Just Group PLC

Earnings Release • Jul 18, 2017

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RNS Number : 1834L

Just Group PLC

18 July 2017

NEWS RELEASE	www.justgroupplc.co.uk

18 July 2017

JUST GROUP plc

BUSINESS UPDATE FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2017

DELIVERING OUR STRATEGY OF GROWTH WITH BETTER MARGINS

Just Group plc1 ("Just", "the Group") announces a business update for the 6 months ended 30 June 2017.

Highlights

·	Retirement Income sales were up 16% on a pro forma2 basis. Total sales rose 24% on a statutory basis
·	Defined Benefit De-risking (DB) sales of £296m were up 80% versus H116, confirming the momentum of the first quarter. We are well positioned going into the seasonally busy second half of the year
·	Q217 Guaranteed Income for Life (GIfL) sales improved by 24% from Q117, helped by individual customers transferring from a defined benefit pension to a drawdown and GIfL mix. First half sales were down 2% on a pro forma basis
·	Lifetime Mortgage (LTM) advances of £230m amounted to 32% of Retirement Income sales, as we focused on originating LTMs which are a good match to our liabilities

Just Group new business3	6 months to 30/06/17	Pro forma 6 months to 30/06/16	Change	Statutory 6 months to 30/06/16
	£m	£m	%	£m
Defined Benefit De-risking	296	164	80	164
Guaranteed Income for Life	390	397	(2)	321
Care Plans	34	58	(41)	41
Retirement Income sales	720	619	16	527
Drawdown	22	5	n/a	5
Total Retirement sales	742	625	19	532
Protection	3	2	17	1
Lifetime mortgage loans advanced	230	322	(28)	255
Total new business sales	975	949	3	788

Rodney Cook, Group Chief Executive, said:

"These figures show the continuing benefits of the merger. We have continued to grow, helped by our vibrant new brand, whilst maintaining our focus on careful risk selection. We have reached our original £40m cost synergy target more than a year ahead of plan and we will now strive to exceed the updated target of £45m in savings.

As we explained at our recent seminar, we expect our accessible GIfL market to grow over the medium to longer term, driven by demographics, individual customer defined benefit transfers, and a continued expansion of the open market. The DB market is set for continued expansion as increasing numbers of trustees seek to de-risk their pension liabilities. LTM prospects remain very positive as property rich, but pension poorer individuals prepare to retire.

Our focus remains on improving shareholder profits and returns, not on volume growth for its own sake. We will continue to take advantage of market growth by refining our risk selection and asset/liability management. Together with our progress on costs, this means margins and IRRs4 and ultimately our ROE will continue to benefit. H117 margins are expected to have exceeded 7.0%. We remain comfortable with full year expectations, albeit with more moderate volume growth and higher margins than previously expected.

We continue to retain financial flexibility, with low levels of gearing and an increasingly capital efficient business model. In addition, we recently added to our financial flexibility by agreeing a £200m five year revolving credit facility on attractive terms.

We see this as a strong start to the year with more to come."

New business sales by quarter (£m, Pro forma)

3 months to:	30-Jun-17	31-Mar-17	31-Dec-16	30-Sep-16	30-Jun-16	31-Mar-16
Defined Benefit De-risking	170	125	365	414	121	43
Guaranteed Income for Life	216	174	174	207	234	163
Care Plans	17	17	19	20	29	29
Retirement Income	403	317	559	641	384	235
Drawdown	11	12	10	9	4	2
Total Retirement sales	414	328	569	650	388	237
Protection	1	2	1	2	1	1
LTM loans advanced	124	107	95	143	173	149
Total new business sales	539	436	665	795	562	387

Notes

1.     The company changed its name from JRP Group plc to Just Group plc at the AGM on the 18th May 2017.

2.     The merger of Just Retirement and Partnership is required for accounting purposes to be treated as an acquisition by Just Retirement of Partnership with an effective date of the beginning of April 2016.  Accordingly, the statutory comparative information includes 6 months of sales by Just Retirement but only 3 months by Partnership.  Pro forma sales are presented as though the merger took place at the beginning of January 2016, in order to give a better understanding of the merged Group.

3.     Numbers in table subject to rounding.

4.     IRR: Internal Rate of Return

Enquiries Investors / Analysts James Pearce, Group Director of Corporate Finance and Investor Relations Telephone: +44 (0) 7715 085 099 james.pearce@wearejust.co.uk Paul Kelly, Investor Relations Manager Telephone: +44 (0) 20 7444 8127 paul.kelly@wearejust.co.uk	Media Stephen Lowe, Group Communications Director Telephone: +44 (0) 1737 827 301 press.office@wearejust.co.uk Temple Bar Advisory Alex Child-Villiers William Barker Telephone: +44 (0) 20 7002 1080

FINANCIAL CALENDAR	DATE
Interim results for the six months to 30 June 2017	13 September 2017

A copy of this announcement will be available on the Group's website www.justgroupplc.co.uk

JUST GROUP PLC

GROUP COMMUNICATIONS

Vale House, Roebuck Close

Bancroft Road, Reigate

Surrey RH2 7RU

This information is provided by RNS

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