Just Share Discussion Threads

[18bt] 01/5/2024 11:23

Largely a reiteration of others' forecasts, but with a little more colour on JUST's target small schemes market:


2023 bulk annuity market volumes soar to record-breaking £49.1bn
Aon says 2023 saw ‘dramatic growth’ in the market for schemes below £100m

2023 bulk annuity market volumes soar to record-breaking £49.1bn
2023 marked a record-breaking year for the UK’s bulk annuity market as the total volume of bulk annuity deals amounted to nearly £50bn, research from Aon finds.

The insurer's UK Risk Settlement Market Update 2023 revealed the bulk annuity market had a "stellar" year with total volumes reaching £41.9bn across 226 transactions, which surpassed the £43.8bn set in 2019.

Aon said this record-breaking figure was the result of several factors including improved scheme funding levels across pension schemes of all sizes which fuelled a significant increase in buy-in and buyout activity.

The firm also noted the market was dominated by a record-breaking 13 transactions which exceeded more than £1bn, including the largest ever bulk annuity deal between RSA Group and Pension Insurance Corporation (PIC), as well as the £4.8bn buy-in between Boots and Legal & General and the £4bn deal between the Co-op scheme and Rothesay. These deals amounted to a combined £29.7bn.

In addition, as well as a record-breaking number of large scheme transactions, the insurer noted there had been a growth in the number of small scheme transactions for schemes with less than £100m in assets under management, with 161 sub-£100m transactions being written throughout the year.

Aon said the growth in capacity for more deals and increased volumes follows on from increased speculation as to additional market consolidation options to "augment" the capacity in the bulk annuity market, but noted the superfund transactions Clara Pensions has completed with the Sears Retail Pension Scheme and Debenhams Retirement Scheme offers a "stepping stone" to buyout.

The firm also noted the option of a public sector consolidator run by the Pension Protection Fund is being considered, but said subject to simplifying benefits so that only a small number of benefits need to be administered, would not preserve benefits in the same manner as conducting a transaction with an insurer.

Aon also found due to the number of insurers which have launched "streamlined" bulk annuity transaction solutions designed for smaller schemes, such as PIC's ‘Mosaic', Aviva's ‘Clarity', Legal & General's ‘Flow' and Just Group's ‘Accessible Feasibility Quotations', would likely lead to increased competition and potentially improve pricing and efficiency for smaller schemes looking to transact.

However, it added while these streamlined processes offer schemes more choice, each of them has a different process which can affect which insurer can offer the most suitable solution for a particular scheme.

The insurer's update said: "This surge in £1bn+ transactions has been driven by several factors including enhanced insurer capacity.

"Robust solvency capital positions within the insurance and reinsurance markets, coupled with ongoing capital efficiency efforts by annuity providers, have created significantly more capacity than in past years. Several £1bn+ deals are currently engaging with the insurance market and attracting wide competition. The UK bulk annuity market could be poised to surpass the £50bn mark this year."

[1jat] 28/4/2024 10:29

Totting up the 2024 press releases for DB pensions, they have announced approx £670m of new business after 4 months of the year….I would say that is on track for a good year.
(Market commentators have suggested up to £80bn will go through the market this year.

[18bt] 11/4/2024 13:28

xd the 1.5p today

[kilobyte2] 11/4/2024 13:28

Ex-divi today: 1.50p

[clive7878] 11/4/2024 12:20

Share price coming off the boil - 102p

[clive7878] 11/4/2024 09:39

A report said that dementure is set to treble in the UK by the year 2050. it was also revealed that Anti-depressants and Anti-parkinson pills also increases the risk.
Question is do some Western Medicines slowly kill the brain cells off, but whilst keeping people alive.

[1jat] 09/4/2024 18:06

Always useful to consider what could shock the share price downwards.

Market sensitivities to capital are set out in the annual report / SFCR - they have reduced exposure to LTMs over the last few years = not that I was particularly concerned about it…UK house prices have been very resilient and the demographics are positive. We cant predict market crashes so we have to live with these risks and hope the Firms Risk Management is robust.

What non- financial shocks could there be?
Regulatory capital requirement changes are top of my list. Private Credit is my main area of concern…the annuity insurers typically have 45-50% in unlisted assets.
Worth watching the PRA consultations and Dear CEO letters to see what may be coming.
A step change in longevity expectations caused by a cure for cancer / heart disease….this is not really a huge concern as the NHS /care sector does not have the cash to keep old people alive without regard to the costs. I hold some pharma funds/stocks as a hedge.

[18bt] 08/4/2024 06:38

Covered extensively by Mr Bearbull in last week’s IC. He has bought and has a good case available on IC site.

[1jat] 07/4/2024 14:56

Really pleased with the bounce in the share price following the 2023 results.
I think there will be steady gains if sales volume and more importantly margin can be replicated (sales should be for the next decade, margin may erode with increased competition).

[jeff h] 04/4/2024 13:10

Another sizeable deal for Just:-

[clive7878] 03/4/2024 21:26

Investors taking advantage of the price rise today - majority sells.
Price may tread water for a while now.

[1jat] 25/3/2024 14:47

It does take some time for analysts to update their views and fund managers to decide what to do (as opposed to traders).
Hopefully there will be wider and deeper institutional investment.

[clive7878] 24/3/2024 10:45

I did think that the share price would go a little flat after the recent rise,
but Friday it is still motoring. Investors seem to have now woken up to Just Group,
so who knows what is to follow.

[1jat] 20/3/2024 22:21

JPM - That is more like it….+25p on the target price…which aligns well with the expected value added this year.
Whether it can close the 35p gap as well depends on sentiment but I expect 110 for the HY and 125 with the 2024 FY results.
Steady as she goes.

[clive7878] 20/3/2024 18:06

Just Group Plc. (JUST:LN) PT Raised to GBP1.60 at JPMorgan
March 20, 2024
JPMorgan analyst Farooq Hanif raised the price target on Just Group Plc. (JUST:LN) to GBP1.60 (from GBP1.35) while maintaining a Overweight rating...

[clive7878] 18/3/2024 22:59

After the recent rise we could expect the share price to flatten out for a while,
until further news comes out, is my feeling in the immediate term.

[1jat] 18/3/2024 15:52

The DB updates today did not really change anything except the average….as they kept slightly ahead of recent market movements across several insurers.

As said many times by CJAC and others the PE ratio is not helpful for insurance companies whose free cash flow depends on how its long term assumptions are playing out.

Capital coverage, free cash flow from operations and increasingly the CSM as a future store of value are the numbers to watch. Looking at NBP (CSM additions) then Just got 30% of its share price added to the CSM….if it adds more than 8% of opening CSM then it is likely the company is growing and future profits and cashflows will grow.

[18bt] 18/3/2024 09:13

Deutsche Bank raises Just Group price target to 105 (90) pence - 'hold'

[clive7878] 17/3/2024 22:02

Sale of 1.2m at close. Bigger trades appear to come in at close of play.
In the case of Friday - mostly sells.

I.C. quotes pe of 9 - lowering for coming year.
So inspiring forecast to come.

[1jat] 14/3/2024 14:21

They have to do a lot of deals like this to get to £3bn.
Fortunately they have made the smaller deal space their own and are able to service standard quotations regularly to trustees…..
The larger schemes generally come with more complications so require a lot more in the way of bespoke terms and sometimes administration system changes to support the scheme……this are of the market is proving to be Just’s sweet spot….once the business is fully on the books it does not matter where it came from…so this is good business.

[salver2] 14/3/2024 12:17

Another 37 million one today - they are coming thick and fast

[clive7878] 14/3/2024 11:14

18BT good spot - We are motoring today.

[18bt] 13/3/2024 12:56

A decent sized BPA deal:

[clive7878] 11/3/2024 10:49

Two good and encouraging posts which has a good chance of materialising in the future.

The interest in trading Just Group has exploded since results.

[18bt] 11/3/2024 06:50

From FT Weekend: Headline UK’s pension buyout boom leaves insurance investors wanting more

Worth a read, but behind a paywall. Conclusion is roughly

Just Group’s low valuation has reflected unambitious targets for ROE, So beating the new, over-12 per cent target sent the shares up 13 per cent. But needs to earn the trust of the market by sustainable earnings growth. Just Group will need to to find sufficient suitable investment providing good returns to match the supply of bulk deals.