3 Things Investors Should Know About Jardine Matheson Holdings Limited’s Latest 2016 Results

Jardine Matheson Holdings Limited (SGX: J36) is a conglomerate due to its majority ownership of Jardine Strategic Holdings Limited (SGX: J37) and 42% stake in the UK-listed insurer, Jardine Lloyd Thompson.

Jardine Strategic (which also owns a majority stake in Jardine Matheson) itself has a significant interest in a number of Singapore-listed companies such as:

  • Jardine Cycle & Carriage Ltd (SGX: C07), which in turn derives most of its results from the Indonesia-based Astra, a conglomerate with interests in areas such as vehicle distribution, financial services, agriculture, mining, and more. Jardine C&C also has its own directly-owned vehicle-distribution arm.
  • Asia-focused real estate investor and developer Hongkong Land Holdings Limited (SGX: H78).
  • Pan-Asian bricks-and-mortar retailer Dairy Farm International Holdings Ltd (SGX: D01).
  • International hotelier Mandarin Oriental International Limited (SGX: M04).

Last week, Jardine Matheson reported its 2016 full year results. Let’s look at three useful pieces of information that investors may want to know from the announcement:

1. The overall result

Here’s a table showing some important numbers from Jardine Matheson’s income statement and balance sheet for 2016 and 2015:

Jardine Matheson 2016 income statement
Source: Jardine Matheson 2016 full year earnings release

We can see that 2016 was a year of growth for Jardine Matheson – its revenue, underlying profit attributable to shareholders, profit attributable to shareholders, dividends, and net asset value per share had all grown.

The lower growth rate in underlying profit attributable to shareholders as compared to the profit attributable to shareholders is because the former strips out the increase in fair value of the company’s investment properties. Generally speaking, the underlying profit is a measure of the recurring profit generated by Jardine Matheson, net of all exceptional items.

2. Segmental performance

The following table shows the profit of Jardine Matheson’s different businesses in 2016 and 2015:

Jardine Matheson 2016 segment income statement
Source: Jardine Matheson 2016 full year earnings release

At a glance, half of the businesses delivered profit growth while the other half saw their profit fall. The property-related and insurance businesses were the ones with the profit declines; the consumer-related businesses, on the other hand, had a good year.

3. Outlook for 2017

Sir Henry Keswick, Jardine Matheson’s chairman, shared the following comment about the company’s future plans in the earnings release:

“After a steady result for the Jardine Matheson Group in 2016, the current year will see our businesses concentrating on improving their underlying performances and investing in key areas for future growth.”

In all, 2016 was a marginally positive year for Jardine Matheson with its winners outperforming its losers. At Jardine Matheson’s current share price of US$65.00, it is priced at 112% of its book value.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Hongkong Land Holdings and Dairy Farm International Holdings. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.