Jelf first-half profit up 41% despite tough conditions

Broking group Jelf made a profit after tax of £1.1m in the six months to 31 March 2012, up 41% on the £810,000 it made in the comparable period last year.

Revenues were flat at £35.2m (H1 2011: £35m), but earnings before interest, tax, depreciation amortisation and exceptional items EBITDAE) was up 5% to £4.4m (H1 2011: £4.2m). This was thanks to lower cost of sales of £3.6m (H1 2011: £4.1m).  

The EBITDAE margin increased to 12.6% from 12.1%.

The broker also sharply reduced net debt to £1.1m from the 2011 level of £10m.

“The group continues to make progress and the investment within the business in growth initiatives and in further improving cost efficiencies continues to make a difference,” Jelf chief executive Alex Alway said in  a statement. “It is anticipated that this will drive improved performance in 2012/13 and beyond.”

Jelf chairman Les Owen praised the results in the tough environment. “This is a very pleasing

performance which has been delivered through a continued clear focus on productivity, efficiency and margin improvements,” he said.

Jelf’s insurance segment was a highlight of the half. Insurance business revenues were up 4% to £23.3m (H1 2011: £22.3m).

Alway indicated that conditions would continue to be difficult going forward, pointing out that the motor rate movements reported at the previous financial year-end had fallen away as insurers re-appraised claims provisions in light of performance.

“There have been some increases in medical insurance and group risk insurance ratings but these remain the exception and no other improvement of insurance ratings has been detected to date,” Alway said.

However, he added that new insurance business grew 14% year on year, and said Jelf would be expanding its affinity business in the second half of 2012 after poaching a team from a competitor. He expects this to lead to growth in 2013.

“The final elements of the systems integration will be completed in the second half of 2012 and will leave the insurance business in a good shape for expansion,” Alway added. “We plan to continue to improve our margins despite a lack of improvement in the rating environment.”