The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Yes, totally agree with you. The market clearly like the update which in turn should help move the share price north of 100P again. Plus, don't forget the 200p takeover price mentioned in Investors Chronicle a few months ago. Just Group's CFO, Andy Parsons, was quoted as saying “We are open to conversations from interested parties and conversations have happened. All we can do is to focus on ourselves – making our business better will increase the appeal to others.” A takeover is what I'm expecting in due course. Good luck, Brighty
Ace….Just is quite fortunate to still be alive and kicking……after the regulator made mortgages much more expensive to hold, Just has had to rebuild its balance sheet…..the hedging was required to enable it to demonstrate reasonable solvency levels while it did this.
They have had sale discussions but those did not meet the Directors valuation of the business…..maybe now the business is on a firmer footing there can be more realistic discussions……there are well capitalised operations looking to move on the DB annuity market…they could buy Just and save themselves a couple of years building the capability….
Richardson has trashed this business since taking the deputy CEO and then CEO role.
In Y/e 2017 JUST paid a 3.72p dividend and made a profit before tax of £181.3M.
The value in JUST has largely been sold to others at giveaway prices.
"Cumulatively since 2018, we have incurred a net loss of £226m (pre-tax) on interest rate hedging " - clowns, that should not be allowed to play with such dangerous products; they clearly do not understand the downside risks.
I bought in at 90p expecting realisation of value for shareholders - it has been squandered by the directors, not least on the directors.
I have exited at 90p, pleased to be out relatively unscathed.
AceofClubs
Perhaps surprisingly the SP continued to gain and ended up 11% on the day…..bodes well for holding this level as I am anticipating some broker upgrades in the next week.
Turns out there wasn’t one…..the market likes the results and the positive forward statements.
Touching 90p now, no doubt it will fall back in the coming days to mid 80’s, but can push on during the year with further delivery against plan….and this year with reduced hedging losses.
Really impressed with the result and increase in dividend, even more impressive is the 2023 outlook and market opportunities. We now need to get a sensible sp performance!!
Yea I added a few more on the drop Friday results tomorrow not expecting anything nasty but would like to know if there is going to be a buy back announcement.
Topped up too. Excellent long term hold. Could even do very well in the short to medium term should the results next week be as expected.
So bought 6000 more at 76.61, hope results are good.
Anyone know why the drop this afternoon?
Large tranfers of assets and liabilities stretching decades into the future are impossible to value or cost accurately. Acturies will tell you otherwise; but they are all dead or retired by the time their predictions are put to the test.
I am always sceptical with purely financial transactions where both parties declare it's profitable business. In transfers of funded Defined Benefit schemes there is yet another party with apparent cause to celebrate; the members of the scheme. Peter Jennings, head of DB sales at Just Group, added: “This was a textbook example of how stakeholders should collaborate to deliver a very efficient and well executed transaction to achieve excellent outcomes for the trustees and their members.” So it's win, win, win.
When reality bites (Equitable Life?) nobody, but nobody, is held to account.
Not a concern today and too far in the future for anybody to be too bothered, the constant flow of schemes into the "Pensions Lifeboat" costs only one party after all: the pension scheme members.
AceofClubs
Just announced a 500m deal with GKN today…and the shares fell 5% which seems at odds with the news. Just is surely set to have another record year of new business.
Not long to the results now….lets see what they bring…...
Encouraging update today re IFRS 17, which is already attracting attention: Just Group to target double-digit growth in yearly profit
UK retirement income market specialists Just Group says it is committed to target 15% growth in underlying operating profit per year over the medium-term under IFRS 17. For 2021, underlying operating profit was GBP210 million. It will also aim to deliver more than 10% return on equity under IFRS 17 for 2022, compared to 9.4% in 2021. As at January 1 last year, adjusted shareholders equity is expected to be around GBP2.1 billion to GBP2.2 billion.
IFRS 17 is a new accounting standard for insurers that was implemented on January 1 this year. Expects this new measure of IFRS 17 underlying operating profit to be comparable to IFRS 4 underlying operating profit. Just Group says it will release 2022 results on March 7.
Last month, Just Group said it is confident of achieving full-year guidance for 2022 citing the increase in interest rates as boosting in-force profits but leading to a lower new business margin.
Good luck, Brighty
They paid a 1p divi in May last year.
I expect there will be one announced with the FY results, question is how big? 1p=£10m approx
they want to retain funds to support new business 2% of 2.5bn is £50m.
Last year the dividend was said to be based on a 2021 pro-forma of 1.5p ie in interim of 0.5p.
The interim was paid.
Also expected to grow profits at 15%, this would imply a total divi of 1.725p, so i expect a final divi of about 1.225p…..lets see what is delivered.
Can I just ask when will shareholders be rewarded with a dividend? Any chance of this in 2023? The TU and results are good as you all agreed.
Ave case size for Just is £50m…..
The big boys are doing 500m-1bn in single deals which is cost effective for them.
The bulk purchase annuity market is going to be huge while interest rates stay high - as schemes are much closer to being able to fully fund complete buy outs of their liabilities which is the aim of the sponsoring organisation.
Currently there are not enough people to assess the risks and price deals….which is driving salaries for actuaries with BPA experience higher….Just should be able to grow sales rapidly and become significantly bigger…..
That will contribute to a large Contractual Service Margin under IFRS17 which reflects expected future profits - release of these will be slow and steady so Just profits will be lower in 2023 (LGEN suggested it would lose 20-25% of profits under the new standard), but there should be a large source of value to compensate…..valuation methods will have to reflect this so there will be a focus on multiple vs CSM (should be more than 100% as future growth will be expected).
I suspect that margins have taken a hit given the bulk market is more competitive than retail.
Also Just is a large user of reinsurance - which reduces capital requirements and new business strain.
The PRA has the 100% reinsured market in its sights in case a reinsurer does fail and leave firms like Just scrambling to find the capital required previously provided by the reinsurer.
Nevertheless - an excellent set of sales numbers from Just and good expectations of future profits….no word yet of IFRS 17 impact….
Great results from JUST today.
* Retirement Income sales up 17% to £3.1bn, driven by DB sales which were up a stonking 33% to £2.6bn.
* 56 transactions signed off during the year (2021: 29 transactions)
* JUST expecting this "strong growth momentum to carry into 2023".
* Continuing to outperform their guidance, driven by a focus on "pricing discipline and risk selection" plus good messaging to the market about "low new business strain enabling strong growth whilst delivering attractive returns and maintaining capital strength".
* Finally, this excellent summary in the RNS: "Given the strong new business growth, we are confident in achieving our expectations for FY 22 underlying operating profit growth, noting that the increase in interest rates has boosted in-force profits, but led to a lower new business margin. Our performance in 2022 has further added to our confidence in Just's ability to deliver 15% growth in underlying operating profit per annum, on average over the medium term. This is underpinned by our successes in a growing DB market, strong pricing discipline and risk selection, and our increasing illiquid investment origination capabilities".
A very encouraging, upbeat update. This just gets better every year.
Good luck, Brighty
Last year there was a business update in mid January.
Hopefully this will be repeated…..and they can give an indicative view of the IFRS 17 changes, plus report what should be a bumper round defined benefit solutions.
"or 137.50p average forecast - hard to choose between them?"
I guess JP shaded that one.
AceofClubs
LGEN has said the change to IFRS will impact annuity business.
A large chunk of value will be held as the contract service margin on the balance sheet and released to P&L over the lifetime of the contract - for annuities 30+ years.
They re attribute much of the reserves and dont charge market movements / experience variances to P&L, these now go through CSM.
As a result profits as measured by release of CSM are much more stable but 20-25% lower for LGEN annuities…and less dependent on new business…..
The analysts will take a while to work out what the value of the company looks like, but a multiple of the CSM could become a comparator between companies and their market value.
Solvency, cash generation and dividend paying capacity said to be be unchanged…..
No M&A until the market works out what is what (as was the case for move to Solvency II).
A large CSM at Just may be the trigger needed to change the sideways direction of the SP of late.
The 6 month results from JUST infer guidance is going to be exceeded this financial year. The market will like that which in turn should help move the share price north of 100P again. Plus, don't forget the 200p takeover price in Investors Chronicle a few months ago. Just's CFO, Andy Parsons, was quoted as saying “We are open to conversations from interested parties and conversations have happened. All we can do is to focus on ourselves – making our business better will increase the appeal to others.” Of particular note was the comment: "conversations have happened". A takeover is what I'm expecting in due course.
Good luck, Brighty
Used to hold 12%, now around 5%….big seller should creating a better mix of shareholder base. Once Abdn selling is done the buyers will be pushing the SP up.
A strong set of results with capital generation improving.
It is an odd world when there is a whopping IFRS loss caused by market pricing of investments but the capital position significantly improves because liabilities have fallen by more than the assets supporting them…..it is the capital that matters and permits the interim dividend to be paid, only half a pence but better than nothing……and shows the company is recovered.
Now we need the market to recognise this.
JPM must be expecting a lot of poor results this week except at LGEN.
They may have a jump on their ilk but could be badly exposed with AV, MNG, JUST, ABDN, QLT results all due….their adjustment in price for JUST will only be correct if the sp goes to 60p on results tomorrow…..otherwise they are just reflecting the current price.