14th Mar 2019 17:03
LONDON (Alliance News) - Just Group PLC late Thursday said it has completed the GBP75 million placing to strengthen its capital base to "support its new business franchise and maintain its focus on growing profits".
The company said it has placed 94.0 million shares at a price of 80 pence each, representing a 6.7% discount to the middle market price.
Just Group shares closed down 13% on Thursday at 85.30 pence each, giving it a market capitalisation of GBP917.5 million.
Barclays Bank and Numis Securities Ltd have been appointed joint global coordinators.
Just Group said Chief Executive Officer Rodney Cook and major shareholder Standard Life Aberdeen PLC have participated in the fundraising.
Cook has subscribed for 250,000 shares, worth GBP200,000, while Standard Life acquired 20.0 million shares, totalling GBP16 million.
Following those transactions, Cook holds 0.3% stake in Just Group, while Standard Life has 11.4% holding.
Upon admission, Just Group will have 1.04 billion shares overall.
Additionally, Just Group will launch an underwritten benchmark debt offering, with a minimum of GBP300 million.
Just Group said, assuming a debt offering of GBP300 million and an equity placing raising GBP80 million, the company's solvency ratio will increase to 160% from 136% at December 31.
Early on Thursday Just Group said it sank to a loss in 2018, citing the uncertainty caused by Brexit.
The company's net premium revenue rose to GBP2.71 billion in 2018 from GBP2.43 billion, but the company sank to a pretax loss of GBP85.5 million from a GBP181.3 profit million the year before.
Just Group booked an investment and economic loss of GBP252.0 million in 2018, compared to a GBP22.6 million profit in 2017. The company said the loss derived after a review into its property growth and volatility assumptions.
The loss was driven by changes to property assumptions "in light of the economic and financial uncertainty caused by Brexit", the company said.
Just Group lowered its property value growth assumption to 3.8% per annum from 4.25% and increased its property volatility assumption to 13% per annum from 12%.
"2018 has been a year of contrasts. We have achieved significant new business profit growth, strong margins and higher sales despite significant uncertainty during the Prudential Regulation Authority's consultation into equity release mortgages. I want to acknowledge the challenges our shareholders have faced during this period and to assure them we remain focused on delivering value for them by developing our highly effective new business franchise," said Chief Executive Rodney Cook.
The FTSE 250 constituent added that it has considered it "appropriate" not to pay a dividend for 2018, and will look to recommence payouts in 2019 at a "rebased" level of approximately one third of the 3.72p paid out in 2017.
The company's gross written premiums increased 15% to GBP2.18 billion, but total revenue slipped 3.7% to GBP2.86 billion as net investment income more than halved to GBP142.6 million.
Just Group's retirement income sales jumped 15% to GBP2.17 billion with defined-benefit de-risking solution sales increasing 32% to GBP1.31 billion but was partially offset by a 4.1% decrease in guaranteed income for life solution sales to GBP786.5 million.
The increase in retirement income sales - along with lifetime mortgage loans advanced in 2018 increasing 18% to GBP602.1 million - resulted in a 15% increase in total new business sales to GBP2.83 billion for 2018.
Cook added that he was "confident" in the outlook for Just Group, believing the firm operates in "highly attractive growth markets".
Related Shares:
SLA.LJust Group