- Sales and earnings well ahead of estimates
- £6 billion pipeline ensures another strong year
- Shares hit highest level since last April
FTSE 250 retirement solutions firm Just Group (JUST) stunned the market with its latest results and promised more good news to come this year.
The shares jumped more than 9% to 89.5p, their highest level in nine months, in anticipation of a round of earnings upgrades by analysts.
STRONGER THAN EXPECTED
Sales last year were up 17% to £3.1 billion driven by a 33% increase in DB (defined benefit) sales which rose 33% to £2.6 billion as the firm completed 56 transactions, almost double 2021’s total.
Higher interest rates have improved pension scheme funding levels ‘materially’, and strong deal momentum in the back half of last year has continued into this year with the firm signing its largest transaction to date at £513 million this month.
Given a pipeline of over £6 billion, Just Group expects DB sales in 2023 to show ‘substantial growth’ over last year’s record levels.
Adjusted pre-tax operating profits rose 41% to £336 million, well ahead of consensus, while return on equity reached 10.7% and net tangible assets were 170p per share.
‘We exceeded the promises made over the last four years and we are very optimistic about the future’, commented chief executive David Richardson.
‘We've delivered a strong performance and have increased confidence in meeting our pledge to grow underlying operating profits over the medium term by an average of 15% per annum.
UPGRADES TO FOLLOW
James Pearse at Jefferies flagged the better-than-expected pre-tax operating profit figure and the firm’s organic capital generation of £134 million which was three times the consensus forecast.
Moreover, the full year dividend of 1.73p was ahead of Pearse’s forecast of 1.71p per share for the year to December 2024.
Analysts at JPMorgan Cazenove suggested the firm’s £6 billion DB pipeline meant there was ‘upside risk’ to the chief executive’s forecast of 15% annual growth in operating profits.
‘Coupled with management’s strong growth outlook for both bulk and retail annuities, we feel the shares are just too inexpensive and we expect them to outperform’, they added.
LEARN MORE ABOUT JUST GROUP
