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When a footballer scores a single goal in a game, it may not seem like a big deal, but when he scores a single goal in every game, that is quite a different story! The same is true in the stock market. Risk specialist and employee benefits consultant Jardine Lloyd Thompson (LSE:JLT) reported an 11% growth in pre-tax profit for the first half of 2012. Not being a “glamour stock,” its share price showed a modest gain of 3.003 to 726.00 by end of the noon hour today. Nonetheless, JLT’s first half results are a buy-and-hold investor’s dream, turning in yet another consistent performance.
First Half Results
Some very important news may have been overlooked by some as they quickly reviewed the statistical information. JLT reported that it has successfully concluded its 3-year Business Transformation Programme which will generate a recurring annualized operational cost savings of ≈ £24 million. The one-off cost of implementing the programme was £27 million.
Whilst other financial institutions are cutting jobs, JLT added 400 new hires in the last six months as part of its international expansion strategy.
The hard numbers look like this:
- Revenue growth of 7% to £441.7 million year-on-year
- Underlying pre-tax profit growth of 12% to £89.4 million
- Pre-tax profit growth of 11% to £85.1 million
- Diluted EPS growth of 11% to 27.0 pence
- Interim dividend increased 4% to 9.6 pence
The company’s most substantial growth has been in its expanding international markets, especially in Latin America, Asia, and Canada.
Results for the Entire Season
Whilst many investors would think of the season as being 12 months, for the sake of argument, we’re going to look at the full 5-year season. Whilst nearly every player has been complaining about the headwinds and rough field conditions, and some are even playing outside the rules, JLT has continued to perform consistently in any type of playing conditions. CEO Dominic Burke said, “JLT’s continued execution of its clearly defined strategy gives us confidence in our ability to deliver year-on-year financial progress despite the difficult global economic conditions.” JLT share price as 410 at 30 July 2007 and it has scored consistently over the 5 year period to 726 today. During substantially the entire 5-year period, the share price has been above its 90-day moving average. Since June 2008 it has outperformed both the FTSE 250 average and the Nonlife Insurance sector by an increasingly wider margin. That is an all-star performance.
Company Spotlight
Jardine Lloyd Thompson is one of the world’s largest risk specialists and employee benefits consultants groups. It is a member of the FTSE 250 with a market cap of £1,578.66. The company employs over 7,000 people operating out of more than 100 offices in 33 different countries. The company specialises in conveying an understanding of the effects of changing legislation and regulations on businesses of all sizes and types as it regards Employee Benefits. On the Risk and Insurance side, JLT provides insurance, reinsurance brokering, and risk management services. Whilst sales make the business grow, JLT’s focus on customer advocacy and support as its superior retention tool.
