JRP total sales up 54% in third quarter

FTSE 250 annuity provider JRP posted a 54% rise in third-quarter new business sales on Thursday that beat analysts’ expectations.

Total new business sales rose to £794.6m from £516.4m in the same period a year ago. Numis said the number was 9% ahead of consensus and its forecast of £726m.

Defined benefit de-risking sales increased to £414m from £127.6m, ahead of consensus estimates of £370m.

Meanwhile, guaranteed income for life sales were up 3% to £206.7m, just surpassing consensus of £202m, while lifetime mortgage loans were down 12% to £142.9m, but above consensus estimates of £124m.

Chief executive Rodney Cook said: "The benefits of the merger to the JRP Group continue to be demonstrated through both strong sales growth announced today and favourable margin development announced in September.

“We remain comfortable with our guidance of a 6% IFRS new business margin for the full calendar year and this represents levels last achieved before the pension freedoms were announced in 2014. As we disclosed at interims, we are ahead of schedule in delivering the synergy benefits of at least £45m per annum with the full run-rate being achieved by 2018.”

RBC Capital Markets said third-quarter sales were 10% ahead of consensus, driven by bulk annuities and lifetime mortgages.

The bank expects growth in lifetime mortgages to continue on the back of increasing demand. It sees the market growing 20% in 2017 and 15% per annum thereafter.

RBC said the stock’s valuation is attractive. “Having declined post the debt raise the stock is trading at 52% of European embedded value (EEV) – historically insurers have rarely traded at this level.”

At 1245 GMT, JRP shares were up 2.1% to 125.60p.