Just Share Discussion Threads

[1jat] 08/11/2022 21:32

18BT
Interesting report….clearly high opportunities but what margin can be achieved? It seems there is strong competition and limited capital for smaller players like just….the conditions for a flight to quality and the bigger players.

[18bt] 08/11/2022 12:40

Barnett Wadingham report out today on the enhanced prospects for the DB Buyout market because of rising interest rates (despite the LDI fiasco). Headlines are:
"We estimate that the average time to buyout reduced by around four years between the start of the year and the end of September for the FTSE 350 DB schemes. This is a consequence of the rapid increase in bond yields and widening credit spreads over the course of the year. Overall, this means that there will be a large number of schemes that are now very close to reaching their endgame target, if not achieved already."

"Based on current expectations, this analysis suggests that around 52% of FTSE 350 DB schemes will be fully funded on a buyout basis within the next three years. This compares to the 23% expected at the start of the year, illustrating the significant acceleration in endgame timescales for most schemes."

[18bt] 08/11/2022 08:02

JUST Group is very much alive - merger of JR Group and Partnership some years ago now. Your cert should be worth something

[noramping] 08/11/2022 07:58

Is this related in anyway to just group? I think that went bump?
I am only saying as I’m pretty certain I have a share cert for just group.

[18bt] 08/11/2022 07:33

1jat - most captive insurers aren't licenced to write life business are they? All the ones I know only write GI risks

[1jat] 07/11/2022 19:08

Suspect margins are low and falling….the schemes and their advisors are squeezing margins hard and Solvency II means the long term risk of longevity is packaged up and reinsured (often back to a captive insurer to recycle upside back to the employer - so the scheme sponsor and reinsurer could go down together - how is that a good business model?)

[my retirement fund] 01/11/2022 09:23

Very difficult to know what their margins are though

[clive7878] 31/10/2022 21:44

My retirement fund - could well be right - just is on my watch list.

[my retirement fund] 16/10/2022 12:01

It's been a long time coming but the sun is finally breaking through the clouds. Share price here looks like it could easily double in next 12 months and still look cheap.Standard Life, confirm stating: "we are seeing renewed interest in annuities given the income security they offer in the current market environment"https://www.theguardian.com/money/2022/oct/15/annuities-pension-income-rates-financial-turmoil?CMP=Share_AndroidApp_Other

[18bt] 09/9/2022 08:38

Barclays raises Just Group price target to 121 (116) pence - 'overweight'

[rapier686] 12/8/2022 14:19

Taking a look at britishbulls.com I'm unclear why anyone would care what they think.

But I think the business is fundamentally quite straightforward. One sentence coming up:

They sell promises to pay various future retirement obligations, and in the meantime invest the proceeds across a spread of investments.

Some of these investments are readily traded instruments (gilts, corporate bonds), some are rather more hands on (equity release mortgages).

The reporting is not so straightforward and that's because valuing both the promises and investments is arguable, assumption based and non trivial. Customers and regulators want to be certain there's a negligible chance that the promises can't be kept when they fall due and shareholders want to know how much the difference between those two large figures is and when they can get their hands on it.

Equity release mortgages have been controversial for a few years, apparently lucrative but some are concerned that the security may prove inadequate when the time comes for repayment umpteen years out.

What do you consider to have been a "rocky ride"? IFRS results are dominated by interest rate movements which are hardly reflective of the company's performance, but adjusted profit has been pretty stable.

[clive7878] 12/8/2022 12:22

Article on Just in the Investors Chronicle today, worth reading.
They forecast a forward pe ratio of 3.7, and say they are cheap.

They have had a rocky ride looking at past results though.
I do find the breakdown of businesses for second half of the years results though a bit unclear,not just having one straight forward business, and the past record of trading may keep the pe ratio on a low value, until more faith is installed in the recovery.

The business going forward does however look stronger, and the share price quite good value.
Just - could be a recovery stock.

Although on 'Britishbulls.com' today they are rated as a 'sell' rightly or wrongly !

[riverman77] 11/8/2022 09:56

I had a listen to that last night. I think they key point is that with the Solvency position now in good shape, they have significantly reduced sensitivity to interest rates so should be less of an issue going forward. Overall, pretty comfortable with how everything is progressing - exceptionally cheap, well-capitalised and with good growth prospects as DB schemes look to derisk. I think management also come across very well and clearly know what they're doing.

[18bt] 11/8/2022 06:41

Riverman, there’s a good slide and voiceover from Andy Parsons in the webcast. I agree the results themselves didn’t explain well.

[riverman77] 10/8/2022 20:51

Thanks, that was roughly along the lines I was thinking. Still some question marks and need to go through the results in more detail to fully understand what's going. I think the company explain it quite poorly.

The company seems to suggest that the IFRS loss was as a result of the hedging (which they had in place to protect the solvency position). However, what you are suggesting is that the hedging helped to mitigate the losses caused by rising rates (so would have been worse without the hedge). To add to the confusion they say they are looking to reduce their hedging to lessen their sensitivity to rates.

[1jat] 10/8/2022 19:03

Riverman
The solvency II metrics are separate from the accounting result.
The increase in interest rates increases the discount rate for the annuity liabilities and that causes a fall in liabilities….the asset values also fall but not as much after hedging so the solvency Ii result improves.
The reduction in asset values goes through the IFRS P&L, but the change in liabilities does not, it is below the line….that is my understanding….
There are big changes coming to IFRS17 which will deter some from investing until the revised accounting presentation becomes well understood.

[riverman77] 09/8/2022 11:44

Don't fully understand how the move in interest rates can lead to a big improvement in the solvency position, but a big loss in IFRS terms (and a sharp fall in NAV per share). I understand it's something to do with the hedging position, but would like to understand more about this - is the IFRS loss something to be concerned about or is it purely an accounting adjustment with no real impact on cashflows? Contrast with LGEN where the situation seems a lot clearer (to me at least).

Agree they look a sitting duck to be taken out - the new reinsurance partner they talk about (but don't name) must surely be taking a look?

[18bt] 09/8/2022 08:10

As usual the call is well worth listening to - very confident of their 15% pa operating profit growth over the next 3-5 years. Really emphasising that they have used very little capital in H1, so loads of firepower for H2.

[18bt] 09/8/2022 08:02

On the call Andy Parsons was specific that the mortality review is expected to incorporate increased mortality risk from COVID in their assumptions - that should lead to a reserves release. They are on CMI 2019 - they are likely to move to either 2020 or 2021.

[18bt] 09/8/2022 06:28

Half year: The interest rate environment makes the different measures even more complex in these results. Big IFRS loss, but massive increase in SII solvency (just showing how the system is so sensitive to interest rates), meanwhile underlying capital generation continues its growth. Overall pretty happy with the results. Interesting that they have disclosed the new business profit on the H2 £0.5bn de-risking. Also that they have taken a hit from early redemptions of older higher interest rate ERMS - that should now slow down as ERM interest raes have risen back up. Annuitant mortality experience offset some of the hit. Both of course seem to be treated as non-underlying... conventional, but not sure it is. Absolutely looks a sitting duck to be taken out too cheaply.

[salver2] 08/8/2022 11:11

Brokers are clueless

[18bt] 08/8/2022 09:26

JPMorgan cuts Just Group price target to 80 (105) pence - 'neutral'
Odd thing to do, the day before results...

[salver2] 05/8/2022 09:09

I would have thought that this was an absolute sitting duck for a bid - so unloved and undervalued

[18bt] 22/7/2022 13:08

Annuities looking increasingly attractive:

Canada Life raises annuity rate
By Jean-Baptiste Andrieux 22nd July 2022 10:57 am

Canada Life has increased its annuity rates. A benchmark annuity of £100,000 will now pay on average an income of around £5,845 a year.

This is circa 29% more than at the start of the year when the same annuity paid around £4,542 a year.

It is the fourteenth time this year that Canada Life raises its annuity rates.

Canada Life retirement income director Nick Flynn said: “Annuities are making a fight back, with the market seeing significant positive moves, driven by the changes in interest rates and also the open market providers competing for business.

“This is not only healthy for the annuity market but also clearly positive for customers looking to get the most value from their pension savings while seeking a lifetime of income security.”