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Just Group plc, a company within the financial services sector, saw a notable increase in its share price following the announcement of its first-half results. The FTSE 250 firm reported a 44% rise in underlying operating profit, reaching £249 million, up from £173 million during the same period last year.
Key Drivers of Performance
The increase in operating profit was primarily driven by a rise in new business sales, a boost in recurring in-force profit, and enhanced operational efficiency. Retirement income sales grew by 30%, totaling £2.5 billion compared to £1.9 billion in the previous year.
The company attributed the improvement to disciplined pricing and effective risk selection in a strong market environment. This led to a 38% increase in new business profits, which amounted to £222 million, up from £161 million a year earlier.
Financial Metrics and Outlook
Looking ahead, Just Group (LSE: JUST) anticipates that new business volumes will remain steady in the second half of the year, although margins may experience a slight decline due to changes in the business mix. The firm maintains a positive outlook regarding the long-term growth prospects within its markets.
The company's capital coverage ratio remained stable at 196%, indicating a solid financial standing, while the new business strain was recorded at 1.5%, comfortably below its target of 2.5%. Cash generation before new business strain was consistent at £49 million.
Adjusted profit before tax increased to £267 million, though IFRS profit before tax fell to £74 million from £117 million last year, attributed to deferred profit. Additionally, the return on equity improved to 15.6%, and tangible net assets per share rose to 240p.
Dividend Declaration
The board has declared an interim dividend of 0.7p per share, marking a 20% increase in line with the company's policy of maintaining dividend growth. CEO David Richardson expressed satisfaction with the business's strong performance, noting contributions from both defined benefit (DB) and retail operations.
Richardson highlighted the company's commitment to investing in technology and talent as key factors in its performance and emphasized confidence in achieving sustainable growth.
