Jelf on growth trail

June 6, 2011

Jelf is on the look-out for bolt-on acquisitions. The Yate-based financial services consultancy specialising in insurance, employee benefits, healthcare and financial planning, reported a 49% rise in operating profits in what it described as a challenging climate during the six months to March 31.

Revenue was flat at £35m against £34.9m a year ago in line with forecasts but pre-tax profits were back in the black at £794,000 against a loss of £1.226m in the first half of 2010. Funds under advice rose from £446m to £500m with the focus remaining on improving margins through operational efficiencies.

Chairman Les Owen said the group has the leadership, management capability and financial flexibility to invest not only in organic growth opportunities but also selective bolt on acquisitions. 

Chief executive Alex Alway declared: "The business has continued to perform well in the first six months of this financial year, revenues have held up and we have achieved an increase in profitability and margin.  Maintaining revenues against a continuing difficult economic backdrop is a good performance and our focus on improving margins means the business is well placed to take advantage of future opportunities."
He reported that the mid-to-large commercial insurance market continued to be competitive due to a mixture of competition and the wider economic climate.  The smaller owner-managed sector, which makes up a substantial element of Jelf clients, continued to feel the effects of the wider economic climate and in turn continued to put pressure on insurance premiums.  
Insurance business revenues improved marginally and represent 64% of Jelf total income – the same proportion as a year ago.
Meanwhile the market for quality advice on employee benefits continued to grow and is "enjoying a good trading environment".  Several new corporate mandates had been secured  in 2011 and the group is also seeing good strong group risk new business sales.

Rates for private medical insurance continued to harden with a  2.6% growth on a year ago.  However, healthcare business results continued  to be weighted towards the second half of the financial year, particularly the third quarter.

Overall the employee benefits business achieved 6.9% growth in revenues year on year, representing 25% of Jelf revenues for the six months to March 31 – up from 24%.
In the financial planning sector revenues dropped 11%  from £4.4m to £3.9m although profitability increased. 

While Jelf now had £500m in third-party funds on wrap and discretionary management programmes producing fund-based income it also continued to advise on more than £1 billion of client funds under advice in old style product structures. Mr Always said this had improved the size of the ongoing trail that can be derived from these investments enabling the group to service clients and grow the business.

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