ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for default Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.

JLT Jardine Lloyd

1,914.00
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Jardine Lloyd LSE:JLT London Ordinary Share GB0005203376 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1,914.00 1,914.00 1,916.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Jardine Lloyd Thompson Group PLC Half-year Report (1874F)

26/07/2016 7:01am

UK Regulatory


Jardine Lloyd Thompson (LSE:JLT)
Historical Stock Chart


From Mar 2019 to Mar 2024

Click Here for more Jardine Lloyd Thompson Charts.

TIDMJLT

RNS Number : 1874F

Jardine Lloyd Thompson Group PLC

26 July 2016

26 July 2016

Jardine Lloyd Thompson Group plc

INTERIM RESULTS

FOR THE SIX MONTHSED 30 JUNE 2016 (UNAUDITED)

Jardine Lloyd Thompson Group plc ('JLT' or 'the Group') announces its interim results for the six months ended 30 June 2016.

In the period, the Group delivered a good underlying financial performance, reflecting the continued momentum of the business.

Financial Highlights

   --     Revenue growth of 5% to GBP619.4m 
   --     Group organic revenue growth of 1%, or 4% excluding UK Employee Benefits 

-- Reported profit before tax (PBT) down 46% to GBP55.2m, reflecting US investment* and exceptional costs

   --     Underlying PBT GBP89.2m, down 7% 

- Underlying PBT, excluding US investment*, GBP106.4m down 2%

   --     Positive impact of foreign exchange movements 
   --     Underlying profit margin down 140bp to 15.9% 

- Underlying profit margin, excluding US investment*, 19.2%, 330 bp higher

   --     Reported diluted EPS of 15.1p 
   --     Interim cash dividend of 11.6p, up 4.5% 

* Net investment in JLT USA in the six month period to 30 June 2016 was GBP17.2m (2015: GBP12.6m)

BUSINESS HIGHLIGHTS

   --     Specialty businesses and JLT Re deliver organic revenue growth of 5% and 3% respectively 
   --     UK Employee Benefits restructuring on track 

-- US Specialty business making significant progress, revenues doubled over corresponding period in 2015

Dominic Burke, Group Chief Executive, commented:

"During the first half of this year we have been encouraged by the level of client wins, which have been as strong as at any time since I became CEO. We are seeing significant financial benefit from collaboration between our Specialty operations around the world, which is helping sustain momentum and drive organic revenue growth across the business. Economic and industry conditions remain challenging; nevertheless we remain confident about the Group's ability to deliver year-on-year financial progress."

Enquiries:

Jardine Lloyd Thompson Group plc

   Dominic Burke                      Group Chief Executive                    020 7528 4948 
   Charles Rozes                      Group Finance Director                  020 7558 3380 
   Paul Dransfield                     Head of Investor Relations            020 7528 4933 

Brunswick Group LLP

   Tom Burns/Dania Saidam                                                             020 7404 5959 

A presentation to investors and analysts will take place at 9.00am today at The St Botolph Building, 138 Houndsditch, London, EC3A 7AW. A live webcast of the presentation can be viewed on the Group's website www.jlt.com.

INTERIM STATEMENT

JLT has delivered good underlying results in the first half of 2016, which reflect the sustained overall momentum of the business set against the backdrop of a challenging environment. Total revenues increased by 5%, or 2% at constant rates of exchange, to GBP619.4m, with overall organic revenue growth of 1%.

 
 6 months                         Total Revenue                    Trading Margin           Underlying 
  to 30 June                                                                               Trading Profit 
------------------  -----------------------------------------  ----------------------  -------------------- 
 GBPm                 2016   Growth     CRE   Organic    2015    2016     CRE    2015   2016    CRE    2015 
==================  ======  =======  ======  ========  ======  ======  ======  ======  =====  =====  ====== 
 Risk & Insurance 
------------------  ------  -------  ------  --------  ------  ------  ------  ------  -----  -----  ------ 
 Specialty 
  Businesses         354.1       8%      6%        5%   329.5     13%     12%     15%   45.7   42.5    51.1 
------------------  ------  -------  ------  --------  ------  ------  ------  ------  -----  -----  ------ 
 JLT Re              127.7       8%      3%        3%   117.9     38%     36%     34%   48.0   43.5    40.0 
==================  ======  =======  ======  ========  ======  ======  ======  ======  =====  =====  ====== 
                     481.8       8%      5%        4%   447.4     19%     18%     20%   93.7   86.0    91.1 
==================  ======  =======  ======  ========  ======  ======  ======  ======  =====  =====  ====== 
 Employee 
  Benefits 
------------------  ------  -------  ------  --------  ------  ------  ------  ------  -----  -----  ------ 
 UK & Ireland         74.9    (12%)   (12%)     (15%)    85.0       -       -      8%    0.2    0.2     7.1 
------------------  ------  -------  ------  --------  ------  ------  ------  ------  -----  -----  ------ 
 International 
  EB                  62.7       6%      3%      (1%)    59.2     28%     26%     26%   17.2   16.1    15.5 
==================  ======  =======  ======  ========  ======  ======  ======  ======  =====  =====  ====== 
                     137.6     (5%)    (6%)     (10%)   144.2     13%     12%     16%   17.4   16.3    22.6 
==================  ======  =======  ======  ========  ======  ======  ======  ======  =====  =====  ====== 
 Group*              619.4       5%      2%        1%   591.6   15.9%   14.8%   17.3%   98.4   89.5   102.4 
==================  ======  =======  ======  ========  ======  ======  ======  ======  =====  =====  ====== 
 

Notes:

   -   Total revenue comprises fees, commissions and investment income. 

- CRE: Constant rates of exchange are calculated by translating 2016 results at 2015 exchange rates.

- Organic growth is based on total revenue excluding the effect of currency, acquisitions, disposals and investment income.

   -   Underlying results exclude exceptional items. 

* Underlying trading profit figures include central costs.

The Group's Risk & Insurance businesses, which represent over 75% of global turnover, grew revenues to GBP481.8 million, an increase of 8%, with organic revenue growth of 4%.

The Specialty businesses increased revenues by 8%, with strong organic revenue growth of 5%. The reduction in the Specialty businesses' trading margin to 13% largely reflects the US Specialty investment in the period. Excluding the net investment cost in the US, the trading margin for the first half would have been 19%, compared to 20% reported in the corresponding period in 2015.

JLT Re increased revenues by 8% to GBP127.7 million, a 3% increase at constant rates of exchange, all of which was on an organic basis. JLT Re's trading profit margin increased to 38%, up from 34% for the same period in 2015.

Revenues within the combined Employee Benefits businesses decreased by 5%, reflecting the performance of the UK and Ireland Employee Benefits business, which saw revenues reduce by 12%.

 
6 months to 30 June 
-----------------------------------------------------  -------  ------ 
GBPm                                                      2016    2015 
=====================================================  =======  ====== 
Underlying trading profit                                 98.4   102.4 
-----------------------------------------------------  -------  ------ 
  Underlying share of associates                           1.9     5.8 
-----------------------------------------------------  -------  ------ 
  Net finance costs                                     (11.1)  (11.9) 
=====================================================  =======  ====== 
Underlying profit before taxation                         89.2    96.3 
-----------------------------------------------------  -------  ------ 
  Exceptional items                                     (34.0)     5.2 
=====================================================  =======  ====== 
Profit before taxation                                    55.2   101.5 
-----------------------------------------------------  -------  ------ 
  Underlying tax expense                                (25.6)  (26.0) 
-----------------------------------------------------  -------  ------ 
  Tax on exceptional items                                 6.6     2.3 
-----------------------------------------------------  -------  ------ 
  Non-controlling interests                              (2.9)   (3.9) 
=====================================================  =======  ====== 
Profit after taxation and non-controlling 
 interests                                                33.3    73.9 
-----------------------------------------------------  -------  ------ 
Underlying profit after taxation and non-controlling 
 interests                                                60.7    66.4 
-----------------------------------------------------  -------  ------ 
Diluted earnings per share                               15.1p   33.6p 
-----------------------------------------------------  -------  ------ 
Underlying diluted earnings per share                    27.6p   30.2p 
-----------------------------------------------------  -------  ------ 
Total dividend per share                                 11.6p   11.1p 
=====================================================  =======  ====== 
 

Underlying trading profit decreased by 4% to GBP98.4 million, with underlying PBT reducing by 7% to GBP89.2 million. Consequently, the trading profit margin for the first half reduced from 17.3% to 15.9%.

The reduction in the Group's underlying trading profit results from the on-going investment in building out the US Specialty business and the specific challenges faced by the UK & Ireland Employee Benefits business, which had a disproportionately large impact on the first half.

Substantial progress has been made in the US Specialty build-out plan and in reshaping the UK & Ireland Employee Benefits business. It is expected that the benefits of the actions taken with respect to the latter will flow through in the second half of the year.

Significant progress and growth has been made in the Group's Specialty and Reinsurance businesses, with continuing momentum in new client wins, the benefit of which will not all be seen in the first half.

Excluding the US net investment of GBP17.2 million in the period, Group underlying trading profit margin would have been 19.2% (330 basis points higher).

The Group's reported PBT was GBP55.2 million and reported EPS was 15.1p, both of which include the impact of exceptional costs of GBP34.0 million during the period.

DIVIDS

The Board has declared an increased interim dividend of 11.6p per share for the period ended 30 June 2016 (2015: 11.1p), which will be paid on 3 October 2016 to shareholders on the register at 2 September 2016.

OPERATIONAL REVIEW

The Group operates two sets of businesses: Risk & Insurance and Employee Benefits. The results of the businesses within each of these areas are reported in more detail below:

RISK & INSURANCE

 
 6 months to                    Total Revenue                  Trading Margin            Underlying 
  30 June                                                                              Trading Profit 
----------------  ========================================  ===================  ========================= 
 GBPm               2016   Growth    CRE   Organic    2015   2016    CRE   2015     2016      CRE     2015 
================  ======  =======  =====  ========  ======  =====  =====  =====  =======  =======  ======= 
 JLT Specialty     145.3       5%     3%        3%   138.8    17%    15%    17%     24.3     22.1     24.1 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Re            127.7       8%     3%        3%   117.9    38%    36%    34%     48.0     43.5     40.1 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Australia 
  & New Zealand     61.9       1%      -        1%    61.1    35%    35%    34%     21.6     21.4     20.6 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Asia           44.6      11%     6%        6%    40.1    21%    21%    20%      9.5      8.8      8.0 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Latin 
  America           27.6     (3%)     3%        3%    28.4    15%    11%    24%      4.0      3.2      6.7 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Insurance 
  Services          24.3     (3%)   (6%)      (5%)    25.0     1%   (1%)     6%      0.1    (0.1)      1.6 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Europe, 
  Middle East 
  & Africa          20.3      43%    40%       24%    14.2    18%    18%    13%      3.7      3.4      1.9 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT USA            16.3     118%   103%       93%     7.5      -      -      -   (17.2)   (16.0)   (12.6) 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Canada          9.5     (9%)   (9%)      (9%)    10.5   (5%)   (6%)     8%    (0.5)    (0.5)      0.9 
----------------  ------  -------  -----  --------  ------  -----  -----  -----  -------  -------  ------- 
 JLT Insurance 
  Management         4.3      12%     5%        5%     3.9     4%     5%   (2%)      0.2      0.2    (0.1) 
================  ======  =======  =====  ========  ======  =====  =====  =====  =======  =======  ======= 
                   481.8       8%     5%        4%   447.4    19%    18%    20%     93.7     86.0     91.1 
================  ======  =======  =====  ========  ======  =====  =====  =====  =======  =======  ======= 
 

JLT Specialty generated revenues of GBP145.3 million in the period, delivering revenue growth of 5%, or 3% on an organic basis. Trading margins were unchanged but at constant rates of exchange reduced to 15%, reflecting the anticipated greater weighting in profits towards the second half, as previously indicated at the time of the Group's preliminary results in March.

This represents a good performance in the context of the continued fall in insurance pricing and challenging economic conditions. Whilst insurance premium reductions are a positive for clients, they also mask JLT's underlying performance. In the first half of the year, significant new business was won across all of the Specialty divisions, which will contribute to results in the second half. Particularly good performances were achieved in Construction, Aerospace and Credit, Political and Security.

The Energy division performed well and won significant new business, although overall results were negatively impacted by a combination of falling insurance rates and much reduced activity in the oil and gas sector.

Furthermore, JLT Specialty's enlarged Fine Art & Specie division has made an encouraging start, with notable new clients won.

International Specialty Businesses

The Group's International Specialty businesses delivered GBP208.8 million of revenue in the first half of this year, representing one third of the Group's revenue, driven by strong organic growth of 6%. Looking in more detail at the larger of these businesses:

In Australia and New Zealand there were notable new business wins across Specialty divisions. These included one of Australia's largest agribusinesses and one of the world's leading legal firms. This increasing Specialty focus has resulted in JLT Australia acting for 13 of the ASX top 50 companies. This strong performance was offset by the significant decline in insurance rates in the region, which limited the organic revenue growth rate to 1%.

At constant rates of exchange, trading profit increased by 4%, with the trading profit margin increasing by 100 basis points to 35%. This was achieved, in part, through the careful management of costs.

Asia delivered a strong performance with a 6% increase in revenues at constant rates of exchange, all of which was organic. On a reported basis, revenues grew by 11% to GBP44.6 million. There were new business wins including Airport Authority Hong Kong, in connection with the construction of the third runway, and Singapore Airlines, both accounts won through strong collaboration with JLT Specialty in London. The benefits of both of these will largely be seen in the second half.

In Latin America there was strong revenue growth of 3% at constant rates of exchange, all of which was organic. However, the impact of adverse exchange rate movements saw reported revenues decrease by 3%.

The Group's Latin American operations continue to make significant investments by the hiring of leading practitioners across all their platforms to accelerate growth. The levels of investment in the first half contributed to the reduction in trading profit, but the benefit of new hires will be increasingly seen during the second half of the year.

JLT's US Specialty business generated revenues of nearly US$23 million, or GBP16.3 million, double that achieved in the first half of 2015. This demonstrates the increasing revenue momentum of this business, with Financial Lines, Cyber, Errors & Omissions (E&O), Real Estate and Natural Resources all winning significant new business. Nearly 200 new clients were secured during the period, and there is a healthy pipeline of activity, supporting previous guidance that revenues are anticipated to approach double those of 2015.

The progress to date has been significant. Based on the Group's experience so far, it is now anticipated that the net investment spend of the business through to 2018 will be $100 million, up from the $80 million previously advised, and with the business then moving into profit in 2019. This increased investment will enable the business to capture the significant sector and regional opportunities it now sees. The Group has increasing confidence in the revenue-generating capabilities of this business.

JLT Re

JLT Re delivered a strong performance, with reported revenues increasing by 8% to GBP127.7 million and organic revenue growth of 3%.

The performance of the business in the first half is pleasing in the context of the continued decline in pricing across most lines of reinsurance business and in most geographies, as abundant capacity continued to dominate the market. The rate of decline has, however, slowed, particularly in the United States. This was evident during the 1 June property renewals, where risk-adjusted pricing typically fell within the range of flat to down 5%, compared with the double digit decreases witnessed in in recent years. In addition, the casualty business during 2016 has also been renewing at flat to 5% down. Outside the US, double digit declines in property catastrophe, marine & energy and aviation business were evident in both the EMEA and Asia regions.

JLT Re's trading profits increased by 20% to GBP48.0 million, reflected in an improved trading margin of 38%, generated in part by the expected savings flowing from the integration of the businesses. This improvement was achieved despite a proportion of the savings being used to recruit leading talent in order further to strengthen the business's general Property & Casualty, Specialty lines and analytics capabilities.

Asia Pacific delivered a good performance, achieving strong levels of organic growth, as it benefited from the increasing importance of Singapore as a reinsurance hub, coupled with increasing volumes of treaty business in China. This region continues to be a focus for investment for the Group.

In North America, two new divisions - JLT Re Structured Solutions and JLT Re Mortgage Solutions - were created to meet clients' evolving demands. During the first half, the Capital Markets division successfully continued to bring alternative capacity to clients through the issuance of a number of privately placed Catastrophe Bonds.

While traditionally the trading margin of this business falls back in the second half of the year, it remains the Group's expectation that a 20% trading profit margin will be achieved for the year, in line with the previous guidance given, and representing an improvement on the previous year.

Employee Benefits

 
 6 months to                    Total Revenue                   Trading Margin         Underlying 
  30 June                                                                             Trading Profit 
================  =========================================  ===================  ==================== 
 GBPm               2016   Growth     CRE   Organic    2015   2016   CRE    2015   2016    CRE    2015 
================  ======  =======  ======  ========  ======  =====  ====  ======  =====  =====  ====== 
 UK & Ireland       74.9    (12%)   (12%)     (15%)    85.0      -     -      8%    0.2    0.2     7.1 
----------------  ------  -------  ------  --------  ------  -----  ----  ------  -----  -----  ------ 
 Asia               41.2       3%    (4%)      (3%)    40.1    36%   35%     35%   15.0   13.7    14.0 
----------------  ------  -------  ------  --------  ------  -----  ----  ------  -----  -----  ------ 
 Australia 
  & New Zealand     11.7      40%     39%        4%     8.4    12%   12%      5%    1.4    1.4     0.5 
----------------  ------  -------  ------  --------  ------  -----  ----  ------  -----  -----  ------ 
 Latin America       8.3     (9%)      3%        3%     9.1     9%   10%     19%    0.7    0.9     1.7 
----------------  ------  -------  ------  --------  ------  -----  ----  ------  -----  -----  ------ 
 Europe, Middle 
  East & Africa      0.8    (11%)      5%        5%     0.9     1%    1%   (68%)      -      -   (0.6) 
----------------  ------  -------  ------  --------  ------  -----  ----  ------  -----  -----  ------ 
 Canada              0.7     (6%)    (6%)      (5%)     0.7    11%   11%   (16%)    0.1    0.1   (0.1) 
================  ======  =======  ======  ========  ======  =====  ====  ======  =====  =====  ====== 
                   137.6     (5%)    (6%)     (10%)   144.2    13%   12%     16%   17.4   16.3    22.6 
================  ======  =======  ======  ========  ======  =====  ====  ======  =====  =====  ====== 
 

UK & IRELAND Employee Benefits

Reported revenues for the Group's UK and Ireland Employee Benefits business for the period were GBP74.9 million, compared to GBP85.0 million in the first half of 2015. This is in part due to the ending of commission-related revenues following the Retail Distribution Review (RDR), resulting in a total of GBP5 million earned in the previous year as expected not being repeated in 2016. The muted demand from pension scheme trustees and corporate sponsors for any more than obligatory services continued, driven in large part by government actions, further impacted first half revenues and profits.

Decisive action has now been completed to better align costs with revenues, mainly through a restructuring programme. The completed actions include the introduction of a flatter, more client-centric structure, which has resulted in headcount reducing by over 300 employees. In line with previous guidance, the Group is confident that the restructuring programme will deliver annualised savings of GBP14 million in 2017. For 2016, the programme will deliver the targeted in year benefit of GBP9 million. Approximately GBP2 million has been recognised already in the first half and therefore the remaining GBP7 million is expected to be realised in the second half of the year.

The focus of 2016 is very much about transitioning this business so that satisfactory margins are restored. Excellent progress has been made and it remains the expectation that the reshaped business will move to an approximate 15% trading profit margin by the end of 2017.

In April's Q1 IMS, the Group indicated that it expected that the business would substantially deliver this year's profits in the second half of the year and this expectation remains unchanged.

For the medium term, the emphasis of the business continues to be on strengthening its platforms and technology and its client propositions so as to be better positioned to respond to the continuing changes in the long term retirement and savings market.

Following the actions which have been taken, revenues in the UK and Ireland Employee Benefits business are now believed to have stabilised and it is expected that it will deliver positive revenue growth in future years. This is a solid business and a leader in pension scheme administration, consulting and technology which has strong prospects for the future.

INTERNATIONal Employee Benefits

JLT's international Employee Benefits businesses delivered combined revenues of GBP62.7 million, representing an increase of 6%, or 3% at constant rates of exchange.

The Asia business faced challenging conditions in the region, impacting the rate of growth during the period, where revenue reduced by 4% at constant rates of exchange. The Group remains strongly positive about the prospects for this business, which has high levels of new business opportunities.

In Australia and New Zealand there was good progress, with revenue growth of 40%, of which organic growth was 4%. Growth was supported by the successful execution of the strategy of focussing on the return-to-work sector, with the first full contributions from our 2015 acquisitions of Recovre and Alpha, both of which have more than met the business's expectations. During the first half, new capabilities in this sector were added with the acquisition of Workwise. Notable new business wins included two of Australia's largest Workers' Compensation accounts.

The business has a market-leading capability across Australia to help workers return to work and to mitigate the cost of workers' compensation claims. This adds to the value JLT creates for corporates and insurers and also generates opportunities to extend its capabilities into new geographies, such as Hong Kong and New Zealand.

In Latin America, organic revenue growth of 3% was delivered, with revenues on a reported basis reducing by 9% due to foreign exchange movements. The reduction in the trading profit during the period was largely driven by the significant investments being made in the business as it continues to build-out its employee benefits capabilities across the whole region.

Associates

The Group's income from its Associates has reduced by GBP3.9 million to GBP1.9 million, following the disposal of its stake in Siaci Saint Honoré in May 2015. It remains the expectation that Associate earnings will be approximately GBP2 million for the full year in 2016.

OPERATING COSTS

During the first half of 2016, the Group's underlying operating expenses (excluding exceptional items) increased by GBP31.8 million, or 6%, to GBP521 million. The foreign exchange impact included therein was GBP5.2 million.

The continued investment in the US Specialty business added GBP11.1 million, and acquisitions made in the second half of 2015 and the first half of 2016 contributed GBP5.2 million to the growth in operating costs. These acquisitions included Eikos in South Africa, and Recovre and Workwise in Australia.

The Group continued to invest in the business, principally the Fine Arts and Specie team in JLT Specialty, across Latin America and in Northern Europe. Combined these added a further 1% to the cost base.

BALANCE SHEET

The net assets of the Group decreased to GBP313 million, from GBP331 million at the 2015 financial year end. The key movements were:

-- An increase in goodwill of GBP33 million, following the acquisition of Workwise in Australia and the

impact of GBP28             million on re-translation of foreign currency denominated goodwill; 

-- An increase in the pension liability of GBP60 million, net of deferred tax, following the reduction in bond yields;

-- Net current assets increased by GBP110 million, principally due to the change in working capital of GBP68 million (excluding acquired working capital) and a net increase in own funds of GBP47 million; and

-- Net debt, defined as own funds, less total borrowings net of transaction costs, increased to GBP544 million following a net cash outflow of GBP68 million and the retranslation of the $500 million of private placement loan notes. These loan notes are fully hedged on the balance sheet. Any movement in these notes and their corresponding hedges is included in the change in the mark-to-market valuation of derivatives.

As at 30 June 2016 the Group had long-term credit facilities totalling GBP980 million. This comprised the private placement loan note programme totalling $500 million and GBP75 million, with a maturity profile extending to 2029; and the committed revolving credit facilities (RCF) totalling GBP500 million, which are provided by the Group's relationship banks and mature in 2021. The RCF includes the April renewal, for a five-year term, of an earlier GBP50 million facility, which is now incorporated within the core RCF.

Utilisation of the RCF stood at GBP248 million, compared to GBP164 million at December 2015. This leaves unutilised headroom of GBP252 million, a level consistent with prior years.

The Net Debt to EBITDA covenant ratio was 2:1, comfortably within the Group's debt covenants.

CASH FLOW

The Group monitors operational rather than statutory cash flows. Operational cash flows monitor the movement in net debt and exclude movements in fiduciary funds.

The net cash outflow in the period of GBP68 million remained consistent with prior period averages, adjusting 2015 for the net inflow of GBP80 million from the Group's disposal of its interest in Siaci Saint Honore.

FOREIGN EXCHANGE

Foreign exchange movements benefited profits by GBP8.7m. Of this, approximately GBP4 million related to transactional exchange, which, if rates were to remain at current levels, would not be expected to recur.

The translation of the Group's international businesses into the consolidated Group income statement is carried out at average exchange rates over the period. Therefore if rates were to remain at current levels, only a part year impact would be seen in 2016.

Following the EU Referendum exchange rate movements have been significant and remain unpredictable.

The Group actively manages transactional exposures through its hedging programme.

In addition, foreign currency denominated assets and liabilities on the balance sheets of the Group's subsidiaries are converted at the closing rate and are exposed to movements in spot exchange rates between reporting periods. External borrowings in foreign currency are fully hedged with currency swaps to manage volatility in both net assets and profitability.

Exceptional items

Net exceptional items in the first half were broadly in line with expectations and totalled GBP34.0 million.

This included restructuring costs of GBP10.2 million which relate to the UK & Ireland Employee Benefits business. This programme remains on track and the expectation remains that this will deliver benefits in 2016 of GBP9 million, and GBP14 million on an annualised basis in 2017. For the full year 2016, a total charge of approximately GBP12 million is anticipated in relation to the restructuring.

As announced on 8 April 2016, the Group reached a settlement and concluded litigation and made a charge of GBP22 million as an exceptional item in the second quarter of the year.

During the period there was also a loss of GBP1.4 million on the disposal of a business in Indonesia.

PHASING OF PROFITS IN 2016

The underlying business continued to perform very well, even setting aside the favourable effects coming from foreign exchange. A shift in the phasing of profits to the second half is still anticipated, albeit at a more moderate rate than previously indicated at the time of the Group's preliminary results in March.

OUTLOOK

JLT is seeing significant financial benefit from collaboration between its Specialty operations around the world, which is helping sustain momentum and drive organic revenue growth across the business. Economic and industry conditions remain challenging; nevertheless the Group remains confident about its ability to deliver year-on-year financial progress.

CONSOLIDATED INCOME STATEMENT

Unaudited Interim Results for the six months ended 30 June 2016

 
                                              6 months   6 months 
------------------------------------  -----  ---------  --------- 
                                                 ended      ended 
                                               30 June    30 June 
------------------------------------  -----  ---------  --------- 
                                                  2016       2015 
------------------------------------  -----  ---------  --------- 
                                      Notes    GBP'000    GBP'000 
====================================  =====  =========  ========= 
Fees and commissions                      2    617,590    590,052 
------------------------------------  -----  ---------  --------- 
Investment income                         2      1,803      1,558 
====================================  =====  =========  ========= 
Total revenue                             2    619,393    591,610 
------------------------------------  -----  ---------  --------- 
Salaries and associated expenses             (388,892)  (363,386) 
------------------------------------  -----  ---------  --------- 
Premises                                      (33,793)   (30,828) 
------------------------------------  -----  ---------  --------- 
Other operating costs                        (115,007)   (74,330) 
------------------------------------  -----  ---------  --------- 
Depreciation, amortisation and 
 impairment charges                       3   (17,273)   (15,452) 
====================================  =====  =========  ========= 
Operating profit                      1,2,3     64,428    107,614 
====================================  =====  =========  ========= 
Analysed as: 
------------------------------------  -----  ---------  --------- 
Operating profit before exceptional 
 items                                  1,2     98,405    102,400 
------------------------------------  -----  ---------  --------- 
Acquisition and integration costs         3      (414)    (6,834) 
------------------------------------  -----  ---------  --------- 
Restructuring costs                       3   (10,151)    (6,664) 
------------------------------------  -----  ---------  --------- 
Net loss on disposal of businesses        3    (1,363)      (607) 
------------------------------------  -----  ---------  --------- 
Litigation costs                          3   (22,000)          - 
------------------------------------  -----  ---------  --------- 
Net gain on sale of associate             3          -     18,542 
------------------------------------  -----  ---------  --------- 
Other exceptional items                   3       (49)        777 
====================================  =====  =========  ========= 
Operating profit                      1,2,3     64,428    107,614 
====================================  =====  =========  ========= 
 
Finance costs                                 (12,156)   (12,568) 
------------------------------------  -----  ---------  --------- 
Finance income                                   1,017        703 
------------------------------------  -----  =========  ========= 
Finance costs - net                           (11,139)   (11,865) 
------------------------------------  -----  ---------  --------- 
Share of results of associates                   1,948      5,720 
====================================  =====  =========  ========= 
Profit before taxation                  1,2     55,237    101,469 
------------------------------------  -----  ---------  --------- 
Income tax expense                        4   (19,048)   (23,730) 
====================================  =====  =========  ========= 
Profit for the period                           36,189     77,739 
====================================  =====  =========  ========= 
 
Profit attributable to: 
------------------------------------  -----  ---------  --------- 
Owners of the parent                      2     33,328     73,890 
------------------------------------  -----  ---------  --------- 
Non-controlling interests                        2,861      3,849 
====================================  =====  =========  ========= 
                                                36,189     77,739 
====================================  =====  =========  ========= 
 
Earnings per share attributable 
 to the owners of the parent 
------------------------------------  -----  ---------  --------- 
during the period (expressed 
 in pence per share) 
------------------------------------  -----  ---------  --------- 
Basic earnings per share                         15.1p      33.7p 
------------------------------------  -----  ---------  --------- 
Diluted earnings per share                       15.1p      33.6p 
------------------------------------  -----  ---------  --------- 
 
The notes on pages 13 to 38 form an integral part 
 of these condensed consolidated interim financial 
 statements. 
----------------------------------------------------------------- 
 

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

 
                                                   6 months  6 months 
------------------------------------------  -----  --------  -------- 
                                                      ended     ended 
                                                    30 June   30 June 
------------------------------------------  -----  --------  -------- 
                                                       2016      2015 
------------------------------------------  -----  --------  -------- 
                                            Notes   GBP'000   GBP'000 
==========================================  =====  ========  ======== 
Profit for the period                                36,189    77,739 
==========================================  =====  ========  ======== 
 
Other comprehensive (expense)/income 
------------------------------------------  -----  --------  -------- 
Items that will not be reclassified 
 to profit or loss 
------------------------------------------  -----  ========  ======== 
Remeasurement of post employment 
 benefit obligations                           20  (66,372)    23,389 
------------------------------------------  -----  --------  -------- 
Taxation thereon                                     11,293   (3,562) 
------------------------------------------  -----  ========  ======== 
Total items that will not be reclassified 
 to profit or loss                                 (55,079)    19,827 
------------------------------------------  -----  --------  -------- 
 
Items that may be reclassified 
 subsequently to profit or loss 
------------------------------------------  -----  --------  -------- 
Fair value (losses)/gains net of 
 tax: 
------------------------------------------  -----  ========  ======== 
 - available-for-sale                                  (10)        72 
------------------------------------------  -----  --------  -------- 
 - available-for-sale reclassified 
  to the income statement                             (146)         - 
------------------------------------------  -----  --------  -------- 
 - cash flow hedges                                (18,043)     4,616 
------------------------------------------  -----  --------  -------- 
Currency translation differences                     62,767  (22,165) 
------------------------------------------  -----  ========  ======== 
Total items that may be reclassified 
 subsequently to profit or loss                      44,568  (17,477) 
==========================================  =====  ========  ======== 
Other comprehensive (expense)/income 
 net of tax                                        (10,511)     2,350 
==========================================  =====  ========  ======== 
Total comprehensive income for 
 the period                                          25,678    80,089 
==========================================  =====  ========  ======== 
 
Attributable to: 
------------------------------------------  -----  --------  -------- 
Owners of the parent                                 20,091    77,285 
------------------------------------------  -----  --------  -------- 
Non-controlling interests                             5,587     2,804 
==========================================  =====  ========  ======== 
                                                     25,678    80,089 
==========================================  =====  ========  ======== 
 
The notes on pages 13 to 38 form an integral part of 
 these condensed consolidated interim financial statements. 
--------------------------------------------------------------------- 
 

CONSOLIDATED BALANCE SHEET

Unaudited Interim Results as at 30 June 2016

 
                                                 As at        As at        As at 
----------------------------------  -----  -----------  -----------  ----------- 
                                               30 June      30 June       31 Dec 
----------------------------------  -----  -----------  -----------  ----------- 
                                                  2016         2015         2015 
----------------------------------  -----  -----------  -----------  ----------- 
                                    Notes      GBP'000      GBP'000      GBP'000 
==================================  =====  ===========  ===========  =========== 
NET OPERATING ASSETS 
----------------------------------  -----  -----------  -----------  ----------- 
Non-current assets 
----------------------------------  -----  -----------  -----------  ----------- 
Goodwill                                7      529,124      481,231      496,166 
----------------------------------  -----  -----------  -----------  ----------- 
Other intangible assets                        101,937       99,996      104,323 
----------------------------------  -----  -----------  -----------  ----------- 
Property, plant and equipment                   64,441       60,505       63,167 
----------------------------------  -----  -----------  -----------  ----------- 
Investments in associates                       46,981       39,820       41,180 
----------------------------------  -----  -----------  -----------  ----------- 
Available-for-sale financial 
 assets                              8,13       16,821       13,384       15,466 
----------------------------------  -----  -----------  -----------  ----------- 
Derivative financial instruments     9,13       95,080       16,324       33,684 
----------------------------------  -----  -----------  -----------  ----------- 
Retirement benefit surpluses           20            -          559          366 
----------------------------------  -----  -----------  -----------  ----------- 
Deferred tax assets                             82,368       55,747       51,023 
==================================  =====  ===========  ===========  =========== 
                                               936,752      767,566      805,375 
==================================  =====  ===========  ===========  =========== 
Current assets 
----------------------------------  -----  -----------  -----------  ----------- 
Trade and other receivables            10      568,051      538,269      528,595 
----------------------------------  -----  -----------  -----------  ----------- 
Derivative financial instruments     9,13        6,632        5,446        1,544 
----------------------------------  -----  -----------  -----------  ----------- 
Available-for-sale financial 
 assets                              8,13       99,598          172           19 
----------------------------------  -----  -----------  -----------  ----------- 
Cash and cash equivalents           11,13      929,215      938,248      901,087 
==================================  =====  ===========  ===========  =========== 
                                             1,603,496    1,482,135    1,431,245 
==================================  =====  ===========  ===========  =========== 
Current liabilities 
----------------------------------  -----  -----------  -----------  ----------- 
Borrowings                          13,14     (22,748)     (24,639)     (22,338) 
----------------------------------  -----  -----------  -----------  ----------- 
Trade and other payables               12  (1,148,506)  (1,093,938)  (1,086,278) 
----------------------------------  -----  -----------  -----------  ----------- 
Derivative financial instruments     9,13     (18,194)      (1,384)      (6,115) 
----------------------------------  -----  -----------  -----------  ----------- 
Current tax liabilities                        (4,142)      (8,304)      (8,749) 
----------------------------------  -----  -----------  -----------  ----------- 
Provisions for liabilities 
 and charges                           15     (10,829)      (5,501)     (18,594) 
==================================  =====  ===========  ===========  =========== 
                                           (1,204,419)  (1,133,766)  (1,142,074) 
==================================  =====  ===========  ===========  =========== 
Net current assets                             399,077      348,369      289,171 
==================================  =====  ===========  ===========  =========== 
Non-current liabilities 
----------------------------------  -----  -----------  -----------  ----------- 
Borrowings                          13,14    (731,367)    (581,704)    (581,244) 
----------------------------------  -----  -----------  -----------  ----------- 
Derivative financial instruments     9,13     (55,026)     (33,156)     (33,726) 
----------------------------------  -----  -----------  -----------  ----------- 
Deferred tax liabilities                      (34,452)     (18,908)     (16,978) 
----------------------------------  -----  -----------  -----------  ----------- 
Retirement benefit obligations         20    (201,474)    (158,523)    (130,753) 
----------------------------------  -----  -----------  -----------  ----------- 
Provisions for liabilities 
 and charges                           15        (837)      (1,348)      (1,043) 
==================================  =====  ===========  ===========  =========== 
                                           (1,023,156)    (793,639)    (763,744) 
==================================  =====  ===========  ===========  =========== 
                                               312,673      322,296      330,802 
==================================  =====  ===========  ===========  =========== 
 
TOTAL EQUITY 
----------------------------------  -----  -----------  -----------  ----------- 
Capital and reserves attributable 
 to the owners of the parent 
----------------------------------  -----  -----------  -----------  ----------- 
Ordinary shares                                 11,008       11,008       11,008 
----------------------------------  -----  -----------  -----------  ----------- 
Share premium                          16      104,077      104,063      104,074 
----------------------------------  -----  -----------  -----------  ----------- 
Fair value and hedging 
 reserves                              16     (31,026)        4,454     (12,827) 
----------------------------------  -----  -----------  -----------  ----------- 
Exchange reserves                      16       42,761     (26,153)     (17,280) 
----------------------------------  -----  -----------  -----------  ----------- 
Retained earnings                              166,464      211,865      227,362 
==================================  =====  ===========  ===========  =========== 
Shareholders' equity                           293,284      305,237      312,337 
----------------------------------  -----  -----------  -----------  ----------- 
Non-controlling interests                       19,389       17,059       18,465 
==================================  =====  ===========  ===========  =========== 
                                               312,673      322,296      330,802 
==================================  =====  ===========  ===========  =========== 
 
The notes on pages 13 to 38 form an integral part 
 of these condensed consolidated interim financial 
 statements. 
-------------------------------------------------------------------------------- 
 

CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

Unaudited Interim Results for the six months ended 30 June 2016

 
                                                                                        Non- 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
                                    Ordinary     Other  Retained  Shareholders'  controlling     Total 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
                                      shares  reserves  earnings         equity    interests    equity 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
                             Notes   GBP'000   GBP'000   GBP'000        GBP'000      GBP'000   GBP'000 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Balance at 1 January 
 2016                                 11,008    73,967   227,362        312,337       18,465   330,802 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Profit for the 
 period                                    -         -    33,328         33,328        2,861    36,189 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Other comprehensive 
 income/(expense) 
 for the period                            -    41,842  (55,079)       (13,237)        2,726  (10,511) 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Total comprehensive 
 income/(expense) 
 for the period                            -    41,842  (21,751)         20,091        5,587    25,678 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Dividends                        6         -         -  (42,550)       (42,550)      (4,514)  (47,064) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Amounts in respect 
 of share based 
 payments: 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
 - reversal of 
  amortisation net 
  of tax                                   -         -    13,402         13,402            -    13,402 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
 - shares acquired                         -         -   (8,085)        (8,085)            -   (8,085) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Acquisitions                               -         -         -              -        (149)     (149) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Disposals                                  -         -         -              -            -         - 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Change in non-controlling 
 interests                                 -         -   (1,914)        (1,914)            -   (1,914) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Issue of share 
 capital                                   -         3         -              3            -         3 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Balance at 30 June 
 2016                                 11,008   115,812   166,464        293,284       19,389   312,673 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
                                                                                        Non- 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
                                    Ordinary     Other  Retained  Shareholders'  controlling     Total 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
                                      shares  reserves  earnings         equity    interests    equity 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
                             Notes   GBP'000   GBP'000   GBP'000        GBP'000      GBP'000   GBP'000 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Balance at 1 January 
 2015                                 11,006    98,674   178,932        288,612       17,940   306,552 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Profit for the 
 period                                    -         -    73,890         73,890        3,849    77,739 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Other comprehensive 
 (expense)/income 
 for the period                            -  (16,432)    19,827          3,395      (1,045)     2,350 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Total comprehensive 
 (expense)/income 
 for the period                            -  (16,432)    93,717         77,285        2,804    80,089 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Dividends                        6         -         -  (40,262)       (40,262)      (3,922)  (44,184) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Amounts in respect 
 of share based 
 payments: 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
- reversal of amortisation 
 net of tax                                -         -    12,779         12,779            -    12,779 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
- shares acquired                          -         -  (17,004)       (17,004)            -  (17,004) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Acquisitions                               -         -         -              -           42        42 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Disposals                                  -         -         -              -          195       195 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Change in non-controlling 
 interests                                 -         -  (16,297)       (16,297)            -  (16,297) 
---------------------------  -----  --------  --------  --------  -------------  -----------  -------- 
Issue of share 
 capital                                   2       122         -            124            -       124 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
Balance at 30 June 
 2015                                 11,008    82,364   211,865        305,237       17,059   322,296 
===========================  =====  ========  ========  ========  =============  ===========  ======== 
 
The notes on pages 13 to 38 form an integral part of 
 these condensed consolidated interim financial statements. 
------------------------------------------------------------------------------------------------------ 
 

CONSOLIDATED STATEMENT OF CASH FLOWS

Unaudited Interim Results for the six months ended 30 June 2016

 
                                                      6 months  6 months 
---------------------------------------------  -----  --------  -------- 
                                                         ended     ended 
                                                       30 June   30 June 
---------------------------------------------  -----  --------  -------- 
                                                          2016      2015 
---------------------------------------------  -----  --------  -------- 
                                               Notes   GBP'000   GBP'000 
=============================================  =====  ========  ======== 
Cash flows from operating activities 
---------------------------------------------  -----  --------  -------- 
Cash generated from operations                    17    29,305    59,148 
---------------------------------------------  -----  --------  -------- 
Interest paid                                          (8,530)   (8,461) 
---------------------------------------------  -----  --------  -------- 
Interest received                                        2,628     2,019 
---------------------------------------------  -----  --------  -------- 
Taxation paid                                         (17,576)  (15,823) 
---------------------------------------------  -----  --------  -------- 
Increase in net insurance broking 
 payables                                               82,422    62,653 
=============================================  =====  ========  ======== 
                                                        88,249    99,536 
---------------------------------------------  -----  --------  -------- 
Dividend received from associates                          895       806 
=============================================  =====  ========  ======== 
Net cash generated from operating 
 activities                                             89,144   100,342 
=============================================  =====  ========  ======== 
 
Cash flows from investing activities 
---------------------------------------------  -----  --------  -------- 
Purchase of property, plant and 
 equipment                                             (4,153)   (6,310) 
---------------------------------------------  -----  --------  -------- 
Purchase of other intangible assets                   (13,166)  (27,320) 
---------------------------------------------  -----  --------  -------- 
Proceeds from disposal of property, 
 plant and equipment                                       367       801 
---------------------------------------------  -----  --------  -------- 
Acquisition of businesses, net 
 of cash acquired                                 18   (4,631)  (13,048) 
---------------------------------------------  -----  --------  -------- 
Acquisition of associates                                    -     (309) 
---------------------------------------------  -----  --------  -------- 
Proceeds from disposal of businesses, 
 net of cash disposed                             19       914      (13) 
---------------------------------------------  -----  --------  -------- 
Proceeds from disposal of associates                         -    80,235 
---------------------------------------------  -----  --------  -------- 
Proceeds from disposal of available-for-sale 
 other investments                                         259       245 
=============================================  =====  ========  ======== 
Net cash (used)/generated in investing 
 activities                                           (20,410)    34,281 
=============================================  =====  ========  ======== 
 
Cash flows from financing activities 
---------------------------------------------  -----  --------  -------- 
Dividends paid to owners of the 
 parent                                               (41,653)  (39,382) 
---------------------------------------------  -----  --------  -------- 
Purchase of available-for-sale 
 financial assets                                  8  (99,701)   (5,423) 
---------------------------------------------  -----  --------  -------- 
Proceeds from disposal of available-for-sale 
 financial assets                                           19     5,199 
---------------------------------------------  -----  --------  -------- 
Purchase of shares                                     (8,085)  (17,004) 
---------------------------------------------  -----  --------  -------- 
Proceeds from issuance of ordinary 
 shares                                                      3       124 
---------------------------------------------  -----  --------  -------- 
Proceeds from borrowings                                87,360    49,936 
---------------------------------------------  -----  --------  -------- 
Repayments of borrowings                                  (63)  (50,061) 
---------------------------------------------  -----  --------  -------- 
Dividends paid to non-controlling 
 interests                                             (4,514)   (3,922) 
=============================================  =====  ========  ======== 
Net cash used from financing activities               (66,634)  (60,533) 
=============================================  =====  ========  ======== 
 
Net increase in cash and cash 
 equivalents                                             2,100    74,090 
---------------------------------------------  -----  --------  -------- 
Cash and cash equivalents at beginning 
 of period                                             901,087   871,246 
---------------------------------------------  -----  --------  -------- 
Exchange gains/(losses) on cash 
 and cash equivalents                                   26,028   (7,088) 
=============================================  =====  ========  ======== 
Cash and cash equivalents at end 
 of period                                             929,215   938,248 
=============================================  =====  ========  ======== 
 
The notes on pages 13 to 38 form an integral part of 
 these condensed consolidated interim financial statements. 
------------------------------------------------------------------------ 
 

BASIS OF ACCOUNTING

The Group's condensed consolidated interim financial statements for the six months ended 30 June 2016 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim financial reporting' as adopted by the European Union.

The Group has considerable financial resources and a geographically diversified business and as a consequence, the Directors believe that the Group is well placed to manage its business risks in the context of the current economic outlook. Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. They therefore continue to adopt the going concern basis in preparing these interim results.

These financial statements should be read in conjunction with the consolidated statutory accounts of the Group for the year ended 31 December 2015, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2015 were approved by the Board of Directors on 1 March 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

These condensed consolidated interim financial statements have been reviewed, not audited.

The accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2015.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2015.

Full details of the audited accounts and accounting policies for the year ended 31 December 2015 are available at www.jlt.com

NOTES TO THE UNAUDITED INTERIM RESULTS

For the six months ended 30 June 2016

1. ALTERNATIVE INCOME STATEMENT

The format of the consolidated income statement on page 8 conforms to the requirements of IFRS. The alternative income statement set out below, which is provided by way of additional information, has been prepared on a basis that conforms more closely to the approach adopted by the Group in assessing its performance. The statement provides a reconciliation between the underlying results used by the Group to assess performance and the IFRS income statement.

 
                                   Underlying  Exceptional 
---------------------------------  ----------  -----------  --------- 
                                       profit        items      Total 
---------------------------------  ----------  -----------  --------- 
6 months ended 30 June 2016           GBP'000      GBP'000    GBP'000 
=================================  ==========  ===========  ========= 
Fees and commissions                  617,590            -    617,590 
---------------------------------  ----------  -----------  --------- 
Investment income                       1,803            -      1,803 
---------------------------------  ----------  -----------  --------- 
Salaries and associated expenses    (381,053)      (7,839)  (388,892) 
---------------------------------  ----------  -----------  --------- 
Premises                             (31,947)      (1,846)   (33,793) 
---------------------------------  ----------  -----------  --------- 
Other operating costs                (90,715)     (24,292)  (115,007) 
---------------------------------  ----------  -----------  --------- 
Depreciation, amortisation and 
 impairment charges                  (17,273)            -   (17,273) 
=================================  ==========  ===========  ========= 
Trading profit                         98,405     (33,977)     64,428 
---------------------------------  ----------  -----------  --------- 
Finance costs - net                  (11,139)            -   (11,139) 
---------------------------------  ----------  -----------  --------- 
Share of results of associates          1,948            -      1,948 
=================================  ==========  ===========  ========= 
Profit before taxation                 89,214     (33,977)     55,237 
=================================  ==========  ===========  ========= 
 
                                   Underlying  Exceptional 
---------------------------------  ----------  -----------  --------- 
                                       profit        items      Total 
---------------------------------  ----------  -----------  --------- 
6 months ended 30 June 2015           GBP'000      GBP'000    GBP'000 
=================================  ==========  ===========  ========= 
Fees and commissions                  590,052            -    590,052 
---------------------------------  ----------  -----------  --------- 
Investment income                       1,558            -      1,558 
---------------------------------  ----------  -----------  --------- 
Salaries and associated expenses    (354,600)      (8,786)  (363,386) 
---------------------------------  ----------  -----------  --------- 
Premises                             (29,722)      (1,106)   (30,828) 
---------------------------------  ----------  -----------  --------- 
Other operating costs                (89,436)       15,106   (74,330) 
---------------------------------  ----------  -----------  --------- 
Depreciation, amortisation and 
 impairment charges                  (15,452)            -   (15,452) 
=================================  ==========  ===========  ========= 
Trading profit                        102,400        5,214    107,614 
---------------------------------  ----------  -----------  --------- 
Finance costs - net                  (11,865)            -   (11,865) 
---------------------------------  ----------  -----------  --------- 
Share of results of associates          5,720            -      5,720 
=================================  ==========  ===========  ========= 
Profit before taxation                 96,255        5,214    101,469 
=================================  ==========  ===========  ========= 
 

2. SEGMENT INFORMATION

Management has determined its operating segments based on the analysis used to make strategic decisions.

Business segment analysis

The Group is organised on a worldwide basis into three main segments: Risk & Insurance, Employee Benefits and Head Office & Other operations. These segments are consistent with the internal reporting structure of the Group.

The Risk & Insurance segment comprises JLT's global specialist, wholesale, reinsurance broking, personal lines and SME activities. The Employee Benefits segment consists of pension administration, outsourcing and employee benefits consultancy, healthcare and wealth management activities. Certain Risk & Insurance and Employee Benefits operating segments have been disclosed within the reporting segments given their individual size. The Head Office & Other segment consists mainly of holding companies, central administration functions, the Group's captive insurance companies and the Group's investments in associates.

JLT USA now qualifies as a reportable operating segment, as a result the comparatives have been restated.

The JLT Asia Risk & Insurance and Employee Benefit segments are disclosed as reportable segments even though they do not qualify as reportable segments by IFRS 8.

Segment results

Management assesses the performance of the operating segments based upon a measure of underlying trading profit. Segment results include the net income or expense derived from the trading activities of the segment together with the investment income earned on fiduciary funds. Interest income on the Group's own funds and finance costs are excluded since the trading activities of the Group's primary segments are not of a financial nature. Income tax expense and the charge in respect of non-controlling interests are excluded from the segmental allocation.

Segment assets and liabilities

Assets and liabilities are not allocated to individual segments and are therefore all reported within Head Office & Other.

Investments in associates

The Group owns the following stakes in its principal associates: 20% of GrECo, which operates mainly in Austria and Eastern Europe; 25% of MAG-JLT, which operates mainly in Italy and 25% of March-JLT, which operates in Spain. The investment and the Group's share of the net profit of these associates are included in the Head Office & Other segment, together with the investment and results of the Group's other associates, Sterling Re Intermediaro de Reaseguro SA de CV, JLT Insurance Management Malta, JLT Energy (France) SAS and JLT Independent Insurance Brokers Private Ltd.

In the prior year, the Group disposed of its 26% stake in Milestone, the holding company of Siaci Saint Honoré.

Other segment items

Capital expenditure comprises additions to property, plant and equipment and other intangible assets.

Business cyclicality

From an overall perspective, given the inherent nature and geographic spread of the Group's operations, whilst there may be an element of period on period phasing of revenue and profits, the business is not considered to be significantly cyclical between each half year period.

2. SEGMENT INFORMATION continued

 
                                                                                         Employee 
                                       Risk & Insurance                                  Benefits 
----------------  ===========================================================  ============================  -----------  ----------- 
 
                                            JLT                         Other        UK                            HO(3) 
6 months                 JLT       JLT   Aus(1)       JLT       JLT       R &         &               Other            & 
 ended             Specialty        Re     & NZ      Asia       USA      I(2)   Ireland      Asia        EB        Other        Total 
 30 June 2016        GBP'000   GBP'000  GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000      GBP'000       GBP'00 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Fees and 
 commissions         144,513   127,434   61,450    44,539    16,278    85,851    74,851    41,165    21,509            -      617,590 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Investment 
 income                  751       219      507        63         -       238         1         8        16            -        1,803 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Total revenue        145,264   127,653   61,957    44,602    16,278    86,089    74,852    41,173    21,525            -      619,393 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Underlying 
 trading profit       24,296    47,989   21,621     9,463  (17,215)     7,553       182    14,997     2,260     (12,741)       98,405 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Operating 
 profit               24,296    47,989   21,621     9,463  (17,215)     7,552  (10,349)    13,732     2,080     (34,741)       64,428 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Finance costs 
 - net                     -         -        -         -         -         -         -         -         -     (11,139)     (11,139) 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Share of 
 results of 
 associates                -         -        -         -         -         -         -         -         -        1,948        1,948 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Profit before 
 taxation             24,296    47,989   21,621     9,463  (17,215)     7,552  (10,349)    13,732     2,080     (43,932)       55,237 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Income tax 
 expense                   -         -        -         -         -         -         -         -         -     (19,048)     (19,048) 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Non-controlling 
 interests                 -         -        -         -         -         -         -         -         -      (2,861)      (2,861) 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Net profit 
 attributable 
 to the owners 
 of the parent        24,296    47,989   21,621     9,463  (17,215)     7,552  (10,349)    13,732     2,080     (65,841)       33,328 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Segment assets                                                                                                 2,493,267    2,493,267 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Investments 
 in associates                                                                                                    46,981       46,981 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Total assets                                                                                                   2,540,248    2,540,248 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Segment 
 liabilities                                                                                                 (2,227,575)  (2,227,575) 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Total 
 liabilities                                                                                                 (2,227,575)  (2,227,575) 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Other segment 
 items: 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Capital 
 expenditure           1,608     3,333      324       359     1,784     2,077     4,404        64       204        3,162       17,319 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Depreciation, 
 amortisation 
 and impairment 
 charges             (4,418)   (1,395)  (1,072)   (1,431)   (1,571)   (2,224)   (3,970)     (482)     (442)      (7,130)     (24,135) 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
 
                                                                                         Employee 
                                       Risk & Insurance                                  Benefits 
----------------  ===========================================================  ============================  -----------  ----------- 
 
                                            JLT                         Other        UK                            HO(3) 
6 months                 JLT       JLT   Aus(1)       JLT       JLT       R &         &               Other            & 
 ended             Specialty        Re     & NZ      Asia       USA      I(2)   Ireland      Asia        EB        Other        Total 
 30 June 2015        GBP'000   GBP'000  GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000      GBP'000      GBP'000 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Fees and 
 commissions         138,378   117,743   60,493    39,979     7,464    81,781    85,058    40,055    19,101            -      590,052 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Investment 
 income                  445       159      649        89         -       195         1         7        13            -        1,558 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Total revenue        138,823   117,902   61,142    40,068     7,464    81,976    85,059    40,062    19,114            -      591,610 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Underlying 
 trading profit       24,087    40,061   20,622     8,020  (12,643)    10,971     7,095    14,048     1,480     (11,341)      102,400 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Operating 
 profit               17,387    36,849   20,622     8,217  (12,909)    10,114     4,929    14,046       858        7,501      107,614 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Finance costs 
 - net                     -         -        -         -         -         -         -         -         -     (11,865)     (11,865) 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Share of 
 results of 
 associates                -         -        -         -         -         -         -         -         -        5,720        5,720 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Profit before 
 taxation             17,387    36,849   20,622     8,217  (12,909)    10,114     4,929    14,046       858        1,356      101,469 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Income tax 
 expense                   -         -        -         -         -         -         -         -         -     (23,730)     (23,730) 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Non-controlling 
 interests                 -         -        -         -         -         -         -         -         -      (3,849)      (3,849) 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Net profit 
 attributable 
 to the owners 
 of the parent        17,387    36,849   20,622     8,217  (12,909)    10,114     4,929    14,046       858     (26,223)       73,890 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Segment assets                                                                                                 2,209,881    2,209,881 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Investments 
 in associates                                                                                                    39,820       39,820 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Total assets                                                                                                   2,249,701    2,249,701 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Segment 
 liabilities                                                                                                 (1,927,405)  (1,927,405) 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Total 
 liabilities                                                                                                 (1,927,405)  (1,927,405) 
================  ==========  ========  =======  ========  ========  ========  ========  ========  ========  ===========  =========== 
Other segment 
 items: 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Capital 
 expenditure           7,599     2,928    1,096     1,981     5,638     1,938     4,385       728       224        7,113       33,630 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
Depreciation, 
 amortisation 
 and impairment 
 charges             (3,852)     (762)  (1,356)   (1,395)   (1,277)   (2,293)   (3,423)     (360)     (362)      (5,849)     (20,929) 
----------------  ----------  --------  -------  --------  --------  --------  --------  --------  --------  -----------  ----------- 
 

(1) Aus = Australia

(2) R & I = Risk & Insurance

(3) HO = Head Office

3. OPERATING PROFIT

 
 
The following items have been charged/(credited) 
 in arriving at operating profit: 
-------------------------------------------------  --------  -------- 
                                                   6 months  6 months 
-------------------------------------------------  --------  -------- 
                                                      ended     ended 
                                                     30 Jun    30 Jun 
-------------------------------------------------  --------  -------- 
                                                       2016      2015 
-------------------------------------------------  --------  -------- 
                                                    GBP'000   GBP'000 
=================================================  ========  ======== 
Foreign exchange (gains)/losses: 
-------------------------------------------------  --------  -------- 
 - fees and commissions                               (101)       948 
-------------------------------------------------  --------  -------- 
 - other operating costs                            (3,717)      (85) 
=================================================  ========  ======== 
                                                    (3,818)       863 
-------------------------------------------------  --------  -------- 
Amortisation of other intangible assets: 
-------------------------------------------------  --------  -------- 
 - software costs                                    10,199     8,653 
-------------------------------------------------  --------  -------- 
 - other intangible assets                              972       904 
-------------------------------------------------  --------  -------- 
Depreciation on property, plant and 
 equipment                                            6,102     5,895 
=================================================  ========  ======== 
Total depreciation and amortisation 
 charges                                             17,273    15,452 
=================================================  ========  ======== 
 
Amortisation of other intangible assets: 
-------------------------------------------------  --------  -------- 
 - employment contract payments (included 
  in salaries and associated expenses)                6,862     5,477 
=================================================  ========  ======== 
 
Gains on disposal of property, plant 
 and equipment                                         (56)      (64) 
=================================================  ========  ======== 
 
Fair value losses - derivatives financial 
 instruments                                             90        44 
-------------------------------------------------  --------  -------- 
(Gains)/losses on sale - available-for-sale 
 financial assets                                     (129)        64 
=================================================  ========  ======== 
                                                       (39)       108 
=================================================  ========  ======== 
 
Exceptional items: 
-------------------------------------------------  --------  -------- 
Acquisition and integration costs of 
 which: 
-------------------------------------------------  --------  -------- 
 - included in salaries and associated 
  exenses                                               165     2,707 
-------------------------------------------------  --------  -------- 
 - included in premises costs                            69     1,015 
-------------------------------------------------  --------  -------- 
 - included in other operating costs                    180     3,112 
=================================================  ========  ======== 
                                                        414     6,834 
-------------------------------------------------  --------  -------- 
Restructuring costs of which: 
-------------------------------------------------  --------  -------- 
 - included in salaries and associated 
  exenses                                             7,674     6,570 
-------------------------------------------------  --------  -------- 
 - included in premises costs                         1,777        91 
-------------------------------------------------  --------  -------- 
 - included in other operating costs                    700         3 
=================================================  ========  ======== 
                                                     10,151     6,664 
-------------------------------------------------  --------  -------- 
 
 
Cost associated with a regulatory review                147         - 
-------------------------------------------------  --------  -------- 
Net loss on disposal of businesses                    1,363       607 
-------------------------------------------------  --------  -------- 
Release of contingent consideration                    (98)     (286) 
-------------------------------------------------  --------  -------- 
Pension curtailment gain                                  -     (491) 
-------------------------------------------------  --------  -------- 
Net gain on sale of associate                             -  (18,542) 
=================================================  ========  ======== 
Total exceptional items                              33,977   (5,214) 
=================================================  ========  ======== 
 
 
 

4. INCOME TAX EXPENSE

 
                                        6 months  6 months 
--------------------------------------  --------  -------- 
                                           ended     ended 
                                         30 June   30 June 
--------------------------------------  --------  -------- 
                                            2016      2015 
--------------------------------------  --------  -------- 
                                         GBP'000   GBP'000 
======================================  ========  ======== 
Current tax expense 
--------------------------------------  --------  -------- 
Current period                            17,774    15,196 
--------------------------------------  --------  -------- 
Adjustments in respect of prior years    (5,297)     1,032 
======================================  ========  ======== 
                                          12,477    16,228 
--------------------------------------  --------  -------- 
Deferred tax expense 
--------------------------------------  --------  -------- 
Origination and reversal of temporary 
 differences                               2,289     5,586 
--------------------------------------  --------  -------- 
Adjustments in respect of prior years      4,282     1,916 
======================================  ========  ======== 
                                           6,571     7,502 
======================================  ========  ======== 
Total income tax expense                  19,048    23,730 
======================================  ========  ======== 
 

The total income tax expense in the income statement of GBP19,048,000 (2015: GBP23,730,000) includes a tax credit on exceptional items of GBP6,560,000 (2015: GBP2,270,000). There were no non-recurring tax credits in the period.

The UK Government introduced a 1% reduction in the headline rate of corporation tax from April 2015. This reduction reduced the UK tax rate from 21% to 20%.

In July 2015 the UK Government announced further measures in relation to the UK corporation tax rate, reducing the headline rate of corporation tax to 19% from April 2017 and then to 18% from April 2020. A further 1% reduction in the main rate of corporation tax rate to 17% from 1 April 2020 was announced in Budget 2016. As at 30 June 2016, the additional 1% rate reduction to 17% from April 2020 has not been enacted. The impact of the rate reduction to 18% has been incorporated into the income tax charge for the 6 months ended 30 June 2016, taking into consideration when timing differences are expected to reverse.

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the tax rate of the home country of the Company as follows:

 
                                             6 months  6 months 
-------------------------------------------  --------  -------- 
                                                ended     ended 
                                              30 June   30 June 
-------------------------------------------  --------  -------- 
                                                 2016      2015 
-------------------------------------------  --------  -------- 
                                              GBP'000   GBP'000 
===========================================  ========  ======== 
Profit before taxation                         55,237   101,469 
===========================================  ========  ======== 
Tax calculated at UK Corporation Tax 
 rate of 20% (2015: 20.25%)                    11,047    20,547 
-------------------------------------------  --------  -------- 
Non-deductible expenses*                        1,861   (2,451) 
-------------------------------------------  --------  -------- 
Non recognition of tax losses/(Utilisation 
 of tax losses not recognised)                  2,384     (347) 
-------------------------------------------  --------  -------- 
Adjustments in respect of prior years         (1,015)     2,948 
-------------------------------------------  --------  -------- 
Effect of difference between UK and 
 non-UK tax rates                               5,161     4,191 
-------------------------------------------  --------  -------- 
Tax on associates                               (390)   (1,158) 
===========================================  ========  ======== 
Total income tax expense                       19,048    23,730 
===========================================  ========  ======== 
 

* The non-deductible expenses relate principally to non-deductible entertainment expenses (2015: non-deductible entertainment expenses and the non-taxable gain on disposal of Siaci).

5. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

Additionally basic and diluted earnings per share are also calculated based on underlying earnings attributable to the owners of the parent.

A reconciliation of earnings is set out below.

 
                                              As at        As at 
--------------------------------------  -----------  ----------- 
                                            30 June      30 June 
--------------------------------------  -----------  ----------- 
                                               2016         2015 
--------------------------------------  -----------  ----------- 
                                          Number of       Number 
                                             shares    of shares 
======================================  ===========  =========== 
Weighted average number of ordinary 
 shares in issue                        220,013,812  219,435,453 
--------------------------------------  -----------  ----------- 
Effect of outstanding share options          31,702      349,815 
======================================  ===========  =========== 
Adjusted weighted average number of 
 ordinary shares for diluted earnings 
 per share                              220,045,514  219,785,268 
======================================  ===========  =========== 
 
 
                                      6 months ended              6 months ended 
                                       30 June 2016                30 June 2015 
------------------------------  ==========================  ========================== 
                                            Basic  Diluted              Basic  Diluted 
                                            pence    pence              pence    pence 
                                              per      per                per      per 
                                  GBP'000   share    share    GBP'000   share    share 
==============================  =========  ======  =======  =========  ======  ======= 
Earnings reconciliation 
------------------------------  ---------  ------  -------  ---------  ------  ------- 
Underlying profit after 
 taxation and non-controlling 
 interests*                        60,745    27.6     27.6     66,406    30.3     30.2 
------------------------------  =========  ------  -------  =========  ------  ------- 
Exceptional items before 
 tax                             (33,977)                       5,214 
------------------------------  ---------  ------  -------  ---------  ------  ------- 
Taxation thereon                    6,560                       2,270 
------------------------------  =========  ------  -------  =========  ------  ------- 
                                 (27,417)  (12.5)   (12.5)      7,484     3.4      3.4 
==============================  =========  ======  =======  =========  ======  ======= 
Profit attributable 
 to the owners of the 
 parent                            33,328    15.1     15.1     73,890    33.7     33.6 
==============================  =========  ======  =======  =========  ======  ======= 
* Underlying excludes 
 exceptional items. 
------------------------------  ---------  ------  -------  ---------  ------  ------- 
 

6. DIVIDS

 
                                       6 months  6 months 
-------------------------------------  --------  -------- 
                                          ended     ended 
                                        30 June   30 June 
-------------------------------------  --------  -------- 
                                           2016      2015 
-------------------------------------  --------  -------- 
                                        GBP'000   GBP'000 
=====================================  ========  ======== 
Final dividend in respect of 2015 of 
 19.5p per share (2014: 18.3p)           42,550    40,262 
=====================================  ========  ======== 
 

An interim dividend in respect of 2016 of 11.6p per share (2015: 11.1p) amounting to a total of GBP25,637,000 (2015: GBP24,420,000) is payable on 3 October 2016 to shareholders who are registered at the close of business on 2 September 2016. The dividend proposed will not be accounted for until it is paid. The ex-dividend date will be 1 September 2016.

7. GOODWILL

 
                            Gross  Impairment  Net carrying 
------------------------  -------  ----------  ------------ 
                           amount      losses        amount 
------------------------  -------  ----------  ------------ 
                          GBP'000     GBP'000       GBP'000 
========================  =======  ==========  ============ 
At 30 June 2016 
------------------------  -------  ----------  ------------ 
Opening net book amount   500,434     (4,268)       496,166 
------------------------  -------  ----------  ------------ 
Exchange differences       28,339        (57)        28,282 
------------------------  -------  ----------  ------------ 
Impairment                      -       (370)         (370) 
------------------------  -------  ----------  ------------ 
Acquisitions                6,762           -         6,762 
------------------------  -------  ----------  ------------ 
Disposals                 (1,716)           -       (1,716) 
========================  =======  ==========  ============ 
Closing net book amount   533,819     (4,695)       529,124 
========================  =======  ==========  ============ 
 
                            Gross  Impairment  Net carrying 
------------------------  -------  ----------  ------------ 
                           amount      losses        amount 
------------------------  -------  ----------  ------------ 
                          GBP'000     GBP'000       GBP'000 
========================  =======  ==========  ============ 
At 30 June 2015 
------------------------  -------  ----------  ------------ 
Opening net book amount   480,176     (4,479)       475,697 
------------------------  -------  ----------  ------------ 
Exchange differences      (8,440)         221       (8,219) 
------------------------  -------  ----------  ------------ 
Acquisitions               14,472           -        14,472 
------------------------  -------  ----------  ------------ 
Disposals                   (719)           -         (719) 
========================  =======  ==========  ============ 
Closing net book amount   485,489     (4,258)       481,231 
========================  =======  ==========  ============ 
 

The impairment charge of GBP370,000 is included in net loss on disposal of businesses of GBP1,363,000.

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

Available-for-sale financial assets are categorised into one of two categories:

1) Investments and deposits consist mainly of fixed term deposits, bonds and certificates of deposits. These investments are held at fair value and are classified between current and non-current assets according to the maturity date.

2) Other investments include securities and other investments held for strategic purposes. These investments are held at fair value unless a fair value cannot be accurately determined in which case they are held at cost less any provision for impairment.

 
                                          Other  Investments 
----------------------------------  -----------  -----------  ------- 
                                    investments   & deposits    Total 
----------------------------------  -----------  -----------  ------- 
                                        GBP'000      GBP'000  GBP'000 
==================================  ===========  ===========  ======= 
At 1 January 2016                         6,436        9,049   15,485 
----------------------------------  -----------  -----------  ------- 
Exchange differences                        513        1,130    1,643 
----------------------------------  -----------  -----------  ------- 
Additions                                     -       99,701   99,701 
----------------------------------  -----------  -----------  ------- 
Disposals/maturities                      (311)         (19)    (330) 
----------------------------------  -----------  -----------  ------- 
Revaluation gain (included within 
 equity)                                      -         (10)     (10) 
----------------------------------  -----------  -----------  ------- 
Amounts to be written off                  (70)            -     (70) 
==================================  ===========  ===========  ======= 
At 30 June 2016                           6,568      109,851  116,419 
==================================  ===========  ===========  ======= 
 
Analysis of available-for-sale 
 financial assets 
----------------------------------  -----------  -----------  ------- 
Current                                       -       99,598   99,598 
----------------------------------  -----------  -----------  ------- 
Non-current                               6,568       10,253   16,821 
==================================  ===========  ===========  ======= 
At 30 June 2016                           6,568      109,851  116,419 
==================================  ===========  ===========  ======= 
 
Analysis of available-for-sale 
 investments and deposits 
----------------------------------  -----------  -----------  ------- 
Fiduciary funds                                      109,572 
----------------------------------  -----------  -----------  ------- 
Own funds                                                279 
==================================  ===========  ===========  ======= 
At 30 June 2016                                      109,851 
==================================  ===========  ===========  ======= 
 
                                          Other  Investments 
----------------------------------  -----------  -----------  ------- 
                                    investments   & deposits    Total 
----------------------------------  -----------  -----------  ------- 
                                        GBP'000      GBP'000  GBP'000 
==================================  ===========  ===========  ======= 
At 1 January 2015                         4,746        9,642   14,388 
----------------------------------  -----------  -----------  ------- 
Exchange differences                       (48)        (671)    (719) 
----------------------------------  -----------  -----------  ------- 
Additions                                     -        5,423    5,423 
----------------------------------  -----------  -----------  ------- 
Disposals/maturities                      (245)      (5,263)  (5,508) 
----------------------------------  -----------  -----------  ------- 
Revaluation gain (included within 
 equity)                                      -           37       37 
----------------------------------  -----------  -----------  ------- 
Amounts to be written off                  (65)            -     (65) 
==================================  ===========  ===========  ======= 
At 30 June 2015                           4,388        9,168   13,556 
==================================  ===========  ===========  ======= 
 
Analysis of available-for-sale 
 financial assets 
----------------------------------  -----------  -----------  ------- 
Current                                       -          172      172 
----------------------------------  -----------  -----------  ------- 
Non-current                               4,388        8,996   13,384 
==================================  ===========  ===========  ======= 
At 30 June 2015                           4,388        9,168   13,556 
==================================  ===========  ===========  ======= 
 
Analysis of available-for-sale 
 investments and deposits 
----------------------------------  -----------  -----------  ------- 
Fiduciary funds                                        8,845 
----------------------------------  -----------  -----------  ------- 
Own funds                                                323 
==================================  ===========  ===========  ======= 
At 30 June 2015                                        9,168 
==================================  ===========  ===========  ======= 
 

9. DERIVATIVE FINANCIAL INSTRUMENTS

 
                                        As at 30 June         As at 30 June 
                                             2016                  2015 
-----------------------------------  ====================  ==================== 
                                      Assets  Liabilities   Assets  Liabilities 
-----------------------------------  -------  -----------  -------  ----------- 
                                     GBP'000      GBP'000  GBP'000      GBP'000 
===================================  =======  ===========  =======  =========== 
Interest rate swaps - fair value 
 hedges                               36,578        (203)    9,214     (10,746) 
-----------------------------------  -------  -----------  -------  ----------- 
Forward foreign exchange contracts 
 - cash flow hedges                   65,134     (47,076)   12,556      (5,568) 
-----------------------------------  -------  -----------  -------  ----------- 
Redemption liabilities - option 
 contracts                                 -     (25,941)        -     (18,226) 
===================================  =======  ===========  =======  =========== 
Total                                101,712     (73,220)   21,770     (34,540) 
===================================  =======  ===========  =======  =========== 
 
Current                                6,632     (18,194)    5,446      (1,384) 
-----------------------------------  -------  -----------  -------  ----------- 
Non-current                           95,080     (55,026)   16,324     (33,156) 
===================================  =======  ===========  =======  =========== 
Total                                101,712     (73,220)   21,770     (34,540) 
===================================  =======  ===========  =======  =========== 
 

The Group's treasury policies are approved by the Board and are implemented by a centralised treasury department. The treasury department operates within a framework of policies and procedures that establish specific guidelines to manage currency risk, liquidity risk and interest rate risk and the use of counterparties and financial instruments to manage these risks. The treasury department is subject to periodic review by internal audit.

The Group uses various derivative instruments including forward foreign exchange contracts and interest rate swaps to manage the risks arising from variations in currency and interest rates. Derivative instruments purchased are primarily denominated in the currencies of the Group's cash flows.

Where forward foreign exchange contracts have been entered into to manage currency risk, they are designated as hedges of currency risk on specific future cash flows, and qualify as highly probable transactions for which hedge accounting is applied. The Group anticipates that hedge accounting requirements will continue to be met on its foreign currency and interest rate hedging activities and that no material ineffectiveness will arise which will result in gains or losses being recognised through the income statement.

The movement in fair value of financial derivatives based upon market values as at 30 June 2016 and designated as effective cash flow hedges was a net gain of GBP18.1 million and has been deferred in equity (2015: net asset of GBP7.0 million). Gains and losses arising on derivative instruments outstanding as at 30 June 2016 will be released to the income statement at various dates up to:

a) 44 months in respect of cash flow hedges on currency denominated UK earnings.

b) 13 years in respect of specific hedges on USD denominated long-term debt drawn under the Group's USD private placement programme.

c) 10 years in respect of interest rate hedges on sterling denominated long-term debt drawn under the Group's private placement programme.

No material amounts were transferred to the income statement during the period in respect of the fair value of financial derivatives.

Transactions maturing within 12 months of the balance sheet date are classified in current maturities. Transactions maturing in a period in excess of 12 months of the balance sheet date are classified as non-current maturities.

a) Forward foreign exchange contracts

The Group's major currency transaction exposure arises in USD and the Group continues to adopt a prudent approach in actively managing this exposure. As at 30 June 2016 the Group had outstanding foreign exchange contracts, principally in USD, amounting to a principal value of GBP1,051,545,000 (2015: GBP831,615,000).

b) Interest rate swaps

The Group uses interest rate swaps to mitigate the impact of changes in interest rates. The notional principal amount of outstanding cross currency interest rate swaps as at 30 June 2016 was USD500,000,000 and GBP75,000,000 (2015: USD500,000,000 and GBP75,000,000). A net gain of GBP36.4 million (2015: net loss GBP1.5 million) on these instruments was offset by a fair value movement of GBP36.4 million (2015: GBP1.5 million) on the private placement loans, both of which were recognised in the income statement in the period.

c) Redemption liabilities

The redemption liabilities represent the valuation of the put options on the future purchase of stakes from non-controlling interests.

d) Price risk

The Group does not have a material exposure to commodity price risk.

The maximum exposure to credit risk at the reporting date is the fair value of the derivatives in the balance sheet.

10. TRADE AND OTHER RECEIVABLES

 
                                             As at     As at 
----------------------------------------  --------  -------- 
                                           30 June   30 June 
----------------------------------------  --------  -------- 
                                              2016      2015 
----------------------------------------  --------  -------- 
                                           GBP'000   GBP'000 
========================================  ========  ======== 
Trade receivables                          414,994   361,541 
----------------------------------------  --------  -------- 
Less: provision for impairment of trade 
 receivables                              (19,699)  (10,938) 
========================================  ========  ======== 
Trade receivables - net                    395,295   350,603 
----------------------------------------  --------  -------- 
Other receivables                          140,174   159,300 
----------------------------------------  --------  -------- 
Prepayments                                 32,582    28,366 
========================================  ========  ======== 
                                           568,051   538,269 
========================================  ========  ======== 
 

As at 30 June 2016, the Group had exposures to individual trade counterparties within trade receivables. In accordance with Group policy, Group operating companies continually monitor exposures against credit limits and concentration of risk. No individual trade counterparty credit exposure is considered significant in the ordinary course of trading activity. Management does not expect any significant losses from non-performance by trade counterparties that have not been provided for.

11. CASH AND CASH EQUIVALENTS

 
                             As at    As at 
-------------------------  -------  ------- 
                           30 June  30 June 
-------------------------  -------  ------- 
                              2016     2015 
-------------------------  -------  ------- 
                           GBP'000  GBP'000 
=========================  =======  ======= 
Cash at bank and in hand   550,648  482,529 
-------------------------  -------  ------- 
Short-term bank deposits   378,567  455,719 
=========================  =======  ======= 
                           929,215  938,248 
=========================  =======  ======= 
 
Fiduciary funds            719,420  796,400 
-------------------------  -------  ------- 
Own funds                  209,795  141,848 
=========================  =======  ======= 
                           929,215  938,248 
=========================  =======  ======= 
 

Fiduciary funds represent client money held in the form of premiums due to underwriters, claims paid by insurers and due to policyholders, and funds held to defray commissions and other income. Fiduciary funds are not available for general corporate purposes.

The effective interest rate in respect of short-term deposits was 0.43% (2015: 0.40%). These deposits have an average maturity of 15 days (2015: 17 days).

12. TRADE AND OTHER PAYABLES

 
                                            As at      As at 
--------------------------------------  ---------  --------- 
                                          30 June    30 June 
--------------------------------------  ---------  --------- 
                                             2016       2015 
--------------------------------------  ---------  --------- 
                                          GBP'000    GBP'000 
======================================  =========  ========= 
Insurance payables                        828,992    805,245 
--------------------------------------  ---------  --------- 
Social security and other taxes            20,663     20,327 
--------------------------------------  ---------  --------- 
Other payables                            148,870    132,169 
--------------------------------------  ---------  --------- 
Accruals and deferred income              128,442    116,685 
--------------------------------------  ---------  --------- 
Deferred and contingent consideration      21,539     19,512 
======================================  =========  ========= 
                                        1,148,506  1,093,938 
======================================  =========  ========= 
 

All payables are considered current as the non-current portion is not material.

13. FINANCIAL INSTRUMENTS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

 
                                                Derivatives 
---------------------------------  -----------  -----------  -----------  ----------- 
                                         Loans         used   Available- 
                                           and          for 
---------------------------------  -----------  -----------  -----------  ----------- 
At 30 June 2016                    receivables      hedging     for-sale        Total 
---------------------------------  -----------  -----------  -----------  ----------- 
Assets per balance sheet               GBP'000      GBP'000      GBP'000      GBP'000 
=================================  ===========  ===========  ===========  =========== 
Available-for-sale financial 
 assets                                      -            -      116,419      116,419 
---------------------------------  -----------  -----------  -----------  ----------- 
Derivative financial instruments             -      101,712            -      101,712 
---------------------------------  -----------  -----------  -----------  ----------- 
Trade and other receivables 
 (a)                                   535,469            -            -      535,469 
---------------------------------  -----------  -----------  -----------  ----------- 
Cash and cash equivalents              929,215            -            -      929,215 
=================================  ===========  ===========  ===========  =========== 
Total                                1,464,684      101,712      116,419    1,682,815 
=================================  ===========  ===========  ===========  =========== 
 
                                                Derivatives        Other 
---------------------------------  -----------  -----------  -----------  ----------- 
                                                       used    financial 
                                                        for 
---------------------------------  -----------  -----------  -----------  ----------- 
                                                    hedging  liabilities        Total 
---------------------------------  -----------  -----------  -----------  ----------- 
Liabilities per balance sheet                       GBP'000      GBP'000      GBP'000 
=================================  ===========  ===========  ===========  =========== 
Borrowings                                                -    (754,115)    (754,115) 
---------------------------------  -----------  -----------  -----------  ----------- 
Trade and other payables 
 (b)                                                      -  (1,020,064)  (1,020,064) 
---------------------------------  -----------  -----------  -----------  ----------- 
Redemption liabilities - 
 option contracts                                  (25,941)            -     (25,941) 
---------------------------------  -----------  -----------  -----------  ----------- 
Derivative financial instruments                   (47,279)            -     (47,279) 
=================================  ===========  ===========  ===========  =========== 
Total                                              (73,220)  (1,774,179)  (1,847,399) 
=================================  ===========  ===========  ===========  =========== 
 
                                                Derivatives 
---------------------------------  -----------  -----------  -----------  ----------- 
                                         Loans         used   Available- 
                                           and          for 
---------------------------------  -----------  -----------  -----------  ----------- 
At 30 June 2015                    receivables      hedging     for-sale        Total 
---------------------------------  -----------  -----------  -----------  ----------- 
Assets per balance sheet               GBP'000      GBP'000      GBP'000      GBP'000 
=================================  ===========  ===========  ===========  =========== 
Available-for-sale financial 
 assets                                      -            -       13,556       13,556 
---------------------------------  -----------  -----------  -----------  ----------- 
Derivative financial instruments             -       21,770            -       21,770 
---------------------------------  -----------  -----------  -----------  ----------- 
Trade and other receivables 
 (a)                                   509,903            -            -      509,903 
---------------------------------  -----------  -----------  -----------  ----------- 
Cash and cash equivalents              938,248            -            -      938,248 
=================================  ===========  ===========  ===========  =========== 
Total                                1,448,151       21,770       13,556    1,483,477 
=================================  ===========  ===========  ===========  =========== 
 
                                                Derivatives        Other 
---------------------------------  -----------  -----------  -----------  ----------- 
                                                       used    financial 
                                                        for 
---------------------------------  -----------  -----------  -----------  ----------- 
                                                    hedging  liabilities        Total 
---------------------------------  -----------  -----------  -----------  ----------- 
Liabilities per balance sheet                       GBP'000      GBP'000      GBP'000 
=================================  ===========  ===========  ===========  =========== 
Borrowings                                                -    (606,343)    (606,343) 
---------------------------------  -----------  -----------  -----------  ----------- 
Trade and other payables 
 (b)                                                      -    (977,253)    (977,253) 
---------------------------------  -----------  -----------  -----------  ----------- 
Redemption liabilities - 
 option contracts                                  (18,226)            -     (18,226) 
---------------------------------  -----------  -----------  -----------  ----------- 
Derivative financial instruments                   (16,314)            -     (16,314) 
=================================  ===========  ===========  ===========  =========== 
Total                                              (34,540)  (1,583,596)  (1,618,136) 
=================================  ===========  ===========  ===========  =========== 
 
(a) Prepayments are excluded from the trade and other 
 receivables balance, as this analysis is required 
 only for financial instruments. 
------------------------------------------------------------------------------------- 
(b) Non-financial liabilities are excluded from the 
 trade and other payables balance, as this analysis 
 is required only for financial instruments. 
------------------------------------------------------------------------------------- 
 

13. FINANCIAL INSTRUMENTS BY CATEGORY CONTINUED

The following table presents the Group's financial assets and liabilities that are measured at fair value at 30 June 2016.

 
                                          Level     Level      Level     Total 
                                              1         2          3 
--------------------------------------  -------  --------  ---------  -------- 
At 30 June 2016                         GBP'000   GBP'000    GBP'000   GBP'000 
======================================  =======  ========  =========  ======== 
Assets 
--------------------------------------  -------  --------  ---------  -------- 
Derivatives used for hedging                  -   101,712          -   101,712 
--------------------------------------  -------  --------  ---------  -------- 
Available-for-sale financial 
 assets 
--------------------------------------  -------  --------  ---------  -------- 
- equity securities                           1         -      1,279     1,280 
--------------------------------------  -------  --------  ---------  -------- 
- debt investments                            -         -      5,288     5,288 
--------------------------------------  -------  --------  ---------  -------- 
- fixed deposits                        109,851         -          -   109,851 
======================================  =======  ========  =========  ======== 
Total                                   109,852   101,712      6,567   218,131 
======================================  =======  ========  =========  ======== 
 
Liabilities 
--------------------------------------  -------  --------  ---------  -------- 
Deferred and contingent consideration         -         -   (21,539)  (21,539) 
--------------------------------------  -------  --------  ---------  -------- 
Redemption liabilities - 
 option contracts                             -         -   (25,941)  (25,941) 
--------------------------------------  -------  --------  ---------  -------- 
Derivatives used for hedging                  -  (47,279)          -  (47,279) 
======================================  =======  ========  =========  ======== 
Total                                         -  (47,279)   (47,480)  (94,759) 
======================================  =======  ========  =========  ======== 
 
                                          Level     Level      Level     Total 
                                              1         2          3 
--------------------------------------  -------  --------  ---------  -------- 
At 30 June 2015                         GBP'000   GBP'000    GBP'000   GBP'000 
======================================  =======  ========  =========  ======== 
Assets 
--------------------------------------  -------  --------  ---------  -------- 
Derivatives used for hedging                  -    21,770          -    21,770 
--------------------------------------  -------  --------  ---------  -------- 
Available-for-sale financial 
 assets 
--------------------------------------  -------  --------  ---------  -------- 
- equity securities                         402         -      1,252     1,654 
--------------------------------------  -------  --------  ---------  -------- 
- debt investments                            -         -      2,734     2,734 
--------------------------------------  -------  --------  ---------  -------- 
- mutual funds                              172         -          -       172 
--------------------------------------  -------  --------  ---------  -------- 
- fixed deposits                          8,996         -          -     8,996 
======================================  =======  ========  =========  ======== 
Total                                     9,570    21,770      3,986    35,326 
======================================  =======  ========  =========  ======== 
 
Liabilities 
--------------------------------------  -------  --------  ---------  -------- 
Deferred and contingent consideration         -         -   (19,512)  (19,512) 
--------------------------------------  -------  --------  ---------  -------- 
Redemption liabilities - 
 option contracts                             -         -   (18,226)  (18,226) 
--------------------------------------  -------  --------  ---------  -------- 
Derivatives used for hedging                  -  (16,314)          -  (16,314) 
======================================  =======  ========  =========  ======== 
Total                                         -  (16,314)   (37,738)  (54,052) 
======================================  =======  ========  =========  ======== 
 

Apart from where disclosed, there are no differences between the fair value and the carrying value of financial assets and liabilities.

Instruments included in level 1 are financial instruments traded in active markets for which the fair value is based upon quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's length basis.

Instruments included in level 2 are financial instruments that are not traded in an active market (for example, over-the-counter derivatives) and for which the fair value is determined by using internal and external models. These models maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 2 includes derivatives used for hedging. The valuations of which are performed using a discounted cash flow methodology incorporating observable market forward foreign exchange and interest rates.

During the year there were no transfers between level 1 and level 2. There were no changes in valuation techniques during the year.

Instruments included in level 3 are financial instruments for which one or more of the significant inputs is not based on observable market data. In respect of deferred and contingent consideration and redemption liabilities - option contracts, unobservable inputs include management's assessment of the expected future performance of relevant acquired businesses and are valued using a discounted cash flow methodology.

13. FINANCIAL INSTRUMENTS BY CATEGORY CONTINUED

A reconciliation of the movements in level 3 is provided below:

 
                               Assets  Liabilites 
----------------------------  -------  ---------- 
                              Level 3     Level 3 
----------------------------  -------  ---------- 
                              GBP'000     GBP'000 
============================  =======  ========== 
At 1 January 2016               6,125    (40,388) 
----------------------------  -------  ---------- 
Exchange differences              513     (4,468) 
----------------------------  -------  ---------- 
Companies acquired                  -     (4,917) 
----------------------------  -------  ---------- 
Utilised in the year                -       3,048 
----------------------------  -------  ---------- 
Charged to income statement      (71)       (755) 
============================  =======  ========== 
At 30 June 2016                 6,567    (47,480) 
============================  =======  ========== 
 

For the assets, GBP71,000 is charged to the income statement in net finance costs.

For the liabilities, of the GBP755,000 charged to the income statement, GBP853,000 is included in net finance costs and GBP98,000 is credited in other operating costs.

14. borrowings

 
                              As at    As at 
--------------------------  -------  ------- 
                            30 June  30 June 
--------------------------  -------  ------- 
                               2016     2015 
--------------------------  -------  ------- 
                            GBP'000  GBP'000 
==========================  =======  ======= 
Current 
--------------------------  -------  ------- 
Bank overdraft               22,055   24,027 
--------------------------  -------  ------- 
Bank borrowings                 449      410 
--------------------------  -------  ------- 
Finance lease liabilities       244      202 
==========================  =======  ======= 
                             22,748   24,639 
==========================  =======  ======= 
Non-current 
--------------------------  -------  ------- 
Unsecured loan notes        482,875  390,276 
--------------------------  -------  ------- 
Bank borrowings             248,051  190,923 
--------------------------  -------  ------- 
Finance lease liabilities       441      505 
==========================  =======  ======= 
                            731,367  581,704 
==========================  =======  ======= 
Total borrowings            754,115  606,343 
==========================  =======  ======= 
 

The borrowings include secured liabilities (leases) of GBP685,000 (2015: GBP707,000).

15. PROVISIONS FOR LIABILITIES AND CHARGES

 
                                    Property 
--------------------------------  ----------  ----------  -------  -------- 
                                     related  Litigation 
--------------------------------  ----------  ----------  -------  -------- 
                                  provisions  provisions    Other     Total 
--------------------------------  ----------  ----------  -------  -------- 
                                     GBP'000     GBP'000  GBP'000   GBP'000 
================================  ==========  ==========  =======  ======== 
At 1 January 2016                      1,300      18,223      114    19,637 
--------------------------------  ----------  ----------  -------  -------- 
Exchange differences                      47         143        -       190 
--------------------------------  ----------  ----------  -------  -------- 
Utilised in the period                 (267)    (10,573)        -  (10,840) 
--------------------------------  ----------  ----------  -------  -------- 
Charged to the income statement           33       1,851      795     2,679 
--------------------------------  ----------  ----------  -------  -------- 
Interest charge                            -           -        -         - 
================================  ==========  ==========  =======  ======== 
At 30 June 2016                        1,113       9,644      909    11,666 
================================  ==========  ==========  =======  ======== 
 
                                    Property 
--------------------------------  ----------  ----------  -------  -------- 
                                     related  Litigation 
--------------------------------  ----------  ----------  -------  -------- 
                                  provisions  provisions    Other     Total 
--------------------------------  ----------  ----------  -------  -------- 
                                     GBP'000     GBP'000  GBP'000   GBP'000 
================================  ==========  ==========  =======  ======== 
At 1 January 2015                      4,881       5,570      362    10,813 
--------------------------------  ----------  ----------  -------  -------- 
Exchange differences                       -        (24)        -      (24) 
--------------------------------  ----------  ----------  -------  -------- 
Utilised in the period               (3,198)       (548)      (8)   (3,754) 
--------------------------------  ----------  ----------  -------  -------- 
(Credited)/charged to the 
 income statement                       (75)         127    (240)     (188) 
--------------------------------  ----------  ----------  -------  -------- 
Interest charge                            2           -        -         2 
================================  ==========  ==========  =======  ======== 
At 30 June 2015                        1,610       5,125      114     6,849 
================================  ==========  ==========  =======  ======== 
 
                                                            As at     As at 
--------------------------------  ----------  ----------  -------  -------- 
                                                          30 June   30 June 
--------------------------------  ----------  ----------  -------  -------- 
                                                             2016      2015 
--------------------------------  ----------  ----------  -------  -------- 
                                                          GBP'000   GBP'000 
================================  ==========  ==========  =======  ======== 
Analysis of total provisions: 
--------------------------------  ----------  ----------  -------  -------- 
Current - to be utilised 
 within one year                                           10,829     5,501 
--------------------------------  ----------  ----------  -------  -------- 
Non-current - to be utilised 
 in more than one year                                        837     1,348 
================================  ==========  ==========  =======  ======== 
                                                           11,666     6,849 
================================  ==========  ==========  =======  ======== 
 

Property related provisions

The Group recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. Provision is made for the future rental cost of vacant property and expected dilapidation expenses. In calculating the provision required, account is taken of the duration of the lease and any recovery of cost achievable from subletting. Property provisions occur principally in the US and UK and relate to a variety of lease commitments. The longest lease term expires in 2025.

Litigation provisions

At any point in time the Group can be involved in a variety of litigation and dispute issues. A provision is established in respect of such issues when it is probable that the liability has been incurred and the amount of the liability can be reasonably estimated. The Group analyses its litigation exposures based on available information, including external legal consultation where appropriate, to assess its potential liability. Where appropriate the Group also provides for the cost of defending or initiating such matters. However, the final outcome could differ materially from the amount provided.

Where a litigation provision has been made it is stated gross of any third party recovery. All such recoveries are included as "other receivables" within trade and other receivables. At 30 June 2016, in connection with certain litigation matters, the Group's litigation provisions include an amount of GBP0.1 million (2015: GBP0.1 million) to reflect this gross basis and the corresponding insurance recovery has been included within trade and other receivables. This presentation has had no effect on the consolidated income statement for the six months ended 30 June 2016 (2015: nil).

Other

Other provisions include provisions for clawback of commission which arises on certain types of Employee Benefits contracts.

 
16. OTHER RESERVES 
---------------------------------------------------------------------------- 
                                                    Fair 
                                                   value 
----------------------------------  -------  -----------  --------  -------- 
                                      Share  and hedging  Exchange 
----------------------------------  -------  -----------  --------  -------- 
                                    premium     reserves  reserves     Total 
----------------------------------  -------  -----------  --------  -------- 
                                    GBP'000      GBP'000   GBP'000   GBP'000 
==================================  =======  ===========  ========  ======== 
At 1 January 2016                   104,074     (12,827)  (17,280)    73,967 
----------------------------------  =======  ===========  ========  ======== 
Fair value gains net of tax 
----------------------------------  -------  -----------  --------  -------- 
- available-for-sale                      -         (10)         -      (10) 
----------------------------------  -------  -----------  --------  -------- 
- available-for-sale reclassified 
 to the income statement                  -        (146)         -     (146) 
----------------------------------  -------  -----------  --------  -------- 
- cash flow hedges                        -     (18,043)         -  (18,043) 
----------------------------------  -------  -----------  --------  -------- 
Currency translation differences          -            -    60,041    60,041 
----------------------------------  =======  ===========  ========  ======== 
Net (losses)/gains recognised 
 directly in equity                       -     (18,199)    60,041    41,842 
----------------------------------  -------  -----------  --------  -------- 
Issue of share capital                    3            -         -         3 
==================================  =======  ===========  ========  ======== 
At 30 June 2016                     104,077     (31,026)    42,761   115,812 
==================================  =======  ===========  ========  ======== 
 
                                                    Fair 
                                                   value 
----------------------------------  -------  -----------  --------  -------- 
                                      Share  and hedging  Exchange 
----------------------------------  -------  -----------  --------  -------- 
                                    premium     reserves  reserves     Total 
----------------------------------  -------  -----------  --------  -------- 
                                    GBP'000      GBP'000   GBP'000   GBP'000 
==================================  =======  ===========  ========  ======== 
At 1 January 2015                   103,941        (234)   (5,033)    98,674 
----------------------------------  =======  ===========  ========  ======== 
Fair value gains net of tax 
----------------------------------  -------  -----------  --------  -------- 
- available-for-sale                      -           72         -        72 
----------------------------------  -------  -----------  --------  -------- 
- cash flow hedges                        -        4,616         -     4,616 
----------------------------------  -------  -----------  --------  -------- 
Currency translation differences          -            -  (21,120)  (21,120) 
----------------------------------  =======  ===========  ========  ======== 
Net gains/(losses) recognised 
 directly in equity                       -        4,688  (21,120)  (16,432) 
----------------------------------  -------  -----------  --------  -------- 
Issue of share capital                  122            -         -       122 
==================================  =======  ===========  ========  ======== 
At 30 June 2015                     104,063        4,454  (26,153)    82,364 
==================================  =======  ===========  ========  ======== 
 
 
17. CASH GENERATED FROM OPERATIONS 
-------------------------------------------------  --------  -------- 
                                                   6 months  6 months 
-------------------------------------------------  --------  -------- 
                                                      ended     ended 
                                                    30 June   30 June 
-------------------------------------------------  --------  -------- 
                                                       2016      2015 
-------------------------------------------------  --------  -------- 
                                                    GBP'000   GBP'000 
=================================================  ========  ======== 
Profit before taxation                               55,237   101,469 
-------------------------------------------------  --------  -------- 
Investment and finance income                       (2,820)   (2,261) 
-------------------------------------------------  --------  -------- 
Interest payable on bank loans and finance 
 leases                                               8,804     8,635 
-------------------------------------------------  --------  -------- 
Fair value losses on derivatives financial 
 instruments                                             90        44 
-------------------------------------------------  --------  -------- 
Net pension financing expenses                        2,499     3,185 
-------------------------------------------------  --------  -------- 
Unwinding of liability discounting                      853       748 
-------------------------------------------------  --------  -------- 
Depreciation                                          6,102     5,895 
-------------------------------------------------  --------  -------- 
Amortisation of other intangible assets              18,033    15,034 
-------------------------------------------------  --------  -------- 
Amortisation of share based payments                 13,490    11,880 
-------------------------------------------------  --------  -------- 
Share of results of associates' undertakings        (1,948)   (5,720) 
-------------------------------------------------  --------  -------- 
Non-cash exceptional items                            9,134       429 
-------------------------------------------------  --------  -------- 
Losses on disposal of businesses                      1,363       607 
-------------------------------------------------  --------  -------- 
Gain on sale of associates                                -  (19,142) 
-------------------------------------------------  --------  -------- 
Gains on disposal of property, plant 
 and equipment                                         (56)      (64) 
-------------------------------------------------  --------  -------- 
(Gains)/losses on disposal of available-for-sale 
 financial assets                                     (129)        64 
-------------------------------------------------  --------  -------- 
Pension curtailment gain                                  -     (491) 
-------------------------------------------------  --------  -------- 
Increase in trade and other receivables            (39,209)  (41,886) 
-------------------------------------------------  --------  -------- 
Decrease in trade and other payables 
 - excluding insurance broking balances            (29,159)  (15,272) 
-------------------------------------------------  --------  -------- 
Decrease in provisions for liabilities 
 and charges                                       (13,597)   (3,942) 
-------------------------------------------------  --------  -------- 
Decrease in retirement benefit obligation               618      (64) 
=================================================  ========  ======== 
Net cash inflow from operations                      29,305    59,148 
=================================================  ========  ======== 
 

18. BUSINESS COMBINATIONS

Adjustments in respect of prior period acquisitions

2015 acquisitions

During the period, the process of finalising the provisional fair values in respect of acquisitions carried out during 2016 has resulted in following changes.

 
                                                    Provisional 
--------------------------------------  ----------  -----------  ---------- 
                                           Revised   fair value 
--------------------------------------  ----------  -----------  ---------- 
                                        fair value     reported      Change 
                                                             at          in 
--------------------------------------  ----------  -----------  ---------- 
                                          acquired       31 Dec  fair value 
                                                           2015 
--------------------------------------  ----------  -----------  ---------- 
                                           GBP'000      GBP'000     GBP'000 
======================================  ==========  ===========  ========== 
Close Brothers Asset Management                491          580        (89) 
--------------------------------------  ----------  -----------  ---------- 
Pierre Leblanc & Associés 
 SAS                                         1,027          990          37 
======================================  ==========  ===========  ========== 
                                             1,518        1,570        (52) 
======================================  ==========  ===========  ========== 
 
These changes in fair value affected 
 the following balance sheet classes: 
--------------------------------------  ----------  -----------  ---------- 
                                                    Provisional 
--------------------------------------  ----------  -----------  ---------- 
                                           Revised   fair value 
--------------------------------------  ----------  -----------  ---------- 
                                        fair value     reported      Change 
                                                             at          in 
--------------------------------------  ----------  -----------  ---------- 
                                          acquired       31 Dec  fair value 
                                                           2015 
--------------------------------------  ----------  -----------  ---------- 
                                           GBP'000      GBP'000     GBP'000 
======================================  ==========  ===========  ========== 
Property, plant and equipment                   41            4          37 
--------------------------------------  ----------  -----------  ---------- 
Other intangible assets                      1,068        1,068           - 
--------------------------------------  ----------  -----------  ---------- 
Trade and other receivables                    713          713           - 
--------------------------------------  ----------  -----------  ---------- 
Cash and cash equivalents 
--------------------------------------  ----------  -----------  ---------- 
- own cash                                     511          511           - 
--------------------------------------  ----------  -----------  ---------- 
- fiduciary cash                             2,218        2,218           - 
--------------------------------------  ----------  -----------  ---------- 
Insurance payables                         (2,218)      (2,218)           - 
--------------------------------------  ----------  -----------  ---------- 
Trade and other payables                     (793)        (704)        (89) 
--------------------------------------  ----------  -----------  ---------- 
Current taxation                              (22)         (22)           - 
======================================  ==========  ===========  ========== 
                                             1,518        1,570        (52) 
======================================  ==========  ===========  ========== 
 
 
                                  As at    As at 
------------------------------  -------  -------  ------- 
                                30 June   31 Dec 
------------------------------  -------  -------  ------- 
                                   2016     2015   Change 
------------------------------  -------  -------  ------- 
Goodwill acquisition            GBP'000  GBP'000  GBP'000 
==============================  =======  =======  ======= 
Purchase consideration 
------------------------------  -------  -------  ------- 
- cash paid                       6,030    6,030        - 
------------------------------  -------  -------  ------- 
- contingent consideration          717      717        - 
------------------------------  -------  -------  ------- 
- deferred consideration            248      248        - 
==============================  =======  =======  ======= 
Total purchase consideration      6,995    6,995        - 
------------------------------  -------  -------  ------- 
Less fair value of net assets 
 acquired                         1,518    1,570     (52) 
==============================  =======  =======  ======= 
Goodwill                          5,477    5,425       52 
==============================  =======  =======  ======= 
 
 
                                           As at     As at 
--------------------------------------  --------  --------  ------- 
                                         30 June    31 Dec 
--------------------------------------  --------  --------  ------- 
                                            2016      2015   Change 
--------------------------------------  --------  --------  ------- 
                                         GBP'000   GBP'000  GBP'000 
======================================  ========  ========  ======= 
Purchase consideration settled 
 in cash                                   6,030     6,030        - 
--------------------------------------  --------  --------  ------- 
Cash and cash equivalents - own 
 cash in subsidiaries acquired             (511)     (511)        - 
======================================  ========  ========  ======= 
                                           5,519     5,519        - 
--------------------------------------  --------  --------  ------- 
Cash and cash equivalents - fiduciary 
 cash in subsidiaries acquired           (2,218)   (2,218)        - 
======================================  ========  ========  ======= 
Cash outflow on acquisition                3,301     3,301        - 
======================================  ========  ========  ======= 
 

18. BUSINESS COMBINATIONS CONTINUED

Current period acquisitions

During the period the following new business acquisitions and additional investments were completed:

 
                                                     Percentage 
-----------------------------  ------  ------------  ----------  ------- 
                                        Acquisition      voting     Cost 
                                                         rights 
-----------------------------  ------  ------------  ----------  ------- 
                                Notes          date    acquired  GBP'000 
=============================  ======  ============  ==========  ======= 
Broderick Piller Pty Ltd 
 (Workwise)                         i      May 2016        100%    7,146 
-----------------------------  ------  ------------  ----------  ------- 
Acquisition of other new                      Jan - 
 businesses completed during                   June 
 the year                          ii          2016     various      917 
-----------------------------  ------  ------------  ----------  ------- 
                                              Jan - 
Additional investments in                      June 
 exisiting businesses              ii          2016     various    2,063 
=============================  ======  ============  ==========  ======= 
                                                                  10,126 
  =================================================  ==========  ======= 
 

i) Acquisition of Broderick Piller Pty Ltd (Workwise)

On 10 May 2016, the Group completed the acquisition of of Broderick Piller Pty Ltd, trading under the name 'Workwise Occupational Health', a leading provider of workplace, health & safety and rehabilitation services. The acquired business contributed revenue of GBP419,000 and net profit, including acquisition and integration costs incurred to date, of GBP92,000 to the Group for the period since acquisition. If the acquisition had taken place on 1 January 2016, we estimate the contribution to Group revenue would have been GBP1,217,000 and net gain, including acquisition and integration costs incurred to date, would have been GBP396,000.

 
Goodwill acquisition                     GBP'000 
=======================================  ======= 
Purchase consideration 
---------------------------------------  ------- 
- cash paid                                3,521 
---------------------------------------  ------- 
- contingent consideration                 3,088 
---------------------------------------  ------- 
- deferred consideration                     537 
=======================================  ======= 
Total purchase consideration               7,146 
---------------------------------------  ------- 
Less fair value of net assets acquired     1,353 
=======================================  ======= 
Goodwill                                   5,793 
=======================================  ======= 
 

The assets and liabilities arising from the acquisition were as follows:

 
                                Acquiree's 
------------------------------  ----------  ---------- 
                                  carrying 
------------------------------  ----------  ---------- 
                                    amount  Fair value 
------------------------------  ----------  ---------- 
                                   GBP'000     GBP'000 
==============================  ==========  ========== 
Property, plant and equipment           55          55 
------------------------------  ----------  ---------- 
Other intangible assets                  3         570 
------------------------------  ----------  ---------- 
Trade and other receivables            260         260 
------------------------------  ----------  ---------- 
Cash and cash equivalents 
------------------------------  ----------  ---------- 
- own cash                             468         468 
==============================  ==========  ========== 
                                       786       1,353 
==============================  ==========  ========== 
 
 
                                                     GBP'000 
===================================================  ======= 
Purchase consideration settled in cash                 3,521 
---------------------------------------------------  ------- 
Cash and cash equivalents - own cash in subsidiary 
 acquired                                              (468) 
===================================================  ======= 
Cash outflow on acquistions                            3,053 
===================================================  ======= 
 

As at 30 June 2016, the process of reviewing the fair values of assets acquired had not been completed, consequently the fair values stated above are provisional.

The contingent consideration of GBP3,088,000 is based upon the expected profit before tax of the business for future period till 2020.

The deferred consideration of GBP537,000 may be adjusted following determination of net current assets on completion balance sheet.

None of the goodwill recognised is expected to be deductible for income tax purposes.

18. BUSINESS COMBINATIONS CONTINUED

ii) Other acquisitions and additional investments

 
Goodwill acquisition                                        GBP'000 
==========================================================  ======= 
Purchase consideration 
----------------------------------------------------------  ------- 
- cash paid                                                   1,578 
----------------------------------------------------------  ------- 
- deferred consideration                                      1,061 
----------------------------------------------------------  ------- 
- contingent consideration                                      231 
----------------------------------------------------------  ------- 
- cancellation of loans                                         110 
==========================================================  ======= 
Total purchase consideration                                  2,980 
----------------------------------------------------------  ------- 
Less fair value of net assets acquired                          149 
----------------------------------------------------------  ------- 
Less equity movement on transactions with non-controlling 
 interest                                                     1,914 
==========================================================  ======= 
Goodwill                                                        917 
==========================================================  ======= 
 

The assets and liabilities arising from the acquisition were as follows:

 
                            Acquiree's 
--------------------------  ----------  ---------- 
                              carrying 
--------------------------  ----------  ---------- 
                                amount  Fair value 
--------------------------  ----------  ---------- 
                               GBP'000     GBP'000 
==========================  ==========  ========== 
Non-controlling interests          149         149 
==========================  ==========  ========== 
                                   149         149 
==========================  ==========  ========== 
 
 
                                         GBP'000 
=======================================  ======= 
Purchase consideration settled in cash     1,578 
=======================================  ======= 
Cash outflow on acquistions                1,578 
=======================================  ======= 
 

As at 30 June 2016, the process of reviewing the fair values of assets acquired had not been completed, consequently the fair values stated above are provisional.

The contingent consideration of GBP231,000 is based upon expected client revenue.

None of the goodwill recognised is expected to be deductible for income tax purposes.

18. BUSINESS COMBINATIONS CONTINUED

Group summary of the net assets acquired and goodwill

 
                                         Workwise   Others    Total 
---------------------------------------  --------  -------  ------- 
                                          GBP'000  GBP'000  GBP'000 
=======================================  ========  =======  ======= 
Purchase consideration: 
---------------------------------------  --------  -------  ------- 
- cash paid                                 3,521    1,578    5,099 
---------------------------------------  --------  -------  ------- 
- contingent consideration                  3,088      231    3,319 
---------------------------------------  --------  -------  ------- 
- deferred consideration                      537    1,061    1,598 
---------------------------------------  --------  -------  ------- 
- cancellation of loans                         -      110      110 
=======================================  ========  =======  ======= 
Total purchase consideration                7,146    2,980   10,126 
---------------------------------------  --------  -------  ------- 
Less fair value of net assets acquired      1,353      149    1,502 
=======================================  ========  =======  ======= 
Less equity movement on transactions 
 with non-controlling interests                 -    1,914    1,914 
=======================================  ========  =======  ======= 
Goodwill on acquisitions occurring 
 during the period                          5,793      917    6,710 
=======================================  ========  =======  ======= 
Impact of revision to fair value adjustment 
 in relation to acquisitions completed in 2015                   52 
==========================================================  ======= 
Net increase in goodwill                                      6,762 
==========================================================  ======= 
 
Impact of additional investments                              1,914 
==========================================================  ======= 
Net decrease in equity                                        1,914 
==========================================================  ======= 
 

Group summary of cash flows

 
                                    Workwise   Others    Total 
----------------------------------  --------  -------  ------- 
                                     GBP'000  GBP'000  GBP'000 
==================================  ========  =======  ======= 
Purchase consideration settled in 
 cash                                  3,521    1,578    5,099 
----------------------------------  --------  -------  ------- 
Cash and cash equivalents - own 
 cash in subsidiary acquired           (468)        -    (468) 
==================================  ========  =======  ======= 
Cash outflow on acquisitions in 
 the period                            3,053    1,578    4,631 
==================================  ========  =======  ======= 
 
 

19. BUSINESS DISPOSALS

On 19 May 2016, the Group disposed of 100% of its shareholdings in PT JLT Gesa for a consideration of GBP1,685,000, resulting in an loss on disposal of GBP1,363,000 including additional costs on disposal.

Net assets and proceeds of disposal

 
                                                   Total 
-----------------------------------------------  ------- 
                                                 GBP'000 
===============================================  ======= 
Goodwill                                           1,716 
-----------------------------------------------  ------- 
Property, plant and equipment                        145 
-----------------------------------------------  ------- 
Other intangible assets                              207 
-----------------------------------------------  ------- 
Trade and other receivables                          333 
-----------------------------------------------  ------- 
Cash and cash equivalents 
-----------------------------------------------  ------- 
 - own cash                                          223 
-----------------------------------------------  ------- 
Trade and other payables                           (829) 
-----------------------------------------------  ------- 
Current taxation                                      84 
===============================================  ======= 
Net assets at disposal                             1,879 
===============================================  ======= 
Exchange gains recycled from exchange reserves       325 
-----------------------------------------------  ------- 
Loss on disposal                                   (519) 
===============================================  ======= 
Proceeds on disposal                               1,685 
===============================================  ======= 
 
Deferred proceeds                                    548 
-----------------------------------------------  ------- 
Cash inflow on disposal during the period          1,137 
===============================================  ======= 
Total consideration                                1,685 
===============================================  ======= 
 

Group summary of cash flows

 
                                                         Total 
-----------------------------------------------------  ------- 
                                                       GBP'000 
=====================================================  ======= 
Disposal consideration settled in cash                   1,137 
-----------------------------------------------------  ------- 
Cash and cash equivalents - own cash in subsidiaries 
 disposed                                                (223) 
=====================================================  ======= 
Cash inflow on disposal during the period                  914 
=====================================================  ======= 
 

20. RETIREMENT BENEFIT OBLIGATIONS

The Group operates a number of pension schemes throughout the world, the most significant of which are of the defined benefit type and operate on a funded basis. The principal pension schemes are the Jardine Lloyd Thompson UK Pension Scheme, the JLT (USA) Incentive Savings Plan, the JLT (USA) Employee Retirement Plan, the JLT (USA) Stable Value Plan, the Pension Plan for Employees of Jardine Lloyd Thompson Canada Inc and the Jardine Lloyd Thompson Ireland Limited Pension Fund.

The pension costs accrued for the period are comprised as follows:

 
                              UK Scheme        Overseas Schemes         Total 
------------------------  ==================  ==================  ================== 
                          6 months  6 months  6 months  6 months  6 months  6 months 
------------------------  --------  --------  --------  --------  --------  -------- 
                             ended     ended     ended     ended     ended     ended 
                           30 June   30 June   30 June   30 June   30 June   30 June 
------------------------  --------  --------  --------  --------  --------  -------- 
                              2016      2015      2016      2015      2016      2015 
------------------------  --------  --------  --------  --------  --------  -------- 
                           GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
========================  ========  ========  ========  ========  ========  ======== 
Defined benefit 
 schemes                         -         -       463     1,311       463     1,311 
------------------------  --------  --------  --------  --------  --------  -------- 
Defined contribution 
 schemes                    10,664    11,020     9,453     7,985    20,117    19,005 
========================  ========  ========  ========  ========  ========  ======== 
                            10,664    11,020     9,916     9,296    20,580    20,316 
========================  ========  ========  ========  ========  ========  ======== 
 
  The amounts recognised in the consolidated income 
  statement are as follows: 
------------------------------------------------------------------------------------ 
                              UK Scheme        Overseas Schemes         Total 
------------------------  ==================  ==================  ================== 
                          6 months  6 months  6 months  6 months  6 months  6 months 
------------------------  --------  --------  --------  --------  --------  -------- 
                             ended     ended     ended     ended     ended     ended 
                           30 June   30 June   30 June   30 June   30 June   30 June 
------------------------  --------  --------  --------  --------  --------  -------- 
                              2016      2015      2016      2015      2016      2015 
------------------------  --------  --------  --------  --------  --------  -------- 
                           GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
========================  ========  ========  ========  ========  ========  ======== 
 
Service cost                     -         -     (463)   (1,311)     (463)   (1,311) 
------------------------  --------  --------  --------  --------  --------  -------- 
Curtailment gain                 -         -         -       491         -       491 
------------------------  --------  --------  --------  --------  --------  -------- 
Expenses                     (170)      (79)      (48)      (39)     (218)     (118) 
------------------------  ========  ========  ========  ========  ========  ======== 
 
Total (included 
 within salaries 
 and 
 associated expense)         (170)      (79)     (511)     (859)     (681)     (938) 
------------------------  --------  --------  --------  --------  --------  -------- 
 
Interest cost             (10,783)  (11,168)   (1,209)   (1,311)  (11,992)  (12,479) 
------------------------  --------  --------  --------  --------  --------  -------- 
Expected return 
 on assets                   8,508     8,304       985       990     9,493     9,294 
------------------------  ========  ========  ========  ========  ========  ======== 
Total (included 
 within finance costs)     (2,275)   (2,864)     (224)     (321)   (2,499)   (3,185) 
========================  ========  ========  ========  ========  ========  ======== 
Expense before taxation    (2,445)   (2,943)     (735)   (1,180)   (3,180)   (4,123) 
========================  ========  ========  ========  ========  ========  ======== 
 

The amounts disclosed in respect of both the UK and Overseas defined benefit schemes ("the Schemes") have been projected from previous valuations of the Schemes. They do not represent the results of a full actuarial valuation. In respect of 30 June 2016 the Group has updated its assumption regarding the discount rate applicable to the Schemes' liabilities in line with current market information.

20. RETIREMENT BENEFIT OBLIGATIONS CONTINUED

The amounts included in the consolidated statement of comprehensive income are as follows:

 
                                             UK Scheme        Overseas Schemes        Total 
--------------------------------------  ===================  ===================  ========= 
6 months ended 30 June                    GBP'000         %   GBP'000          %    GBP'000 
 2016 
======================================  =========  ========  ========  =========  ========= 
Actual return less expected 
 return on Scheme assets                   23,926                  18                23,944 
--------------------------------------  ---------  --------  --------  ---------  --------- 
% of period end market 
 value of Scheme assets                                5.1%                    - 
--------------------------------------  ---------  --------  --------  ---------  --------- 
Experience gains arising 
 on Scheme liabilities 
 (1)                                            -                 249                   249 
--------------------------------------  ---------  --------  --------  ---------  --------- 
% of period end present 
 value of Scheme liabilities 
 (1)                                                      -                 0.3% 
--------------------------------------  ---------  --------  --------  ---------  --------- 
Changes in assumptions 
 underlying the present 
 value of the Scheme liabilities         (83,902)             (6,663)              (90,565) 
--------------------------------------  ---------  --------  --------  ---------  --------- 
% of period end present 
 value of Scheme liabilities                        (13.0%)              (88.0%) 
======================================  =========  ========  ========  =========  ========= 
Actuarial losses recognised 
 in reserves (2)                         (59,976)             (6,396)              (66,372) 
======================================  =========  ========  ========  =========  ========= 
% of period end present 
 value of Scheme liabilities                         (9.3%)               (8.5%) 
======================================  =========  ========  ========  =========  ========= 
 
                                  UK Scheme         Overseas Schemes          Total 
---------------------------  ====================  ==================  ==================== 
                              6 months   6 months  6 months  6 months   6 months   6 months 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                 ended      ended     ended     ended      ended      ended 
                               30 June    30 June   30 June   30 June    30 June    30 June 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                  2016       2015      2016      2015       2016       2015 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                               GBP'000    GBP'000   GBP'000   GBP'000    GBP'000    GBP'000 
===========================  =========  =========  ========  ========  =========  ========= 
Defined benefit obligation 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Present value of 
 funded obligations          (646,314)  (614,462)  (75,373)  (59,114)  (721,687)  (673,576) 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Fair value of plan 
 assets                        464,946    467,146    55,267    48,466    520,213    515,612 
===========================  =========  =========  ========  ========  =========  ========= 
Net liability recognised 
 in the balance sheet        (181,368)  (147,316)  (20,106)  (10,648)  (201,474)  (157,964) 
===========================  =========  =========  ========  ========  =========  ========= 
 
                                                                              Total 
---------------------------  ---------  ---------  --------  --------  ==================== 
                                                                        6 months   6 months 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                                                           ended      ended 
                                                                         30 June    30 June 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                                                            2016       2015 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                                                         GBP'000    GBP'000 
===========================  =========  =========  ========  ========  =========  ========= 
Defined benefit obligation 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Retirement benefit 
 surpluses                                                                     -        559 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Retirement benefit 
 obligations                                                           (201,474)  (158,523) 
===========================  =========  =========  ========  ========  =========  ========= 
Net liability recognised 
 in the balance sheet                                                  (201,474)  (157,964) 
===========================  =========  =========  ========  ========  =========  ========= 
 
                                  UK Scheme         Overseas Schemes          Total 
---------------------------  ====================  ==================  ==================== 
                              6 months   6 months  6 months  6 months   6 months   6 months 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                 ended      ended     ended     ended      ended      ended 
                               30 June    30 June   30 June   30 June    30 June    30 June 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                                  2016       2015      2016      2015       2016       2015 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
                               GBP'000    GBP'000   GBP'000   GBP'000    GBP'000    GBP'000 
===========================  =========  =========  ========  ========  =========  ========= 
Reconciliation of 
 defined benefit liability 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Opening defined benefit 
 liability                   (118,947)  (162,620)  (11,440)  (16,415)  (130,387)  (179,035) 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Exchange differences                 -          -   (1,598)       312    (1,598)        312 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Pension expense                (2,445)    (2,943)     (735)   (1,180)    (3,180)    (4,123) 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Employer contributions               -        580        63       913         63      1,493 
---------------------------  ---------  ---------  --------  --------  ---------  --------- 
Total (loss)/gain 
 recognised in reserves 
 (2)                          (59,976)     17,667   (6,396)     5,722   (66,372)     23,389 
===========================  =========  =========  ========  ========  =========  ========= 
Net liability recognised 
 in the balance sheet        (181,368)  (147,316)  (20,106)  (10,648)  (201,474)  (157,964) 
===========================  =========  =========  ========  ========  =========  ========= 
 
 

(1) Calculation is only done as part of the year-end valuation of the schemes

(2) Amounts recognised in reserves have been taken through the statement of comprehensive income

21. RELATED PARTY TRANSACTIONS

The Group has taken advantage of the exemption available under IAS 24, "Related Party Disclosures", not to disclose details of transactions with its subsidiary undertakings. For the period, the Group's related parties are the same as those disclosed on page 152 of the Group's Annual Report for 2015. The basis of the remuneration of the Directors and key management remains consistent with that reported in the Group's Annual Report for 2015.

22. PRINCIPAL RISKS

As a global company, JLT faces a range of risks, each of which has the potential to impact on the achievement of our strategic business objectives, as well as providing opportunity in the right circumstances.

The Group takes a holistic approach to risk management and the control environment with the responsibility and accountability shared across all the Group companies, and the ultimate responsibility resting with the Board.

The outcome of the EU referendurm on 23 June 2016 will introduce uncertainity in future periods. Whilst there has been much speculation in the press about the scenarios the country now faces, the Group will continue to serve its clients best interests. The Group will continue to monitor events closely working with its insurance partners and clients, as the outcome starts to become more certain.

The principal risks to which the Group will be exposed in the second half of the financial year are substantially the same as those discussed on pages 41 and 42 of the Group's Annual Report for 2015. These are summarised below:

 
 PRINCIPAL RISKS          NATURE OF RISK 
=======================  ==================================================== 
 STRATEGIC RISKS 
-----------------------  ---------------------------------------------------- 
 Economic Instability     JLT's business is more tied to economic 
                           activity and growth rather than (re)insurance 
                           market rates, since greater levels 
                           of corporate activity generally drive 
                           greater demand for the Group's services. 
                           There is a risk that economic instability 
                           reduces client demand. 
-----------------------  ---------------------------------------------------- 
 Strategic Risks          There are risks to the company's strategic 
                           plan arising from changes in external 
                           environment, markets and customer behaviour, 
                           as well as risks arising from acquisitions 
                           and strategic change initiatives. 
=======================  ==================================================== 
 OPERATIONAL RISKS 
-----------------------  ---------------------------------------------------- 
 Loss of Key Staff        The Group's principal asset is its 
                           people; there is a risk that the organisation 
                           may not be able to attract and retain 
                           market leading talent. 
-----------------------  ---------------------------------------------------- 
 Business Interruption    The Group operates from over 100 offices 
                           in 40 territories across the world, 
                           each with a unique local environment. 
                           There is a risk of a business interruption 
                           due to a large, unexpected incident. 
-----------------------  ---------------------------------------------------- 
 Loss of IT Environment   The Group is reliant on the ability 
                           to process its transactions on behalf 
                           of its clients. Risks arise from non-performance 
                           of an IT supplier, malicious act and/or 
                           cyber crime. 
-----------------------  ---------------------------------------------------- 
 Information Security     Intermediaries and pension administrators 
                           retain confidential data in the normal 
                           course of business. Risks relate to 
                           loss of customer records or breach 
                           of confidentiality due to inadequate 
                           security. 
-----------------------  ---------------------------------------------------- 
 Errors and Omissions     Intermediaries run a risk of incurring 
                           a loss if the operating procedures 
                           in place across the Group in relation 
                           to market security, placement and claims 
                           are not complied with or alleged negligence/breach 
                           of contract in the provision of services/advice 
                           becomes apparent. 
-----------------------  ---------------------------------------------------- 
 Litigation               Litigation risk can arise from a number 
                           of different sources such as: 
                           - M&A litigation (e.g. breach of Sale 
                           & Purchase Agreement). 
                           - Breach of Employment Law. 
                           - Tortious liability arising from the 
                           recruitment of individuals where appropriate 
                           recruitment controls are not adhered 
                           to. 
-----------------------  ---------------------------------------------------- 
 Regulatory Breach        Risks arise from non-compliance with 
  / Financial Crime        or misinterpretation of local and international 
                           regulations and failure to meet regulatory 
                           standards both in the present, and 
                           retrospectively, in relation to past 
                           business activities. 
=======================  ==================================================== 
 FINANCIAL RISKS 
-----------------------  ---------------------------------------------------- 
 Capital Risk             Risks arising from an inability to 
  and Liquidity            maintain an effective and efficient 
                           capital structure and ensure an optimal 
                           cost of capital, or meet the short 
                           term financial demands of the business. 
-----------------------  ---------------------------------------------------- 
 Foreign Currency         The Group has foreign exchange exposures 
                           to: 
                           - 'Translational' risk arising from 
                           the need to convert currencies into 
                           GBP for reporting purposes. 
                           - 'Transactional' risk arising from 
                           revenues and costs being denominated 
                           in different currencies. 
-----------------------  ---------------------------------------------------- 
 Counterparty             There is a risk associated with a failure 
  Risk                     of a key counterparty resulting in 
                           a loss of own cash, fiduciary funds, 
                           investments and deposits, derivative 
                           assets and/or trade receivables. 
-----------------------  ---------------------------------------------------- 
 Defined Benefit          Risk of adverse impact on the balance 
  Pension Scheme           sheet and income statement as a consequence 
                           of an increase in the Defined Benefit 
                           Pension Scheme deficit. 
=======================  ==================================================== 
 

23. forward-looking statements

Certain statements in this interim report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Statement of directors' responsibilities

The directors confirm that this consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-- An indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

-- Material related-party transactions in the first six months and any material changes in the related-party transactions described in the last Annual Report.

The directors of JLT Group plc are listed in the Annual Report of the Company for the year ended 31 December 2015, subject to the following changes which have taken place since the publication of that document: James Twining retired from the Board on 26 April 2016; Bruce Carnegie-Brown was appointed to the Board with effect from 1 May 2016; and Rodney Leach died on 12 June 2016.

On behalf of the Board

Charles Rozes

Finance Director

26 July 2016

INDEPENDENT REVIEW REPORT TO JARDINE LLOYD THOMPSON GROUP PLC

REPORT ON THE UNAUDITED CONSOLIDATED INTERIM RESULTS

Our conclusion

We have reviewed Jardine Lloyd Thompson Group plc's unaudited consolidated interim financial statements (the "interim financial statements") in the interim results of Jardine Lloyd Thompson Group plc for the 6 months ended 30 June 2016. Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The consolidated interim financial statements, which are prepared by Jardine Lloyd Thompson Group plc, comprise:

   --    the consolidated balance sheet as at the 30 June 2016; 

-- the consolidated income statement and statement of comprehensive income for the period then ended;

   --    the consolidated statement of cash flows for the period then ended; 
   --    the consolidated statement of changes in equity for the period then ended; and 
   --    the explanatory notes to the consolidated interim financial statements. 

The consolidated interim financial statements included in the interim results have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in 'Basis of Accounting' on page 13 in the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

RESPONSIBILITIES FOR THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND THE REVIEW

Our responsibilities and those of the directors

The interim results, including the consolidated interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim results in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the consolidated interim financial statements in the interim results based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of consolidated financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the consolidated interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

26 July 2016

London

Notes:

(a) The maintenance and integrity of the Jardine Lloyd Thompson Group plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR DGGDRRDDBGLU

(END) Dow Jones Newswires

July 26, 2016 02:01 ET (06:01 GMT)

1 Year Jardine Lloyd Thompson Chart

1 Year Jardine Lloyd Thompson Chart

1 Month Jardine Lloyd Thompson Chart

1 Month Jardine Lloyd Thompson Chart

Your Recent History

Delayed Upgrade Clock