4th Sep 2019 09:53
(Alliance News) - Just Group PLC on Wednesday reported a sharp rise in first-half profit but said it will not resume just yet paying dividend, citing regulatory and economic uncertainty.
In the six months ended June 30, pretax profit jumped to GBP125.3 million from GBP45.7 million a year before, largely due to a GBP68.1 million profit from investments. The FTSE 250-listed insurance company took a GBP58.7 million loss on investments in 2018's interim.
Investment income also helped first half revenue, which rose by 40% to GBP2.04 billion from GBP1.45 billion.
Just Group's solvency coverage ratio increased to 149% from 136% at the end of December. The company said its solvency coverage benefited from a GBP75.0 million share placing in March, but the was partially offset by a fall in house prices.
New business sales fell by 33%, however, to GBP1.01 billion from GBP1.52 billion with retirement income sales tumbling by 30% to GBP831.3 million from GBP1.18 billion from a year the before.
Retirement income sales were down year-on-year in every segment, Just Group reported.
Define benefit de-risking solutions fell by 29% to GBP512.3 million from GBP718.1 million and guaranteed-income-for-life contracts fell by 32% to GBP287.9 million from GBP426.5 million.
Care plans were down by 11% to GBP31.1 million from GBP34.8 million.
Just Group said it won't pay an interim dividend, unchanged from last year.
Interim Chief Executive David Richardson said: "We have stated previously that we expected to recommence dividend payments for the 2019 financial year at a rebased level of around one third of the amount paid in 2017."
However, "regulatory and economic uncertainty mean the directors are not recommending the payment of an interim dividend."
Richardson said the company will revisit its dividend policy later in the year at the time of its full-year results, "informed by our capital position and the outlook at the time".
"Whilst we have made significant progress in adapting our business model, as is evident from today's results, the first half of 2019 has not been easy for our business or for shareholders, as we have faced economic and regulatory challenges. However, we have made real operational progress and I take pride in the way the business is responding," the interim CEO said.
Just Group's shares were trading 5.9% lower at 43.59 pence each in London on Wednesday morning.
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