CompaniesJul 26 2016

Costs send JLT profits down 46%

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Costs send JLT profits down 46%

Employee benefits adviser Jardine Lloyd Thompson Group’s profits have taken a hit as result of ‘exceptional costs’ and investment in its US operations.

For the six months ended 30 June reported profit before tax fell by £25.3m to £55.2m, a 46 per cent drop, as net investment in JLT USA hit £17.2m against 2015’s figure of £12.6m.

The company attributed the rest of the fall to one-off costs but gave no further details.

JLT’s underlying profit before tax was £89.2m, down 7 per cent, whilst underlying profit before tax excluding US investment is £106.4m, down 2 per cent over the same period.

Elsewhere, the results revealed revenue growth of 5 per cent to £619.4m and group organic revenue growth of 1 per cent or 4 per cent excluding UK employee benefits.

JLT reported a positive impact of foreign exchange movements, with underlying profit margins down at 140 basis points to 15.9 per cent.

Excluding US investment, the underlying profit margin was up 19.2 per cent, 330 basis points higher.

The interim cash dividend stands at 11.6p up 4.5 per cent.

Dominic Burke, group chief executive, said: “During the first half of this year we have been encouraged by the level of client wins, which have been as strong as at any time since I became CEO.

“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.

“Economic and industry conditions remain challenging; nevertheless we remain confident about the Group’s ability to deliver year-on-year financial progress.”

ruth.gillbe@ft.com