JLT affected by weak sterling but continues to invest
Professional services company Jardine Lloyd Thompson has been affected by the weak sterling against the dollar, but continues to invest in the business to drive growth.
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Jardine Lloyd Thompson Group
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16:34 29/03/19
From 1 July to 7 November, the FTSE 250 company said its performance was impacted by movements in foreign exchange rates, following the EU referendum in June, as there will be a £12m benefit, if sterling and dollar rates remain at current rates of exchange. It now estimates a further £4m benefit, for a total of £16m on a full-year basis.
The additional £4m is anticipated to be more than offset by investment in the specialty investment business in the US, the challenging rating environment, and investments in growth markets.
The company said the trading environment is anticipated to remain challenging for the remainder of the year however, despite this it will continue to invest across the company to drive future growth, improve margins and win market share.
The risk and insurance businesses delivered a resilient performance during the period, in spite of the insurance and reinsurance pricing pressures in multiple markets and headwinds caused by ongoing global economic uncertainty.
Performance in certain sectors such as energy and marine continued to reflect depressed commodity prices and reduced activity in these sectors, while other divisions, such as aviation and construction, performed well in the JLT speciality business, while it won new clients.
JLT Re traded well in the US and Asia, and remains on track to increase its operating margin to 20%.
Performance remained steady in the period across the other risk and insurance businesses in Latin America, Asia, Australia and New Zealand.
The build-out of the US specialty business continued with total investment for the year about £6m above that of 2015, due to additional investment announced in July and the negative impact of foreign exchange movements.
The employee benefits had a strong performance in Australia and New Zealand, due to a focus and investment in the return-to-work sector.
However, in the UK, it remained “challenging”, but it expects revenues in the second half of the year to be ahead of those in the same period in 2015, and realise £7m of targeted cost savings.
Shares in Jardine Lloyd Thompson were down 1.18% to 1,009p at 0830 GMT.