JLT profits edge up

Jardine Lloyd Thompson (JLT) said that pretax profits for the six months to June 30 edged up to £48.6m from £48.1m a year earlier as turnover rose to £260.4m from £250.7m.

The broker said total risk & insurance turnover increased by 5% to £219.8m but trading margin narrowed to 18% compared to 22% for the comparable period.

JLT said the trading margins remain under pressure primarily as a result of declining insurance premium rates
in all areas other than those directly relating to catastrophe exposures.

It added that there continues to be intense competition amongst brokers to gain and retain market share.

It was a similar case with the JLT Risk Solutions business, which achieved a "stable" turnover of £61.2m
in the first six months but saw its trading margin reduced from 18% to 14%.

The company said its UK and Ireland insurance broking business continued to demonstrate good growth with an increase in turnover of 7% to £23.4m, with stable margins
compared to the same period last year.

CEO Dominic Burke said: "In light of the difficult trading conditions, we have delivered a creditable performance. Profits have been stabilised and we have made significant progress with our operational review.

"We anticipate that the benefits will be reflected in 2007 and more fully in 2008."

Burke reiterated the company expects only a modest overall improvement in trading for the current full year.

JLT also announced that it was entering a period of consultation with its staff over the proposed closure of its Defined Benefit (DB) pension scheme in the UK
to all future accruals from 1st December 2006.

The company said members of the DB scheme will be offered a new flexible and competitive Defined Contribution (DC) scheme.

In its trading statement, JLT said: "The financial impact will be to reduce pension liabilities by an amount yet to be finalised although the number is expected to be reasonably material."

In early trading, shares in JLT were down 2.44% to 360.50p.