Just Group Regulatory News (JUST)

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Just Group plc (the "Group", "Just") announces its results for the six months ended 30 June 2023.

Profitable and sustainable growth1

Strong Solvency II and IFRS1

Rewarding shareholders

David Richardson, Group Chief Executive Officer, said:

"We have delivered another impressive set of results and we are highly confident that we will comfortably exceed our 15% profit growth pledge this year.

Our DB business is going from strength to strength and I am delighted that our retail business has returned to growth. We are growing sustainably and are exceptionally well positioned to continue benefiting from the positive drivers and favourable demographics supporting both of our principal markets.

We have a growth mindset and we've developed a winning formula - one which will ensure we fulfil our purpose, to help people achieve a better later life, while building substantial value for shareholders.

Over the last four years, our performance has consistently exceeded the commitments we have made and we're more optimistic than ever about the future for Just."

Notes

1 All comparatives throughout the document are restated under IFRS 17 and IFRS 9.

2 Alternative performance measure ("APM") - In addition to statutory IFRS performance measures, the Group has presented a number of non-statutory alternative performance measures. The Board believes that the APMs used give a more representative view of the underlying performance of the Group. APMs are identified in the glossary at the end of this announcement. Adjusted operating profit is reconciled to IFRS profit before tax in the Business Review.

3 These figures include the estimated impact of a TMTP recalculation for 30 June 2023. At 31 December 2022 the Solvency II figures include a formal TMTP recalculation.

4 Contractual Service Margin.

For those analysts who have registered, a presentation will take place today at 1 Angel Lane, London, EC4R 3AB, commencing at 08:30 am. The presentation will also be available via a live webcast.

A copy of this announcement, the presentation slides and the transcript will be available on the Group's website www.justgroupplc.co.uk

JUST GROUP PLC

GROUP COMMUNICATIONS

Enterprise House

Bancroft Road

Reigate

Surrey RH2 7RP

Forward-looking statements disclaimer:

This announcement has been prepared for, and only for, the members of Just Group plc (the "Company") as a body, and for no other persons. The Company, its Directors, employees, agents and advisers do not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.

By their nature, the statements concerning the risks and uncertainties facing the Company and its subsidiaries (the "Group") in this announcement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. This announcement contains, and we may make other statements (verbal or otherwise) containing, forward-looking statements in relation to the current plans, goals and expectations of the Group relating to its or their future financial condition, performance, results, strategy and/or objectives. Statements containing the words: "believes", "intends", "expects", "plans", "seeks", "targets", "continues" and "anticipates" or other words of similar meaning are forward-looking (although their absence does not mean that a statement is not forward-looking). Forward-looking statements involve risk and uncertainty because they are based on information available at the time they are made, based on assumptions and assessments made by the Company in light of its experience and its perception of historical trends, current conditions, future developments and other factors which the Company believes are appropriate and relate to future events and depend on circumstances which may be or are beyond the Group's control. For example, certain insurance risk disclosures are dependent on the Group's choices about assumptions and models, which by their nature are estimates. As such, although the Group believes its expectations are based on reasonable assumptions, actual future gains and losses could differ materially from those that we have estimated. Other factors which could cause actual results to differ materially from those estimated by forward-looking statements include, but are not limited to: domestic and global political, economic and business conditions; asset prices; market-related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of governmental and/or regulatory authorities including, for example, new government initiatives related to the provision of retirement benefits or the costs of social care; the impact of inflation and deflation; market competition; changes in assumptions in pricing and reserving for insurance business (particularly with regard to mortality and morbidity trends, gender pricing and lapse rates); risks associated with arrangements with third parties, including joint ventures and distribution partners and the timing, impact and other uncertainties associated with future acquisitions, disposals or other corporate activity undertaken by the Group and/or within relevant industries; inability of reinsurers to meet obligations or unavailability of reinsurance coverage; default of counterparties; information technology or data security breaches; the impact of changes in capital, solvency or accounting standards; and tax and other legislation and regulations in the jurisdictions in which the Group operates (including changes in the regulatory capital requirements which the Company and its subsidiaries are subject to). As a result, the Group's actual future financial condition, performance and results may differ materially from the plans, goals and expectations set out in the forward-looking statements. The forward-looking statements only speak as at the date of this document and reflect knowledge and information available at the date of preparation of this announcement. The Group undertakes no obligation to update these forward-looking statements or any other forward-looking statement it may make (whether as a result of new information, future events or otherwise), except as may be required by law. Persons receiving this announcement should not place undue reliance on forward-looking statements. Past performance is not an indicator of future results. The results of the Company and the Group in this announcement may not be indicative of and are not an estimate, forecast or projection of the Group's future results. Nothing in this announcement should be construed as a profit forecast.

Chief Executive Officer's Statement

Delivering sustainable growth

I am very pleased to present my Chief Executive Officer's Statement for the first six months of 2023, during which we have further demonstrated the strength and potential of our business model. We are growing sustainably and are exceptionally well positioned to continue benefiting from the positive drivers and favourable demographics supporting both of our principal markets.

Retirement sales growth

The rise in interest rates during 2022 and 2023 has a positive effect on both the Defined Benefit ("DB") and retail Guaranteed Income for Life ("GIfL") markets.

Sales have more than doubled in the first six months of 2023 to £1.9bn with DB sales, up 149% to £1.4bn (H1 2022: £0.6bn) and retail sales, up 54% to £0.5bn (H1 22: £0.3bn). This positive momentum has continued into the second half and we expect another very busy period.

Defined Benefit business

Our DB business is going from strength to strength. During the first six months of the year, we completed 35 transactions of which 32 were less than £100m (of these, 22 were less than £10m). We have written our largest (£513m) and smallest (£0.6m) deals to date, and have a sizeable ongoing pipeline of new business opportunities for the second half. Our bulk quotation service continues to grow in popularity, with over 200 schemes from 19 EBCs1 onboarded. The service is providing a steady source of smaller deal completions as EBCs and trustees increasingly benefit from regular insurer price monitoring and a streamlined transaction process.

As well as expanding our leadership position in the smaller transaction size segment, we will also drive growth by securing a greater number of larger transactions. We have written almost 350 DB transactions since entering the market in 2013 and through these, have gained significant pricing and deal experience to now regularly quote on larger transactions. Our participation in the larger transaction segment is supported by the flexibility provided by our stronger capital position and our expanded panel of reinsurance partners. Combined with the strong outlook for the market in 2023, we expect our participation in the larger deal segment to increase further.

In DB, LCP2 estimate that c.1,000 DB pension schemes are already fully funded on an insurer buyout basis. As a result, 2023 and 2024 industry volumes are expected to significantly exceed the record £44bn written in 2019. We welcome the Chancellor's confirmation, in his recent speech, of the important role played by insurers offering buy- outs.

Retail business

I am delighted that the GIfL market has returned to strong growth and has had its busiest six month period since Pensions Freedoms were announced in 2014. The open market, where Just competes, has achieved particularly strong growth, and is providing us with increased opportunity to utilise our medical underwriting expertise to risk select.

Higher interest rates have stimulated both customer and adviser demand. The findings from the FCA's thematic review into retirement income advice, are likely to increase the importance of considering guaranteed solutions to help customers achieve their objectives. We believe this will be supported further by the expectations created by Consumer Duty, which came into effect on 31st July.

Expanding our investments in tandem

In order to take advantage of these growth opportunities, we are continuing to expand our investment capabilities to support new business pricing and deliver reliable and secure returns for our shareholders. Our "manager of managers" model approach gives us the flexibility to source assets providing attractive risk reward characteristics across a range of asset classes, sectors and geographies. I am pleased to note that we have sourced £0.8bn of other illiquid investments3 in the first six months of the year and that we continue to find opportunities to support the UK economy.

As the government's Solvency UK agenda takes shape over the next two years, we expect this will unlock additional opportunities to grow our investment in illiquid assets.

Customers and our purpose

The volatility in investment markets witnessed by our customers during the final quarter of 2022 and the current unpredictable economic outlook in the UK creates uncertainty and worry for many who have investments in equities and fixed interest bonds. We provide a guaranteed income for life to customers, and as interest rates have risen, the amount of retirement income we are able to pay customers has increased significantly. This secure income is often purchased to cover the essential expenditure of the household and in these uncertain times, our solutions provide much sought reassurance to customers.

As the retirement specialist we are focussed on helping people in later life. When we provide financial advice, we help people to discover whether they are entitled to State Benefits and often uncover many missed benefits that when secured, can make a profound impact on their lives. We provide a range of professional advice and guidance to help people, and are continuing to invest in these services to make them more valuable to a wider range of potential customers. We can't resolve all the challenges faced by our customers, but we are helping where we are able to do so and remain focused on living up to the purpose we set out many years ago: we help people achieve a better later life.

Sustainability

We achieve our goals responsibly and are committed to a sustainable strategy that protects our communities and the planet we live on. I am very proud that over the last three years we have reduced our operational carbon intensity per employee by 81%. However, the most material impact we can make to reduce carbon emissions will be achieved through the decisions we take with our £21bn investments portfolio.

Last year we completed our full £575m green and sustainability bond investment commitments well ahead of schedule. In the first six months of 2023 we have continued to invest in environmental, social, and corporate governance ("ESG") related assets with over £300m invested in social housing, the renewable energy industry and facilities at NHS University Hospital Southampton.

Our people

Our Just culture is underpinned by our people who are passionate and committed to making a difference to the lives of those around them. A key business priority is that all of our colleagues feel proud to work at Just. The combination of our strong purpose and having highly engaged teams working the 'Just way', is a competitive advantage which is helping us to drive high performance and achieve our ambitious growth targets.

I would like to thank my colleagues for their continued focus in providing outstanding support for our customers when they needed it most and for helping to deliver an excellent set of results.

We are investing to develop the skills of our colleagues, attract new talent into Just and build high performing teams. We have continued to maintain excellent levels of colleague engagement, with a key priority to build a diverse and inclusive workforce.

Financial performance

In the first six months of 2023, underlying operating profit, now measured under IFRS 17, is up 154% to £173m, driven by the strong sales performance. We expect sales activity in the second half of the year to be in line with or above the first half of the year. Our first half performance has led to a return on equity of 13%.

Investment and economic profits were £71m, and combined with a number of smaller non-operating items lead to an adjusted profit before tax4 of £246m for the first six months of 2023 (first six months of 2022: adjusted loss before tax £185m). Of this £246m, £129m of profit is deferred to the CSM reserve in the balance sheet, leaving a profit before tax of £117m.

The strength and resilience of our capital position and our disciplined pricing and risk selection ensures we are, and will continue to be capital self-sufficient. This means we can fund our growth ambitions, reward shareholders with a growing dividend and maintain a strong buffer of capital in what are uncertain times.

We will pay an interim dividend of 0.58 pence per share, in line with our stated policy, which represents 15% growth over last year's interim dividend.

In conclusion

We expect the current macro-economic and political concerns to have a negligible effect on the Group's business model, with sustained higher long term interest rates continuing to drive demand for our products. We are exceptionally well positioned to continue benefiting from the positive structural growth drivers and demographics supporting both of our principal markets. Our ability to take advantage of these trends have further increased our confidence in Just's ability to deliver 15% growth in underlying operating profit per annum, on average over the medium term.

We have never been stronger. We have the capability and opportunities to achieve our ambitious growth plans so that we build substantial value for shareholders and fulfil our purpose to help more people achieve a better later life.

David Richardson

Group Chief Executive Officer

1 Employee benefit consultant ("EBC")

2 Lane, Clark, Peacock ("LCP"), an employee benefit consultant.

3 In addition to £789m of other illiquid assets originated during the first six months of 2023, Just also originated £75m of internally funded lifetime mortgage assets.

4 Alternative performance measure (APM), see glossary for definition. See the business review for explanation of the use of APM's and reconciliation to statutory results.

Business Review

STRONG GROWTH, CONTINUED MOMENTUM

The Group is well positioned in attractive markets with strong and structural growth drivers. This enables us to benefit from the significant boost in demand for our products due to the significant rise in long term interest rates over the past 18 months. We innovate, risk select and price with discipline, ensuring our business model delivers long-term value for customers and shareholders.

The Business Review presents the results of the Group for the six months ended 30 June 2023, including unaudited IFRS and Solvency II information. These are the first reported results under IFRS 17, which has prompted some modification of the Group's key performance indicators, as set out below.

The growth and success of the business during the first half of 2023 is built on the foundation of a transformed, low capital intensity new business model, supported by our strong and resilient capital base. We continue to maintain cost control across the business whilst specifically targeting our investment in proposition development, and to enable the business to scale efficiently. We continue to diversify the asset portfolio by originating a greater proportion of illiquid assets to back the new business in line with our investment strategy.

We entered 2023 with very strong momentum in the DB business, as rising interest rates over the past 18 months have accelerated the closure of scheme funding gaps. During the first six months of 2023, we wrote a record amount of DB new business for a first half, £1.4bn from 35 transactions (H1 22: £0.6bn, 14 transactions) in a buoyant market estimated by Hymans Robertson at £25bn (H1 22: £12bn). LCP forecast that up to £60bn of DB buy-in/buy-out transactions could occur in 2023, and therefore the DB market is well on track to substantially exceed the previous record of £44bn in 2019. Just enters the second half of 2023 with a record pipeline of active quotations, and we expect to maintain sales in line with, or above our first half level. Strong pricing discipline is contributing to further optimising returns from our new business capital budget. We expect the positive trend to persist as schemes continue their preparatory work to be transaction ready for 2024. We estimate that less than 15% of the £1.4tn DB market opportunity has executed thus far, with LCP forecasting c.£600bn of DB buy-in/buy-out transactions over the decade to 2032, of which over £200bn could transact over the next three years. Around one in five, (c.1,000) of all DB schemes are already fully funded on an insurer buyout basis, with the remaining c.4,000 progressively working towards full funding over the next decade and beyond.

Our GIfL business is also buoyant, boosted by strong growth in the Open Market, where Just operates. Higher interest rates directly increase the customer rate on offer, increasing the attractiveness of a guaranteed income. The customer rate can be further improved through individual medical underwriting, in which Just is a market leader, with a substantial uplift, especially for those customers with medical conditions. Quote activity remains elevated, following the rise in rates post September 2022's mini-budget. During the six months to 30 June 2023, we wrote £470m of GIfL business, up 54% year on year (H1 22: £305m). The introduction of the FCA's Consumer Duty in July and findings later this year from the thematic review into retirement income advice are likely to lead to increased advisor conversations on the importance of considering guaranteed solutions to help customers achieve their objectives.

For the first six months of the year, underlying operating profit was up 154% at £173m (H1 22: £68m), a position that leads us to being very confident of meeting or exceeding our target to deliver 15% growth in underlying operating profit per annum, on average over the medium term. Retirement Income2 sales of £1,899m were more than double the H1 22 level (£879m), as both DB and GIfL sales markedly increased, which led to a new business profit of £161m (H1 22: £76m). New business margin was pleasing at 8.5% (H1 22: 8.6%) as buoyant markets supported active risk selection, whilst maintaining pricing and cost discipline. In-force profit at £92m (H1 22: £72m) reflected an increased return on surplus assets in addition to a growing book of in-force business. Finance costs have reduced following the November 2022 tender offer and subsequent cancellation of £76m tier 2 debt.

Total investment and economic variances of £71m combined with other items to drive an adjusted profit before tax for the first six months of £246m. Of this £246m, £129m of profit is deferred to the CSM reserve in the balance sheet, leaving a profit before tax of £117m.

Long dated cashflows from assets and liabilities on the balance sheet are closely cashflow matched and not exposed to movements in long term interest rates. Historically, hedges to protect interest rate exposure in our Solvency II position have created volatility in IFRS profit before tax as interest rates moved. However, a revised hedging strategy during 2022 and H1 23, including the purchase of £2bn of long dated gilts held at amortised cost under IFRS has removed1 the IFRS exposure whilst significantly containing our Solvency II sensitivity to future interest rate movements. The key sensitivities of the Group's capital and financial position to future economic and demographic factors are set out below and in notes 11 and 14 of these financial statements.

The Group's Solvency II capital position1 has further strengthened to 204%2 (31 December 2022: 199%) helped in part by a continued rise in long term interest rates. Underlying organic capital generation for the first half of 2023 was healthy at £18m (H1 22: £33m) with the £30m capital strain from writing the increased volume of new business maintained at a low 1.6% of premium (H1 22: £11m and 1.3% of premium). This low new business strain, materially inside our 2.5% target, reflects strong pricing discipline, risk selection, and business mix. Lower finance costs also contributed. We continue to closely monitor and prudently manage our risks, including interest rates, inflation, currency, residential property and credit. The Solvency II sensitivities are set out below.

The recent Financial Services and Markets Act contains new powers to set the direction for financial services following the UK's exit from the European Union, including reforms to the Solvency II capital regime. As part of the proposed new Solvency UK regime, in June, HM Treasury and the PRA set out their proposals to implement the more straightforward items, including simplification measures and a 65% reduction in risk margin for life insurance business by the end of 2023. The risk margin reduction is estimated to improve our current solvency ratio by over 5 percentage points. A consultation paper on the more complex changes to matching adjustment ("MA") rules and the associated investment flexibility is expected to be launched in September, with reforms to take effect in 2024. We expect these MA changes to support the role HM Treasury is expecting from the industry, whereby appropriate reforms could increase investment by tens of billions of pounds in long-term finance to the broader economy, including infrastructure, decarbonisation, social housing and increased investment in science and technology.

At this time, the outlook for the economy continues to evolve, reflecting macro-economic and political concerns including the trajectory of central bank rates to reduce and control inflation, and a UK election by the end of 2024. The interest rate increases are predicted to lead to a possible shallow recession later in 2023, followed by a gradual recovery in 2024. We expect these macro forces to have a negligible effect on the Group's business model, with sustained higher long term interest rates continuing to drive demand for our products. We have a strong and resilient capital base, with a low strain business model that is generating sufficient capital on an underlying basis to fund our ambitious growth plans, whilst also paying a shareholder dividend that is expected to grow over time.

1 See note 14 for interest rate sensitivities, with a 100 bps increase in interest rates resulting in an increase in pretax profit of £4.1m and a 100 bps decrease in interest rates resulting in an increase in pretax profit of £8.3m.

2 Solvency II capital coverage ratios as at 30 June 2023 includes a notional recalculation of TMTP. and 31 December 2022 includes a formal recalculation of TMTP.

3 Alternative performance measure, see glossary for definition.

Alternative performance measures and key performance indicators

Within the Business Review, the Group has presented a number of alternative performance measures ("APMs"), which are used in addition to IFRS statutory performance measures. The Board believes that the use of APMs gives a more representative view of the underlying performance of the Group.

Just Group has been growing strongly for a number of years and regards the writing of profitable new business contracts as a key objective for management. As a result, in management's view, the use of an alternative performance measure which includes the value of profits deferred for recognition in future periods is a more meaningful measure than IFRS profits excluding the value of new business sales.

The APMs used by the Group are: return on equity, underlying operating profit, new business profit, Retirement Income sales, underlying organic capital generation, organic capital generation, new business strain, in-force operating profit, adjusted profit before tax, adjusted earnings, adjusted earnings per share and tangible net asset value per share. The Directors have concluded that the principles used as a basis for the calculation of the APMs remain appropriate, although due to the adoption of new accounting standards the reconciliation from APMs' to IFRS reported results has changed. Further information on our APMs can be found in the glossary, together with a reference to where the APM has been reconciled to the nearest statutory equivalent.

KPIs are regularly reviewed against the Group's strategic objectives, which have remained unchanged following the adoption of IFRS 17, which has also not impacted the Group dividend policy. The Group's KPIs are discussed in more detail on the following pages.

The Group's KPIs are shown below:

1 Alternative performance measure, see glossary for definition.

2 Solvency II capital coverage ratios as at 30 June 23 includes a notional recalculation of TMTP and 31 December 2022 includes a formal recalculation of TMTP.

Tangible net assets / Return on equity

The return on equity in the six months to 30 June 2023 was 13.0% (30 June 2022: 5.4%), using annualised underlying operating profit after attributed tax of £132m (30 June 2022: £55m) arising on average tangible net assets of £2,033m (30 June 2022: £2,020m). The 7.6pp movement was driven by increased underlying operating profit, driven by new business volumes that more than doubled during the period. Tangible net assets are reconciled to IFRS total equity as follows:

Underlying operating profit

Underlying operating profit is the core performance metric on which we have based our 15% growth target, per annum, on average, over the medium term. Underlying operating profit captures the performance and running costs of the business including interest on the capital structure, but excludes operating experience and assumption changes, which by their nature are unpredictable and can vary substantially from period to period. For the first six months of 2023, underlying operating profit grew by 154% to £173m, which is a strong foundation, and provides strong confidence in achieving our full year ambitions.

1 See reconciliation to IFRS profit before tax further in this Business Review.

New business profit

New business profit more than doubled during the six months to £161m (H1 22: £76m) driven by a 116% increase in Retirement Income sales to £1.9bn (H1 22: £0.9bn). The new business margin was maintained at 8.5% (H1 22: 8.6%) reflecting continued pricing discipline and risk selection in buoyant markets.

CSM amortisation

IFRS 17 introduces two new concepts, the Contractual Service Margin and the Risk Adjustment to the statement of financial position. CSM amortisation represents the release from the CSM reserve into profit as services are provided, net of accretion (unwind of discount) on the CSM reserve balance (see below). £29m of net CSM amortisation represents a £56m release of CSM into profit, offset by £27m of interest accreted to the CSM.

The CSM release into profit was £56m (H1 22: £42m), which represents an annualised 6.2% (H1 22: 6.3%) of the CSM balance immediately prior to release. The increase during the period represents growth in the CSM reserve from an additional year of deferred new business profit and the longevity assumption change at 31 December 2022 which was also deferred to CSM.

Accretion on the CSM balance amounted to £27m (H1 22: £16m) represents an annualised 3.1% (H1 22: 2.3%) of the opening plus new business CSM balance. CSM accretion is calculated using locked-in discount rates. The increase during the period reflects the higher interest rates applicable through the forward rates locked in at 31 December 2021 for new business written pre 2022 as well as higher interest rates applicable to the new business written since the end of 2021 and the increase in the CSM balance following the FY22 longevity assumption change.

Net Underlying CSM increase

This represents the net underlying increase in deferred profit in CSM over the period before allowing for transfers to CSM in respect of operating experience and assumption changes recognised in the current year. The new business profit to CSM in-force release multiple of 3 times reflects the strong growth of the insurance portfolio.

In-force operating profit

In-force operating profit represents investment returns earned on surplus assets, the release of allowances for credit default, CSM amortisation, release of risk adjustment allowance for non-financial risk and other. Taken together, these are the key elements of the IFRS 17 basis operating profit from insurance activities.

The in-force operating profit increased by 28% to £92m (H1 22: £72m), driven by a significant increase in investment return, as a result of higher interest rates, on a higher amount of surplus assets.

other group companies' operating results

The operating result for other Group companies was a loss of £8m in the six months ended 30 June 2023(six months ended 30 June 2022: loss of £7m). These costs arise from the holding company, Just Group plc, and the HUB group of businesses.

Development expenditure

Development expenditure of £10m for the six months ended 30 June 2023 (six months ended 30 June 2022 £9m), relates mainly to product development, proposition enhancement and new initiatives. It also includes investment in distribution improvements such as online capability and digital access.

finance costs

Finance costs have decreased by 13% to £33m for the six months ended 30 June 2023 (six months ended 30 June 2022: £38m). These include the coupon on the Group's Restricted Tier 1 notes, as well as the interest payable on the Group's Tier 2 and Tier 3 notes. Finance costs have reduced following the November 2022 tender offer and subsequent cancellation of £76m tier 2 debt.

Today, we are launching an open market repurchase facility (the "OMR Facility") under which Just Group plc may from time to time, seek to repurchase on a first come first serve basis, a limited amount up to and not exceeding £24.027m in aggregate nominal amount of its outstanding 2026 tier 2 subordinated notes (ISIN XS1504958817) (the "Notes"). The price paid for the Notes will be subject to market pricing and conditions at the time, and at the sole discretion of Just Group plc. The rationale for the OMR Facility is to optimise the capital structure and debt profile of the Group, while offering to holders of the Notes the opportunity to sell them to Just Group plc. Morgan Stanley & Co International plc have been appointed as sole agent to execute the OMR Facility. The OMR Facility will expire on 31 October 2023. Any Notes purchased by Just Group plc will subsequently be cancelled.

Retirement income Sales

1 GIfL includes UK GIfL, South Africa GIfL and Care Plans.

The structural drivers and trends in our markets underpin our confidence that we can continue to deliver attractive returns and growth rates over the long term. Higher interest rates stimulate further demand for our products, and we are well positioned to take advantage of the growth opportunities available in our chosen markets. Over the past 18 months, rising interest rates have accelerated the closure of DB scheme funding gaps, and therefore more schemes are able to begin the process to be 'transaction ready', accelerating business into our short/medium term pipeline that previously would have been expected to transact in the second half of the decade. The retail GIfL business had its busiest six month period since 2014, with the Open market, where Just competes showing particularly strong growth. Higher interest rates directly increase the customer rate we can offer, further improved through individual medical underwriting. This increases the value of the guarantee to customers, relative to other forms of retirement income.

DB sales at £1,429m (H1 22: £574m) were up 149%, reflecting heightened activity, during the first six months of the year. In February, we closed our largest DB transaction to date at £513m. In total, we completed 35 deals, of which 32 were below £100m in size, as we maintained our leadership presence in the

GIfL sales for the six months to 30 June 2023 were £470m (six months to 30 June 2022: £305m), 54% higher year on year. This strong foundation provides us with opportunity to utilise our market leading medical underwriting to risk select more profitable and niche segments of the market in the second half. Furthermore, we estimate that since 2014, more than £130bn of cumulative retirement savings have moved to drawdown on platform, often without a decumulation strategy. Due to the higher customer rates now on offer, we expect that advisers and customers will re-examine the role of guaranteed income in retirement. The introduction of the FCA's Consumer Duty in July and the findings later this year from the thematic review into retirement income advice are also likely to increase the importance of considering guaranteed solutions to help customers achieve their objectives.

Adjusted Earnings per share

Adjusted EPS (based on underlying operating profit after attributed tax) has increased to 12.9 pence for the current period from 5.3 pence for the 6 months ended 30 June 2022.

1 Alternative performance measure, see glossary for definition.

Earnings per share

Earnings per share has increased to 7.3 pence for the current period from (18.1) pence for the six months ended 30 June 2022.

Reconciliation of Underlying operating profit and Adjusted operating profit

1 Alternative performance measure, see glossary for definition.

Operating experience and assumption changes

Operating experience and assumption changes represent continued positive mortality experience, partially offset by some minor data and modelling refinements.

STRategic expenditure

Strategic expenditure was £7m for the six months ended 30 June 2023 (six months ended 30 June 2022: £3m). This included the transformation to IFRS 17, in addition to a greater investment in the development of our robo-advice Destination Retirement proposition.

Investment and economic movements

Investment and economic movements for the six months ended 30 June 2023 were positive at £71m (six months ended 30 June 2022: £255m loss). The Group takes an active approach to hedging its interest rate exposure. In the second half of 2021 and across 2022, as rates rose and the solvency position strengthened, we gradually reduced the interest rate hedging to a broadly economically neutral position, albeit still incurred £257m of losses in relation to interest rate hedging in the first half of 2022 (£536m loss for FY 2022, due to rising interest rates). In 2023, the continued increase in risk free rates has a negligible effect following the implementation of a revised interest rate hedging strategy during 2022 and the first half of 2023, including the purchase of £2bn of long dated gilts held at amortised cost under IFRS. This approach has removed1 the IFRS exposure whilst significantly containing our Solvency II sensitivity to future interest rate movements (see estimated Group Solvency II sensitivities below).

Furthermore, during the first six months of 2023, credit spreads have narrowed, leading to a £7m positive movement (H1 22: credit spreads widened leading to a negative movement of £32m). The LTM portfolio property growth was c.4% during the first six months of 2023, with our diversified portfolio outperforming the long-term property growth assumption of 1.65% for the six months (3.3% annual property growth assumption). Other includes positives from corporate bond default experience and inflation.

1 See note 14 for interest rate sensitivities, with a 100 bps increase in interest rates resulting in an increase in pretax profit of £4.1m and a 100 bps decrease in interest rates resulting in an increase in pretax profit of £8.3m.

Capital management

The Group's capital coverage ratio was estimated to be 204% at 30 June 2023, including a notional recalculation of transitional measures on technical provisions ("TMTP") (31 December 2022: 199% including a formal recalculation of TMTP). The Solvency II capital coverage ratio is a key metric and is considered to be one of the Group's KPIs.

1 Solvency II capital coverage ratios as at 30 June 23 includes a notional recalculation of TMTP and 31 December 2022 includes a formal recalculation of TMTP.

2 This is the reported regulatory position as included in the Group's Solvency and Financial Condition Report as at 31 December 2022.

The Group has approval to apply the matching adjustment and TMTP in its calculation of technical provisions and uses a combination of an internal model and the standard formula to calculate its Group Solvency Capital Requirement ("SCR").

Movement in excess own funds1

The table below analyses the movement in excess own funds, in the six months to 30 June 2023.

1 All figures are net of tax, and include a notional recalculation of TMTP where applicable.

2 New business strain calculated based on pricing assumptions.

3 Organic capital generation includes surplus from in-force, new business strain, overrun and other expenses, interest and other operating items. It excludes economic variances, regulatory changes, dividends and capital issuance.

In the first six months of 2023, we have delivered £18m of underlying organic capital generation (six months ended 30 June 2022: £33m).

The business is delivering sufficient ongoing capital generation to support deployment of capital to capture the profitable growth opportunity available in our chosen markets, provide returns to our capital providers and further investment in the strategic growth of the business.

Underlying organic capital generation ("UOCG") has benefitted from the ongoing focus across the business on minimising new business capital strain. In the first six months of 2023, due to writing £1.9bn of new business(H1 22: £0.9bn), new business strain increased by £19m to £30m, which represents 1.6% of new business premium (six months ended 30 June 2022: 1.3% of premium), well within our target of below 2.5% of premium. This continued outperformance is driven by continued pricing discipline and risk selection, together with a high proportion of small and medium transactions within the DB sales mix as part of our origination strategy. UOCG before new business strain improved by 9% to £48m (H1 22: £44m).

In-force surplus after TMTP amortisation was down 3% to £84m, primarily due to higher interest rates which reduces the amount of capital available (via lower SCR and risk margin) to release. Group and other costs including development and non-life costs were £12m (six months ended 30 June 2022: £11m). Finance costs at £24m were lower, which reflected the interest savings following a tender offer and subsequent cancellation of £76m tier 2 debt in November 2022. Management actions and other items reduced the capital surplus by £4m, leading to a total of £14m from organic capital generation.

Other economic movements summed to £9m in the capital surplus. The effect from higher interest rates (10 year gilts rose by rose by 55bps during the period) was negligible at £(3)m in the surplus as Own Funds and SCR both reduced, although this provided a boost to the ratio. Property price growth, supported by our regular individual property valuation refresh, of c.4% (compared to our six monthly 1.65% long term growth assumption) led to an £18m increase in capital surplus, offset by £6m of Other. Payment of the 2022 final dividend in May cost £13m and strategic expenses reduced the capital surplus by a further £5m.

Estimated group Solvency II sensitivities1,5

The property sensitivity has remained stable at 11% (31 December 2022: 12%). We expect that reduced LTM origination and backing ratio on new business will contain the Solvency II sensitivity to house prices to at or below this level over time. The credit quality step downgrade sensitivity has slightly reduced due to credit spreads narrowing during the period, which decreases the cost of trading the 10% of our credit portfolio assumed to be downgraded back to their original credit rating.

Sensitivities to economic and other key metrics are shown in the table below.

1 In all sensitivities the Effective Value Test ("EVT") deferment rate is allowed to change subject to the minimum deferment rate floor of 3% as at 30 June 2023 (2.0% as at 31 December 2022) except for the property sensitivity where the deferment rate is maintained at the level consistent with base balance sheet.

2 Sensitivities are applied to the reported capital position which includes a notional TMTP recalculation.

3 Credit migration stress covers the cost of an immediate big letter downgrade (e.g. AAA to AA or A to BBB) on 10% of all assets where the capital treatment depends on a credit rating (including corporate bonds, ground rents/income strips; but lifetime mortgage senior notes are excluded). Downgraded assets are assumed to be traded to their original credit rating, so the impact is primarily a reduction in Own Funds from the loss of value on downgrade. The impact of the sensitivity will depend upon the market levels of spreads at the balance sheet.

4 After application of NNEG hedges.

5 The results do not include the impact of capital tiering restriction.

1 Solvency II capital coverage ratios as at 30 June 2023 include a notional recalculation of TMTP and 31 December 2022 includes a formal recalculation of TMTP.

Highlights from condensed consolidated statement of comprehensive income

The table below presents the Condensed consolidated statement of comprehensive income for the Group.

Insurance revenue includes the recognition of revenue earned associated with the expected value of claims and expenses of both new and in-force business. Insurance revenue also includes the release of risk adjustment as contracts run off, and the value of release into profit of contractual service margin. In the six months to 30 June 2023, insurance revenue increased by £114m (18%) to £753m (six months to 30 June 2022: £639m) as the premiums during the period further increases the number of annuitants the Group serves.

The origination of £1,899m of Retirement Income new business sales written during the first six months of 2023 is initially recognised in the contractual service margin and will be released to insurance revenue over the term of the associated insurance contracts.

Insurance service expenses represents the actual value of claims and expenses of both new and in-force business. During the first six months of 2023, insurance service expenses increased by 17% to £682m (H1 22: £583m) due to the increased volume of business.

Net expenses from reinsurance contracts represent the difference between the values of expected and actual reinsurance claims and expenses, together with the release of reinsurance risk adjustment as contracts run off, and the release of reinsurance contractual service margin. The reinsurance contractual service margin represents the cost of reinsurance which is spread over the duration of the reinsurance contracts. During the six months to 30 June 2023, net expenses from reinsurance contracts increased by £8m to £17m reflecting a higher release of reinsurance CSM (cost) following an increase to the CSM balance attributable to the mortality basis change at FY22.

The main components of net investment return are interest earned and changes in fair value of the Group's corporate bond, mortgage and other fixed income assets. Although there has been an increase in risk-free rates during the period, a revised hedging strategy during 2022 and H1 23 has removed1 the IFRS exposure whilst significantly containing our Solvency II sensitivity to future interest rate movements. We closely match our assets and liabilities, hence fluctuations in interest rates will cause similar movements on both sides of the IFRS balance sheet. During the first half of 2023, the Group purchased long term-gilts held on an amortised cost basis in IFRS, fair value basis in Solvency II to reduce the Group's Solvency II capital exposure to interest rate movements.

Finance costs from insurance and reinsurance contracts represent the net cost of the unwind of the discounting of reserves, and the net gain or loss from changes in discount rates. The net income in the current period reflected a benefit from the increase in discount rates on the value of best estimate and risk adjustment reserves, partly offset by the net cost of unwind of reserves. Long dated cashflows from assets and liabilities on the balance sheet are closely cashflow matched and not exposed to movements in long term interest rates, particularly since the change in the interest rate hedging strategy explained above.

1 See note 14 for interest rate sensitivities, with a 100 bps increase in interest rates resulting in an increase in pretax profit of £4.1m and a 100 bps decrease in interest rates resulting in an increase in pretax profit of £8.3m.

Other operating expenses are broadly stable at £51m in the current period and are in line with £50m for the six months ended 30 June 2022, as we maintained strong cost control in the business, despite an inflationary environment.

The Group's overall finance costs increased to £39m (six months to 30 June 2022: £29m). Finance costs have increased due to interest charged on repurchase agreements used to fund the new gilts investment portfolio in relation to the new interest rate hedging strategy, which was implemented in the first half of 2023. Within the KPIs, interest on repurchase agreements is excluded from finance costs as it is included within the return on surplus within in-force operating profit alongside the gilt income.

Note that the coupon on the Group's Restricted Tier 1 notes is recognised as a capital distribution directly within equity and not within finance costs.

Income tax for the period ended 30 June 2023 was £35m (six months ended 2022: credit of £56m). The effective tax rate of 30% (2022: 24%) is higher than the standard 23.5% corporation tax rate. This is principally due to tax on a prior year adjustment.

Highlights from condensed consolidated statement of financial position

The table below presents selected items from the Condensed consolidated statement of financial position. The information below is extracted from the statutory consolidated statement of financial position.

During the period, financial investments increased by £2.8bn to £26.2bn (2022: £23.4bn). Excluding the derivatives and collateral, and gilts purchased in relation to the interest rate hedging, during the first half of 2023, the core Investments portfolio increased by 5% to £21.3bn. Over the past 18 months, central banks and governments are withdrawing accommodative stimulus in response to the pandemic, while at the same time, central banks are rapidly raising base rates from their historical low levels to counteract the effect of inflation and prevent it becoming embedded in the economy. Increases in risk-free rates during the period reduce the value of the assets (and matched liabilities), but this was more than offset by investment of the Group's £1.9bn of new business premiums. Credit spreads also tightened during the period. The credit quality of the corporate bond portfolio remains resilient, with 51% of the Group's corporate bond and gilts portfolio rated A or above(31 December 2022: 52%), with a reduction due to a slightly lower weighting to Government investments. Our diversified portfolio continues to grow and is well balanced across a range of industry sectors and geographies.

We continue to position the portfolio with a defensive bias, and year to date have experienced positive ratings performance as 9% of the Group's bond portfolio (excluding gilts) was upgraded, offset by 4% being downgraded. The Group continues to have very limited exposure to those sectors that are most sensitive to structural change or macroeconomic conditions, such as auto manufacturers, consumer (cyclical) and basic materials. The Group has increased its ground rent (primarily commercial) investments, and selectively added to consumer and banks investments. The BBB-rated bonds are weighted towards the most defensive sectors including utilities, communications and technology, and infrastructure. We have broadened the BBB exposure towards ground rents, which offer the security of a first charge over the asset, with reduced exposure from the heavier weighted sectors.

The Group continues to have ample liquidity. We prudently manage the balance sheet by hedging all foreign exchange and inflation exposure, and have implemented a revised interest rate hedging strategy during the first half of 2023. This involved the purchase of £2bn of long dated gilts, which are held at amortised cost under IFRS. The effect is to significantly reduce the Solvency II sensitivity to future interest rate movements, without the associated volatility on the IFRS position.

To support new business pricing, optimise back book returns, and to further diversify the investments, the Group originates other illiquid assets including infrastructure, real estate investments and private placements. Income producing real estate investments such as ground rents and income strips are typically much longer duration and hence the cashflow profile is very beneficial, especially to match DB deferred liabilities.

To date, Just has invested £3.9bn in other illiquid assets, representing 18% of the investments portfolio(31 December 2022: 16%), spread across more than 300 investments, both UK and abroad. We have invested in our in-house credit team as we have broadened the illiquid asset origination, and work very closely with our specialist asset managers on structuring to enhance our security, with a right to veto on each asset. We anticipate that the upcoming Solvency II reforms, when implemented, will increase the investment opportunities available to us through wider matching adjustment eligibility criteria, such as callable bonds, or assets with a construction phase, where the commencement of cashflows is not entirely certain. A PRA consultation paper on the more complex changes to matching adjustment ("MA") rules and the associated investment flexibility is expected to be launched in September, with reforms to take effect in 2024. We expect these MA changes to support the role HM Treasury is expecting from the industry, whereby appropriate reforms could increase investment by tens of billions of pounds in long-term finance that underpins UK economic growth and productivity.

In the first six months of the year, we funded £789m of other illiquid assets (35 investments), which represented a 42% new business backing ratio. Other illiquid assets are originated via a panel of 15 specialist external asset managers, each carefully selected based on their particular area of expertise. Our "manager of managers" approach allows us to efficiently scale origination of new investments, and to flex allocations between sectors depending on market conditions and risk adjusted returns.

In addition, during the first half of 2023, internally funded lifetime mortgages were £75m (H1 22, £274m), primarily due to a quieter LTM market, which more than halved to £1.4bn, and our ongoing pricing discipline. LTMs remain an attractive asset class, however, in a higher interest rate environment, the initial loan-to-value available to customers is reduced. We continue to be selective in the mortgages we originate, as we use our market insight and distribution to target certain sub-segments of the market. The loan-to-value ratio of the in-force lifetime mortgage portfolio was 36.5% (31 December 2022: 37.3%), reflecting continued performance across our geographically diversified portfolio, which offsets the interest roll-up. Lifetime mortgages at £5.2bn represent 24% of the investments portfolio, which we expect to drift lower over time as we originate less new LTMs and diversify the portfolio with other illiquid assets. The 11% Solvency II capital coverage ratio impact for an immediate 10% fall in UK house prices remains at a level we are comfortable with.

The following table provides a breakdown by credit rating of financial investments, including privately rated investments allocated to the appropriate rating.

1 Includes units held in liquidity funds, derivatives and collateral and gilts (interest rate hedging).

2 Includes investment in trusts which holds ground rent generating assets which are included in investment properties and investments accounted for using the equity method in the IFRS consolidated statement of financial position.

3 The comparative has been restated to re-allocate ground rents and certain SME investment and other funds to the appropriate rating.

The sector analysis of the Group's financial investments portfolio is shown below and continues to be well diversified across a variety of industry sectors.

1 Includes direct ground rents and where applicable, investment in trusts which holds ground rent generating assets which are included in investment properties and investments accounted for using the equity method in the IFRS consolidated statement of financial position.

In accordance with IFRS 17, the Group distinguishes between its portfolios of reinsurance contracts which cover longevity and inflation risks and portfolios of reinsurance treaties covering longevity reinsurance alone. The Group's contracts transferring inflation risk are quota share arrangements which are in asset positions. Since the introduction of Solvency II in 2016, the Group has increased its use of reinsurance swaps rather than quota share treaties and these are in liability positions.

Reinsurance assets decreased to £719m at 30 June 2023 (31 December 2022: £776m) as the reinsurance quota share treaties gradually run-off.

Other assets remained consistent at £1.3bn at 30 June 2023 (31 December 2022: £1.3bn). These assets mainly comprise cash and intangible assets. The Group holds significant amounts of assets in cash, so as to protect against liquidity stresses.

Insurance contract liabilities increased to £20.6bn at 30 June 2023 (31 December 2022: £19.6bn). The increase in liabilities reflects the increase in new business premiums written offset by an increase to the valuation rate of interest and policyholder payments over the period.

Other liability balances decreased to £971m at 30 June 2023 (31 December 2022: £871m) due to the reductions in the deferred tax liability and accruals.

The Group's total equity at 30 June 2023 was £1.2bn (31 December 2022: £1.1bn). Total equity includes the Restricted Tier 1 notes of £322m (after issue costs) issued by the Group in September 2021. The total equity attributable to ordinary shareholders increased to £850m (31 December 2022: £783m).

New business profit Reconciliation

New business profit is deferred on the balance sheet under IFRS 17. It is the equivalent of the previous new business profit KPI under IFRS 4 and is determined in a similar manner, but uses risk parameters updated for IFRS 17. The effect of these changes is detailed in the reconciliation table at the end of this section.

In addition IFRS 17 introduces clarification regarding the economic assumptions to be used at the point of recognition of contracts for accounts purposes. Just recognises contracts based on their completion dates for IFRS 17, but bases its assessment of new business profitability for management purposes based on the economic parameters prevailing at the quote date for GIfL business. IFRS 17 also introduces a requirement to include the reinsurance CSM in respect of business to be written after the reporting date up until the end of reinsurance treaty notice periods.

Deferral of profit in CSM

As noted above, underlying operating profit is the core performance metric on which we have based our 15% growth target, per annum, on average, over the medium term. This includes new business profits deferred in CSM that will be released in future. When reconciling the underlying operating profit with the statutory IFRS profit it is necessary to adjust for the value of the net deferral of profit in CSM.

Net transfers to contractual service margin includes amounts that are recognised in profit or loss including the accretion and the amortisation of the contractual service margin:

Restatement of alternative performance measures

As noted earlier, certain Group's KPIs have been affected by the implementation of IFRS 17 as a result of changes to risk parameters and other measurement factors in the underlying statutory accounts. The opportunity has been taken to make other changes to the derivation of the KPIs at the same time as implementing IFRS 17, notably:

· The impact of demographic changes on the valuation of LTMs has been reclassified as an investment value change instead of being included with insurance experience and assumption changes. This change treats the full return on LTMs as investment return and recognises their reduced significance within the investment portfolio.

· Non-recurring expenses have been reallocated to new business acquisition expenses or development expenses within underlying operating profit or to strategic expenses. This has also been reflected and aligned to the classifications used for measurement of Solvency II capital generation.

The table below compares the new business profits, Underlying profit and Adjusted operating profit before tax KPIs as presented in the Annual Report and Accounts in 2022 under IFRS 4 (previous accounting standard) with the equivalent KPIs based on the IFRS 17 accounts:

The Board has declared an interim dividend of 0.58 pence per share (£6m) (HY2022 interim dividend 0.5 pence per share £5m). This is in line with our stated policy for the interim dividend to be one-third of the equivalent prior year full year dividend of 1.73 pence per share.

ANDY PARSONS

Group Chief Financial Officer

Risk management

The Group's enterprise-wide risk management strategy is to enable all colleagues to take more effective business decisions through a better understanding of risk.

Purpose

The Group risk management framework supports management in making decisions that balance the competing risks and rewards. This allows them to generate value for shareholders, deliver appropriate outcomes for customers and help our business partners and other stakeholders. Our approach to risk management is designed to ensure that our understanding of risk underpins how we run the business.

Risk framework

Our risk framework, owned by the Group Board, covers all aspects involved in the successful management of risk, including governance, reporting and policies. Our appetite for different types of risk is embedded across the business to create a culture of confident risk-taking. The framework is continually developed to reflect our risk environment and emerging best practice.

Risk evaluation and reporting

We evaluate our principal and emerging risks to decide how best to manage them within our risk appetite. Management regularly reviews its risks and produces management information to provide assurance that material risks in the business are being appropriately mitigated. The Risk function, led by the Group Chief Risk Officer ("GCRO"), challenges the management team on the effectiveness of its risk evaluation and mitigation. The GCRO provides the Group Risk and Compliance Committee ("GRCC") with his independent assessment of the principal and emerging risks to the business.

Company policies govern the exposure of risks to which the Group is exposed and define the risk management activities to ensure these risks remain within appetite.

Financial risk modelling is used to assess the amount of each risk type against our capital risk appetite. This modelling is principally aligned to our regulatory capital metrics. The results of the modelling allow the Board to understand the risks included in the Solvency Capital Requirement ("SCR") and how they translate into regulatory capital needs. By applying stress and scenario testing, we gain insights into how risks might impact the Group in different circumstances.

Quantification of the financial impact of climate risk is subject to significant uncertainty. Risks arising from the transition to a lower carbon economy are heavily dependent on government policy developments, social responses to these developments and market trends. Just's initial focus has been on the implementation of strategies to reduce the likely exposure to this risk. Just will continue to adapt its view of climate risk as more data and methodologies emerge.

The aggregate exposure to climate risk is assessed against existing risk appetites, with climate risk a factor to be considered in the management of these risks. Risk appetite tolerances will be reviewed as further stress-testing results become available.

Own Risk and Solvency Assessment

The Group's Own Risk and Solvency Assessment ("ORSA") process embeds comprehensive risk reviews into our Group management activities. Our annual ORSA report is a key part of our business risk management cycle. . It summarises work carried out in assessing the Group's risks related to its strategy and business plan, supported by a variety of quantitative scenarios, and integrates findings from recovery and run-off analysis. The report provides an opinion on the viability and sustainability of the Group and informs strategic decision making. Updates are provided to the GRCC each quarter, including factors such as key risk limit consumption as well as conduct, and operational and market risk developments, to keep the Board appraised of the Group's evolving risk profile.

Reporting on climate risk is being integrated into the Group's regular reporting processes, which will evolve as the quantification of risk exposures develops and key risk indicators ("KRIs") are identified.

Principal risks and uncertainties

A material change was made to how the risks and uncertainties are presented in this report. The first section summarises the Group's ongoing core risks and how they are managed in business as usual. The risk outlook section calls out the risk subjects that are evolving and are of material importance from a Group perspective.

Ongoing principal risks

Risk outlook

The Group's strategic priorities are explained in more detail on pages 16 and 17 of the Just Group plc Annual Report and Accounts 2022.

Statement of Directors' responsibilities

Each of the Directors of the Company confirms that to the best of their knowledge:

· the Condensed consolidated financial statements have been prepared in accordance with UK-adopted IAS 34: Interim financial reporting, as adopted by the UK Endorsement Board;

· the interim results statement includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7, namely important events that have occurred during the period and their impact on the Condensed consolidated financial statements, as well as a description of the principal risks and uncertainties faced by the Company and the undertakings included in the Condensed consolidated financial statements taken as a whole for the remaining six months of the financial period; and

· the interim results statement includes a fair review of material related party transactions and any material changes in the related party transactions described in the last annual report as required by Disclosure and Transparency Rule 4.2.8.

By order of the Board:

David Richardson

Group Chief Executive Officer

14 August 2023

Independent review report to Just Group plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Just Group plc's condensed consolidated interim financial statements (the "interim financial statements") in the interim results of Just Group plc for the 6 month period ended 30 June 2023 (the "period").

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The interim financial statements comprise:

· the condensed consolidated statement of financial position as at 30 June 2023;

· the condensed consolidated statement of comprehensive income for the period then ended;

· the condensed consolidated statement of cash flows for the period then ended;

· the condensed consolidated statement of changes in equity for the period then ended; and

· the explanatory notes to the interim financial statements.

The interim financial statements included in the interim results of Just Group plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the interim results, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the interim results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

London

14 August 2023

Condensed consolidated statement of comprehensive income for the period ended 30 June 2023

The notes are an integral part of these financial statements.

Condensed consolidated statement of changes in equity for the period ended 30 June 2023

1 Includes currency translation reserve of £0.1m (31 December 2022: £1.1m, 30 June 2022: £0.9m).

The notes are an integral part of these financial statements.

Condensed consolidated statement of financial position as at 30 June 2023

The notes are an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 14 August 2023 and were signed on its behalf by:

Andy parsons

Director

Condensed consolidated statement of cash flows for the period ended 30 June 2023