Just Share Discussion Threads

[edwardt] 06/9/2018 09:28

come on chaps -operating profit up 85%, 13% ahead of consensus, a ebit margin of 10.2%, versus 8.9% last year. got to be scope for more debt with t2 bonds to fend off regulatory meddling. if my house falls 1.7% a year for 20 years i have bigger problems and in that instance, owning lloyds et al is borderline crazy.

holding divi back is sensible and is definitely a game of cat and mouse with the regulator.

[scrapheap] 06/9/2018 08:58

I would have suggested they could have said based on the trading results we would have declared an interim divi of xxp but we are holding off payment of this until full year results and by when the impact of any capital hit would be known.

[topvest] 06/9/2018 08:45

I think there is a lot of posturing going on here. The PRA will be reading these results and seeing the damage they are causing. They run the risk of wrecking the industry, rather than a house price slump. Don't get me wrong. I'm happy with prospective rule changes to safeguard policy holders, its retrospective back-book changes that is the issue!

At least today's news seems to have been priced in. I guess we need to await developments, but any equity raise would be highly dilutive.

[lovat scout] 06/9/2018 08:42

Maybe LTM LTVs will have to adjust and portfolio average will have to be around 20-25% instead of 31%?

[spectoacc] 06/9/2018 08:29

@Robsy2 - the issue isn't that house prices may fall 28%, it's that the PRA may decide that JUST needs to provision for if they do.

Slightly worrying that JUST say they've been in regular contact with the PRA, but still feel the need to defer declaring the interim. They could always have pulled it if things did turn out bad (as BP did once).

[18bt] 06/9/2018 08:28

Robsy, if 28% fall in property prices, one of the biggest hits will be on the Govt with Help to Buy being at 95% LTVs. The PRA need to be consistent and apply these assumptions to the banking sector for all business and not just in severe stress tests

[topvest] 06/9/2018 08:27

I wonder how this is impacting Aviva and Legal & General. They are not as exposed relatively, but still big numbers.

[robsy2] 06/9/2018 08:25

It could be a lively couple of months here....
The audit qualification and halted divi are the obvious negatives.
The back book has not provided any material issues to date. The safety margin provided by the regulator is demanding . If we come anywhere near a 28% fall in property prices etc then there will be a lot of others sweating more.housebuilders , banks etc . The fact that this is provided for already and flagged up as needing another tweak is fine with me. They need to be selective and disciplined about the business they write and manage their book of risk.

Perhaps we have nothing to fear but fear itself.

[18bt] 06/9/2018 08:19

topvest agree with your views on the PRA, the reduction in income for new pensioners (reflected in the increase in margins on new business) is a real hit. If the regulator compromises, I would have thought that it is likely to be in the timescales for implementation - your point about turning a remote risk in 20 years time to an immmediate one is spot on. One effect could also be that they force the sale of some mortgages to unregulated entities, who might not be so scrupulous e.g. on dilapidations on redemption - but of course that's the FCA's problem, not the PRA.

[value hound] 06/9/2018 08:18

I agree re the probable watering down of the eventual regulation.

As far as JUST is concerned on the back of today's results, the position is no different. It's either incredibly cheap or has to do a future fundraising (which could be at a discount). Kind of binary-ish?

[topvest] 06/9/2018 08:10

Hmmm this just shows how the Regulator has mis-managed the position on this. Seldom have I seen a more ridiculous position on a set of interim results: record results, massive book value and going concern emphasis of matter.

The going concern flag shows that the stupid regulator is at risk of actually causing material damage from this consultation paper now rather than a remote risk in 20 years time. Somewhere along the lines this has developed into a real regulation screw-up. The regulator is actually causing what they are trying to avoid. Net result....Pensioners lose out as prices go up, shareholders potentially ruined by a policy u-turn and pensions may not get paid in the worst case scenario. Ludicrous!

Having said that I suspect Just Group are playing the politics here and are saying to the regulator....in these interim results.....look what you have potentially done to us!

Net result is that the regulation will probably get watered down. This sort of regulation should be forward looking and not endlessly changing the past. At the end of the day, why invest in anything regulated if the regulator has the power to take everything away from you just because they have a change in view on a regulatory capital calculation!

[nav_mike] 06/9/2018 07:56

Aye not the most positively worded RNS Ive ever read, but I still look at the big numbers of £1.768bn on the balance sheet v £818m mcap

Gonna have to be a whopper of an impairment provision (or whatever they call it in this sector) to justify that

[spectoacc] 06/9/2018 07:29

Wise from a business perspective, perhaps won't be from a shareholder perspective.

"We are actively planning for a wide range of outcomes from the consultation process. We have a number of capital management options open to us and in evaluating those will seek to optimise shareholder value."

I don't read that as being very good - sounds like they've a good idea what's coming from having talked to the PRA, and that it isn't positive. Tho to be fair to JUST management, this has been a kick in the balls for them.

[scrapheap] 06/9/2018 07:25

Hmm... wise to defer the dividend but that and the accounts being qualified re to going concern risks due to the PRA issues, shows how big a risk this is to the business....

[nav_mike] 05/9/2018 13:51

Another perfectly timed investment lol :)

There has certainly been a pick up in selling in the last two hours....I guess all will be revealed in the morning

[scrapheap] 05/9/2018 12:31

hoping this new low is just pre-update nerves rather than anything more suspicious!

[nav_mike] 05/9/2018 09:00

In at 88p today that difference between the balance sheet and mcap is too large to ignore (I hope)

[edwardt] 03/9/2018 13:06

prudential partnered with hub group for its annuity business - got to be good for jsut who own hub.

[mikett1] 03/9/2018 12:59

Permira selling out at 145 in May seems to be a major catalyst for the decline in share price. They're a private equity group, that's what they do. The upcoming PRA report doesn't account for the amount this has dropped IMHO. I have been watching this for a while, and bought in today. Expecting good results 6th September, and a change in momentum coinciding with st Legers day.

[robsy2] 03/9/2018 09:40

Morning All
I'm a buyer this morning. I've read the posts over the weekend (thanks all) ,and see some value here.
The selling just looks overdone to me.The insurance sector is well and heavily regulated and full of actuarial expertise. They and their peers may need extra capital. This is a good thing.The govnt needs to be prudent about LTM for everyones sake because it will be a key financial product going fwd from here.
They should work on the basis that hosue prices will get cheaper over the next 20 years , maybe falling in inflation adjusted terms . These things can be monitered and adjusted for as we go along. LTM is only part of the picture as well and insurance companies in general in the UK have shown themselves to be good at managing long terms books of risk.

Best
R2

[spectoacc] 03/9/2018 08:47

I guess at the very least there's uncertainty. Isn't the only listed co being hit by regulatory uncertainty atm, and that's before President Corbyn.

[nav_mike] 03/9/2018 08:36

Vast disparity now between Balance Sheet net assets and mcap

This government review surely cant account for this can it? Or is the threat of a forced rights issue really that great?

[scrapheap] 22/8/2018 17:31

there's certainly an uptick in trading volume going on - expect an RNS to see whose buying / selling before long I'd have thought....