Jardine LLoyd Cuts Profit Forecast on Pension Changes, Poundby
Jardine Lloyd Thompson Group Plc lowered its expectations for 2015 profit after government pensions changes hurt the insurance broker’s U.K. employee benefits business and the stronger pound cut income from overseas. The shares fell to the lowest since March 5.
JLT said Tuesday that trading profit for employee benefits had seen a further reduction between July and November after uncertainty stemming from U.K. government changes to the occupational pensions market resulted in a "significant slowdown" in new business. The broker now expects revenue to fall by "mid to high single-digit percentage on 2014 and trading profit, in pounds million, will be in the low- to mid-teens," JLT said.
JLT’s oversea earnings could also be hurt by a strengthening of the pound since July. If exchange rates stay at current levels, there is expected to be a 4 million-pound negative impact on group profit, the company said.
“While the recent performance of our U.K. employee benefits business is clearly disappointing, we are confident of returning this business to long-term growth," Group Chief Executive Dominic Burke said in the statement. “Our Risk and Insurance and international employee benefits businesses have continued to perform robustly despite challenging trading conditions.”
JLT dropped as much as 3.1 percent to 931.5 pence in London trading. The shares were down 3 percent at 932 pence at 8:28 a.m.