Jardine Lloyd Thompson cuts profit forecast as pensions business slows
Jardine Lloyd Thompson downgraded its profit expectations for 2015 as the insurance broker’s UK employee benefits business took a hit from government pension changes and the strengthening of the pound.
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The company said in its interim management statement that the UK employee benefits business experienced a further reduction in underlying trading profit during the period.
This was caused in part by a significant slowdown in project work and new business due to the uncertainty created by government-led changes to the UK occupational pensions market.
Jardine said that as previously indicated, trading profit was also further reduced by the structural impact of the Retail Distribution Review on its commission revenue, although this is having a greater impact than anticipated at the time of the interim results in July.
As a result, the company said full-year revenues in the UK employees business will decline by a mid to high single digit percentage from 2014 and trading profit will be in the low to mid-teens.
Nevertheless, Jardine said it expects some level of revenue growth and an improvement in the trading margin in 2016.
At 1453 GMT, shares were down 5.6% at 907.50p.