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Just Group interim loss widens but seeks larger DB de-risking deals

9th Aug 2022 10:48

(Alliance News) - Just Group PLC on Tuesday reported a sharply widened loss in the first half, and even seen its written premiums fall, but reiterated its confidence in meeting its growth targets as it eyes larger DB de-risking deals.

In the six months to June 30, its pretax loss widened significantly to GBP296 million from a GBP87 million loss the year prior.

Gross premiums written slipped to GBP880 million from GBP909 million. Net premium revenue fell to GBP868 million from GBP898 million.

New business operating profit fell 7% to GBP68 million from GBP74 million.

Its Solvency II capital coverage ratio rose to 184% from 164%.

"This is a strong set of results which continues to demonstrate our ability to generate profitable growth within a sustainable capital model," Chief Executive David Richardson said.

The Reigate, Surrey-based provider of retirement financial services to individuals and companies noted its booked a GBP3.14 billion net expense from its investments, widened significantly from the GBP659 million expense seen the year prior.

"The main components of net investment income are interest earned and changes in fair value of the group's corporate bond, mortgage and other fixed income assets," it explained. "There has been an increase in risk-free rates during the period, which has resulted in unrealised losses in relation to assets held at fair value."

Just Group declared an interim dividend of 0.5 pence per share.

Richardson added: "Following our strong first half we have increased confidence of delivering 15% growth in underlying operating profit per annum, on average over the medium term. We have a unique opportunity to build substantial value to shareholders and deliver our purpose to help more people achieve a better later life."

It noted it completed its largest defined benefit de-risking transaction, with a GBP500 million full scheme buy-in, following the post-close.

"We are in an exciting growth phase for the group. A significant portion of that growth will come from completing more transactions in the larger, above GBP250 million segment of the DB de-risking market, aided by the optionality of further DB partnering," it said.

Just Group added: "The near term actively quoting pipeline is over GBP5 billion, and we expect a very busy second half with multiple GBP100 million to GBP1 billion opportunities coming to market."

Shares in Just Group were 0.9% higher in London on Tuesday mid-morning at 75.70 pence each.

By Paul McGowan; [email protected]

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