Last checked at 16 May 2019 07:00
NEWS RELEASE | www.justgroupplc.co.uk |
16 May 2019
JUST GROUP plc
BUSINESS UPDATE FOR THE 3 MONTHS ENDED 31 MARCH 2019
FOCUS ON CAPITAL DISCIPLINE
Just Group plc ("Just", the "Group") announces a business update for the 3 months ended 31 March 2019.
Highlights
· | Retirement Income sales for Q119 were 59% lower than for Q118, as a result of a lower level of completed Defined Benefit De-risking ("DB") sales and our disciplined Guaranteed Income for Life ("GIfL") pricing stance. |
· | DB sales were down 90% year on year to £26m in Q119, due to a temporary reduction in activity levels in our target segment. In Q2 so far we have completed a series of transactions with a value in excess of £300m and the run rate is returning to that of the second half of 2018. The pipeline remains full and market pricing is attractive. |
· | GIfL sales for Q119 were down 23% year on year to £145m. The lower level of volumes reflects pricing increases implemented following the Prudential Regulation Authority's publication of CP13/18. The volumes are in line with our planned run rate and more similar to the Q418 level. |
· | Lifetime Mortgage ("LTM") advances of £79m were down 47%, as we focus on capital efficient LTMs and manage volumes in line with Retirement Income sales. |
Just Group new business1 | 3 months to 31/03/19 | 3 months to 31/03/18 | Change |
£m | £m | % | |
Defined Benefit De-risking | 26 | 249 | (90) |
Guaranteed Income for Life | 145 | 188 | (23) |
Care Plans | 13 | 17 | (23) |
Retirement Income sales | 184 | 454 | (59) |
Drawdown | 12 | 11 | 8 |
Total Retirement sales | 196 | 465 | (58) |
Protection2 | - | 1 | NM |
Lifetime mortgage loans advanced | 79 | 151 | (47) |
Total new business sales | 276 | 617 | (55) |
David Richardson, Interim Group Chief Executive, said:
"Today's update reflects our disciplined approach to the management of our capital in the new regulatory regime. Our GIfL price increases and DB pricing standards have been implemented rigorously, ensuring that we deliver to shareholders a new business internal rate of return in line with our targeted mid-teen levels. The continued growth in our markets gives us confidence that there remains a considerable opportunity to deploy capital in a disciplined and profitable manner. Although it was a quiet start to the year, DB transaction volumes in Q2 have been good. Given the strength of our pipeline, we remain comfortable that DB sales for the year will be similar to the annualised rate seen in H218.
Our capital position has been much improved by the £375m raised in March, and we are absolutely focussed on achieving capital neutrality by 2022. We have a plan in place to ensure we achieve this target, which includes a number of actions we will be taking over the course of this year. These include a renewed focus on cost control, the closure of loss making operations such as the US, reductions in new business LTM backing ratios and a shift towards more capital efficient assets."
New business sales by quarter1 (£m)
3 months to: | 31 Mar 2019 | 31 Dec 2018 | 30 Sep 2018 | 30 Jun 2018 | 31 Mar 2018 | 31 Dec 2017 | 30 Sep 2017 | 30 Jun 2017 | 31 Mar 2017 |
Defined Benefit De-risking | 26 | 233 | 363 | 469 | 249 | 434 | 269 | 170 | 125 |
Guaranteed Income for Life | 145 | 159 | 201 | 238 | 188 | 213 | 217 | 216 | 174 |
Care Plans | 13 | 21 | 17 | 18 | 17 | 20 | 18 | 17 | 17 |
Retirement Income | 184 | 413 | 581 | 725 | 454 | 666 | 504 | 403 | 317 |
Drawdown | 12 | 13 | 14 | 13 | 11 | 14 | 14 | 11 | 12 |
Total Retirement sales | 196 | 426 | 595 | 738 | 465 | 681 | 518 | 414 | 328 |
Protection2 | - | - | - | - | 1 | 2 | 1 | 1 | 2 |
LTM loans advanced | 79 | 119 | 170 | 162 | 151 | 142 | 137 | 124 | 107 |
Total new business sales | 276 | 545 | 765 | 900 | 617 | 826 | 656 | 539 | 436 |
Notes
1. Numbers in table subject to rounding.
2. Protection closed to new business in Q4 17. Q1 18 Protection new business sales represented applications in the pipeline.
Enquiries
Investors / Analysts
James Pearce, Director of Group Finance
Telephone: +44 (0) 7715 085 099 james.pearce@wearejust.co.uk
Alistair Smith, Investor Relations Manager Telephone: +44 (0) 1737 232 792 alistair.smith@wearejust.co.uk
|
Media
Stephen Lowe, Group Communications Director
Telephone: +44 (0) 1737 827 301 press.office@wearejust.co.uk
Temple Bar Advisory Alex Child-Villiers William Barker Telephone: +44 (0) 20 7002 1080 |
FINANCIAL CALENDAR
| DATE |
AGM | 13 June 2019 |
A copy of this announcement will be available on the Group's website www.justgroupplc.co.uk
JUST GROUP PLC
GROUP COMMUNICATIONS
Vale House, Roebuck Close
Bancroft Road, Reigate
Surrey RH2 7RU
This announcement may contain and Just may make verbal statements containing "forward-looking statements" with respect to certain of its plans and current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Just's control, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which Just and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on Just's profitability and ability to access capital and credit, a decline in the Group's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of Just may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of Just speak only as of the date they are made. Except as required by applicable law or regulation, Just expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.