- Firm hits positive underlying capital generation goal a year early
- Market capitalisation back above £1bn after strong share rally
As ever, full-year figures for Just Group (JUST) involved plenty of complex, moving parts.
While financing charges rose, new business profit rose faster. That meant a 9 per cent uptick in adjusted operating profits, though statutory earnings were hit by lower investment returns and the sale of a lifetime mortgage portfolio. At the same time, that disposal and increased use of hedging have further reduced Just’s exposure to UK property price swings and de-risked the balance sheet.
The net effect has been positive. Together with cost-cutting, a cautious approach to new business writing and downward revisions to longevity assumptions, the life insurer now has the cash generation to fund itself. And with surplus capital continuing to rise, the long-term threat of a dilutive fundraising has all but dissipated.
Though growth opportunities lie ahead, chief executive David Richardson still views Just as “approaching an inflection point, rather than at an inflection point”. All the same, a 49 per cent discount to tangible net assets suggests further upside. Buy.
Last IC View: Buy, 78.8p, 28 Jan 2021
| JUST GROUP (JUST) | ||||
| ORD PRICE: | 101p | MARKET VALUE: | £1.05bn | |
| TOUCH: | 101-101.4p | 12-MONTH HIGH: | 101p | LOW: 40.7p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 6 | |
| NET ASSET VALUE: | 211p | SOLVENCY II RATIO: | 156% | |
| Year to 31 Dec | Gross written premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016* | 2.69 | 199 | 20.2 | 4.40 |
| 2017 | 1.89 | 181 | 16.7 | 3.72 |
| 2018 | 2.18 | -85.5 | -6.83 | nil |
| 2019 | 1.92 | 369 | 28.4 | nil |
| 2020 | 2.15 | 237 | 16.1 | nil |
| % change | +12 | -36 | -43 | - |
| Ex-div: | n/a | |||
| Payment: | n/a |
