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Just Group plc (LSE:JUST), a specialist in retirement income, has announced its financial results for the six months ended 30 June 2024. The company reported significant growth across key financial metrics, driven by robust new business sales, operational efficiency, and disciplined risk management.
Strong Operating Performance
Underlying operating profit surged by 44% to £249 million compared to £173 million in H1 2023. This impressive increase was fueled by strong new business sales, higher recurring in-force profit, and operational gearing. The Group's focus on sustainable growth through pricing discipline and risk selection in buoyant markets contributed to this achievement.
Retirement Income sales saw a substantial increase of 30%, reaching £2.5 billion compared to £1.9 billion in H1 2023. The Group's disciplined approach to pricing and risk selection resulted in an improved margin of 9.0%, up from 8.5% in the prior year. These factors drove a 38% increase in new business profits, totaling £222 million compared to £161 million in H1 2023.
As Just Group enters the second half of 2024, momentum remains strong. The Group forecasts new business volumes in the second half to be similar to the outstanding performance in the first half, though with slightly lower margins due to business mix. The strong structural growth drivers of the retirement income market are expected to continue well into the future.
Financial Stability and Capital Management
Just Group's Solvency II capital coverage ratio remained resilient and stable at 196%, slightly down from 197% at the end of 2023. The Group has successfully reduced its interest rate sensitivity and further diversified its investment portfolio, decreasing exposure to residential property.
The Group's new business strain was maintained at 1.5%, slightly below the 1.6% recorded in H1 2023 and well within the target of below 2.5% of premium. Cash generation before new business strain remained broadly unchanged at £49 million, reflecting the Group's low capital intensity new business model, which is further supported by management actions and the availability of surplus capital.
Adjusted profit before tax increased to £267 million, up from £246 million in H1 2023. This growth was driven by a strong rise in underlying operating profit and positive non-operating items. However, of this £267 million, £193 million was deferred to the Contractual Service Margin (CSM), leaving an IFRS profit before tax of £74 million, down from £117 million in the previous year.
Enhancing Shareholder Value
Just Group delivered improved return on equity, which increased to 15.6% (annualized), compared to 13.0% in H1 2023. Additionally, tangible net assets per share grew to 240p, up from 224p at the end of 2023. These metrics highlight the Group's ability to generate long-term value for shareholders.
In line with its commitment to delivering shareholder returns, Just Group declared an interim dividend of 0.7p per share, marking a 20% growth. This dividend represents one-third of the 2023 full-year dividend, consistent with the Group’s stated policy.
