare market.
The Group's high-net-worth life insurance broker in Asia
continued its impressive growth record and in 2013 opened a new
office in Geneva to complement its existing hubs in Asia where it
is the undisputed market leader. There continue to be substantial
opportunities to build out our Employee Benefits business in Asia
and we have the expertise in place to continue to make rapid
progress.
Our Employee Benefits operations in Latin America, Australia
& New Zealand, Canada and South Africa all continue to make
very good progress.
ASSOCIATES
Contribution After Tax
GBPm 2013 2012 Growth
------- ------- ---------
Associates 8.1 8.3 (2%)
------- ------- ---------
Our Associates' contribution in 2013 has been largely flat,
reflecting the mixed trading conditions that have impacted our
European Associates in particular. Good progress has been made on
the further development of our specialty-led approach with our
partners and there continue to be increasing examples of
international collaboration.
The weighting of the contribution from Associates is towards the
first half of the financial year and we expect this to
continue.
EXCEPTIONAL ITEMS
In 2013 total net exceptional and non-recurring costs for the
year were GBP22.8 million (2012: GBP4.9 million), in line with
expectations. This primarily comprised the costs of the Business
Transformation Programme which commenced at the beginning of 2013,
certain one-off costs in relation to the consolidation of our
London premises and acquisition and integration costs, in
particular in relation to the Alexander Forbes Consultants &
Actuaries business which was acquired in December 2012 together
with the one-off transaction costs relating to the Towers Watson Re
acquisition completed in November 2013.
For 2014, exceptional and non-recurring items are expected to be
in the region of GBP21 million, reflecting acquisition and
integration costs of GBP12.5 million, primarily in relation to the
Towers Watson Re acquisition, together with the cost of the second
and final year of the two year Business Transformation Programme of
GBP8.5 million.
OPERATING COSTS
In 2013 the Group's underlying operating cost ratio reduced by
70 basis points to 81.1% of total revenue. This has been achieved
despite continued investment in the business through recruitment,
building our global presence, enhancing our IT platform and other
new initiatives such as consolidating our property footprint in
London.
As reported at the time of the interims in July, London property
costs have increased as a result of the consolidation of our London
property estate into the St Botolph Building which took place in
the second half of the financial year. This move is reflected in
the increase in property costs in the year and we expect to see a
further increase of GBP5 million in 2014, reflecting the full year
costs of the new building.
CaSH FLOW AND BALANCE SHEET
The Group continues to be well funded. The increase in net debt
during the year largely reflects the cost of acquisitions in 2013,
in particular the US$250 million cost of the Towers Watson Re
acquisition.
Net debt at 31st December 2013 was GBP345 million. At that date
the Group had committed long term unsecured bank facilities of
GBP350 million and drawn private placement loan notes equivalent to
GBP214 million, resulting in total committed debt facilities
equivalent to GBP564 million, with maturities between 2015 and
2025. Gross borrowings as at 31st December 2013 were GBP460 million
which includes GBP447 million of borrowings under the Group's
committed facilities, leaving unutilised committed facilities
headroom in excess of GBP115 million.
In 2013 the Group took steps to reduce the volatility in the
deficit of its UK defined benefit pension scheme by entering into
annuity buy-in contracts with Prudential which secure the future
benefits relating to over GBP200 million of pensioner liabilities.
This has resulted in the pension scheme holding assets which
closely match a portion of its liabilities, thereby reducing
exposure to ongoing longevity and asset risk arising from that
portion of the pension scheme liabilities.
Foreign Exchange
The Group's major currency transaction exposure arises in those
businesses that earn US Dollar denominated revenue but which have a
Sterling cost base. The Group therefore continues to operate a US
Dollar hedging programme to smooth the volatility caused by
exchange rate movements. In 2013, the Group achieved an average
rate after hedging of US$1.55 compared to an average market rate of
US$1.57.
As at 1st March 2014, some 74% of anticipated dollar revenues
for 2014 (approximately US$350 million) are hedged at an average
rate of US$1.56. For 2015, some 47% of dollar revenues are hedged
at an average rate of US$1.53 and 25% hedged for 2016 at an average
rate of US$1.54.
As a guide, each one cent movement in the achieved rate
currently translates into a change of approximately GBP1.5 million
in revenue and a corresponding impact on trading profit equal to
approximately 65% of the revenue change.
In addition to the transactional foreign exchange exposure which
is managed through the Group's hedging programmes, JLT is also
exposed to translational foreign exchange movements which are not
hedged, the most material of which is the Australian Dollar, given
the relative size and profitability of the Group's Australian
business.
The current strength of sterling coupled with the volatility in
foreign exchange markets is therefore likely to have an effect on
JLT's 2014 results, when compared to 2013, if exchange rates were
to remain at current levels.
By way of example, if the 2013 profits of all of our major
overseas businesses were translated at current rates rather than
average rates during 2013, this would have reduced our profits by
some GBP6.7 million during the year.
BUSINESS TRANSFORMATION PROGRAMME
The Group's two year Business Transformation Programme is
proceeding well. During the year we opened a new shared service
centre in Malaysia to support our businesses in Asia. We also
continued to implement a number of efficiency improvement projects
to support our businesses across Latin America. At the full year we
had spent GBP9.5 million securing recurring benefits of GBP7.3
million. The projected total one-off costs and recurring annualised
savings for the programme remain at GBP18.0 million and GBP12.0
million respectively.
AMENDMENTS TO INTERNATIONAL ACCOUNTING STANDARD 19 (IAS 19)
EFFECTIVE 1STJANUARY 2013
Following a change to IAS 19 which took effect from 1stJanuary
2013, the expected rate of return assumed for scheme assets was
limited to the same AA corporate bond discount rate applied to the
scheme liabilities. Accordingly, we have re-stated the Group's 2012
net pensions finance charge on this new basis and this had the
effect of increasing the net pensions finance charge in respect of
2012 from GBP0.5 million to GBP5.6 million. The 2013 finance charge
was broadly similar to the re-stated 2012 charge at GBP5.7
million.
BOARD AND SENIOR MANAGEMENT DEVELOPMENTS
With effect from 1st April 2014 Mike Methley will take over as
Chairman of JLT Canada and JLT Insurance Management. Combining
these roles with Mike's existing role as CEO of the Group's Latin
American business provides a significant opportunity to further
develop collaboration and capabilities across the Americas.
Given Mike's newly expanded responsibilities, Bala Viswanathan,
who has been CEO of our successful Mumbai operation since its
inception, is to be appointed Group Chief Operating Officer from
1st April 2014 and will relocate from Mumbai to London at that
time. Bala's operational skills in developing and running the
Group's shared services operation in Mumbai place him in a unique
position to continue to drive forward the Group's operational
efficiency initiatives. Bala will join the Group Executive
Committee and report to the Group CEO.
After 8 successful years as Group CEO Dominic Burke is taking a
short break from the beginning of May until the end of June. During
this period Mark Drummond Brady will assume the role of Acting CEO.
Mark is the International Chairman of Risk & Insurance, a main
Board Director and has been with JLT since 1987.
OUTLOOK
Although the external operating and competitive environment
remains challenging, JLT's distinctive culture, clear strategy and
expanding platform give us real confidence in our ability to
deliver year-on-year financial progress.
Results follow
Jardine Lloyd Thompson Group plc
Consolidated Income Statement
For the year ended 31st December 2013
Notes 2013 2012
GBP'000 GBP'000
restated
---------- ----------
0BFees and commissions 3 974,623 874,320
Investment income 4,529 5,744
Total revenue 979,152 880,064
Salaries and associated expenses (580,968) (519,119)
Premises (53,638) (44,408)
Other operating costs (157,386) (140,179)
Depreciation, amortisation and impairment
charges 4 (24,667) (21,037)
---------- ----------
1BOperating profit 3,4 162,493 155,321
---------- ----------
2BAnalysed as:
3BOperating profit before exceptional
items 185,365 160,184
Business Transformation Programme 4 (9,521) (3,794)
4BAcquisition and integration costs 4 (9,020) (1,875)
5BPremises consolidation costs 4 (5,022) -
6BOther non-recurring items 4 691 806
---------- ----------
7BOperating profit 3,4 162,493 155,321
---------- ----------
Finance costs 5 (17,476) (13,672)
Finance income 5 1,441 1,621
---------- ----------
Finance costs - net 5 (16,035) (12,051)
Share of results of associates 8,106 8,271
Profit before taxation 3 154,564 151,541
Income tax expense 6 (41,789) (39,814)
---------- ----------
Profit for the year 112,775 111,727
---------- ----------
8BProfit attributable to:
Owners of the parent 101,960 102,153
Non-controlling interests 10,815 9,574
---------- ----------
112,775 111,727
---------- ----------
9BEarnings per share attributable to the
owners of the parent during the year (expressed
in pence per share) 8
Basic earnings per share 46.6 46.7
Diluted earnings per share 46.4 46.5
Jardine Lloyd Thompson Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31st December 2013
Notes 2013 2012
GBP'000 GBP'000
restated
--------- ---------
Profit for the year 112,775 111,727
--------- ---------
Other comprehensive (expense)/income
Items that will not be reclassified to
profit or loss
--------- ---------
Remeasurement of post employment benefit
obligations 16 (9,370) (10,956)
Taxation thereon 1,364 1,182
--------- ---------
Total items that will not be reclassified
to profit or loss (8,006) (9,774)
Items that may be reclassified subsequently
to profit or loss
Fair value gains net of tax:
--------- ---------
- available-for-sale 48 43
- cash flow and fair value hedges 1,720 21,074
Currency translation differences (24,332) (9,664)
--------- ---------
Total items that may be reclassified subsequently
to profit or loss (22,564) 11,453
--------- ---------
Other comprehensive (expense)/income net
of tax (30,570) 1,679
Total comprehensive income for the year 82,205 113,406
--------- ---------
Attributable to:
Owners of the parent 72,830 104,258
Non-controlling interests 9,375 9,148
--------- ---------
82,205 113,406
--------- ---------
Jardine Lloyd Thompson Group plc
Consolidated Balance Sheet
As at 31st December 2013
Notes 2013 2012
GBP'000 GBP'000
---------- ----------
NET OPERATING ASSETS
Non-current assets
Goodwill 9 429,450 276,388
Other intangible assets 69,092 55,399
Property, plant and equipment 59,715 28,227
Investment in associates 101,445 91,167
Available-for-sale financial assets 10 22,346 17,398
Derivative financial instruments 11 16,906 21,551
Deferred tax assets 51,809 54,659
750,763 544,789
---------- ----------
10BCurrent assets
Trade and other receivables 12 411,428 348,452
Derivative financial instruments 11 9,826 9,107
Available-for-sale financial assets 10 1,421 252
Cash and cash equivalents 13 753,164 624,321
---------- ----------
1,175,839 982,132
---------- ----------
Current liabilities
Borrowings 15 (12,995) (16,954)
Trade and other payables 14 (909,595) (736,809)
Derivative financial instruments 11 (2,344) (2,094)
Current tax liabilities (5,201) (11,508)
Provisions for liabilities and charges 17 (10,158) (12,241)
---------- ----------
(940,293) (779,606)
---------- ----------
11BNet current assets 235,546 202,526
---------- ----------
12BNon-current liabilities
Borrowings 15 (447,188) (236,702)
Derivative financial instruments 11 (30,543) (14,699)
Deferred tax liabilities (12,542) (12,416)
Retirement benefit obligations 16 (130,627) (131,391)
Provisions for liabilities and charges 17 (4,952) (3,889)
---------- ----------
(625,852) (399,097)
---------- ----------
360,457 348,218
---------- ----------
TOTAL EQUITY
Capital and reserves attributable to
the owners of the parent
Ordinary shares 11,003 10,997
14BShare premium 18 103,739 103,188
15BFair value and hedging reserves 18 17,224 15,456
Exchange reserves 18 (1,999) 20,893
Retained earnings 211,009 182,775
Shareholders' equity 340,976 333,309
Non-controlling interests 19,481 14,909
---------- ----------
360,457 348,218
---------- ----------
Jardine Lloyd Thompson Group plc
Consolidated Statement of Changes in Equity
For the year ended 31st December 2013
116BFor the year
ended
31st December
2013 117BOrdinary 118BOther 119BRetained 120BShareholders' 121BNon-controlling 122BTotal
123Bshares 124Breserves 125Bearnings 126Bequity 127Binterests 128Bequity
129BGBP'000 130BGBP'000 131BGBP'000 132BGBP'000 133BGBP'000 134BGBP'000
------------- ------------- -------------- ------------------- -------------------- -------------
135BBalance at
1st January
2013 136B10,997 137B139,537 138B182,775 139B333,309 140B14,909 141B348,218
------------- ------------- -------------- ------------------- -------------------- -------------
142BProfit for
the year 143B- 144B- 145B101,960 146B101,960 147B10,815 148B112,775
149BOther
comprehensive
income for the
year 150B- 151B(21,124) 152B(8,006) 153B(29,130) 154B(1,440) 155B(30,570)
------------- ------------- -------------- ------------------- -------------------- -------------
156BTotal
comprehensive
income for the
year 157B- 158B(21,124) 159B93,954 160B72,830 161B9,375 162B82,205
163BDividends - - (57,092) (57,092) (5,475) (62,567)
170BAmounts in
respect
of share based
payments:
171B- reversal of
amortisation - - 18,306 18,306 - 18,306
178B- shares
acquired - - (21,704) (21,704) - (21,704)
185BAcquisitions - - - - 685 685
192BDisposals - - - - (48) (48)
199BAdditions - - - - 35 35
206BChange in
non-controlling
interests - - (5,230) (5,230) - (5,230)
213BIssue of
share capital 6 551 - 557 - 557
------------- ------------- -------------- ------------------- -------------------- -------------
220BBalance at
31st December
2013 221B11,003 222B118,964 223B211,009 224B340,976 225B19,481 226B360,457
------------- ------------- -------------- ------------------- -------------------- -------------
227B 228B 229B 230B 231B 232B
233BFor the year 27BTotal
ended Ordinary Other Retained Shareholders'
31st December
2012 (restated) Non-controlling
shares reserves earnings equity interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- -------------- ------------------- -------------------- -------------
Balance at 1st
January
2012 234B10,960 235B124,140 236B151,007 237B286,107 238B12,327 239B298,434
------------- ------------- -------------- ------------------- -------------------- -------------
Profit for the
year 240B- 241B- 242B102,153 243B102,153 244B9,574 245B111,727
Other
comprehensive
income
for the year 246B- 247B11,879 248B(9,774) 249B2,105 250B(426) 251B1,679
------------- ------------- -------------- ------------------- -------------------- -------------
Total
comprehensive
income
for the year 252B- 253B11,879 254B92,379 255B104,258 256B9,148 257B113,406
Dividends 258B- 259B- 260B(53,571) 261B(53,571) 262B(5,679) 263B(59,250)
Amounts in
respect of share
based payments:
- reversal of
amortisation 264B- 265B- 266B14,720 267B14,720 268B- 269B14,720
- shares acquired 270B- 271B- 272B(18,200) 273B(18,200) 274B- 275B(18,200)
Acquisitions 276B- 277B- 278B- 279B- 280B(1,176) 281B(1,176)
Disposals 282B- 283B- 284B- 285B- 286B289 287B289
Change in
non-controlling
interests 288B- 289B- 290B(3,560) 291B(3,560) 292B- 293B(3,560)
Issue of share
capital 294B37 295B3,518 296B- 297B3,555 298B- 299B3,555
------------- ------------- -------------- ------------------- -------------------- -------------
Balance at 31st
December
2012 300B10,997 301B139,537 302B182,775 303B333,309 304B14,909 305B348,218
------------- ------------- -------------- ------------------- -------------------- -------------
Jardine Lloyd Thompson Group plc
Consolidated Statement of Cash Flows
For the year ended 31st December 2013
Notes 2013 2012
GBP'000 GBP'000
---------- ---------
32BCash flows from operating activities
33BCash generated from operations 19 164,871 133,399
34BInterest paid (8,772) (7,924)
35BInterest received 4,097 7,469
36BTaxation paid (41,380) (35,190)
37BIncrease in net insurance broking
payables 106,203 45,005
---------- ---------
225,019 142,759
38BDividend received from associates 1,732 1,140
---------- ---------
39BNet cash generated from operating
activities 226,751 143,899
---------- ---------
40BCash flows from investing activities
41BPurchase of property, plant and equipment (44,788) (12,820)
42BPurchase of intangible fixed assets (27,354) (20,671)
43BProceeds from disposal of property,
plant and equipment 596 1,508
44BAcquisition of businesses, net of
cash acquired 20 (150,874) (25,779)
45BAcquisition of associates (230) (14,690)
46BProceeds from disposal of businesses,
net of cash disposed 21 (2,089) (736)
47BPurchase of available-for-sale other (3,264) -
investments
48BProceeds from disposal of available-for-sale 1,317 -
other investments
49BNet cash used in investing activities (226,686) (73,188)
---------- ---------
50BCash flows from financing activities
51BDividends paid to Company's shareholders (57,582) (53,533)
52BPurchase of available-for-sale financial
assets (6,439) (14,852)
53BProceeds from disposal of available-for-sale
financial assets 269 158
54BPurchase of shares (21,704) (18,200)
55BProceeds from issuance of ordinary
shares 557 3,555
56BProceeds from borrowings 230,403 74,626
57BRepayments of borrowings (4,711) (1,206)
58BDividends paid to non-controlling
interests (5,475) (5,679)
---------- ---------
59BNet cash generated/(used) from financing
activities 135,318 (15,131)
---------- ---------
60BNet increase in cash and cash equivalents 135,383 55,580
61BCash and cash equivalents at beginning
of year 624,321 573,616
62BExchange losses on cash and cash
equivalents (6,540) (4,875)
---------- ---------
63BCash and cash equivalents at end
of year 13 753,164 624,321
---------- ---------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
1. Basis of preparation
The Group's consolidated preliminary results have been prepared
under the historical cost convention as modified by the revaluation
of available-for-sale investments and derivative financial
instruments and using accounting policies and presentation which
comply with International Financial Reporting Standards (IFRS) as
adopted by the European Union and the Companies Act 2006.
The accounting policies are consistent with those of the Annual
Report for the year ended 31st December 2012 except as described
below.
IAS 19 (Revised) 'Employee benefits' amends the accounting for
employment benefits. The Group has applied the standard
retrospectively in accordance with the transition provisions of the
standard and has therefore restated the 2012 comparatives to
reflect the impact of the revision to IAS 19 (Revised).
The primary impact of the standard is to replace the interest
cost on the defined benefit obligation and the expected return on
plan assets with a net interest cost based on the net defined
benefit asset or liability and the discount rate, measured at the
beginning of the year. There is no change to the method used to
determine the discount rate; this continues to reflect the yield on
high-quality corporate bonds. The restatement has increased the
income statement charge by GBP5,049,000 as the discount rate
applied to assets is lower than the expected return on assets. The
revision to the standard also requires that administration expenses
borne by the schemes not related to the administration of plan
assets be recognised in the income statement; the impact of this is
GBP200,000. The total effect has been that the income statement
charge for the year to 31st December 2012 has increased by
GBP5,249,000 (net of tax: GBP4,294,000). This has no effect on
total comprehensive income as the increased charge in profit or
loss is offset by a credit in other comprehensive income.
The measurement and disclosure requirements of IFRS 13 'fair
value measurement' are applicable for the December 2013 year
end.
The preliminary results for the year ended 31st December 2013
are unaudited.
2. 64BAlternative income statement
The format of the consolidated income statement on page 11
conforms to the requirements of IFRS. The alternative income
statement set out below, which is provided by way of additional
information, has been prepared on a basis that conforms more
closely to the approach adopted by the Group in assessing its
performance. The statement provides a reconciliation between the
underlying results used by the Group to assess performance and the
IFRS income statement.
Year ended 31st December 2013
-------------------------------------
Underlying Exceptional
profit items Total
GBP'000 GBP'000 GBP'000
----------- ------------ ----------
Fees and commissions 974,623 - 974,623
Investment income 4,529 - 4,529
Salaries and associated expenses (569,716) (11,252) (580,968)
Premises (48,229) (5,409) (53,638)
Other operating costs (151,175) (6,211) (157,386)
Depreciation, amortisation
and impairment (24,667) - (24,667)
----------- ------------ ----------
Trading profit 185,365 (22,872) 162,493
Finance costs - net (16,035) - (16,035)
Share of results of associates 8,106 - 8,106
----------- ------------ ----------
Profit before taxation 177,436 (22,872) 154,564
----------- ------------ ----------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
2. 64BAlternative income statement cont'd
Year ended 31st December 2012 (restated)
----------------------------------------------
Underlying Exceptional
profit items Total
GBP'000 GBP'000 GBP'000
-------------- --------------- ------------
Fees and commissions 874,320 - 874,320
Investment income 5,744 - 5,744
Salaries and associated expenses (516,296) (2,823) (519,119)
Premises (44,313) (95) (44,408)
Other operating costs (138,234) (1,945) (140,179)
Depreciation, amortisation
and impairment (21,037) - (21,037)
-------------- --------------- ------------
Trading profit 160,184 (4,863) 155,321
Finance costs - net (12,051) - (12,051)
Share of results of associates 8,271 - 8,271
-------------- --------------- ------------
Profit before taxation 156,404 (4,863) 151,541
-------------- --------------- ------------
3. 65BSegment information
Management has determined its reporting segments based on the
analysis used to make strategic decisions.
Business segment analysis
The Group is organised on a worldwide basis into three main
segments: Risk & Insurance, Employee Benefits and Head Office
& Other operations. These segments are consistent with the
internal reporting structure of the Group.
The Risk & Insurance segment comprises JLT's global
specialist, wholesale, reinsurance broking, personal lines and SME
activities. The Employee Benefits segment consists of pension
administration, outsourcing and employee benefits consultancy,
healthcare and wealth management activities. Certain Risk &
Insurance and Employee Benefits operating segments have been
disclosed within the reporting segments given their individual
size. The Head Office & Other segment consists mainly of
holding companies, central administration functions, the Group's
captive insurance companies and the Group's investments in
associates.
Segment results
Management assesses the performance of the operating segments
based upon a measure of underlying trading profit. Segment results
include the net income or expense derived from the trading
activities of the segment together with the investment income
earned on fiduciary funds. Interest income on the Group's own funds
and finance costs are excluded as they are not considered as part
of the trading activities of the Group's primary segments. Income
tax expense and the change in respect of non-controlling interests
are excluded from the segmental allocation.
Segment assets and liabilities
Assets and liabilities are not allocated to individual segments
and are therefore all reported within Head Office & Other.
Investments in associates
The Group owns the following stakes in its principal associates:
26% in Milestone, the holding company of Siaci Saint Honoré, which
operates principally in France; 20% of GrECo which operates mainly
in Austria and Eastern Europe; 25% of MAG-JLT, which operates
mainly in Italy; and 25% of March-JLT, which operates mainly in
Spain. On 31st July 2013 the Group disposed of 25% of JLT Energy
(France) SAS which reduced its shareholdings to 35% and therefore
from that date this company is treated as an associate. The
investment and the Group's share of the net profit of these
associates are included in the Head Office & Other segment,
together with the investment and results of the Group's other
associates, Sterling Re Intermediaro de Reaseguro SA de CV and JLT
Insurance Management Malta.
Other segment items
Capital expenditure comprises additions to property, plant and
equipment and intangible assets.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
3. 66BSegment information cont'd
Year ended 31st December 2013
Risk & Insurance Employee Benefits
-------------------------------------------------- ------------------
Other Other
JLT Lloyd Australia Risk UK & Employee Head
& & & Office
Specialty Partners New Insurance Ireland Benefits & Other Total
Zealand
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- --------- ---------- ---------- --- ---------- ---------- ------------ --------------
Fees and
commissions 243,997 83,507 121,829 270,065 172,101 83,124 - 974,623
Investment
income 815 142 2,640 886 1 45 - 4,529
---------- --------- ---------- ---------- --- ---------- ---------- ------------ --------------
Total revenue 244,812 83,649 124,469 270,951 172,102 83,169 - 979,152
Underlying
trading
profit 51,169 18,344 37,073 43,304 32,200 23,608 (20,333) 185,365
---------- --------- ---------- ---------- --- ---------- ---------- ------------ --------------
Operating profit 47,816 18,344 35,933 35,389 27,008 22,795 (24,792) 162,493
Finance costs
- net - - - - - - (16,035) (16,035)
Share of results
of associates - - - - - - 8,106 8,106
---------- --------- ---------- ---------- --- ---------- ---------- ------------ --------------
Profit before
taxation 47,816 18,344 35,933 35,389 27,008 22,795 (32,721) 154,564
Income tax
expense - - - - - - (41,789) (41,789)
Non-controlling
interests - - - - - - (10,815) (10,815)
---------- --------- ---------- ---------- --- ---------- ---------- ------------ --------------
Net profit 47,816 18,344 35,933 35,389 27,008 22,795 (85,325) 101,960
---------- --------- ---------- ---------- --- ---------- ---------- ------------ --------------
Segment assets 1,825,157 1,825,157
Investment in
associates 101,445 101,445
------------ --------------
Total assets 1,926,602 1,926,602
------------ --------------
Segment
liabilities (1,566,145) (1,566,145)
------------ --------------
Total
liabilities (1,566,145) (1,566,145)
------------ --------------
Other segment
items
Capital
expenditure 2,143 872 7,873 10,120 10,255 782 40,097 72,142
Depreciation,
amortisation
and impairment (4,145) (1,152) (2,624) (7,171) (4,794) (728) (10,807) (31,421)
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
3. 67BSegment information cont'd
Year ended 31st December 2012
Risk & Insurance Employee Benefits
------------------------------------------ --------------------
Other Other
Lloyd Australia Risk
JLT & & & UK & Employee Head Office
New
Specialty Partners Zealand Insurance Ireland Benefits & Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated
Fees and
commissions 234,750 79,126 123,238 233,569 146,030 57,607 - 874,320
Investment
income 1,166 177 3,283 1,062 7 49 - 5,744
------------ --------- ---------- ----------- -------- ---------- ------------ ------------
Total revenue 235,916 79,303 126,521 234,631 146,037 57,656 - 880,064
Underlying
trading
profit 46,776 17,610 36,894 38,464 28,029 15,246 (22,835) 160,184
------------ --------- ---------- ----------- -------- ---------- ------------ ------------
Operating profit 45,930 17,510 36,702 38,576 24,374 15,177 (22,948) 155,321
Finance costs
- net - - - - - - (12,051) (12,051)
Share of results
of associates - - - - - - 8,271 8,271
------------ --------- ---------- ----------- -------- ---------- ------------ ------------
Profit before
taxation 45,930 17,510 36,702 38,576 24,374 15,177 (26,728) 151,541
Income tax
expense - - - - - - (39,814) (39,814)
Non-controlling
interests - - - - - - (9,574) (9,574)
------------ --------- ---------- ----------- -------- ---------- ------------ ------------
Net profit 45,930 17,510 36,702 38,576 24,374 15,177 (76,116) 102,153
------------ --------- ---------- ----------- -------- ---------- ------------ ------------
Segment assets 1,435,754 1,435,754
Investments
in associates 91,167 91,167
Total assets 1,526,921 1,526,921
------------ ------------
Segment
liabilities (1,178,703) (1,178,703)
Total
liabilities (1,178,703) (1,178,703)
------------ ------------
Other segment
items
Capital
expenditure 1,463 391 1,841 8,458 5,750 510 15,078 33,491
Depreciation,
amortisation
and impairment (4,342) (2,563) (2,416) (6,258) (3,615) (400) (9,239) (28,833)
Geographical segment analysis
Although the Group's two business segments are managed on a
worldwide basis, they operate in five principal geographical areas
of the world.
The United Kingdom is the home country of the parent company
Jardine Lloyd Thompson Group plc.
The Risk & Insurance segment operates in the United Kingdom,
the Group's home country. In the Americas, the Risk & Insurance
segment operates in Bermuda, the Caribbean, Brazil, Canada,
Colombia, Peru, Chile and the United States. The Australasian
segment includes operations in Australia and New Zealand. In
Europe, it operates in Republic of Ireland, Sweden, Finland,
Norway, Denmark, Germany, Guernsey, France, The Netherlands, Spain,
Switzerland and Russia. The Asian segment includes operations in
Singapore, Hong Kong, Taiwan, Indonesia, Japan, Thailand, South
Korea, Philippines, Malaysia, China and Vietnam. In Africa, it
operates in South Africa.
The Employee Benefits segment operates in the United Kingdom. In
the Americas, the Employee Benefits segment operates in Brazil,
Canada, Colombia and Peru. The Australasian segment includes
operations in Australia and New Zealand. In Europe, it operates in
the Republic of Ireland. The Asian segment includes operations in
Singapore, Hong Kong, Taiwan, Indonesia, Japan, Thailand, South
Korea, Philippines, Malaysia, China and Vietnam. In Africa, it
operates in South Africa.
The Head Office & Other activities segment is mainly based
in the United Kingdom with minor operations in the Americas, Europe
and Asia. The Group's captive operations are included in the United
Kingdom segment.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
3. 68BSegment information cont'd
Fees and commissions are disclosed by (1) the country in which
the office is located and (2) the country in which the customer is
located.
Segment non-current assets, segment assets and segment
liabilities are disclosed based on the country in which they are
located or occur. Interest bearing assets (e.g. cash and cash
equivalents and investments & deposits) relating to the Group's
own funds and deferred tax assets are excluded from segment assets.
Interest bearing liabilities (e.g. borrowings) and income and
deferred tax liabilities are excluded from segment liabilities.
Items excluded from segmental allocation are referred to as
"unallocated".
Year ended 31st December
2013
Fees and Fees and Segment
commissions commissions non-current Segment Segment
(1) (2) assets assets liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------ ------------ ---------- ------------
UK 540,951 337,587 336,194 1,048,684 (742,449)
Americas 149,637 247,146 138,947 298,557 (129,757)
Australasia 130,591 141,835 27,250 115,233 (81,203)
Asia 126,414 145,918 34,170 141,598 (102,839)
Europe 24,066 78,786 17,361 43,669 (24,636)
Rest of the World 2,964 23,351 4,335 4,360 (2,184)
------------ ------------ ------------ ---------- ------------
974,623 974,623 558,257 1,652,101 (1,083,068)
------------ ------------ ------------ ---------- ------------
Investment in associates 101,445 -
Unallocated assets/(liabilities) 173,056 (483,077)
---------- ------------
Total assets/(liabilities) 1,926,602 (1,566,145)
---------- ------------
Year ended 31st December
2012
Fees and Fees and Segment
commissions commissions non-current Segment Segment
(1) (2) assets assets liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------ ------------ ---------- ------------
UK 497,467 301,286 227,896 864,335 (643,362)
Americas 124,494 215,158 72,602 164,560 (81,933)
Australasia 128,765 140,267 26,435 108,783 (79,359)
Asia 99,852 117,985 18,607 90,018 (67,158)
Europe 22,061 77,160 13,805 38,891 (26,026)
Rest of the World 1,681 22,464 669 494 (399)
------------ ------------ ------------ ---------- ------------
874,320 874,320 360,014 1,267,081 (898,237)
------------ ------------ ------------ ---------- ------------
Investment in associates 91,167 -
Unallocated assets/(liabilities) 168,673 (280,466)
---------- ------------
Total assets/(liabilities) 1,526,921 (1,178,703)
---------- ------------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
4. 69BOperating profit
The following items have been (credited)/charged
in arriving at operating 2013 2012
profit: GBP'000 GBP'000
------------------- -----------
Foreign exchange (gains)/losses:
- fees and commissions (2,687) (4,728)
- other operating costs 902 1,002
------------------- -----------
(1,785) (3,726)
------------------- -----------
Amortisation of intangible assets:
- software costs 12,240 10,202
- other intangible assets 1,093 794
Depreciation on property, plant and equipment:
- owned assets 11,243 9,909
- leased assets under finance leases 91 132
------------------- -----------
Total depreciation and amortisation charges 24,667 21,037
------------------- -----------
Amortisation of intangible assets:
- employment contract payments (included in salaries
and associated expenses) 6,754 7,796
(Gains)/losses on disposal of property, plant and
equipment (22) 7
Operating lease rentals payable:
- minimum lease payments
- land and buildings 30,817 24,419
- furniture, equipment and motor vehicles 770 624
- computer equipment and software 284 62
- sub-lease receipts
- land and buildings (1,668) (1,668)
Available-for-sale financial assets:
- fair value gains (2) (4)
- gain on sale - (2)
Exceptional items:
Acquisition and integration costs of which:
------- ------
- included in salaries and associated expenses 2,562 760
- included in premises costs 387 59
- included in other operating costs 6,071 1,056
------- ------
9,020 1,875
Business Transformation Programme of which:
------- ------
- included in salaries and associated expenses 8,690 2,063
- included in premises costs - 36
- included in other operating costs 831 1,695
------- ------
9,521 3,794
London premises consolidation costs 5,022 -
Loss on disposal of JLT Re Spain branch 372 -
Profit on partial disposal of JLT Energy (France) (715) -
Profit on sale of premises in Colombia (348) (571)
Profit on disposal of JLT Spain - (235)
Total exceptional items 22,872 4,863
------- ------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
5. 70BFinance income and costs
2013 2012
GBP'000 GBP'000
restated
--------- ---------
Interest receivable - own funds 1,441 1,337
Investment income from fixed asset investments - 280
Interest expense:
- bank and other borrowings (11,658) (7,836)
- finance leases (24) (26)
- interest in respect of liability discounting (114) (223)
73BPension financing:
--------- ---------
- expected return on post employment scheme assets 22,940 22,157
- interest on post employment scheme liabilities (28,620) (27,744)
--------- ---------
Net pension financing expense (5,680) (5,587)
Fair value gains on financial instruments
- forward contracts: cash flow hedges - 4
--------- ---------
Finance costs - net (16,035) (12,051)
--------- ---------
Finance costs (17,476) (13,672)
Finance income 1,441 1,621
--------- ---------
Finance costs - net (16,035) (12,051)
--------- ---------
6. 74BIncome tax expense
2013 2012
GBP'000 GBP'000
restated
--------------- -------------
Current tax expense
Current year 41,510 44,231
Adjustments in respect of prior years 918 (274)
--------------- -------------
42,428 43,957
--------------- -------------
75BDeferred tax expense
Origination and reversal of temporary differences (514) (3,072)
Reduction in tax rate 1,610 859
Adjustments in respect of prior years (1,735) (1,930)
--------------- -------------
(639) (4,143)
--------------- -------------
Total income tax expense 41,789 39,814
--------------- -------------
The total income tax expense in the income statement of
GBP41,789,000 (2012: GBP39,814,000) includes a tax credit on
exceptional items of GBP5,012,000 (2012: GBP1,021,000).
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
6. 76BIncome tax expense cont'd
The UK Government has announced various measures in relation to
UK corporation tax including a 1% reduction in the headline rate of
corporation tax from April 2013, and reductions of 2% in 2014 and
1% in 2015. These reductions reduce the UK tax rate from 24% to
20%. As at 31st December 2013 the 1% rate reduction to 23% is
already in force and the subsequent 2% rate and 1% rate reductions
have been enacted. The impact of the 2% and the 1% reduction have
therefore been incorporated into the income tax charge for the year
ended 31st December 2013.
The tax on the Group's profit before tax differs from the
theoretical amount that would arise using the tax rate of the home
country of the Company as follows:
2013 2012
GBP'000 GBP'000
restated
-------- ---------
Profit before taxation 154,564 151,541
-------- ---------
Tax calculated at UK Corporation Tax rate of
23.25% (2012: 24.5%) 35,936 37,128
Non-deductible expenses * 4,783 2,968
Tax losses not previously recognised (102) (64)
Adjustments in respect of prior years (817) (2,204)
Effect of UK and non-UK tax rate differences 2,284 3,204
Effect of reduction in UK tax rate 1,590 808
Tax on associates (1,885) (2,026)
-------- ---------
Total income tax expense 41,789 39,814
-------- ---------
* The non-deductible expenses relate principally to non-deductible entertainment expenses.
7. 77BDividends
2013 2012
GBP'000 GBP'000
--------- ----------
Final dividend in respect of 2012 of 15.9p
per share (2011: 14.8p) 34,976 31,567
Less: adjustment* (111) (891)
--------- ----------
34,865 30,676
Interim dividend in respect of 2013 of 10.1p
per share (2012: 9.6p) 22,227 22,895
--------- ----------
57,092 53,571
--------- ----------
* Adjustment relating to dividend equivalents accrued in respect
of various performance related share awards and long-term incentive
plans not currently anticipated to fully vest.
A final dividend in respect of 2013 of 17.1p per share (2012:
15.9p) amounting to a total of GBP37,438,000 (2012: GBP34,781,000)
is proposed by the Board. The dividend proposed will not be
accounted for until it has been approved at the Annual General
Meeting on 29th April 2014.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
8. 78BEarnings per share
Basic earnings per share are calculated by dividing the profit
attributable to the owners of the parent by the weighted average
number of ordinary shares in issue during the year, excluding
unallocated shares held by the Trustees of the Employee Share
Ownership Plan Trust and the Qualifying Employee Share Ownership
Trust.
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares.
Additionally basic and diluted earnings per share are also
calculated based on underlying earnings attributable to the owners
of the parent.
A reconciliation of earnings is set out below.
2013 2012
No. of shares No. of shares
-------------- --------------
Weighted average number of ordinary shares
in issue 218,951,874 218,829,889
Effect of outstanding share options 899,435 1,059,100
-------------- --------------
Adjusted weighted average number of ordinary
shares for diluted earnings per share 219,851,309 219,888,989
-------------- --------------
2013 2012
restated
-------------------------------- ------------------------
Basic Diluted Basic Diluted
pence pence pence pence
per per per per
GBP'000 share share GBP'000 share share
--------- ------ -------- --- ---------- ------ --------
Earnings reconciliation
Underlying profit after
taxation and non-controlling
interests 119,820 54.7 54.5 105,995 48.4 48.2
Exceptional items before
tax (22,872) (4,863)
Taxation thereon 5,012 1,021
(17,860) (8.1) (8.1) (3,842) (1.7) (1.7)
16BProfit attributable
to the owners of the parent 101,960 46.6 46.4 102,153 46.7 46.5
--------- ------ -------- --- ---------- ------ --------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
9. 78BGoodwill
Gross Impairment Net carrying
amount losses amount
GBP'000 GBP'000 GBP'000
--------- ----------- -------------
At 31st December 2013
Opening net book amount 280,975 (4,587) 276,388
Exchange differences (13,219) 11 (13,208)
Acquisitions 166,270 - 166,270
--------- ----------- -------------
Closing net book amount 434,026 (4,576) 429,450
--------- ----------- -------------
At 31st December 2012
Opening net book amount 264,618 (4,708) 259,910
Exchange differences (2,526) 121 (2,405)
Acquisitions 18,883 - 18,883
--------- ----------- -------------
Closing net book amount 280,975 (4,587) 276,388
--------- ----------- -------------
Goodwill is allocated to the Group's cash generating units
(CGUs) identified according to country of operation and business
segment. A summary of the goodwill allocation is presented
below.
Employee
Risk & Insurance Benefits Total
GBP'000 GBP'000 GBP'000
----------------- ---------- --------
At 31st December 2013
Australasia 17,419 - 17,419
Asia 19,632 4,528 24,160
UK and Europe 187,384 67,961 255,345
Americas 127,725 740 128,465
Africa - 4,061 4,061
352,160 77,290 429,450
----------------- ---------- --------
At 31st December 2012
Australasia 20,220 - 20,220
Asia 10,695 3,042 13,737
UK and Europe 110,269 67,973 178,242
Americas 63,183 1,006 64,189
204,367 72,021 276,388
----------------- ---------- --------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
10. 79BAvailable-for-sale financial assets
Available-for-sale financial assets are categorised according to
their nature into one of two categories:
1) Investments and deposits consist mainly of fixed term
deposits, bonds and certificates of deposits. These investments are
held at fair value and are classified between current and
non-current assets according to the maturity date.
2) Other investments include securities and other investments
held for strategic purposes. These investments are held at fair
value unless a fair value cannot be accurately determined in which
case they are held at cost less any provision for impairment.
Other Investments
investments & deposits Total
GBP'000 GBP'000 GBP'000
------------ ------------ --------
At 1st January 2013 3,104 14,546 17,650
Exchange differences (202) (2,897) (3,099)
Additions 3,264 6,439 9,703
Companies acquired 1,003 - 1,003
Disposals/maturities (969) (269) (1,238)
Revaluation gain (included within
equity) 55 - 55
Amounts to be written off (307) - (307)
------------ ------------ --------
At 31st December 2013 5,948 17,819 23,767
------------ ------------ --------
Analysis of available-for-sale
financial assets
Current - 1,421 1,421
Non-current 5,948 16,398 22,346
------ ------- -------
At 31st December 2013 5,948 17,819 23,767
------ ------- -------
Available-for-sale investments & deposits
Fiduciary 16,283
Own funds 1,536
-------
At 31st December 2013 17,819
-------
Other Investments
investments & deposits Total
GBP'000 GBP'000 GBP'000
------------ ------------ --------
At 1st January 2012 3,025 159 3,184
Exchange differences 30 (307) (277)
Additions - 14,852 14,852
Disposals/maturities - (158) (158)
Revaluation gain (included within
equity) 49 - 49
At 31st December 2012 3,104 14,546 17,650
------------ ------------ --------
Analysis of available-for-sale
financial assets
Current - 252 252
Non-current 3,104 14,294 17,398
------ ------- -------
At 31st December 2012 3,104 14,546 17,650
------ ------- -------
Available-for-sale investments & deposits
Fiduciary 14,165
Own funds 381
-------
At 31st December 2012 14,546
-------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
10. 80BAvailable-for-sale financial assets cont'd
The credit quality of available-for-sale investments and
deposits is assessed by reference to external credit ratings, where
available, and other current and historical credit data including
counterparty default rates. This is summarised as follows:
2013 2012
GBP'000 GBP'000
-------- --------
AA 16,398 14,294
AA/A - 148
A 4 -
Other 1,417 104
-------- --------
Total 17,819 14,546
-------- --------
11. 81BDerivative financial instruments
At 31st December At 31st December
2013 2012
-------------------------------------- -----------------------------------
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------------ ------------------ ---------------
Interest rate swaps - fair value
hedges 2,990 (14,382) 7,738 (8,102)
Forward foreign exchange contracts
- cash flow hedges 23,742 (18,505) 22,920 (8,691)
------------------ ------------------ ------------------ ---------------
Total 26,732 (32,887) 30,658 (16,793)
------------------ ------------------ ------------------ ---------------
Current 9,826 (2,344) 9,107 (2,094)
17BNon-current 18B16,906 19B(30,543) 20B21,551 21B(14,699)
---------- ------------ ---------- ------------
22BTotal 23B26,732 24B(32,887) 25B30,658 26B(16,793)
---------- ------------ ---------- ------------
The credit quality of counterparties with whom derivative
financial assets are held is assessed by reference to external
credit ratings, where available, or to historical information about
counterparty default rates. This is summarised as follows:
2013 2012
GBP'000 GBP'000
-------- --------
AA 1,721 11,953
AA/A 13,304 1,963
A 11,707 16,742
Total 26,732 30,658
-------- --------
Maturity analysis
The table below analyses the Group's derivative financial
instruments, which will be settled on a gross basis, into relevant
maturity groupings based upon the remaining period at the balance
sheet date to contractual maturity. The amounts disclosed are the
contractual undiscounted cash flows.
Less than Greater than
1 1
year year
At 31st December 2013 GBP'000 GBP'000
---------- -------------
Forward foreign exchange contracts
Outflow (243,457) (474,231)
Inflow 256,158 502,150
---------- -------------
At 31st December 2012
Forward foreign exchange contracts
Outflow (230,341) (565,808)
Inflow 241,703 587,691
---------- ----------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
11. 82BDerivative financial instruments cont'd
The Group's treasury policies are approved by the Board and are
implemented by a centralised treasury department. The treasury
department operates within a framework of policies and procedures
that establishes specific guidelines to manage currency risk,
liquidity risk and interest rate risk and the use of counterparties
and financial instruments to manage these. The treasury department
is subject to regular internal audit.
The Group uses various derivative instruments including forward
foreign exchange contracts, interest rate swaps and from time to
time, foreign currency collars and options to manage the risks
arising from variations in currency and interest rates. Derivative
instruments purchased are primarily denominated in the currencies
of the Group's main markets.
Where forward foreign exchange contracts have been entered into
to manage currency risk, they are designated as hedges of currency
risk on specific future cash flows, and qualify as highly probable
transactions for which hedge accounting is applied. The Group
anticipates that hedge accounting requirements will continue to be
met on its foreign currency and interest rate hedging activities
and that no material ineffectiveness will arise which will result
in gains or losses being recognised through the income
statement.
The fair value of financial derivatives based upon market values
as at 31st December 2013 and designated as effective cash flow
hedges was an asset of GBP5.2 million and has been deferred in
equity (2012: asset of GBP14.2 million). Gains and losses arising
on derivative instruments outstanding as at 31st December 2013 will
be released to the income statement at various dates up to:
a) 38 months in respect of cash flow hedges on currency denominated UK earnings.
b) 12 years in respect of specific hedges on USD denominated
long term debt drawn under the Group's USD private placement
programme.
No material amounts were transferred to the income statement
during the year in respect of the fair value of financial
derivatives.
Transactions maturing within 12 months of the balance sheet date
are classified in current maturities. Transactions maturing in a
period in excess of 12 months of the balance sheet date are
classified as non-current maturities.
a) Forward foreign exchange contracts
The Group's major currency transaction exposure arises in USD
and the Group continues to adopt a prudent approach in actively
managing this exposure. As at 31st December 2013 the Group had
outstanding foreign exchange contracts, principally in USD,
amounting to a principal value of GBP758,308,000 (2012:
GBP829,394,000).
b) Interest rate swaps
The Group uses interest rate hedges, principally interest rate
swaps, to mitigate the impact of changes in interest rates. The
notional principal amounts of outstanding cross currency interest
rate swaps as at 31st December 2013 was USD375,000,000 (2012:
USD375,000,000).
c) Price risk
The group does not have a material exposure to commodity price
risk.
The maximum exposure to credit risk at the reporting date is the
fair value of the derivatives in the balance sheet.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
12. 83BTrade and other receivables
2013 2012
GBP'000 GBP'000
---------- ----------
Trade receivables 284,748 235,368
Less: provision for impairment of trade receivables (11,375) (11,029)
---------- ----------
Trade receivables - net 273,373 224,339
Other receivables 125,090 110,052
Prepayments 12,965 14,061
---------- ----------
411,428 348,452
---------- ----------
13. 84BCash and cash equivalents
2013 2012
GBP'000 GBP'000
---------- ----------
Cash at bank and in hand 371,435 297,031
Short-term bank deposits 381,729 327,290
753,164 624,321
---------- ----------
Fiduciary funds 639,392 513,371
Own funds 113,772 110,950
753,164 624,321
-------- --------
The effective interest rate in respect of short-term deposits
was 0.50% (2012: 0.60%). These deposits have an average maturity of
29 days (2012: 28 days).
14. 85BTrade and other payables
2013 2012
GBP'000 GBP'000
---------- ----------
Insurance payables 655,675 527,536
Social security and other taxes 17,460 15,658
Other payables 125,755 100,954
Accruals and deferred income 97,657 85,608
Deferred consideration 13,048 7,053
909,595 736,809
---------- ----------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
15. 92BBorrowings
2013 2012
GBP'000 GBP'000
-------- --------
Current
Bank overdraft 12,508 16,493
Unsecured loan notes - 405
Bank borrowings 399 -
Finance lease liabilities 88 56
12,995 16,954
-------- --------
Non current
Unsecured loan notes 214,006 76,227
Bank borrowings 232,656 160,267
Finance lease liabilities 526 208
447,188 236,702
-------- --------
Total borrowings 460,183 253,656
-------- --------
The borrowings include secured liabilities (leases) of
GBP614,000 (2012: GBP264,000).
The carrying amounts and fair value borrowings are as
follows:
Carrying Fair
amount value
2013 2013
GBP'000 GBP'000
--------- --------
Current
Bank overdraft 12,508 12,508
Bank borrowings 399 399
Finance lease liabilities 88 88
12,995 12,995
--------- --------
Non current
Unsecured loan notes 214,006 214,006
Bank borrowings 232,656 232,656
Finance lease liabilities 526 526
447,188 447,188
--------- --------
Total borrowings 460,183 460,183
--------- --------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
15. Borrowings cont'd
Carrying Fair
amount value
2012 2012
GBP'000 GBP'000
--------- --------
Current
Bank overdraft 16,493 16,493
Unsecured loan notes 405 405
Finance lease liabilities 56 56
16,954 16,954
--------- --------
Non current
Unsecured loan notes 76,227 76,227
Bank borrowings 160,267 160,267
Finance lease liabilities 208 208
--------- --------
236,702 236,702
--------- --------
Total borrowings 253,656 253,656
--------- --------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
16. 86BRetirement benefit obligations
The Group operates a number of pension schemes throughout the
world, the most significant of which are of the defined benefit
type and operate on a funded basis. The principal pension schemes
are the Jardine Lloyd Thompson Pension Scheme in the UK, the JLT
(USA) Incentive Savings Plan, the JLT (USA) Employee Retirement
Plan, the Pension Plan for Employees of Jardine Lloyd Thompson
Canada Inc and the Jardine Lloyd Thompson Ireland Limited Pension
Fund.
The pension costs accrued for the year are comprised as
follows:
2013 2012
----------------------------- -----------------------------
UK Overseas Total UK Overseas Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- --------- -------- -------- --------- --------
Defined benefit
schemes - - - - 8 8
Defined contribution
schemes 16,926 13,516 30,442 13,743 12,418 26,161
-------- --------- -------- -------- --------- --------
16,926 13,516 30,442 13,743 12,426 26,169
-------- --------- -------- -------- --------- --------
The Jardine Lloyd Thompson Pension Scheme is based in the UK and
has two sections; one providing defined benefits and the other
providing benefits on a defined contribution basis. The assets of
the scheme are held in a trustee administered fund separate from
the Company.
With effect from 1st December 2006 the Scheme was amended to
eliminate future benefits accrual. Under the Scheme as amended, a
participant's normal retirement benefit will be determined based on
their service and compensation prior to 1st December 2006.
The latest triennial actuarial funding valuation of the Jardine
Lloyd Thompson Pension Scheme was undertaken as at 31st March 2011.
This valuation was updated to 31st December 2013 by a qualified
actuary employed by the Group.
The principal overseas schemes are:
a) The JLT (USA) Incentive Savings Plan which is a defined
contribution scheme. Employees may contribute up to 50% of their
salary subject to an IRS maximum each year - USD17,500 in 2013 -
and the Group contributes at a rate of 100% of each 1% contributed
by the employee up to a maximum employee contribution of 4%, up to
a maximum of USD10,200. Employees aged over 50 may make "catch-up"
contributions subject to an IRS maximum each year - USD5,500 in
2013.
b) The JLT (USA) Employee Retirement Plan which is a defined
benefit scheme. The latest actuarial valuation was undertaken at
1st January 2013 by independent actuaries. With effect from 31st
July 2005 the Plan was amended to eliminate future benefit
accruals. Under the Plan as amended, a participant's normal
retirement benefit will be determined based on their service and
compensation prior to 31st July 2005. The average compensation and
length of service will be determined as at 31st July 2005.
c) The Pension Plan for Employees of Jardine Lloyd Thompson
Canada Inc. The JLT Canada Pension Plan has two sections; one
providing defined benefits based primarily on the 2007 pensionable
salary and the other providing benefits on a defined contribution
basis. The JLT pension contribution for the defined contribution
plan ranges from 3% to 15% based on age and service. The last
formal valuation of the JLT Canada Pension Plan was undertaken as
of 31st December 2011 by a qualified third party actuary. The
defined benefits section was amended to eliminate future benefits
accrual with effect from 1st January 2009.
d) The Jardine Lloyd Thompson Ireland Limited Pension Fund which
is a defined benefit pension scheme with assets held in a
separately administered fund. The contributions are agreed between
the Trustees and the Company based on advice by a qualified
actuary. The most recent triennial actuarial valuation for funding
purposes was carried out by a qualified independent actuary as at
1st June 2011. With effect from 30th November 2008 the scheme was
closed to new entrants and future service accrual. The company also
operates a defined contribution scheme namely, The Jardine Lloyd
Thompson 2004 Retirement Benefits Scheme, which is held and
administered by a separate trust.
e) The Jardine Matheson Executive Staff Retirement Plan
(JMESRP), Jardine Matheson Resident Staff Retirement Plan (JMRSRP)
and Menu Plan section B and C of the Jardine Matheson Group
Retirement Plan (JMGRP). The JMRSRP and section C of the JMGRP
provided benefits based on final salary, which were solely funded
by the participating employer, while the JMESRP and section B of
the JMGRP provided benefits based on final salary, which were
funded by both the participating employer and the members.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
16. 87BRetirement benefit obligations cont'd
With effect from 31st December 2009, the participation in the
JMESRP, JMRSRP and JMGRP (collectively the plans) ceased and the
schemes were closed.
The accrued rights of the members in the plans were transferred
to the Hong Kong Mandatory Provident Fund (MPF) scheme on 1st
January 2010. The MPF scheme provides benefits on a defined
contribution basis. The scheme is funded by both the employer and
the members. The employer contribution under the MPF scheme ranges
from 5% to 15% of the member's monthly basic salary based on an age
factor. The MPF scheme is held and administered by a separate
trust, which is funded by both the participating employer and the
members.
The principal actuarial assumptions used were as follows:
Canadian Irish
At 31st December 2013 UK Scheme US Scheme Scheme Scheme
----------- ---------- --------- -------
Rate of increase in salaries n/a n/a 3.00% n/a
Rate of increase of pensions in
payment (a) 3.42% n/a 3.50% 3.00%
Discount rate (b) 4.60% 4.70% 4.80% 4.00%
Inflation rate 3.25-3.52% 3.00% 2.25% 2.00%
Revaluation rate for deferred pensioners 2.25% n/a n/a 2.00%
Mortality - life expectancy at
age 65 for male member: (c)
Aged 65 at 31st December 22.8 19.7 19.7 21.7
----------- ---------- --------- -------
Canadian Irish
At 31st December 2012 UK Scheme US Scheme Scheme Scheme
----------- ---------- --------- -------
Rate of increase in salaries n/a n/a 3.00% n/a
Rate of increase of pensions in
payment (a) 3.01% n/a 3.50% 3.00%
Discount rate (b) 4.60% 3.75% 3.90% 3.60%
Inflation rate 2.57-3.11% 3.00% 2.25% 2.00%
Revaluation rate for deferred pensioners 1.77% n/a n/a 2.00%
Mortality - life expectancy at
age 65 for male member: (c)
Aged 65 at 31st December 23.8 19.6 19.7 21.7
----------- ---------- --------- -------
(a) In respect of the UK scheme, where there are inflation
linked benefits the inflation increases are limited to a maximum of
5% per annum (some are limited to 3% per annum).
(b) In line with IAS 19 (Revised) the expected return on scheme
assets assumption is the same as the discount rate assumed for the
liabilities.
(c) Mortality assumptions for the UK scheme are based on 92% of
the S1PxA tables, with improvements based on CMI 2013 tables with a
1.25% p.a. long-term rate of improvement.
Mortality assumptions for the US scheme are based on the IRS
2014 Mortality Table with Static Projections.
Mortality assumptions for the Canadian scheme are based on 90%
of the 1994 Uninsured Pensioner Mortality Table projected
generationally using the AA scale.
Mortality assumptions for the Irish scheme, in respect of both
deferred pensioners and pensioners, assume that deaths after
retirement will be in accordance with standard mortality tables 62%
PNML00 for males and 70% PNFL00 for females with an increase to the
annuity value of:
- 0.50% (male with no spouse's pension)
- 0.38% (female with no spouse's pension)
- 0.39% (male or female with spouse's pension)
This is per annum compound for each year between 2008 and the
year in which normal pension date falls. Pre-retirement mortality
has been assumed as nil.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
16. 88BRetirement benefit obligations cont'd
UK Scheme Overseas Schemes Total
---------------------- -------------------- ----------------------
Defined benefit obligation 2013 2012 2013 2012 2013 2012
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ---------- ---------- --------- --------- ---------- ----------
Present value of
funded obligations (583,745) (574,360) (60,566) (68,937) (644,311) (643,297)
Fair value of plan
assets 458,727 463,621 54,957 48,285 513,684 511,906
---------------------------- ---------- ---------- ---------
Net liability recognised
in the balance sheet (125,018) (110,739) (5,609) (20,652) (130,627) (131,391)
UK Scheme Overseas Schemes Total
---------------------- -------------------- ----------------------
Reconciliation of
defined benefit 2013 2012 2013 2012 2013 2012
liability GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated
---------------------------- ---------- ---------- --------- --------- ---------- ----------
Opening defined benefit
liability (110,739) (99,222) (20,652) (21,777) (131,391) (120,999)
Exchange differences - - (529) 1,004 (529) 1,004
Pension expense (4,942) (4,779) (994) (1,016) (5,936) (5,795)
Employer contributions 13,018 1,363 3,581 3,992 16,599 5,355
Total loss recognised
in reserves (22,355) (8,101) 12,985 (2,855) (9,370) (10,956)
---------------------------- ---------- ---------- ---------
Net liability recognised
in the balance sheet (125,018) (110,739) (5,609) (20,652) (130,627) (131,391)
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
16. 89BRetirement benefit obligations cont'd
UK Scheme Overseas Schemes Total
Reconciliation of defined
benefit 2013 2012 2013 2012 2013 2012
obligation GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening defined benefit
obligation (574,360) (523,846) (68,937) (66,407) (643,297) (590,253)
Exchange differences - - 601 3,114 601 3,114
Service cost - - - (8) - (8)
Interest cost (26,039) (25,035) (2,581) (2,709) (28,620) (27,744)
(Loss)/gain on defined
benefit obligation (138) (40,990) 6,122 (5,889) 5,984 (46,879)
Actual benefit payments 16,792 15,511 4,229 2,962 21,021 18,473
Closing defined benefit
obligation (583,745) (574,360) (60,566) (68,937) (644,311) (643,297)
UK Scheme Overseas Schemes Total
Reconciliation of fair
value of 2013 2012 2013 2012 2013 2012
assets GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated
Opening value of assets 463,621 424,624 48,285 44,630 511,906 469,254
Exchange differences - - (1,130) (2,110) (1,130) (2,110)
Expected return on
assets 21,097 20,256 1,843 1,901 22,940 22,157
Actuarial (losses)/gains (22,217) 32,889 6,863 3,034 (15,354) 35,923
Employer contributions 13,018 1,363 3,581 3,992 16,599 5,355
Actual benefit payments (16,792) (15,511) (4,229) (2,962) (21,021) (18,473)
Expenses - - (256) (200) (256) (200)
Closing value of assets 458,727 463,621 54,957 48,285 513,684 511,906
The analysis of the fair value of the scheme assets is as
follows:
UK Scheme Overseas Schemes
Value Value Value Value
At 31st December 2013 GBP'000 % GBP'000 %
Equities 169,056 37% 37,434 69%
Bonds 47,023 10% 11,800 21%
Investment funds 100,989 22% - -
Qualifying insurance policies 179,358 39% - -
Deferred buy-in premium (40,343) (9%) - -
Other assets - - 1,110 2%
Cash 2,644 1% 4,613 8%
-------- ----- ------
Total market value 458,727 100% 54,957 100%
UK Scheme Overseas Schemes
Value Value Value Value
At 31st December 2012 GBP'000 % GBP'000 %
Equities 167,119 36% 29,695 62%
Bonds 238,801 52% 12,981 27%
Investment funds 53,154 11% - -
Other assets 2,402 1% 1,059 2%
Cash 2,145 - 4,550 9%
-------- ----- ------
Total market value 463,621 100% 48,285 100%
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
16. 90BRetirement benefit obligations cont'd
Other assets include hedge funds and property. The schemes do
not hold cash as a strategic investment and cash balances at 31st
December represent working balances.
The long-term rates of return on scheme assets at 31st December
2013 have been derived considering market conditions at 31st
December 2012.
UK Scheme Overseas Schemes Total
--------------------
Reconciliation of
return on 2013 2012 2013 2012 2013 2012
assets GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated
-------------------------- --------- --------- -------- --------- ---------
Expected return on
assets 21,097 20,256 1,843 1,901 22,940 22,157
Actuarial (losses)/gains (22,217) 32,889 6,863 3,034 (15,354) 35,923
-------------------------- --------- --------- -------- --------- ---------
Actual return on
assets (1,120) 53,145 8,706 4,935 7,586 58,080
The amounts recognised in the consolidated income statement are
as follows:
UK Scheme Overseas Schemes Total
2013 2012 2013 2012 2013 2012
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated
-------- --------- -------- -------- ---------
Service cost - - - (8) - (8)
Expenses - - (256) (200) (256) (200)
-------- --------- -------- -------- ---------
Total (included within
salaries and associated
expenses) - - (256) (208) (256) (208)
-------- --------- -------- -------- ---------
Interest cost (26,039) (25,035) (2,581) (2,709) (28,620) (27,744)
Expected return on
assets 21,097 20,256 1,843 1,901 22,940 22,157
-------- --------- -------- --------
Total (included within
finance costs) (4,942) (4,779) (738) (808) (5,680) (5,587)
-------- --------- -------- -------- ---------
Expense before taxation (4,942) (4,779) (994) (1,016) (5,936) (5,795)
The amounts included in the consolidated statement of
comprehensive income are as follows:
UK Scheme Overseas Schemes Total
--------------------
2013 2012 2013 2012 2013 2012
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated
------------------------------- --------- --------- -------- --------- ---------
(Losses)/gains on
defined benefit obligation (138) (40,990) 6,122 (5,889) 5,984 (46,879)
Actuarial (losses)/gains (22,217) 32,889 6,863 3,034 (15,354) 35,923
Total actuarial (losses)/gains
recognised (22,355) (8,101) 12,985 (2,855) (9,370) (10,956)
Cumulative actuarial
losses recognised (203,654) (181,299) (26,377) (39,362) (230,031) (220,661)
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
16. 91BRetirement benefit obligations cont'd
The five year history of experience adjustments is as
follows:
UK Scheme
2013 2012 2011 2010 2009
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated restated
---------- ---------- --------- ---------
Defined benefit obligation
at end of year (583,745) (574,360) (523,846) (492,911) (480,701)
Fair value of plan assets 458,727 463,621 424,624 435,498 409,075
---------- ---------- --------- ---------
Deficit in the scheme (125,018) (110,739) (99,222) (57,413) (71,626)
---------- ---------- --------- ---------
Difference between the actual
and expected return on plan
assets
- amount (GBP'000) (22,217) 32,889 (17,930) 20,658 24,902
- expressed as a percentage
of the plan assets (4.84%) 7.09% (4.22%) 4.74% 6.09%
Experience losses/(gains)
on plan liabilities
- amount (GBP'000) 1,364 11,890 903 1,902 (4,639)
- expressed as percentage
of the present value of the
plan liabilities (0.23%) (2.07%) (0.17%) (0.39%) 0.97%
Overseas Schemes
2013 2012 2011 2010 2009
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated restated restated restated
--------- --------- --------- ---------
Defined benefit obligation
at end of year (60,566) (68,937) (66,407) (59,425) (54,379)
Fair value of plan assets 54,957 48,285 44,630 44,003 38,112
Deficit in the schemes (5,609) (20,652) (21,777) (15,422) (16,267)
Difference between the actual
and expected return on plan
assets
- amount (GBP'000) 6,863 3,034 (2,665) 1,787 3,695
- expressed as a percentage
of the plan assets 12.49% 6.28% (5.97%) 4.06% 9.70%
Experience losses/(gains)
on plan liabilities
- amount (GBP'000) 377 (3,925) 308 453 (3,060)
- expressed as a percentage
of the present value of the
plan liabilities (0.62%) 5.69% (0.46%) (0.76%) 5.63%
The expected employer contributions for the year ending 31st
December 2014 are as follows:
Defined benefit
GBP'000
UK Scheme 7,000
US Scheme 2,017
Canadian Scheme 460
Irish Scheme 820
Total expected contributions 10,297
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
17. 92BProvisions for liabilities and charges
Property
related Litigation
provisions provisions Other Total
GBP'000 GBP'000 GBP'000 GBP'000
----------- -------- -------------
At 1st January 2013 6,863 8,308 959 16,130
Exchange differences - (17) - (17)
Reclassification from
current assets/liabilities 24 - - 24
Utilised in the year (1,404) (5,435) (41) (6,880)
Charged/(credited)
to the income statement 1,392 3,498 (211) 4,679
Interest charge 32 - - 32
Companies acquired 1,142 - - 1,142
At 31st December 2013 8,049 6,354 707 15,110
Property
related Litigation
provisions provisions Other Total
GBP'000 GBP'000 GBP'000 GBP'000
----------- -------- --------
At 1st January 2012 6,604 6,112 537 13,253
Exchange differences (1) (57) - (58)
Utilised in the year (966) (2,448) (66) (3,480)
Charged to the income
statement 563 4,476 61 5,100
Interest charge 58 - - 58
Companies acquired 605 225 427 1,257
At 31st December 2012 6,863 8,308 959 16,130
2013 2012
GBP'000 GBP'000
Analysis of total provisions:
Current - to be utilised within one year 10,158 12,241
Non-current - to be utilised in more than one year 4,952 3,889
15,110 16,130
Property related provisions
The Group recognises a provision for onerous contracts when the
expected benefits to be derived from a contract are less than the
unavoidable costs of meeting the obligations under the contract.
Provision is made for the future rental cost of vacant property. In
calculating the provision required, account is taken of the
duration of the lease and any recovery of cost achievable from
subletting. Property provisions occur principally in the US and UK
and relate to a variety of lease commitments. The longest relevant
lease terms for each country are to 2016 and 2022 respectively.
Litigation provisions
At any point in time the Group can be involved in a variety of
litigation issues. A provision is established in respect of such
issues when it is probable that the liability has been incurred and
the amount of the liability can be reasonably estimated. The Group
analyses its litigation exposures based on available information,
including external legal consultation where appropriate, to assess
its potential liability. Where appropriate the Group also provides
for the cost of defending or initiating such matters.
Where a litigation provision has been made it is stated gross of
any third party recovery. All such recoveries are included as
"other receivables" within trade and other receivables. At 31st
December 2013, in connection with certain litigation matters, the
Group's litigation provisions include an amount of GBP0.1 million
(2012: GBP0.1 million) to reflect this gross basis and the
corresponding insurance recovery has been included within trade and
other receivables. This presentation has had no effect on the
consolidated income statement for the year ended 31st December 2013
(2012: nil).
Other
Other provisions include provisions for clawback of commission
which arises on certain types of Employee Benefit contracts.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
18 94BOther reserves
Fair
value 28BTotal
&
Share hedging Exchange 29Bother
premium reserves reserves reserves
GBP'000 GBP'000 GBP'000 GBP'000
At 1st January 2013 103,188 15,456 20,893 139,537
Fair value gains net of
tax:
- available-for-sale - 48 - 48
- cash flow hedges - 1,720 - 1,720
Currency translation differences - - (22,892) (22,892)
Net gains/(losses) recognised
directly in equity - 1,768 (22,892) (21,124)
Issue of share capital 551 - - 551
At 31st December 2013 103,739 17,224 (1,999) 118,964
Fair
value 30BTotal
&
Share hedging Exchange 31Bother
premium reserves reserves reserves
GBP'000 GBP'000 GBP'000 GBP'000
At 1st January 2012 99,670 (5,661) 30,131 124,140
Fair value gains net of
tax:
- available-for-sale - 43 - 43
- cash flow hedges - 21,074 - 21,074
Currency translation differences - - (9,238) (9,238)
Net gains/(losses) recognised
directly in equity - 21,117 (9,238) 11,879
Issue of share capital 3,518 - - 3,518
At 31st December 2012 103,188 15,456 20,893 139,537
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
19. 95BCash generated from operations
2013 2012
GBP'000 GBP'000
restated
Profit before taxation 154,564 151,541
Investment income receivable (4,529) (7,361)
Interest payable on bank loans and finance leases 11,682 7,862
Fair value gains on financial instruments (2) (4)
Net pension financing expenses 5,680 5,587
96BUnwinding of liability discounting 114 223
97BDepreciation 11,334 10,041
Amortisation of intangible assets 20,087 18,792
Amortisation of share based payments 15,815 15,902
Amount written off of the Employee Benefit Trust 66 -
Share of results of associates' undertakings (8,106) (8,271)
Non cash exceptional items 1,786 795
Gains on disposal of businesses (343) (235)
Gains on disposal of property, plant and equipment (22) (564)
Gains on disposal of fixed asset investments (348) -
Gains on disposal of current asset investments - (2)
Increase in trade and other receivables (39,627) (50,366)
Increase/(decrease) in trade and other payables
- excluding insurance broking balances
balances 15,240 (7,014)
(Decrease)/increase in provisions for liabilities
and charges (2,177) 1,620
Decrease in retirement benefit obligation (16,343) (5,147)
Net cash inflow from operations 164,871 133,399
20. 98BBusiness combinations
2012 acquisitions
During the year, the process of finalising the provisional fair
values in respect of acquisitions carried out during 2012 has been
completed.
Provisional
fair
value reported
Revised fair at Change in
value acquired 31st Dec 2012 fair value
GBP'000 GBP'000 GBP'000
Alexander Forbes - Employee Benefits
business 6,700 6,791 (91)
Towner Management Group 865 848 17
Others 150 (51) 201
7,715 7,588 127
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 99BBusiness combinations cont'd
These changes in fair value affected the following balance sheet
classes:
Provisional
fair
Revised fair value reported Change in
value acquired at 31st Dec fair value
2012
GBP'000 GBP'000 GBP'000
-----------
Property, plant and equipment 1,274 1,274 -
Other intangible assets 2,383 2,182 201
Trade and other receivables 7,424 7,636 (212)
Cash and cash equivalents
- own cash 1,285 1,285 -
Trade and other payables (4,652) (4,637) (15)
Current taxation 847 700 147
Deferred taxation 314 314 -
Provisions for liabilities and charges (1,195) (1,208) 13
Non-controlling interests 35 42 (7)
7,715 7,588 127
-----------
Goodwill calculation At 31st Dec At 31st Dec Change
2013 2012
GBP'000 GBP'000 GBP'000
Purchase consideration
- cash paid 21,889 21,889 -
- contingent consideration 628 787 (159)
- deferred consideration 1,512 1,616 (104)
Total purchase consideration 24,029 24,292 (263)
Less fair value of net assets acquired 7,715 7,588 127
Goodwill 16,314 16,704 (390)
At 31st Dec At 31st Dec Change
2013 2012
GBP'000 GBP'000 GBP'000
--------
Purchase consideration settled in
cash 21,889 21,889 -
Cash and cash equivalents - own cash
in subsidiaries acquired (1,285) (1,285) -
Cash outflow on acquisition 20,604 20,604 -
--------
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 100BBusiness combinations cont'd
Current year acquisitions
During the year the following new business acquisitions and
additional investments were completed:
Percentage
Acquisition voting rights Cost
Notes Date acquired GBP'000
Insfield Insurance Brokers Sdn
Bhd i Feb 2013 100% 3,525
ForVison Risk Services Ltd ii Oct 2013 100% 3,535
Towers Watson Reinsurance Group iii Nov 2013 100% 176,983
Eluleka Consulting (Pty) Ltd iv Nov 2013 100% 4,865
Insure Direct (Brokers) LLC and
Independent Risk Solutions Holding
BV v Dec 2013 51% - 100% 8,348
Acquisition of new businesses completed Jan - Dec
during the year vi 2013 - 3,069
Additional investments in existing Jan - Dec
business vi 2013 - 6,288
206,613
i - Acquisition of Insfield Insurance Brokers Sdn Bhd
On 1st February 2013 the Group announced the acquisition of
Insfield Insurance Brokers Sdn Bhd, a business within the insurance
sector in Malaysia, covering a range of classes: Marine, Energy,
Media, Manufacturing, Financial Lines and Employee Benefits. The
acquired business contributed revenue of GBP1,461,000 and a net
profit of GBP159,000 to the Group for the period since acquisition.
If the acquisition had taken place on 1st January 2013 the
contribution to Group revenue and net profit would have been
GBP1,730,000 and GBP297,000 respectively.
Goodwill calculation
GBP'000
Purchase consideration
- cash paid 2,872
- contingent consideration 653
Total purchase consideration 3,525
Less fair value of net assets acquired 609
Goodwill 2,916
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 101BBusiness combinations cont'd
The assets and liabilities arising from the
acquisition were as follows:
Acquiree's
GBP'000 Fair value
GBP'000
carrying amount Fair value
GBP'000 GBP'000
Property, plant and equipment 34 34
Other intangible assets 2 2
Trade and other receivables 549 549
Cash and cash equivalents
- own cash 141 141
- fiduciary cash 148 148
Insurance payables (148) (148)
Trade and other payables (30) (30)
Current taxation (80) (80)
Deferred taxation (7) (7)
609 609
GBP'000
Purchase consideration settled in cash 2,872
Cash and cash equivalents - own cash in subsidiary acquired (141)
--------
2,731
Cash and cash equivalents - fiduciary cash in subsidiary
acquired (148)
--------
Cash outflow on acquisition 2,583
--------
As at 31st December 2013, the process of reviewing the fair
values of assets acquired had not been completed, consequently the
fair values stated above are provisional.
The contingent consideration of GBP653,000 is based on the
expected net revenue of MYR9,242,000 for the 12 month period
following the acquisition. The maximum amount of contingent
consideration payable has been provided for.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
ii - Acquisition of ForVision Risk Services Ltd
On 16th October 2013 the Group announced the acquisition of
ForVision Risk Services Ltd, a Taiwan-based leading broker
providing insurance, reinsurance and risk management services for
companies with local and international operations. The acquired
business contributed revenue of GBP161,000 and a net profit of
GBP122,000 to the Group for the period since acquisition. If the
acquisition had taken place on 1st January 2013 the contribution to
Group revenue and net profit would have been GBP771,000 and
GBP282,000 respectively.
Goodwill calculation
GBP'000
Purchase consideration
- cash paid 1,671
- contingent consideration 1,864
Total purchase consideration 3,535
Less fair value of net assets acquired 128
Goodwill 3,407
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 102BBusiness combinations cont'd
The assets and liabilities arising from the
acquisition were as follows:
Acquiree's
GBP'000 Fair value
GBP'000
carrying amount Fair value
GBP'000 GBP'000
Property, plant and equipment 2 2
Trade and other receivables 143 143
Cash and cash equivalents
- own cash 25 25
Trade and other payables (14) (14)
Current taxation (28) (28)
128 128
GBP'000
Purchase consideration settled in cash 1,671
Cash and cash equivalents - own cash in subsidiary acquired (25)
--------
Cash outflow on acquisition 1,646
--------
As at 31st December 2013, the process of reviewing the fair
values of assets acquired had not been completed, consequently the
fair values stated above are provisional.
The contingent consideration of GBP1,864,000 is based upon a
combination of factors including the completion accounts net
assets, and the profit of the three years following completion. The
maximum amount of contingent consideration payable has been
provided for.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
iii - Acquisition of Towers Watson Reinsurance Group
On 6th November 2013 the Group acquired the Towers Watson
Reinsurance operations, a Reinsurance broking business operating in
the United States, the United Kingdom, Bermuda, Canada, France and
Germany. The acquired business contributed revenue of GBP9,939,000
and a net loss of GBP592,000 to the Group for the period since
acquisition. The majority of the business acquired was historically
a sub-operating unit within a larger entity; the results of this
element of the business were not disclosed on a stand-alone basis.
The business reported under US GAAP with an accounting period
ending 30 June. As a result of these factors it is impracticable to
provide disclosures in respect of the revenue and net profit that
the business would have contributed to the Group had the
acquisition taken place on 1st January 2013. It is estimated that,
under US GAAP, the revenue for the business for the year to 30 June
2013 was USD166,000,000 and the profit before tax was
USD26,000,000.
Goodwill calculation
GBP'000
Purchase consideration
- cash paid 175,553
- deferred consideration 1,430
Total purchase consideration 176,983
Less fair value of net assets acquired 31,907
Goodwill 145,076
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 103BBusiness combinations cont'd
The assets and liabilities arising from the
acquisition were as follows:
Acquiree's
GBP'000 Fair value
GBP'000
carrying amount Fair value
GBP'000 GBP'000
Property, plant and equipment 510 510
Other intangible assets 1,064 6,735
Available-for-sale financial assets 1,003 1,003
Trade and other receivables 7,114 20,964
Cash and cash equivalents
- own cash 20,408 20,408
- fiduciary cash 17,770 17,770
Insurance payables (17,770) (17,770)
Trade and other payables (9,884) (13,448)
Current taxation 170 170
Deferred taxation 103 (3,280)
Provisions for liabilities and charges (1,155) (1,155)
19,333 31,907
GBP'000
Purchase consideration settled in cash 175,553
Cash and cash equivalents - own cash in subsidiary acquired (20,408)
---------
155,145
Cash and cash equivalents - fiduciary cash in subsidiary
acquired (17,770)
---------
Cash outflow on acquisition 137,375
---------
As at 31st December 2013, the process of reviewing the fair
values of assets acquired had not been completed, consequently the
fair values stated above are provisional.
The deferred consideration of GBP1,430,000 is based upon the
completion accounts net assets as at 6th November 2013. The amount
recognised is based on the provisional amount of assets acquired as
stated above.
The goodwill recognised in the United States of GBP64,963,000
and in Canada of GBP4,371,000 are expected to be deductible for
income tax purposes, the remaining goodwill is not expected to be
deductible.
iv - Acquisition of Eluleka Consulting (Pty) Ltd
On 28th November 2013, the Group announced the acquisition of
Eluleka Consulting (Pty) Ltd, a South African Employee Benefits and
Healthcare broker and consultant to corporates. The acquired
business contributed revenue of GBP141,000 and a net profit of
GBP54,000 to the Group for the period since acquisition. If the
acquisition had taken place on 1st January 2013 the contribution to
Group revenue and net profit would have been GBP1,608,000 and
GBP288,000 respectively.
Goodwill calculation
GBP'000
Purchase consideration
- cash paid 2,556
- contingent consideration 2,309
Total purchase consideration 4,865
Less fair value of net assets acquired 213
Goodwill 4,652
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 104BBusiness combinations cont'd
The assets and liabilities arising from the acquisition were as follows:
Acquiree's
GBP'000 Fair value
GBP'000
carrying amount Fair value
GBP'000 GBP'000
Property, plant and equipment 15 15
Trade and other receivables 151 151
Cash and cash equivalents
- own cash 247 247
Trade and other payables (141) (141)
Current taxation (59) (59)
213 213
GBP'000
Purchase consideration settled in cash 2,556
Cash and cash equivalents - own cash in subsidiary acquired (247)
--------
Cash outflow on acquisition 2,309
--------
As at 31st December 2013, the process of reviewing the fair
values of assets acquired had not been completed, consequently the
fair values stated above are provisional.
Contingent consideration of GBP2,309,000 is based upon the
expected revenue and operating profit of the three years following
completion. The maximum amount of contingent consideration payable
has been provided for.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
v - Acquisition of Insure Direct (Brokers) LLC and Independent
Risk Solutions Holding BV
On 31st December 2013, the Group gained control of Insure Direct
(Brokers) LLC and Independent Risk Solutions Holding BV. Insure
Direct (Brokers) LLC is a leading Dubai-based insurance broker and
Employee Benefits advisor with operations in Bahrain and Qatar.
Independent Risk Solutions Holding BV is a marine specialty broker
based in the Netherlands. No contribution towards the revenue and
net profit to the Group has been recognised in 2013. If the
acquisition had taken place on 1st January 2013 the contribution to
Group revenue and net profit would have been GBP8,821,000 and
GBP844,000 respectively.
GBP'000
Purchase consideration
- cash paid 6,629
- deferred consideration 1,719
Total purchase consideration 8,348
Less fair value of net assets acquired 869
Goodwill 7,479
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 105BBusiness combinations cont'd
The assets and liabilities arising from the
acquisition were as follows:
Acquiree's
GBP'000 Fair value
GBP'000
carrying amount Fair value
GBP'000 GBP'000
Property, plant and equipment 225 225
Other intangible assets 22 22
Trade and other receivables 1,921 1,855
Cash and cash equivalents
- own cash 3,100 3,099
- fiduciary cash 3,688 3,688
Insurance payables (3,688) (3,688)
Trade and other payables (2,798) (2,798)
Current taxation 101 101
Deferred taxation 61 61
Bank overdraft (360) (360)
Non-controlling interests (1,336) (1,336)
936 869
GBP'000
Purchase consideration settled in cash 6,629
Cash and cash equivalents - own cash in subsidiary acquired (3,099)
--------
3,530
Cash and cash equivalents - fiduciary cash in subsidiary
acquired (3,688)
--------
Cash outflow on acquisition (158)
--------
As at 31st December 2013, the process of reviewing the fair
values of assets acquired had not been completed, consequently the
fair values stated above are provisional.
The deferred consideration of GBP1,719,000 is based upon the
completion accounts net assets as at 31st December 2013. The amount
recognised is based on the provisional fair value of assets
acquired as stated above.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
vi - Other acquisitions and additional investments
Goodwill calculation
GBP'000
Purchase consideration
- cash paid 7,455
- deferred consideration 533
- contingent consideration 653
- cancellation of loans 716
Total purchase consideration 9,357
Less fair value of net assets acquired 599
Less equity movement on transactions with non-controlling
interests 5,628
Goodwill 3,130
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 106BBusiness combinations cont'd
The assets and liabilities arising from the
acquisition were as follows:
Acquiree's
GBP'000 Fair value
GBP'000
carrying amount Fair value
GBP'000 GBP'000
Property, plant and equipment 139 139
Other intangible assets - 282
Trade and other receivables 146 146
Cash and cash equivalents
- own cash 6 6
- fiduciary cash 330 330
Insurance payables (330) (330)
Trade and other payables (631) (631)
Deferred taxation (1) (1)
Non-controlling interests 658 658
317 599
GBP'000
Purchase consideration settled in cash 7,455
Cash and cash equivalents - own cash in subsidiary acquired (6)
--------
7,449
Cash and cash equivalents - fiduciary cash in subsidiary (330)
--------
Cash outflow on acquisition 7,119
--------
As at 31st December 2013, the process of reviewing the fair
values of assets acquired had not been completed, consequently the
fair values stated above are provisional.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
20. 107BBusiness combinations cont'd
Group summary of the net assets acquired and goodwill
IDB
Towers &
Insfield ForVision Watson Eluleka IRS Others Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Purchase consideration
- cash paid 2,872 1,671 175,553 2,556 6,629 7,455 196,736
- deferred consideration - - 1,430 - 1,719 533 3,682
- contingent consideration 653 1,864 - 2,309 - 653 5,479
- cancellation of loans - - - - - 716 716
Total purchase consideration 3,525 3,535 176,983 4,865 8,348 9,357 206,613
Less fair value on acquisitions
occurring during the
year 609 128 31,907 213 869 599 34,325
Less equity movement
on transactions with
non-controlling interests - - - - - 5,628 5,628
Goodwill on acquisitions
occurring during the
year 2,916 3,407 145,076 4,652 7,479 3,130 166,660
Impact of revision to
fair value adjustment
in relation to acquisitions
completed in 2012 (390)
Net increase in goodwill 2,916 3,407 145,076 4,652 7,479 3,130 166,270
Impact of the additional
investments 5,628
Net decrease in equity 5,628
Group summary of cash flows
IDB
Towers &
Insfield ForVision Watson Eluleka IRS Others Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Purchase consideration
settled in cash 2,872 1,671 175,553 2,556 6,629 7,455 196,736
Cash and cash equivalents
- own cash in subsidiaries
acquired (141) (25) (20,408) (247) (3,099) (6) (23,926)
2,731 1,646 155,145 2,309 3,530 7,449 172,810
Cash and cash equivalents
* fiduciary cash in subsidiaries acquired (148) - (17,770) - (3,688) (330) (21,936)
Cash outflow on acquisition
in the year 2,583 1,646 137,375 2,309 (158) 7,119 150,874
Post balance sheet acquisitions
On 15th January 2014, the Group acquired 100% of the share
capital of Lambert Brothers Insurance Brokers ("LBIB") in Hong
Kong, a mid-market insurance brokerage with broking operations in
Marine Hull, Construction, Employee Benefits, Corporate and SME
schemes, for a consideration of GBP3,844,000.
On 29th January 2014, the Group acquired 75% of the share
capital of SCK in Brazil, an Employee Benefits and insurance
broking operation, for a consideration of GBP3,960,000.
At the date of this report, the accounting for these
acquisitions has not been finalised and therefore it is not
possible to detail the acquired identifiable assets and liabilities
or the related goodwill.
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
21. 108BBusiness disposals
On 31st July 2013, 24.6% of JLT Energy (France) SAS was disposed
of in exchange of shares in March-JLT, leaving the Group with
35.4%.
Total
GBP'000
Net assets and proceeds of disposal
Property, plant and equipment 30
Other intangible assets 40
Cash and cash equivalents
- own cash 1,717
Trade and other payables (1,635)
Current taxation 18
Deferred taxation 34
Non-controlling interests (82)
Net assets at disposal 122
Exchange gains recycled from exchange reserves (10)
Gain on disposal 725
Proceeds on disposal in the form of investment in associates 837
Cash and cash equivalents - own cash in subsidiary sold (1,717)
Cash outflow on disposal (1,717)
Other disposals
During the year the Group completed other disposals, none
of which were individually significant.
Net assets and proceeds of disposal Total
GBP'000
Non-controlling interests 34
Equity movement on transactions with non-controlling interests 398
Consideration in the form of deferred proceeds 432
Loss on disposal of JLT Re Spain branch (372)
Group summary of cash flows
JLT Energy JLT Re Spain
(France)
SAS branch Total
GBP'000 GBP'000 GBP'000
Cash outflow on disposal - (372) (372)
Cash and cash equivalents
- own cash in subsidiary sold (1,717) - (1,717)
Cash outflow on disposal during the
year (1,717) (372) (2,089)
Jardine Lloyd Thompson Group plc
Notes to the Preliminary Results
For the year ended 31st December 2013
22. 109BPrincipal risks - 110BAs with all businesses, the Group is
exposed to a range of financial and operational risks, not wholly
within its control, which could have a material impact on the
Group's financial performance.
The principal risks to which the Group is exposed are discussed
on pages 30 to 35 of the Annual Report for 2012. The Annual Report
for 2013 will contain an updated discussion on these risks and
will be posted to shareholders no later than 28th March 2014.
23. 111BThe financial information contained in this preliminary
announcement does not constitute statutory accounts within the
meaning of the Companies Act 2006. The results for the year
ended 31st December 2013 are unaudited and statutory accounts
have not yet been delivered to the Registrar of Companies.
24. 112BStatutory accounts for the year ended 31st December 2013
will be posted to shareholders no later than 28th March 2014
and delivered to the Registrar of Companies following the Annual
General Meeting on 29th April 2014.
25. 113BThe shareholders entered in the Register of Members at 4.00pm
on 4th April 2014 will be entitled to the proposed final dividend
of 17.1p per share which will, subject to approval at the Annual
General Meeting to be held on 29th April 2014, be payable on
1st May 2014.
26. 114BForward-looking statements -
This document contains forward-looking statements with respect
to the operations, performance and financial condition of Jardine
Lloyd Thompson Group plc. By their nature, these statements are
subject to risks, assumptions and uncertainties that could cause
actual results to differ materially from those expressed or implied
because they relate to future events.
Unless otherwise required by applicable law, regulation or accounting
standard, we do not undertake to publicly update any forward-looking
statements, whether as a result of new information, future developments
or otherwise. Nothing in this presentation should be construed
as a profit forecast.
27. 115BCopies of the preliminary press release (and statutory accounts
when available) may be obtained from the Company Secretary, Jardine
Lloyd Thompson Group plc, The St Botolph Building, 138 Houndsditch,
London, EC3A 7AW.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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