Just Group profits jump amid buoyant retirement income market

Just Group reported a 47% jump in underlying operating profit in its 2023 results on Friday, to £377m, which it put down to significant increases in new business and in-force profits.

The FTSE 250 company said retirement income sales experienced 24% growth to £3.9bn, accompanied by a widened margin of 9.1%, on the back of pricing discipline and enhanced risk selection.

New business profits were ahead 33% to £355m, reflecting a year marked by buoyant markets and strategic market positioning.

The group said it had maintained its momentum into 2024, with the defined benefit (DB) market achieving a record year and the guaranteed income for life (GIfL) market reaching its highest level in a decade, increasing 46% to £5.3bn.

It remained optimistic for sustained growth in both markets, driven by strong structural drivers.

Just Group recorded a capital coverage ratio of 197%, with increased resilience compared to the prior year, while new business strain remained low at 0.9%, significantly below the target of below 2.5% of premium.

Adjusted profit before tax reached £520m, driven by robust growth in underlying operating profit, positive longevity assumption changes, and economic profits.

The group said it achieved an improved return on equity of 13.5% and tangible net assets per share of 224p, and declared a dividend of 2.08p per share, representing 20% growth from the prior year.

Just Group said it remained confident in its ability to deliver 15% growth in underlying operating profit from the current higher base, forecasting a minimum doubling of 2021's level in 2024.

“We are delighted with our financial performance in 2023, a record year for the group, and are confident of exceeding our medium term profit growth pledge,” said group chief executive officer David Richardson.

“As such, we now expect to achieve our target of doubling profits in three years instead of the originally intended five.

“Given the multiple opportunities available and strong structural growth drivers in our chosen markets, we have never been more confident in our ability to deliver sustainable and compounding growth.”

Reporting by Josh White for Sharecast.com.