24th Feb 2015 08:13
LONDON (Alliance News) - Just Retirement Group PLC Tuesday said it is well placed to compete and has new product to roll out when new rules governing savings and pensions come into force in April, even as it reported a fall in operating profit in the first six months of its financial year.
Just Retirement, which is known for providing specialist annuity products, which provide guaranteed income in retirement, was hit last year when new legislation was proposed in the UK that removed an effective requirement on individuals to buy the products. It has reacted to the blow by developing new products and emphasising its defined benefit business.
In a statement, Just Retirement said that operating profit before tax, which is stated before items including "non-recurring and project expenditure", restructuring costs and investment and economic losses or profits, fell to GBP34.9 million in the six months to the end of December 2014, from GBP40.0 million in the corresponding period last year.
Underlying operating profit, which is the sum of the new business operating profit and in-force operating profit and excludes one-off assumption changes and investment variances, fell to GBP42.6 million from GBP47.3 million.
Chief Executive Rodney Cook said the first half was both "challenging and exciting" as the group worked on its response to the pensions changes in the UK.
"As expected, we have seen a marked decline in individually underwritten annuity (IUA) sales - although not to the extent that some commentators had initially predicted," Cook said.
"We have achieved significant success in sales of our DB product, which has very nearly offset the reduction experienced in IUA sales. During the period we completed 17 DB schemes, including two schemes for GBP75 million and GBP76 million," Cook added.
"We are well placed to take on the challenges that will emerge post-April when the second wave of Budget reforms take effect. From April we will start the roll-out of our guaranteed income for life products which have been improved to take advantage of the legislative changes and introduce our new flexible fund-based products designed to provide those at- and in-retirement with additional choice in using their defined contribution pension savings," Cook said.
Just Retirement said it will pay an interim dividend of 1.1p per share. The company floated on the London Stock Exchange in November 2013 and did not pay an interim dividend for the corresponding period in the prior financial year.
Just Retirement shares rose 11% to 160.00 pence in early trade Tuesday, comfortably the best performer in the FTSE 250.
By Samuel Agini; [email protected]; @samuelagini
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