Buoyant interims for Jelf

25/05/2006 Robert Tyerman

Corporate insurance, healthcare and financial services intermediary Jelf Group has lifted first-half profits 60 per cent to £490,000 pre-tax.

Bristol-based Jelf increased turnover 53 per cent to £7.5 million in the six months to March, helped by a vigorous acquisition policy. Chief executive Alex Alway, who says the company's organic growth reached 29 per cent, says more stringent and expensive regulation of small insurance brokers continues to drive them into the arms of Jelf, which has pulled off 16 deals in four years.

He maintains AIM-quoted Jelf has been successful at integrating these acquisitions and retaining key personnel, not always easy with 'people businesses', and increasing gross margins. The interim figures do not reflect any contribution from insurance broker Goss Group, bought in March for up to £6.9 million in a shares-and-cash deal with phased payments partly tied to future performance, or B.D.Thomas, bought after the end of March.

Jelf spent a net £7.2 million on acquisitions and disposals in the first half. The company took in a post-expenses £6.9 million from a placing at 106p at the time of the Goss purchase and increased cash from £1.9 million at its September year-end to £4.3 million on March 31.

With an operational focus on the South of England — 'outside London' — and South Wales, Jelf aims to achieve a mix of 50 per cent insurance, 30 per cent financial services and 20 per cent healthcare. The company keeps out of retail insurance and, insists Alway, is not competing 'head to head' with the likes of Direct Line, its largest competitor being the private £1.5 billion Towergate group.

Bullish brokers forecast full-year pre-tax profits of more than £3 million for Jelf. The shares, highlighted by Growth Company Investor at 119p in January, rose 5p this morning to 162.5p, valuing the company at £40 million, and should prove resilient if the acquisitions continue to work as well as they have done so far.

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