just group on Tuesday reported a 15% improvement in its first-half underlying operating profit to £74 million, thanks to higher prevailing operating profit and lower financial costs.
The FTSE 250 company said that in the six months to June 30, retirement income sales were down 3% to £879 million, with defined benefit risk reduction sales up 3% and retail sales by 14%.
It signed its biggest defined benefit de-risking deal to date in July, consisting of a £0.5bn buyout insuring 4,800 members, with 50% of liabilities reinsured, adding £24m new trading profits after June 30.
Just Group said it had a “record pipeline” of over £5bn, giving it confidence to meet or exceed its growth ambitions for the year.
The company reported an improvement in the capital coverage ratio of 184% from 164% at the end of December, with organic capital generation contributing two percentage points to the ratio, interest rate increases adding 12 points and other economic factors an additional six points.
Its underlying organic capital generation rose from £25m to £31m a year earlier, thanks to “continued outperformance” in new business capital pressure, which at £11m sterling, accounted for 1.3% of sales, compared to £17 million and 1.9% in the first half. 2021.
On an IFRS basis, Just Group’s post-tax loss was £226m, down from £70m year-on-year as ‘economic gaps’ driven by rate increases interest and the loss on the sale of the third LTM portfolio resulting in investments and economic effects. losses of £353m, down from £174m a year ago.
Tangible net assets per share amounted to 172p at 30 June, compared to 194p at the end of December.
The board declared an interim dividend of 0.5 pence per share, returning to its stated policy of a sustainable dividend which is expected to grow over time.
He also reiterated his confidence in achieving the objective of underlying operating profit growth of 15% per year on average over the medium term, and in increasing the organic generation of capital to support a “growth strong and profitable sales” and increase the long-term value of the company.
“This is a strong set of results that continue to demonstrate our ability to deliver profitable growth within a sustainable capital model,” said group chief executive David Richardson.
“In July, we signed our largest defined benefit transaction to date, for almost £0.5 billion, and this is our second defined benefit partnership transaction.
“There is a very favorable defined benefit market backdrop and we have a record pipeline of over £5bn.”
Richardson said that, combined with the company’s “positive momentum” and supported by its capital position, gave him confidence that Just Group would achieve its growth ambitions in 2022 and beyond.
“After our strong first half, we are more confident of achieving 15% growth in underlying operating profit per year, on average over the medium term.
“We have a unique opportunity to create substantial shareholder value and achieve our goal of helping more people have better lives later.”
At 10.07am BST, shares of Just Group rose 0.93% to 75.7p.
Reporting by Josh White on Sharecast.com.