The same pension freedom changes that some investors feared would spell disaster for JRP Group (JRP) could well be the driving force behind the rise in individual annuity sales - which grew by half to £321m - during the first half of the year. Chief executive of the recently merged group, Rodney Cook, attributes part of the increase in sales of guaranteed income for life products to more people being spurred to shop around for retirement products. Retirees are also adapting to the post-2015 pensions framework, according to Mr Cook.
There was more good news for investors, as management raised its target for post-merger synergies to £45m by the end of 2018 from the £40m originally expected. Lifetime mortgages continued to grow in popularity, with advances up almost three-quarters to £255m.
However, defined benefit sales halved to £164m. Deputy chief executive David Richardson says uncertainty around the impact of Solvency II on the life insurer's ability to undertake derisking transactions meant a lot of the work set to complete during the first half was "sucked out" into the final quarter of last year. However, since the end of June, more than £330m in defined benefit sales have been completed.
Analysts at Barclays expect book value of 170p a share at December 2016, compared with 168p at the end of last year.
JRP GROUP (JRP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 114p | MARKET VALUE: | £1.06bn | |
| TOUCH: | 113.8-114p | 12-MONTH HIGH: | 188p | LOW: 85p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 2 | |
| NET ASSET VALUE: | 180p | SOLVENCY RATIO: | 134% | |
| Half-year to 30 June | Gross premiums written (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015* | 473 | -20 | -3.3 | nil |
| 2016 | 505 | 226 | 29.0 | 1.1 |
| % change | +7 | - | - | - |
Ex-div: 22 Sep Payment: 28 Oct | ||||
