Just Group shares surge on solid first-half results

Just Group shares were rocketing on Tuesday morning, after it announced a robust set of first-half results.

The FTSE 250 company reported a 44% increase in underlying operating profit, reaching £249m, compared to £173m in the same period last year.

That growth was largely driven by higher new business sales, increased recurring in-force profit, and improved operational efficiency.

Retirement income sales grew 30% to £2.5bn, up from £1.9bn a year earlier.

The firm said its focus on pricing discipline and risk selection in strong markets led to an improved margin of 9.0%, contributing to a 38% rise in new business profits, which totaled £222m, compared to £161m last year.

As Just Group moved into the second half, the company said it expected new business volumes to remain consistent with the first half, though margins could be slightly lower due to business mix.

However, it said it remained optimistic about the long-term structural growth of its markets.

Just Group said its capital coverage ratio remained stable at 196%, reflecting a solid financial position, while its new business strain was 1.5%, well within its target of below 2.5%.

Cash generation before new business strain was steady at £49m.

Adjusted profit before tax rose to £267m, although IFRS profit before tax declined to £74m, from £117m last year, due to deferred profit.

Just Group also reported an improved return on equity of 15.6% and an increase in tangible net assets per share to 240p.

The board declared an interim dividend of 0.7p per share, reflecting 20% growth and aligning with its stated policy of maintaining dividend growth.

“We are delighted with the strong momentum in our business driven by the multiple opportunities available and structural growth in our chosen markets,” said group chief executive officer David Richardson.

“Our DB and retail businesses both contributed to this excellent performance, reflecting our continuing investment in technology and talent.

“We have never been more confident in our ability to deliver sustainable and compounding growth.”

Richardson said the company had a “growth mindset”, and developed a winning formula, which is delivering sustained growth in the value of the business.

“Given the strong first half outcome, the positive market dynamics, and our forward-looking pipeline, we expect to substantially exceed previous 2024 guidance of doubling 2021's £211m operating profit in three years.”

At 0830 BST, shares in Just Group were up 12.95% at 132.6p.

Reporting by Josh White for Sharecast.com.