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Jardine Matheson Holdings Limited’s Latest Earnings: How Did The Jardine Lloyd Thompson Business Do?

Jardine Matheson Holdings Limited  (SGX: J36) is a sprawling conglomerate with interests in many Singapore-listed companies such as automobile distributor Jardine Cycle & Carriage Ltd (SGX: C07), bricks-and-mortar retailer Dairy Farm International Holdings Ltd (SGX: D01), hotelier Mandarin Oriental Limited (SGX: M04), and more.

But that’s not at all. Jardine Matheson also has stakes in the London-listed insurer Jardine Lloyd Thompson, the privately-held Jardine Pacific, and more.

In early March, Jardine Matheson released its 2017 full year earnings update. Given the complexity of the company, I thought it would be useful for investors to have a look at the performance of the individual businesses.

In previous articles, I had discussed the Jardine Pacific and Jardine Motors businesses. In this article, I will be running through the performance of Jardine Lloyd Thomspon.

What Jardine Lloyd Thompson does

Jardine Lloyd Thompson, which is 42% owned by Jardine Matheson, is one of the world’s leading providers of insurance and reinsurance services. As mentioned earlier, the insurer is listed in the London stock market. The company also provides employee benefits related advice, brokerage, and associated services.

The financial performance

The table below shows a condensed income statement from Jardine Lloyd Thompson for 2017 and 2016:


Source: Jardine Matheson 2017 full year earnings presentation

There are a few points worth mentioning here. Firstly, Jardine Lloyd Thompson had a good year in 2017, with its revenue, underlying trading profit, and underlying profit all up by 10% or more.

Secondly, the company’s revenue grew in 2017 partly because its Risk & Insurance business saw revenue growth of 11%, driven mainly by strong performances in Europe, Latin America, Asia, and the United States.

Secondly, its Employee Benefits business produced top-line growth of 7%, while progress was made in the development of the company’s Specialty business in the US.

Last but not least, Jardine Lloyd Thompson is undertaking a reorganization of its businesses into three global divisions, namely, Reinsurance, Specialty, and Employee Benefits, and is implementing a business transformation program that is expected to significantly reduce costs.

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