Broker posts pre-tax profits of £53.4m.
JLT has a strong pipeline of acquisitions, chief executive Dominic Burke said as the company announced its half-year profits this week.
JLT posted pre-tax profits of £53.4m, for the six months to 30 June. This represented a 30% fall year on year due to an exceptional £26m gain made last year after the company merged its French business, Siaci, with Saint Honore to create France’s largest independent broker. The underlying change was a rise of 4%.
Burke said that a drop in asking prices could lead to further acquisition opportunities, as the broker was not willing to pay over-inflated prices. However, after spending £42m making 14 acquisitions since the start of 2007, Burke insisted there was no rush.
“We do not need to make acquisitions,” he said. “We do bolt-on acquisitions. We have a strong pipeline but we estimate that we do one in 10 that we look at.”
The broker’s strong underlying pre-tax profit was further boosted as income from fees and commissions improved 9% to £266.2m, compared to the same period last year, or 6% at constant rates of exchange (CRE), comprising 4% organic growth and 2% due to acquisitions. The broker said there were no exceptional items in the first six months of 2008.
Underlying trading profit also increased by 9% to £44m or 10% at CRE. The underlying trading margin was maintained at 17%.
JLT said the improved trading performance reflected creditable organic growth, tight cost control and improvements to its operating model.
Burke said JLT was positive in its outlook for the rest of 2008. “We believe that we are making very good progress to deliver year on year, very profitable, sustainable growth,” he said.
But he remained cautious over the current market conditions. “Right now there are some fledgling signs of the market turning in selective areas.
“We would very much still say that we are in a soft market. It still remains very soft and very competitive.”