12th Aug 2021 09:56
(Alliance News) - Just Group PLC on Thursday reported a drop in total revenue and a swing to a loss in the first half of 2021 after booking a heavy net investment charge, as the company plans to ask shareholders for permission to issue contingent convertible bonds.
Net premium revenue increased 33% year-on-year to GBP898.4 million from GBP677.7 million. But after recording a net investment expense, versus net investment income last year, total revenue fell 86% to GBP247.0 million from GBP1.81 billion.
The Reigate, Surrey-based firm, which provides retirement financial services to individuals and companies, swung to a pretax loss of GBP86.8 million from a profit of GBP304.5 million.
"Interest rate rises led to economic losses...which offset the growth in adjusted operating profit," Just explained.
Shares were down 2.3% to 103.60 pence in London on Thursday morning.
Just Group said the results showed sustainable growth and improving capital generation. Retirement Income sales were up 22% to GBP909 million from GBP745 million, while Defined Benefit De-risking sales rose 21% to GBP555 million from GBP460 million.
Just Group, which hasn't paid a dividend since its 2017 final, said it would not be appropriate to resume payouts. "Whilst the group has made significant progress to build its capital base...the post pandemic effects on the economy as government stimulus is withdrawn leads to a degree of caution," the company said.
The firm convened a general meeting to ask shareholders for permission to issue further restricted tier 1 contingent convertible bonds, as well as other forms of subordinated debt. The bonds would convert into shares if Just ceases to comply with Solvency II capital requirements.
"The board is comfortable with the current capital position of the group. Nevertheless, the board is proposing that shareholders delegate to the board additional flexibility to manage the capital position on an ongoing basis," the company said.
Chief Executive David Richardson said: "This is a strong set of results which build on our landmark achievement in 2020 of becoming capital self-sufficient. New business premiums, operating profits and underlying capital generation have improved significantly on the previous year. Our business performance has been transformed over the past couple of years and we are now delivering organic, sustainable growth."
"The fundamental drivers in our core markets are strong. We are confident in our outlook as we deliver sustainable and profitable growth across the group."
The company also committed to net zero carbon emissions from its investment portfolio by 2050, with an interim target to reduce emissions by 50% by 2030.
By Ivan Edwards; [email protected]
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