- First-half sales and profit top estimates
- Full year seen ‘substantially’ above target
- Shares reach five-year high
Retirement savings and solutions provider Just Group (JUST) delivered better-than-expected results for the first half and said it saw 2024 earnings ‘substantially’ above its previous target.
The shares surged as much as 22p or 18% to 139p before settling up 13% at 133p, taking their year-to-date gains to more than 50% and marking a five-year high. Just Group is a Shares Tip Of The Year for 2024.
STRONG MOMENTUM
For the six months to the end of June, retirement income sales grew 30% to £2.5 billion against consensus forecasts of £2.2 billion while disciplined pricing and risk control led to an increase of 50 basis points (0.5%) in the operating margin to 9% against 8.5% a year ago.
Underlying operating profit rose an even more impressive 44% to £249 million against forecasts of around £210 million driven by new business sales, higher recurring in-force profit and operational gearing.
The firm said momentum remained strong entering the second half of the year and it expected new business volumes to match the first half, although with a slightly lower margin due to the business mix.
New business strain, or the cost of taking on new customers, was 1.5% of premiums written, slightly better than the same period last year and well below the firm’s 2.5% ceiling thanks to its new low capital-intensity business model.
NEVER MORE CONFIDENT
Chief executive David Richardson said he was ‘delighted’ with the strong momentum in the business, driven by the multiple opportunities available and structural growth in its chosen markets.
‘Our DB (defined benefit) and retail businesses both contributed to this excellent performance, reflecting our continuing investment in technology and talent,’ added Richardson.
‘We have never been more confident in our ability to deliver sustainable and compounding growth. 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. This formula is delivering sustained growth in the value of the business.’
Given the strong first-half performance, positive market dynamics and its forward-looking pipeline, Just Group now expects to ‘substantially exceed previous 2024 guidance of doubling 2021's £211m operating profit in three years’.
