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Just looked on the co website and on 21 /09 just announced a £250m pension risk transfer deal.
The previous announcement was October 2020.
Hopefully this means the market is dealing again and Just will announce a series of new deals…which are capital light and profitable in year one.
I've been putting some effort into getting my head around the situation, as it is indeed confusing how selling a LTM portfolio at £80m over IFRS book value generates a book loss of £76m.
Just divides profit into "new-business" and "in-force".
When insurance liabilities are taken on, they are discounted back to the present day at a discount rate. That rate reflects the expected yield from the assets that will back the liabilities.
My perspective is that the loss on sale is a recognition that historic new business profits have turned out to have been overstated, as with a smaller proportion of high yield LTMs in the portfolio a lower discount rate is appropriate.
A big cause of the headline loss on the sale of the mortgages is loss of discount that occurs on insurance liabilities as replacement assets are likely to have a much lower yield to maturity. LTM are illiquid assets, are subjective to value but if you have enough capital to hold them like Rothesay they are a desirable asset. Just issue is that it has too large a proportion of this class of asset which was spooking the regulator.
https://www.fool.co.uk/investing/2021/08/13/this-ftse-250-penny-stock-is-up-80-would-i-buy-it/
SCR of 160% should permit dividends to restart soon.
Good set of results, market just didn't like IFRS loss but - also their update massively complex compared to other companies. Worries too about something hidden in there possibly? Used to hold these shares and will keep an eye on them for now, maybe will buy in again but on face of it very good performance.
I'd put the reasons for the drop as:
* Nobody likes to see an IFRS loss
* Yet another large chunk of mortgages to be flogged off at a considerable discount to book value
* More restricted T1 debt - the last tranche had to pay 9.375% to get takers. And why do they need it?
dont hold these shares anymore but perplexed at the downward movement - these are good results
How can the price drop on them results.. wtf does the city want. Them to announce they have won 150 million on euro millions placed it in dogecoin quadrupled the 150 million and now going to pay that all to the shareholders..... In the states this would be up 20%
Brightly I doubt that share price will get to £2 any time soon, look at Lgen, Aviva which are dividends payers but trade below NAV but discount to NAV should reduce. The Tier 1 sub notes should further boost capital position.
They have just been going around quietly delivering on New business and capital. All the insurers have posted IFRS losses because of market movements….as long as the capital position is good there is nothing to worry about.
I’m agreeing with brighty and looking for a strong H2 share price performance, hopefully it starts today.
This is a strong set of results. Retirement Income sales for H1 21 up 22% to £909m (H1 20: £745m). Defined Benefit De-risking ("DB") sales were up 21% during the period and retail sales were up 24%. A re-rate in the share price is clearly coming: i.e. Net assets per share of 192p with a current share price of 106p. £2 is likely by the end of this year. Good luck, Brighty
Commentary in other results (Aviva q1 and LGEN today) indicate the market has been slow.
Looking from the trustee and sponsor company perspective they may want to see what mortality is across the pandemic before signing a deal that may contain a windfall for the insurer.
Don’t expect good bulk sales from Just, but that should be a positive for capital retention and may outweigh any negatives from a sales perspective.
12 Aug 2021 - Interim results for the 6 months ended 30 June 2021
Does anyone know when we can expect the next trading update from Just?
Bought another £15k worth of shares. Good prospects imo.
Just Group is under valued and perhaps off the radar currently but there were some very encouraging comments about a 200p valuation / takeover price in Investors Chronicle a few months ago. 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". One to watch. 200p is where this should be by the end of this year, if not sooner. Check out the NAV. It's 100% above the current share price.
Good luck, Brighty
I managed to top up some at 92.75, this business is perfect for investment!
was going to buy £20k... but placed my money elsewhere... pity. Looks a fairly decent company!
Any rhyme or reason as to why the share price has been so unloved this past week or so?
Everything seems very positive from a business standpoint.
Just bought in £8k. Looks signicantly undervalued.
Remember aviva said that q2 was looking much better.... presumably this ebbs and flows.
Aviva Q1 annuity sales were down 50%
I think we can reasonably infer that Just sales were low in Q1 hence no Q1 update. However that is good for capital generation. The inforce book will have released capital, potential credit losses will be unwound like the banks have done with their provisions....
The annuity market will recover.
Still a buy for me...plenty of upside
Currently treading water and paying the price of not giving a trading update ahead of the AGM last week.
I am not sure we can read anything into the lack of an update.
The macro economics look better and should favour a better capital position.....if there have been lower sales of lumpy bulk annuities that may conserve capital.....but there is plenty of time to sign some deals before the HY.....
Looking for decent capital generation/releases at the HY and an improved solvency capital ratio to spur the share price on.
Oh and PHNX is raising about 500m by selling its European businesses.....that cash will need to be spent on something.....