TIDMJLT
RNS Number : 0478W
Jardine Lloyd Thompson Group PLC
04 November 2014
Jardine Lloyd Thompson Group plc
Interim Management Statement
4(th) November, 2014, London: Jardine Lloyd Thompson Group plc
("JLT" or "the Group"), one of the world's leading suppliers of
insurance, reinsurance and employee benefits related advice,
brokerage and associated services, today released its Interim
Management Statement for the period from 1(st) July to 3(rd)
November 2014 in accordance with the requirements of the Disclosure
& Transparency Rules of the UK Listing Authority.
Trading performance
The Group's trading performance for the period has been broadly
in line with our expectations, with good levels of overall organic
revenue growth consistent with the rate delivered during the first
six months of the year.
This was achieved despite the continuing marked decline in the
insurance and reinsurance rating environment experienced since the
beginning of the second quarter of this year. While the impact of
the strength of sterling in the third quarter of 2014 was not as
material as that experienced in the first half, currency movements
will nonetheless impact the year-on-year results.
Our Risk and Insurance businesses delivered good overall levels
of organic revenue growth despite increasingly challenging trading
conditions, driven by new client wins and increased penetration as
our businesses have continued to benefit from our strategy of
deepening our specialty capabilities and expanding our geographic
reach.
Our Employee Benefits businesses have made strong progress,
particularly in Asia and Australasia, where our distinctive life
insurance and healthcare offering continues to allow us to benefit
from the strong underlying demographic factors driving client
demand for our products and services. Our UK business has also made
solid progress, with a number of new client wins and a strong
pipeline of activity and new opportunities emerging from the
significant changes affecting the UK pensions industry.
The integration of Towers Watson Re is progressing well and the
combined JLT Re business is building a strong pipeline for 2015 and
beyond. We continue to invest in the business through the addition
of new talent and the build out of our analytics platforms.
Strategic developments
In line with JLT's ambition to be one of the world's leading
specialty brokers and reflecting growing client demand, JLT
announced on 29(th) August its intention to launch a US Specialty
business under the leadership of Michael Rice, CEO, and Patrick
Donnelly, Deputy CEO. This announcement was followed on 10(th)
September by the appointment of Jim Pierce as Chairman of JLT
Specialty Insurance Services Inc.
The reaction to this announcement from professionals across the
insurance industry has been very encouraging, with our US Specialty
business already growing to more than 50 colleagues in just over
two months, well ahead of our plans. This includes colleagues who
have joined us as a result of a bolt-on acquisition, announced on
3(rd) October, of part of Alliant's energy business that focuses on
larger and more complex major and international accounts, some of
whom are existing international clients of JLT.
The quality and number of candidates who have approached us has
led us to step up our recruitment activities, with the result that
we have accelerated some of the investment we were intending to
make from 2015, into 2014. It is now anticipated that this will
result in a net investment of approximately US$10 million in 2014,
based on completed recruitment and positive ongoing discussions.
Our plans are expected to result in a total net investment of
approximately GBP50 million during the period 2014 to 2017, with
the business expected to start to contribute to profits in 2018 and
generate an accelerated return thereafter. This investment is to be
fully expensed through the income statement.
On 29(th) August, JLT also announced the merger of JLT Specialty
Ltd. and Lloyd & Partners Ltd. to create a single specialty
business of increased scale, distinctive reputation and enhanced
transactional capability. The business will trade as JLT Specialty
with the Lloyd & Partners brand retained to service and develop
the Group's independent wholesale client base. Subject to the
appropriate regulatory approvals, the merger will take effect for
reporting purposes from 1(st) January 2015 and will be led by
Adrian Girling, as Chairman, and John Lloyd as CEO.
Broadening our geographic reach
On 2(nd) July, JLT announced the acquisition of a 26%
shareholding in Independent Insurance Brokers Private Limited, the
Mumbai and Chennai based insurance and reinsurance broking
subsidiary of the Sunidhi Group, a leading Indian financial
services Group with over 100 locations across India.
On 15(th) September, JLT announced the establishment of JLT
Turkey, subject to regulatory approval and finalisation of
contracts.
The investment in India and the establishment of JLT Turkey are
in line with the Group's strategy of expanding its presence in
markets where long-term growth is supported by fundamental
macro-economic trends and a growing demand for JLT's distinctive
specialist capabilities.
Board changes
JLT announced a series of Board changes during the period,
designed to align the Group's senior leadership with the above
strategic developments and position JLT for its next phase of
growth.
Nic Walsh was appointed as a non-executive director of the
Group, following a long and distinguished career at AIG, most
recently in the US where he resides. Nic's deep knowledge of the US
insurance market will prove invaluable to JLT as the firm builds
its US reinsurance and Specialty retail operations.
Mark Drummond Brady was appointed Deputy Group CEO, reflecting
the increasing size, complexity and international reach of the
Group. Mike Reynolds was appointed Global CEO of JLT Re. He retains
his position as Group Finance Director until the appointment of his
successor for which a formal search process is underway.
Financial position
On 30(th) October 2014, the Group successfully completed a
US$125 million issue of private placement loan notes with an
existing institutional investor. The unsecured loan notes were
issued by JLT's wholly owned subsidiary, JIB Group Ltd., and
consist of US$62.5 million 12 year loan notes with a coupon of
3.93% and US$62.5 million 15 year loan notes with a coupon of
4.13%.
The proceeds of the private placement have been swapped into
sterling at floating rates and will be used to refinance existing
shorter term borrowings under the Group's revolving credit
facilities with its relationship banks. As at 31(st) October 2014,
the Group has unsecured committed debt facilities totalling
approximately GBP725 million equivalent.
JLT's financial position continues to be strong with
acquisitions financed from operating cash flows and committed
borrowing facilities.
There have been no other significant changes in the financial
position of the Company since the publication of the interim
results for the six months ended 30(th) June 2014.
Outlook
Dominic Burke, Chief Executive said:
"I am encouraged by the success we have had in attracting
leading market professionals from across the industry to join our
new US Specialty business. This has enabled us to accelerate our
investment plans, with the result of bringing some of our projected
future expense forward into the second half of the current
year.
Trading conditions remain challenging, given the decline in the
insurance and reinsurance rating environment, which continued into
the third quarter. As we indicated at the time of our interim
results, we remain cautious about the outlook for the underlying
business for the full year.
The good levels of organic revenue growth we are achieving
demonstrate the success of our strategy of deepening our specialty
focus and expanding our geographical reach and give us confidence
in our investment plans which are designed to drive sustainable and
long term growth."
ENDS
Enquiries
Jardine Lloyd Thompson
Paul Dransfield
Head of Group Corporate Communications
Tel: +44 20 7528 4935
Brunswick Group
Tom Burns/ Dania Saidam
Tel: +44 20 7404 5959
This announcement may contain "forward looking statements"
regarding the financial position, business strategy or plans for
future operations of the group. By their nature, forward looking
statements involve risk and uncertainty, relating to facts that are
beyond the company's ability to control, such as future market
conditions. Any such statements in this announcement speak only as
at the date of this announcement. The company does not assume any
obligation to, and does not intend to, revise or update these
forward looking statements except as required pursuant to
applicable law.
About Jardine Lloyd Thompson Group plc
Jardine Lloyd Thompson is one of the world's leading providers
of insurance, reinsurance and employee benefits related advice,
brokerage and associated services. JLT's client proposition is
built upon its deep specialist knowledge, client advocacy, tailored
advice and service excellence.
JLT is quoted on the London Stock Exchange and owns offices in
41 territories with more than 9,500 employees. Supported by the JLT
International Network, it offers risk management and employee
benefit solutions in 135 countries.
www.JLTGroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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