Chief exec denies sale caused by plummeting confidence in stock

JLT group chief executive Steve McGill put on a brave face as a major shareholder sold its entire stake. French broking group SIACI sold 10.3 million shares, or 5.2% of JLT. JLT owns 31% of SIACI. The sale was announced just after JLT's first half results on Monday.

McGill pronounced "a hell of a result" as JLT's stock survived the downward pressure to stay steady during the day at 590p, substantially lower than the 52-week high of 713p it achieved in November. McGill denied the sale indicated SIACI's management believed JLT's stock had run out of steam.

He said dilution was going to reduce the French company's stake to less than 5%, at which point it would become liable to pay tax on it dividends. "If I was in their shoes I would do the same," he said. "Selling 5% and having the shares [price] not change shows how resilient JLT is. That's a hell of a result."

The lack of movement in JLT's stock emphasised investors' caution in the insurance broking sector. The group's expense ratio was down by two percentage points to 78% - brought down in the risk and insurance division as turnover growth outstripped cost inflation - and McGill predicted it would stay lower than 83% for the next three to five years.

He hinted at more acquisitions, but said those on the broking side would be small to medium sized. John Hastings-Bass, chairman of retail insurance broking and employee benefits, said buying anything larger than a £20m broker "would give us cultural issues on integration and that's what we want to avoid".

JLT results at a glance

  • Turnover up 11% to £216.1m from £194.2m
  • Profit before tax up 8% to £57.3m from £53.2m
  • The UK's risk and insurance division - the biggest operation both geographically and by business sector - scored a 6% rise in pre-tax profits.
  • It grew sales to £111m in the period from £97m the year before and generated a profit before tax of £37m compared to £35m.
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