JLT helped by weak pound; see positive outlook in US

Insurance broker Jardine Lloyd Thompson reported a 13% fall in statutory full year pre-tax profits but said the weak pound helped results and the outlook was better for its US operation.

Underlying pre-tax profits rose 1% to £172.6m, which reflected the £27m investment in the US Specialty business.

Revenue rose 9% to £1.26bn and the total dividend was lifted to 32.2p a share from 30.6p.

JLT said the 2016 results were set against a “continued challenging trading environment, which persisted throughout the year”.
“This included the sustained softness in both the insurance and reinsurance rating environments, depressed commodity prices and lacklustre global GDP growth,” it said.

JLT also said the weakening of sterling after the UK's decision to leave the European referendum in June had a “significant impact” in the year.

“While the group's hedging programme has the effect of smoothing the achieved rate on US dollar transactional revenues, the scale of the sterling depreciation nonetheless saw material improvement in the achieved rate, especially in the second half of 2016,” JLT said.

“Of the overall £22.2m gain at underlying profit before tax level, £13.4m related to transactional foreign exchange and £8.8m related to the translation of overseas results into sterling.”

JLT warned however, that for foreign exchange market remained volatile, and it was not possible to predict its impact on 2017 results with any certainty.