Just Share Discussion Threads

[1jat] 10/3/2024 11:14

Just turning this around a bit…..the larger insurers typically pay out 50-70% of their earnings in dividends.
If Just earns 30p sustainably for the next few years until it starts to look like the other insurers, a 20p dividend at 8% would lead to a share price of 250p. The Shareholder NAV would need to be 300p and would take about 6-7 years to get there which is near the end of Transitional Measures….
This does not appear implausible but requires consistent delivery as the market will continue to evolve.

I anticipate annual share price increases around 20p pa for the next few years plus the currently small dividend rising at 15-20% pa.

That is currently a 20% investment return, reducing to the teens as the company grows.

[clive7878] 09/3/2024 21:00

L&G is paying 9% dividend.but then Just is on a pe of 3, so there could well be more mileage in the share price of Just to come, maybe next week even.

[cjac39] 08/3/2024 20:27

1jat agreed - until the tmtp runoff is done they will not generate meaningful cap gen. Thereafter it will be great. They’re pumping new biz numbers and relying on third party illiquids. A risky proposition. Av, Mng even l&g are safer bets but I get the excitement vs own funds discount.

[clive7878] 08/3/2024 20:22

Some bigger sells at the end, pushing the price downwards.
Teletext has then the price at 96p
Next week will be interesting, also the write up in the IC.

[1jat] 08/3/2024 19:34

Re buy backs….I dont think they are in much of a position to do a significant one in the short term….
CJAC is right in his assertion that cash generation and capital are somewhat constrained but this will ease over time.
They have an expensive 300m debt to roll over this year….I would expect them to be able to roll it over on improved terms, or make a partial debt repayment. Any financing savings can be passed into the dividend.
Interestingly they have reduced the SII debt element to 30% by growing the own funds so they will be under no investor pressure to pay down the debt.

Potential risks exist - regulator will look at the valuation of illiquid assets more closely and financial reinsurance. There will also be some commercial pressure on the margin which is good in the market - there is nothing to stop a scheme getting a regular quote from Just and then asking a competitor to beat the price. Being able to price schemes/GiFL business using very little capital suggest they are potentially making excess profits or have mis-priced the business.

Anyway after these numbers I expect some upgrades coming from the analysts and some decent buy orders from funds.

[18bt] 08/3/2024 10:30

On the call, David Richardson was asked about share buybacks vs dividends and for a 2024 forecast! He claims shareholders have braodly stopped asking for dividend increases because of the scale of the opportunity, but they like the positive signalling. So he was uncommital, but he did say they would continue to look at signalling the positive environment through increased dividends.

[18bt] 08/3/2024 10:05

On ground rents, this is in the detail: "we established a £(45)m provision for the potential residential ground rent consultation, which may impact valuation of those assets".

[clive7878] 08/3/2024 10:02

Posts 1872 from clive7878 - a no brainer - and 1877 from 1jat - a pe of 3 is not justified - posted a couple of days ago tells then of the prospect of a share rise.
And its happened today. This is a solid stock going forward. Just has attracted a lot of business over the last 12 months and the stock was cheap on a pe of 3 prior to this. Dividend could be better though.

[18bt] 08/3/2024 09:57

Interestingly, I posted yesterday that the market forecasts for turnover was £4,101. They don't really focus on that number which includes DB partners (funded reinsurance). The actual figure was £4,309m not the £3,893 of group funded premiums. This is rather hidden in the press release.

[eigthwonder] 08/3/2024 09:40

cjac, i think you are comparing real apples with imaginary pears. As you note the asset numbers are made up actuarial figures and yet you want to complain about the real number return on them. BTW the figure is low because the liabilities (which generate the "profit" are very long dated. The ROE is a better indicator of returns for shareholders and that is over 13%. The only number which is real (or less made up) is UCG and that is supporting a dividend of 19 I think, which means there is plenty of headroom to grow the dividend as well as grow the business.

[riverman77] 08/3/2024 09:38

Presumably they're not generating much capital because they're writing lots of new business, which won't initially generate capital, but will do so in future years.

[18bt] 08/3/2024 09:36

The confident forecast that they will double profits in 3 years, should lead to upgrades in analysts forecast, which currently average out at £419m. Analysts meeting has started very confidently. I think the stockmarket is underestimating massively the potential in the de-risking market. It's as though they expect the market to finish in a year or two.

[18bt] 08/3/2024 09:31

cjac - the point is that capital generation should compound quite quickly as the CSM unwinds on business

[salver2] 08/3/2024 09:22

Thank you CJACfor that I’ve got quite a lot of shares in this and I still can’t make head nor tail of this !

[cjac39] 08/3/2024 09:16

i still dont get this and perhaps never will. it is only about cap gen; not some illusory profit figure. UCG was 57. add back the nb strain and you get cap gen of 92. own funds, adjusted for subdebt and net risk margin and tmtp (none of them are real assets) are 2bln. so this business generates a return of 4.5% on its adj own funds and we are supposed to be excited? the divi will be forever capped by this maths as profits do not allow divis - only cap gen does. but congrats to those who stay the course.

[babbler] 08/3/2024 07:34

Note the comment on doubling profit... And the time to get there being reduced

[salver2] 08/3/2024 07:27

Great results and I agree with you Ijat -it’s difficult to understand why they are this price and who was selling at the 70 p mark after announcing a great trading statement-I can never work out the pe here taking the 27 eps it’s about 3.5 times earnings but taking the 11 which appears it’s about 9 -I suppose it’s divi is miserable and people dont understand the many moving parts

[1jat] 08/3/2024 07:20

These show Just is in rude health…and needs to be rated as such.
A PE of 3 is not justified.

[18bt] 08/3/2024 07:16

Big increase in the final dividend is a huge plus and should still compound at close to 15% from here based on a further increase of at least 15% in 2024 operating profits. Return on equity of 13.5% now getting into reasonable territory. NTA per share 224p, up 34p. Only real blot is on ground rents where they have £177m, but that’s a lot less than e.g. Rothesay. As always plenty to look at, but difficult not to be pleased. Whether the market will recognise them is of course another matter.

[18bt] 07/3/2024 16:36

Consensus forecasts seem to be:
Written premium/turnover: £4,101.0
Adjusted EBIT £377m
Adjusted PTP £380.7
Adjusted EPS 27p
Final div 1.38p

[1jat] 07/3/2024 11:09

Just has the smaller end of the market (sub £100m) pretty well sewn up.
LGEN, AV, PIC etc interested in the £300m to multi-billion deals.
Just needs to do a lot of deals…but it seems to have a decent platform to allow it to do a lot of smaller deals. We shall see if it can achieve decent margins on the business tomorrow.

The run up in the share price is still not at the level of the business update….I remain hopeful the market will begin to appreciate the company more….I would like to see 20p on the shareprice in each of the next 5 years.

[18bt] 07/3/2024 11:02

Decent sized pension derisking deal in advance of tomorrow:

IWCSSS and IWMPS

The buy-in between the trustees of the IWCSS and the IWMPS, which are non-associated multi-employer schemes set up in 1994 after the privatisation of the coal industry, and Just Group totals £44m.

The transaction has secured the benefits for the 132 members of the Maltby Colliery sections of the schemes.

Hogan Lovells acted as legal adviser to the scheme, having served as the trustees' advisers since the schemes' inception.

Just Group business development manager Ross Breckon said: "We've enjoyed working with the trustees, the scheme sponsor and their advisers to secure the benefits of the 132 members of the Maltby Colliery Section of the IWCSSS and IWMPS, demonstrating the bulk annuity market is a vibrant one and open to schemes of all sizes."

Hogan Lovells partner Claire Southern added: "We are proud to have acted for the trustees of the Industry-Wide Coal schemes since the schemes were established and are delighted to have helped them secure an excellent deal for Maltby Colliery section members."

[clive7878] 03/3/2024 11:29

Looks encouraging I don't believe Just is on many investor radar screen at present.
Price nearly always starts higher each day and then falls back.

I do wonder whether one should not be topping up prior to results as this looks like a no brainer.
But there is always unforeseen black clouds that could come around the corner.

[1jat] 02/3/2024 18:59

I expect they will have added more than 30p /share to the Tangible Net Asset Value - to take it to around 230p of which 100p is debt, so SH value is 130p….and expected to increase similarly in 2024…2025̷0;.
Say it can trade at 70-80% that would be 91-104p…add 21-24p for next few years…. So I do expect the share price to rise reasonably significantly in the next 3 years without M&A.

[clive7878] 02/3/2024 10:42

1jat - thanks for that.
Maybe buyers were coming in on Friday, in anticipation of the results,
so hopefully the share price will continue to be stronger in the coming week.
If results are next Friday, it may well be too late to be mentioned in next weeks IC.
Could we hit 90p or more ?