Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I've bought in this morning, fantastic results!
Having said the market is not biting….it is not chewing Just and spitting it out either.
Significantly better performance than other asset owners with significant annuity books.
LGEN -4% PHNX -3% MNG -2.5% AV -1.5%
Market not biting so far…there are a lot of uncertainties in valuing this business so caution is understandable.
However, the story does look brighter and if the CSM does double in 5 years that should double the SP on its own.
Re potential bidders, there are some that would need infrastructure (eg MNG) others would be consolidation - but the market does not need that as capacity is scarce and new business abundant.…. slow and steady appreciation is what we can hope for….or an increasing yield if the market is not willing to uplift the SP. I expect a total return of 15% will be seen through SP and dividends….not too shabby.
Not sure of an L&G offer anywhere near those levels. A buyer might come in but a lot of the major firms do exactly what JUST does, so they don't need the infrastructure, products or regulatory permissions. They do need forward cashflow and with IRFS17 the growing run off will look good for profits and the balance sheet given there is 204p of value. Any price below 150 would be an effective use of capital. I'd hope the average analyst price moves towards this number. Capital returns will be light here, clearly the capital can be used better growing the balance sheet/ An offer nearer 200 would only come from a player that is not already in the market but the PRA have made the bar high for these takeovers. This business is now shipshape virtually no nasties in the closet with most of the past risks managed away. A definite BUY for me. DYOR
Profit up 154% ... Sales in the first six months of the year more than doubled to £1.9bn, £0.9bn previously, with the DB division seeing 149% growth to £1.4bn...
https://www.sharecast.com/news/news-and-announcements/just-group--14381044.html
L&G should / could put a bid in for JUST. There was an article about a 200p takeover price for JUST in Investors Chronicle a few months ago. A takeover is what I'm expecting and probably north of 200p a share based on these numbers. Surely JUST will hit 100P a share again soon before moving upwards for a 200p+ a share takeover. Don't forget also that Quliter went up 12% on good results last week....Good luck, Brighty
Unbelievable results. Profits up 3 fold. Remember we are a c.£850m mcap currently with adjust H1 profit of c.£250m. It's mind boggling!
L&G numbers are a massive disappointment compared to our blockbuster numbers!
Even better than anticipated.
Good margin on the new business written, low capital consumption, improved solvency ratio.
Should generate some positive broker commentary….and hopefully some meaningful increase in the SP.
Brilliant numbers from Just today with profit up 154% to £173m (H1 22: £68m)
Plus, retirement Income sales more than double to £1.9bn (H1 22: £0.9bn)
Just also reporting 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%)"
Both the DB and retail markets remain buoyant, with a record pipeline of DB business.
Net assets per share of 204p.
Other key messaging:
* Adjusted profit before tax was £246m (H1 22: adjusted loss before tax £185m), driven by strong growth in underlying operating profit, and investment and economic profits. Of this £246m, £129m of profit is deferred to CSM4 in the balance sheet, leaving an IFRS profit before tax of £117m (H1 22: IFRS loss before tax of £237m).
* Improved return on equity to annualised 13.0% and tangible net assets per share of 204p (H1 22: 5.4% and 31 December 2022: 190p respectively).
This is even better than expected.
Good luck, Brighty
Quilter up over 12% today on good interim numbers announced today. Hopefully we can have a repeat here...
Good luck, Brighty
15th is what it has said in their financial calendar for a while.
Key figure is what Is added to the CSM (future profits) and the % of annuity sales that represents….LGEN said 8-9%. Less than 6% would be problematic for me if their margins are much worse than the bigger players.
Interims over the last 3 years have been 13 Aug 2020, 12 Aug 2021 and 9 Aug 2022. Looks as though Tuesday 15th August will be the date for the 6 months results .....
Good luck Brighty
Last year there was an interim divi announced on 09-Aug-22 with an Ex Div date of 18th Aug. The Business Update last month didn't confirm a date for the interims but it should be next week going on past dates? I'm expecting the numbers to be very good based on the business update....
Good luck, Brighty
Life insurance deals for cash have not happened anyway near a full embedded value…..
All share mergers are more feasible as the capital is not leaving the market and it is arguable that the paper is overvalued too…on both sides of a merger.
I would think 120p for cash and 150p in paper would get a deal done…..but neither may appeal to the Board or management…..
No bid and the price will be 50% of book value….but that should increase significantly in the next 5 years….as long as the margins on annuities can match the big players and be sustained.
There was an article about a 200p takeover price for JUST in Investors Chronicle a few months ago. A takeover is what I'm expecting in due course and probably north of 200p a share based on these numbers. Anyway, the market clearly like the update which in turn should help move the share price over 100P a share again soon. However, I'm waiting for the 200p a share takeover...Good luck, Brighty
The recent LGEN IFRS17 update stated that 10bn of BPA business would generate 800-900m of CSM (and risk adjustment).
That is the target for just to aim for….so £150-180m of future profits to be added in H1
There is undoubtedly a lot of volume passing into Just…..the only question must be about margins and capacity. The market is said to be capacity constrained which in classic economics should allow super/excess profits to be made.
Two questions will be answered with the HY results:
What increase in CSM is derived from these large sales?
What level of capital strain from the sales can the company sustain?
IMO this is going to go through a boom period….and the SP should follow the CSM up.
The IFRS17 update suggested the CSM would double if they meet their 15% growth in underlying profit target…..that means a NAV of 350p and a share price closer to 250p maintaining a substantial discount……surely due a re-rating soon.
Some absolutely incredible mind boggling numbers. Positive impact of cost of living crisis. New channel yielding record revenue. I wouldn't be surprised if JUST is taken over by a large player, they have everything going for them!
Another BPA for 90m announced on twitter….a regular occurrence.
Cant read the article, but the introductory headline and teaser indicate Lex is positive on Just.
It is premium content, would someone be able to summarise?
And despite todays 5% bump, it is trading well below 50% of its assets including expected future profits……I can understand not getting full credit as they are in the future, but the gap is too wide…..even 65% would be 120p…not too much to ask is it?
Back at the bottom of its recent trading range. Time to buy?
Bit of excitement today, presumably something to do with the broker upgraded target from 115 to 125.
But generally stuck between 80 and 95p…..financials generally the same influenced by liquidity in banks and credit risks…..bumper sales expected for the next few years…but will it prove to be sufficiently profitable?
Jatw; your outlook for JUST must depend on whether you are a believer or not. Rebuild the Balance Sheet? Take a look at the NAV per share over the past few years. Richardson was justifying the firesales with a "what if the housing market declined 10%"? The answer is; it might take 18 months to recover: but all those equity release holders were not going to die in 18 months! Others have lapped up the value and JUST holders are left with crumbs. The DB annuity market is far more risky than the equity release market in my opinion and the average equity release customer is older than most with a DB pension entitlement.
Pleased to be out, but a takeover would wrong foot me.
AceofClubs
The item that stands out for me it that their £500m deal in 2023 is retained on the Shareholder balance sheet, without the use of the business partner reinsurance…..that is a significant sign of financial strength that has not been seen for a long time…..of course they can add reinsurance at any time in the future, but I find that very encouraging.