Just Group adjusted operating profits rise
StockMarketWire.com - Just Group's adjusted operating profit before tax for the six months ended 30 June rose to £67.2m - up 39% on the pro forma comparative result.
The group said this was mainly driven by a significant increase in new business operating profit.
It said its vibrant new brand had strengthened its market presence, and it had maintained its focus on careful risk selection.
The group said the more than doubling of new business profit from £31.0m in H1 2016 (pro forma) to £64.0m in H1 2017 was driven by a 16% increase in retirement income sales, together with margin expansion from 5.0% to 8.9%.
It said the increase in volume was driven by a stronger start to the year for defined benefit de-risking solutions than in H1 2016, when volumes were affected by the introduction of Solvency II.
The group said it had benefited from improving unit costs due to these higher volumes and the impact of substantial merger synergies.
Group chief executive Rodney Cook said: "We have had a good start to the year and are executing our strategy to grow profits.
"Our careful risk selection is delivering margin expansion and demonstrating the value of our IP-led pricing approach.
"This together with volume growth is delivering greater profits.
"Shareholder returns have improved, and we are also working to reduce our cost of capital.
"We have reduced our future cost of debt following our inaugural credit rating and have access to lower cost liquidity through our new revolving credit facility.
"As previously stated, we are currently in a period where new business capital consumption exceeds releases, but remain on plan to be capital generative after 2019.
"Prospects remain favourable for our markets, with continued growth in shopping around for individual GIfLs, and a strong DB de-risking outlook.
"We expect demand for lifetime mortgages to continue to grow as increasing numbers reach retirement with greater wealth invested in housing rather than pension assets.
"Although the first half margin may normalise somewhat in the remainder of the year, a 2017 full year margin above 8% seems increasingly likely, given over £260m of DB already transacted in Q3.
"We therefore look forward to the second half of the year with confidence."
At 9:29am: (LON:JUST) Just Group Plc Ord 10p share price was +1p at 161.9p
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