Just Retirement (JRG), which specialises in enhanced annuities for those with health-related issues, saw underlying operating profit slip just 3 per cent at the full-year stage, to £97m. That’s not bad given the pressures unleashed by the Budget day decision to scrap compulsory annuity purchases. It's also rather better than analysts had been expecting, with a consensus forecast of around £85m.
Inevitably, however, the annuity operation is struggling: sales volumes of individual annuities slumped over 50 per cent compared with the period prior to the Budget. But management hasn’t been idle. To begin with, £14m of annual cost savings have been delivered, earlier than originally planned. Management is also looking to begin launching a new range of products from April. This will continue to offer the income certainty associated with annuities, but with greater flexibility.
Neither is Just Retirement completely dependent on individual annuities. The lifetime mortgage loans business - lending against the value of a retiree's home, with repayment due only after the borrower's death - grew its advances by 54 per cent to £476m. Meanwhile, Just Retirement's defined benefit business, which launched last year, wrote £92m of premiums.
Deutsche Bank expects adjusted EPS of 8.5p for 2015, down from 16.2p in 2014, and embedded value of 198p a share.
JUST RETIREMENT (JRG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 142p | MARKET VALUE: | £711m | |
| TOUCH: | 141-143p | 12-MONTH HIGH: | 289p | LOW: 125p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 170p | EMBEDDED VALUE: | 192p | |
| Year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011* | 0.89 | 2.5 | na | nil |
| 2012* | 1.13 | 24.5 | na | nil |
| 2013* | 1.27 | 78.3 | 16.2 | nil |
| 2014 | 1.20 | 92.8 | 16.2 | 2.2 |
| % change | -6 | +19 | - | - |
Ex-div: 13 Nov Payment: 08 Dec *Prior to flotation | ||||
