Shares in Jardine Lloyd Thompson fell sharply this week after the broker warned of tough market conditions in the second half of the year.
Despite posting pre-tax profits of £76.6m for the six months to 30 June, up 63.3% on the same period last year, the share price fell 11% to 374p.
Chief executive Dominic Burke said the results were “satisfactory” and “in line with expectations”.
Underlying trading margin increased 10%, reflecting cost savings, with the risk and insurance division seeing its margin rise 21%.
But Burke painted a subdued picture of the company’s future prospects. “We anticipate that the results in the second half will be impacted by the deteriorating market conditions.”
He said the company was facing increasing competition from rivals who were cutting fees in a bid to win clients. Rates were also softening with decreases of up to 50%, putting pressure on commission income, he said.
The weak American dollar had also taken its toll. The US generates about one quarter JLT’s revenues.
Burke said, however, that the company would still show “overall progress” in its financial performance in 2007 compared to 2006.
The broker’s share price recovered gradually over the week.