Just Group earnings boosted by derisking outlined profit plans

Just Group expects to exceed annual revenue targets after the specialist insurer posted a 154 p.c revenue improve within the first half.

The pensions specialist advised traders he was “very confident he will well outperform underlying corporate profit growth of more than 15 per cent this year, after profit in the first six months of 2023 was £173 million.”

Profits rose from £68 million a yr earlier, beating analysts’ forecasts of £162 million.

Income from new companies within the first half was supported by gross sales of the FTSE 250 firm’s pension merchandise, which rose by simply over £1bn to £1.9bn.

Earnings outlook: Just Group advised traders it was ‘very confident in comfortably outpacing’ underlying working revenue progress of greater than 15 p.c this yr

Demand for its outlined profit plans, during which firms switch some or all of their pension obligations, drove many of the enlargement as rate of interest hikes helped slim or eradicate funding gaps.

The Surrey-based firm accomplished 35 outlined profit transactions throughout the interval, together with the most important deal in its historical past, a £513 million full buy-in to the GKN Group Pension Scheme.

It additionally accomplished a £190m buy-in from the trustees of the Ibstock Pension Scheme, which Just has attributed to the rise in authorities bond yields within the wake of former Prime Minister Liz Truss’s controversial ‘mini-budget’ final September .

Higher rates of interest additionally boosted returns from Just Group’s annuities division, which introduced in £470 million in new enterprise, up 54 per cent on the earlier yr.

The section loved its busiest six months for the reason that determination in 2014 to permit Britons over the age of 55 to withdraw cash from their outlined contribution pool.

Just has elevated its interim dividend by 15 p.c to 0.58 pence per share.

David Richardson, chief government of Just Group, stated: ‘We have delivered another impressive set of results and we are confident that we will well exceed our promise of 15 per cent earnings growth this year.

“Our DB business continues to grow and I am delighted that our retail business is growing again.

“We are growing sustainably and are exceptionally well positioned to continue to benefit from the positive drivers and favorable demographics supporting both of our major markets.”

Consultancy Lane, Clark, Peacock estimates that up to £60 billion in defined benefit transactions could take place this year, well above the pre-pandemic record of £44 billion in 2019.

It notes that around a fifth of the UK’s 5,000 group outlined profit plans are at the moment totally funded on an insurer buyout foundation.

Just group shares had been up 0.5 p.c Tuesday morning at 82.4 pence and have grown about 7 p.c over the previous 12 months.

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