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DAB - agree….we can expect them to add 30p and more to the TNAV for the next 5-10 years just on UK business.
There is approx 100p of debt to repay….but all the additional value flows to Shareholders and most of it should be added to the SP.
Whatever price the Directors were holding out for last year is justified and they will add some more for any new discussions. I dont intend to sell any (except in GIA to move to ISA/SIPP wrapper).
On the dividend point. It is still a relatively young business so the cash it is throwing off isn't the same as the older asset rich insurance businesses. It also doesn’t have a huge customer investment book hat it charges fees on. Again, this impacts cash generation.
Don't pay out cash when any cash can be used as capital against growth , when the RRR is 13.5%+ keep it and grow.
There are so many good number in here. The 34p in underlying value growth per share is the one for me. From 190p to 224p. Thiat is real value set to be paid out in the longer term and bosts the liklihood that someone might take them out when the price difference is so great. I expect us to shoot past £1 and would expect £1.20 within a few weeks .
Record year in 2023 and forecast to be beaten in 2024.
"we are forecasting that 2024 underlying operating profit will be at least double the 2021 level of £211m."
They say this means doubling profit in 3 years instead of the intended 5.
How often do you see that?
The summary results look very encouraging. 2p is still a small dividend though. If new business strain is so low at 0.9% and cash generation is good, cash will just pile up unless it is somehow spent. Such an interesting proposition.
Really excellent, far better than expected.
Hopefully the market will take note and look forward to value added for the next 5-10 years
This will blow past £1, a significant overshoot on earnings!!! I have read Just and others can only process so much if this pension transfer business due to admin resourcing constraints...fully expect this to rocket 🚀
Yes agree, 90 plus.
In Jan RNS we were told the new business margin in H2 exceeded the 8.5% they achieved in H1. New business profits in H1 were excellent so if this volume has continued into H2 with a higher margin then the reported profit should be impressive.
H1 excerpt is below..
Retirement Income sales2 have more than doubled to £1.9bn (H1 22: £0.9bn), which has driven a 112% increase in new business profits to £161m (H1 22: £76m), with a consistently strong new business margin of 8.5% (H1 22: 8.6%).
I am expecting good results and an open above 90. Although I am doubtful it will be able to cling on.
A nice little run up ahead of the results, assisted by the positive noises from LGEN and AV in relation to annuities….
I really hope the potential here starts to show soon.
Wow, almost £200k trade at 8.41 today. Pretty sure that's a buy. Bodes well for tomorrow
LGEN NBP margin of 9%, CSM released at 6.6%….what will Just make?
LGEN reported operating profits from annuity business rose slightly…
Well the source was the TU RNS back in Jan, which stated the 7th. Clearly this was always a provisional date but it has never been corrected by the company.
Not long to wait regardless and hopefully good news to report
The company website has the results on the 8th……I am aware sites like HL show them reporting on 7th….I would hope the company has it right and it is the sources that HL and others use that is out of date.
I am expecting TNAV to increase by 30p which all accrues to shareholders….there is about 100p of debt in the value they publish….the sp will trade at a discount….given this increase should recur for several years to come I expect a strong increase in SP for the patient.
Agree with everything you say - other than results should be on the 7th!
H2 margin was great than the 8.5% achieved in H1 (as per Jan RNS) so i'm expecting really good numbers. Hopefully the SP will be nearer 100p when the news is digested
The results on Fri 8 March cant come soon enough for me.
That there is no run up in the SP tells me there is nothing surprising expected in the results….in which case Just can expect to be trading on a P/E of less than 5. Have a strong capital position and be increasing the NAV /share attributable to shareholders (There is about £1bn of debt).
There may be little coverage by analysts, but surely some are noticing Just is a lot stronger and more valuable than it has been for many years….A SP gain of 10-20p would be most welcome.
I particularly liked this comment in the YE trading update. SP reaction is unfortunately somewhat muted despite fantastic numbers and expected operating profit growth.
"Our successes in 2023 and positioning in buoyant markets give us increased confidence in our prospects for 2024. These strong foundations enable us to continue delivering 15% growth in underlying operating profit per annum, on average over the medium term."
JP Morgan agrees. Raised price target from 125p to 135p.
"Just Group's management actions in recent years have led to a Solvency II ratio, debt leverage and quality of capital that now compares favourably with peers.
"We see very strong new business growth prospects, which should support double digit dividends per share growth, coupled with an attractive valuation."
FT reporting that the BPA market is set to deliver £60bn of premium in the current year….
There is more than enough business to go round with participants reporting staffing as a limiting factor in how much business they can process….
1 Expect Just to continue to dominate at the smaller end (but this is largely automated for Just)
2 Expect Just to pick up a share of larger deals.
Look for the cumulative effect of writing volume at decent margin to show through….both in the value of future business and in free cash flow (6% of the VoNB each and every year for about 25-30 years)
Market perked up a bit on Friday and following through this morning as the TU was digested.
Hoping for a strong movement when the results come out.
Agreed re YE operating profit. Was £173m for H1 and H2 was at a higher margin so £350m seems the minimum.
For a business valued at less than £900m this is ridiculous. Even at a low 5 times op.profit that's a valuation double the current SP.
I have bought this morning …there are expectations of 1 or 2 new players entering the bulk annuity market this year…..surely they will look at investing in Just as an entry route rather than set up a new entity and seek regulatory approval……
Just seems to be unloved /mis-trusted/misunderstood.
New business margin in excess of 8.5% would mean NB profit around £350m with £80m invested to support this business which should leave £250m for other purposes (including dividend / capital return / growth in 2024 and beyond)
The only fly in the ointment is £400m of funded reinsurance in 2023, so presumably there may be a small number of £bn in this business where Just retains some liability and is reliant on collateral arrangements to protect from the failure of the reinsurer….the FCA is investigating whether additional capital is required to make these arrangements robust…
Just has a dominant position in the smaller end of the DB transfer business and can move up the scale if it chooses - although margin may be lower on larger deals.
15% growth pa means a doubling of profit in 5-6 years…..
Surely at some point it must move up?
So am I, baffling.
I am amazed as to why the sp is sub-100p.
Lloyds is selling a £6bn BPA business - it is suggested that Royal London is a prime bidder….It is not clear whether Lloyds is just selling its back book or whether bid teams and administration is also up for sale. It will be interesting to see what the disposal profit is relative to CSM/embedded value of the book rather than the pure liability value…..
The £6bn liability is about 3 years new business for Just, so I would not expect Just to be a bidder…but you never know….
It would be interesting if they could form a JV with one of the potential PE entrants.