Just Group PLC Q2 2019 TRADING UPDATE (4847G)
July 24 2019 - 2:00AM
UK Regulatory
TIDMJUST
RNS Number : 4847G
Just Group PLC
24 July 2019
NEWS RELEASE www.justgroupplc.co.uk
24 July 2019
JUST GROUP plc
Q2 2019 TRADING UPDATE
INTENSIFIED FOCUS ON CAPITAL AND VALUE
Just Group plc ("Just", the "Group") announces its Q219 trading
update. As stated at the AGM, the Board remains focused on
delivering capital self-sufficiency by 2022, while in parallel
developing other strategic and business options to enhance
shareholder value.
Key points
-- Continued focus on capital efficiency. We have continued to make our
business model more capital efficient during H1 by reducing new business
volumes and by focusing on less capital intensive areas, including interest-serviced
mortgages and older borrowers. These steps have ensured that we continue
to achieve an attractive internal rate of return on shareholder capital
invested in new business. We have closed our loss-making US care unit,
are in the process of outsourcing our UK income drawdown service and
we are working to end operating losses at HUB Group, our corporate solutions
and distribution business. Together with further savings, including the
rationalisation of our property footprint, these actions have already
led to more than GBP10m of annualised cost reductions in our core businesses.
In addition, we are working to establish the appropriate regulatory treatment
of our pioneering no negative equity guarantee (NNEG) hedging transaction,
in order to enable larger scale NNEG risk transfer, and we are exploring
the scope to add to our existing longevity reinsurance programme
-- Commitment to 2022 capital self-sufficiency. Achieving organic capital
generation by 2022 is the Group's top priority. This is already evident
in the actions being taken, and we remain on track. As stated at the
AGM, an increased focus on capital has already been introduced to short
term management incentive targets
-- Capital development in H119. Although we are increasing the capital efficiency
of areas under management's control, the economic environment has remained
challenging. The Group's capital strength remains satisfactory although
falling risk free rates and house prices have both affected our solvency
position, as indicated by our published sensitivities. Fitch recently
affirmed our A+ (Strong) Insurer Financial Strength rating with a Stable
outlook
-- Increase in Q2 volumes following a quiet Q1. Our focus on capital discipline
is demonstrated by H119 Retirement Income sales of GBP831m, which are
30% lower than for H118. Without compromising our disciplined approach
to pricing we benefited from a strong recovery in Q219 Defined Benefit
De-risking volumes to GBP486m, compared to GBP26m of sales in Q119. Guaranteed
Income for Life sales of GBP288m for H119 maintained the Q1 run rate.
Overall we remain comfortable with our guidance that 2019 sales will
be consistent with the run rate established in H218.
David Richardson, Interim Group Chief Executive Officer,
said:
"The message from our shareholders has been clear. We have good
businesses in attractive markets, which are performing well
commercially. However, we must reduce new business capital strain
and achieve capital self-sufficiency by 2022. All of our decisions
are being made with this objective in mind. As we continue our
constructive dialogue with the PRA, I am focused on adapting to the
changing regulatory environment and putting the business on a surer
footing for the future. Recently all of our Directors expressed
their support by adding to their personal shareholdings. I am also
delighted we have appointed Andy Parsons as our new CFO and look
forward to him joining the Group in January 2020. The reaffirmation
of our credit ratings by Fitch confirms our financial strength. All
of this demonstrates the faith we and others have in our
business."
Retirement Income sales by quarter(1) (GBPm)
30 Jun 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec 30 Sep 30 Jun
3 months to: 2019 2019 2018 2018 2018 2018 2017 2017 2017
Defined Benefit De-risking 486 26 233 363 469 249 434 269 170
------- ------- ------- ------- ------- ------- ------- ------- -------
Guaranteed Income
for Life 143 145 159 201 238 188 213 217 216
------- ------- ------- ------- ------- ------- ------- ------- -------
Care Plans 18 13 21 17 18 17 20 18 17
------- ------- ------- ------- ------- ------- ------- ------- -------
Retirement Income
sales 647 184 413 581 725 454 666 504 403
------- ------- ------- ------- ------- ------- ------- ------- -------
Note 1: Numbers in table subject to rounding.
Enquiries
Investors / Analysts Media
James Pearce, Director of Group Stephen Lowe, Group Communications
Finance Director
Telephone: +44 (0) 7715 085 099 Telephone: +44 (0) 1737 827 301
james.pearce@wearejust.co.uk press.office@wearejust.co.uk
Temple Bar Advisory
Alex Child-Villiers
William Barker
Telephone: +44 (0) 20 7002 1080
FINANCIAL CALENDAR DATE
Interim results for the six months 4 September 2019
to 30 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTBLGDRRSDBGCX
(END) Dow Jones Newswires
July 24, 2019 02:00 ET (06:00 GMT)
Just (LSE:JUST)
Historical Stock Chart
From Jun 2024 to Jul 2024
Just (LSE:JUST)
Historical Stock Chart
From Jul 2023 to Jul 2024