JLT first half was impressive, but Thistle is yet to shine

Broking group Jardine Lloyd Thompson’s first-half results have impressed analysts, but Thistle Insurance Services, the newly formed UK retail and underwriting business, has yet to come into its own. Chief executive Dominic Burke also described as “laughable” rumours that rival Aon would buy JLT.

JLT’s net profit for the first half of 2010 increased 39% to £60.6m from £43.5m. The net profit was lifted by a one-off tax credit, which cut the tax bill to £9.4m from £17.8m. Profit before tax was £70m, 14% up on the £61.3m the company made in the first half of 2009.

Fees and commissions increased 21% over first-half 2009 levels to £375.6m from £309.7m. The company also increased its interim dividend for the first time since 2004, to 8.8p from 8.5p.

“They were great results – even better than we were going for,” Panmure Gordon analyst Barrie Cornes said. The underlying profit before tax of £73.6m was 3% ahead of Panmure Gordon’s £71.2m forecast. Cornes was also particularly impressed with the 6% organic growth for the period.

Trading profits increased in JLT’s risk and insurance and employee benefits segments. But Thistle Insurance Services’ trading loss widened to £800,000 in the first half of 2010, from £100,000 in the first half of 2009. “Thistle is still at a very formative stage of its development,” Burke explained. “It is too early to give guidance about its financial performance.”

Burke reiterated his assertion that Thistle will become the “third leg” of JLT alongside the risk and insurance and employee benefits units. “It is a very exciting third dynamic of the JLT group,” he said.

Burke denied persistent rumours that rival Aon was stalking the firm, or that individual units of JLT were up for sale. He described the rumours as “nonsense-mongering by one or two competitors that are disgruntled they continue to lose people and clients to JLT”.