(Wraps in CEO, analyst comments, share price reaction)
By Carolyn Cohn
LONDON Feb 28Insurance broker Jardine Lloyd
Thompson (JLT) said it saw an improving outlook for its
expanding U.S. specialty business, as oil exploration costs are
falling and it expects President Donald Trump's policies to
boost the building sector.
Investment in the United States last year crimped the
earnings of JLT, which reported a one percent rise in 2016
pre-tax profit on Tuesday, but it said its U.S. business was on
track to turn a profit in 2019.
"In the construction space, with Trump talking about the
need to rebuild America and its infrastructure, that's obviously
a very positive outlook," Chief Executive Dominic Burke told
Reuters by phone.
"Oil prices are seen to be reasonably stable ... this is
also coinciding with the cost of exploration coming down."
Burke said he was confident that JLT's organic revenue would
grow around 6 percent this year, up from 2 percent last year,
helped by the completion of a turnaround in its UK employee
benefits business, as well as by U.S. expansion.
Insurance and reinsurance premiums continued to fall but at
a slower pace, he said.
"There is not much room left for these rates to go any
softer, it seems to be heading towards an inevitable turn in the
JLT said pretax profit totalled 172.6 million pounds ($214
million) in the year ended Dec. 31, slightly below forecasts
from analysts at Panmure Gordon and RBC.
Total revenue rose nine percent to 1.26 billion pounds.
JLT said in a statement that the trading environment had
been challenging, with "sustained softness" in insurance and
It said it would pay a final dividend of 20.6 pence per
share, bringing the total dividend to 32.2 pence, up 5 percent
from a year earlier.
KBW analysts described the results as a "fractional miss in
a difficult trading environment", reiterating their perform
rating on the stock.
JLT's shares were up 0.7 percent at 1,037 pence at 0955 GMT,
compared with a 0.22 percent rise in the FTSE mid-cap index
($1 = 0.8050 pounds)
(Reporting by Carolyn Cohn and Noor Zainab Hussain; Editing by
Simon Jessop and Susan Fenton)