REG - Just Group plc - BUSINESS UPDATE FOR THE YEAR ENDED 31 DEC 2022

JustAnnouncement

26/01/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230126:nRSZ8946Na&default-theme=true

RNS Number : 8946N  Just Group PLC  26 January 2023

 NEWS RELEASE  www.justgroupplc.co.uk

 

26 January 2023

JUST GROUP plc

BUSINESS UPDATE FOR THE YEAR ENDED 31 DECEMBER 2022

 

Just Group plc ("Just", the "Group") announces a business update for the year
ended 31 December 2022.

 

Highlights

 

 ·                                 Retirement Income sales up 17% to £3.1bn, driven by Defined Benefit
                                   De-risking ("DB") sales.
 ·                                 DB sales were up 33% to £2.6bn. We completed 56 transactions during the year
                                   (2021: 29 transactions), aided by our proprietary bulk quotation service and
                                   repeat business. We expect this strong growth momentum to carry into 2023.
 ·                                 New business strain is expected to be c2%, continuing to outperform our
                                   guidance, driven by our focus on pricing discipline and risk selection. Low
                                   new business strain enables strong growth whilst delivering attractive returns
                                   and maintaining capital strength.
 ·                                 Given the strong new business growth, we are confident in achieving our
                                   expectations for FY 22 underlying operating profit growth, noting that the
                                   increase in interest rates has boosted in-force profits, but led to a lower
                                   new business margin.
 ·                                 Our performance in 2022 has further added to our confidence in Just's ability
                                   to deliver 15% growth in underlying operating profit per annum, on average
                                   over the medium term. This is underpinned by our successes in a growing DB
                                   market, strong pricing discipline and risk selection, and our increasing
                                   illiquid investment origination capabilities.

 

Retirement Income sales for 2022 up 17% to £3.1bn

 

 Just Group new business(1)                  12 months to  12 months to  Change

                                             31/12/22      31/12/21
                                             £m            £m            %
 Defined Benefit De-risking                  2,567         1,935         33
 Guaranteed Income for Life (incl. Care)(2)  564           739           (24)
 Retirement Income sales                     3,131         2,674         17

 

The rise in interest rates during 2022 had a positive effect on DB scheme
funding positions, which led to a very busy second half of the year for Just.
The 56 transactions we executed during 2022 (close to double 2021's activity
level) is expected to exceed a quarter of total market transactions.

 

In July, we completed our largest DB transaction to date - a £484m deal
utilising our DB partnering model. Adding the £259m DB partner premium to
Just's shareholder funded DB De-risking sales led to total DB sales of
£2,826m(3), up 46% on prior year. We estimate 2022 industry volumes to be
c£30bn (2021: £27.7bn), and our share to have grown to nearly 10%. In 2023,
LCP(4) anticipates that DB market volumes will exceed the record £44bn
achieved in 2019.

 

The market for guaranteed income for life solutions was more challenging, as
pension pots decreased in value due to falling equity and bond markets, which
resulted in smaller case sizes. Retail sales were down 24% as we maintained
pricing discipline in a competitive market and chose to deploy the available
capital budget towards the heightened activity in the DB market. The rise in
long term interest rates has stimulated increased customer interest during Q4,
boosting quotation volumes.

 

During 2022, we originated over £1bn of other illiquid assets(5) (2021:
£615m). This supports the increase in Retirement Income new business sales,
and demonstrates the scalability of our established "manager of managers"
model.

 

IFRS 17

On 6 February, we will provide a market update on the Group's  transition to
IFRS 17.

 

David Richardson, Group Chief Executive, said:

"Over the last three years we have delivered 18% average sales growth per
annum, demonstrating the strength of our new business model as we take
advantage of our differentiated market positioning. We have significant
untapped potential and a tremendous opportunity to achieve further material
growth in the rapidly expanding DB market.

Our proprietary bulk quotation service and repeat business programme help to
overcome human capital constraints in the industry and therefore increase
access to competitive DB pricing for many more pension schemes.  The growth
in our capacity to source illiquid investments and broadening of our
reinsurance arrangements mean we are well positioned to transact on larger
deals.

This excellent level of growth has been achieved whilst delivering continued
outperformance in new business capital strain, which, together with our robust
capital position, allows us to take advantage of the structural growth
opportunities available to us.

I am very grateful for the remarkable effort from our colleagues during 2022.
Once again, they provided outstanding service to our customers and
distribution partners, enabling us to help more people achieve a better later
life. Our successes in 2022 and the positive developments in the DB market
have increased our confidence in Just's ability to deliver 15% growth in
underlying operating profit per annum, on average over the medium term."

 

 

 FINANCIAL CALENDAR                                      DATE

 Results for the year ended 31 December 2022             7 March 2023

 Interim results for the six months ended 30 June 2023   15 August 2023 (provisional)

 

Note 1: Numbers in table subject to rounding

Note 2: Care Plan sales are now reported within the GIfL figure, and were
£44m in 2022 (2021: £51m)

Note 3: Just shareholder funded DB sales of £2,567m, inclusive of £225m that
Just retained from the July DB partner transaction. A further £259m was
reinsured, which when added to the shareholder funded figure leads to £2,826m
in total

Note 4: LCP - a leading employee benefit consultant

Note 5: In addition to over £1bn of other illiquids, Just has also originated
£0.5bn of lifetime mortgage assets in 2022

Note 6: All the figures are unaudited

 

 Enquiries

 Investors / Analysts                 Media

 Alistair Smith, Investor Relations   Stephen Lowe, Group Communications Director

 Telephone: +44 (0) 1737 232 792      Telephone: +44 (0) 1737 827 301

 alistair.smith@wearejust.co.uk       press.office@wearejust.co.uk

 Paul Kelly, Investor Relations       Temple Bar Advisory

 Telephone: +44 (0) 20 7444 8127      Alex Child-Villiers

 paul.kelly@wearejust.co.uk           William Barker

                                      Telephone: +44 (0) 20 7183 1190

 

A copy of this announcement 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

 

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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTUVRRROSUAUUR