Collaboration among its Specialty operations around the world is driving organic revenue growth for Jardine Lloyd Thompson Group plc (JLT), but the £36.2 million in profit for the first half of 2016 is half the £77.7 million for the same period of 2015.
The company’s profit before tax (PBT) dropped 46% to £55.2 million for the Jan. to June period in 2016 compared to £101.5 million for the prior-year half, indicate the interim financial results released Tuesday by JLT.
The decrease reflects United States investment and exceptional costs, notes a statement from JLT, which operates Risk & Insurance and Employee Benefits businesses, including in Canada.
The underlying PBT was £89.2 million for the 2016 half ending June 30, down 7% from £96.3 million for the same period of 2015.
Related: JLT Group’s underlying profit down 7% to 170.1 million in 2015
However, JLT remains encouraged. The company notes for the six months ended June 30, “JLT has delivered good underlying results in the first half of 2016, which reflect the sustained overall momentum of the business set against the backdrop of a challenging environment. Total revenues increased by 5%, or 2% at constant rates of exchange, to £619.4 million, with overall organic revenue growth of 1%.”
JLT’s interim results show that the aforementioned revenue compares to £591.6 million for the first half of 2015.
JLT Interim Results by Business
Group organic revenue growth was 1%, or 4% excluding U.K. Employee Benefits, while Specialty businesses and JLT Re delivered organic revenue growth of 5% and 3%, respectively.
“U.S. Specialty business is making significant progress,” JLT notes, adding that revenues doubled in the first half of 2016 over the corresponding period of 2015.
As for the Group’s Risk & Insurance businesses, which represent more than 75% of global turnover, these “grew revenues to £481.8 million, an increase of 8%, with organic revenue growth of 4%,” the results show.
Of the £481.8 million, JLT Specialty’s total revenue for the first six months of 2016 was £145.3 million, with growth of 5%; JLT Re’s revenue was £127.7 million, with growth of 8%; JLT Australia & New Zealand’s revenue was £61.9 million, with growth of 1%; JLT Asia’s revenue was £44.6 million, with growth of 11%; JLT Latin America’s revenue was £27.6 million, with growth of -3%; JLT Insurance Services’ revenue was £24.3 million, with growth of -3%; JLT Europe, Middle East & Africa’s revenue was £20.3 million, with growth of 43%; JLT USA’s revenue was £16.3 million, with growth of 118%; JLT Canada’s revenue was £9.5 million, with growth of -9%; and JLT Insurance Management’s revenue was £4.3 million, with growth of 12%.
Risk & Insurance First-Half Total Revenue
Revenues within the combined Employee Benefits businesses decreased by 5%, reflecting a 12% reduction in the U.K. and Ireland Employee Benefits business.
“Substantial progress has been made in the U.S. Specialty build-out plan and in reshaping the U.K. & Ireland Employee Benefits business. It is expected that the benefits of the actions taken with respect to the latter will flow through in the second half of the year,” the interim results state.
“During the first half of this year, we have been encouraged by the level of client wins,” Group chief executive Dominic Burke says in the statement.
“We are seeing significant financial benefit from collaboration between our Specialty operations around the world, which is helping sustain momentum and drive organic revenue growth across the business,” Burke points out.
Although economic and industry conditions remain challenging, he acknowledges, “nevertheless, we remain confident about the Group’s ability to deliver year-on-year financial progress.”