12th May 2014 11:31
LONDON (Alliance News) - Jelf Group PLC Monday said its first-half pretax profit rose by almost four-fifths, boosted by revenue growth in its insurance and employee-benefits businesses and a better gross profit margin.
In a statement, the UK-based brokerage said pretax profit increased to GBP2.3 million in the six months ended March 31, from GBP1.3 million in the corresponding period a year earlier, as revenue grew by 9.7% to GBP39.3 million.
Costs associated with making sales fell to GBP2.8 million, from GBP3.4 million, resulting in a 12% rise in gross profit. Administrative expenses increased by 11% to GBP34.0 million. As a result, operating profit increased, despite revenue alone rising at a slower rate than the rate of increase in administrative expenses.
The revenue increase was down to Jelf Group's insurance business and employee benefits businesses, where revenue growth offset a decrease in revenues at the company's financial planning business.
Jelf said insurance revenues made up 68% of group revenues in the first-half, up by three percentage points compared with the same period last year. The company said it is "hopeful" that the current trading environment for the insurance business and its clients will continue to improve in 2014, adding that it is beginning to see premiums increase where businesses are expanding as confidence grows.
The market for employee benefits, which made up 23% of group revenues, down by two percentage points, remains "robust" with "a number of new client opportunities" in the pipeline of business prospects, according to Jelf, which said it has benefited from businesses seeking advice for implementing new rules requiring auto-enrolment into pension schemes.
Financial planning fell by one percentage point to 9% as a percentage of group revenue. Jelf said it is continuing to see an increase in clients looking for financial planning advice.
"The trading environment in which the group operates continues to be competitive but there are now some positive signs that the outlook for the wider economy is improving. We continue to invest in the business whilst maintaining a focus on delivering further efficiencies and providing an excellent service to our clients," Alex Alway, chief executive, said in a statement.
"During the first half of this financial year we have dealt with a considerable number of insurance claims on behalf of our clients due to the poor weather. This has stretched the operations of certain parts of Jelf but has also provided an opportunity to generate client goodwill. I am pleased to be able to report that our service in response to the floods was appreciated by our clients and enabled us to win several new client mandates," Always said.
The CEO said Jelf will continue to review acquisition opportunities as they arise but we will retain a "disciplined approach" to price and value.
On February 28, Jelf acquired Riverside Insurance Brokers Ltd, a small independent insurance broker based in Tonbridge, southern England. In June 2013, Jelf acquired The Insurance Partnership, which contributed GBP4.7 million in revenue in the first six months of the financial year.
Jelf shares were Monday quoted at 129.30 pence, up 2.6%.
By Samuel Agini; [email protected]; @samuelagini
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