Just Share Discussion Threads

[scrapheap] 21/12/2018 08:22

Interesting financing plan.... A sort of unappealing backstop it seems to my reading if the need should arise and which would be very dilutive if conversion was triggered. But it avoids a preemptive rights issue needed I guess?

[qs99] 12/12/2018 07:58

haha, great quote bolador.......

JUST IMO have got off lightly and broker notes confirm that. Also phased over 19 so plenty of time to sort.

IMO this certainty ALSO makes JUST still a takeover target as its business is doing pretty well IMO/DYOR, and if shares were £1.60++ and updates have been positive on trading front, then why would those rumored predators not take a look at £1?

[bolador] 12/12/2018 07:53

Ronald Reagan once said the most terrifying nine words in the English language were

"I'm from the government and I'm here to help".

Just has found out, customers have found out and shareholders too have found out how right he was.

[topvest] 11/12/2018 20:12

The clever bods at the PRA who cannot explain anything in simple english lost. Common sense has prevailed. I think its fairly disgraceful the way that these regulators try and change rules retrospectively, just to prove their own intellectual arguments and hypotheses. Companies and shareholders caught in the crossfire lose out, as have the customers that are now getting higher pricing. It was certainly not their finest paper or moment, but a total disaster!

[qs99] 11/12/2018 18:38

Very useful thanks

[18bt] 11/12/2018 17:37

This is helpful:

Fitch Ratings-London-11 December 2018: Fitch Ratings has revised Just Retirement Limited's and Just Group plc's (Just Group) Outlooks to Stable from Negative. The agency also affirmed Just Retirement Limited's Insurer Financial Strength (IFS) Rating at 'A+' and the Long-Term Issuer Default Ratings (IDR) of Just Retirement Limited and Just Group , the group's ultimate holding company, at 'A'.

Fitch simultaneously affirmed the rating on Just Group's GBP230 million Tier 3 subordinated debt at 'BBB'.

KEY RATING DRIVERS

- The Outlook revision reflects a significant reduction in the uncertainty regarding the ultimate adverse impact of proposed valuation changes in relation to Just Group's portfolio of equity release mortgages (ERMs). This follows the publication of the UK prudential regulator's (PRA) Policy Statement (PS31/18), which updates the assumption setting methodology for insurers' ERM valuation models under Solvency II (S2).

Under PS31/18 insurers are not required to apply the revised ERM valuation assumptions retrospectively to business written prior to 2016. This is in contrast to the proposals outlined in the PRA's previously published consultation paper (CP13/18). The proposals in CP13/18, if implemented, would, absent capital actions, have led to a large reduction in Just Group's S2 coverage ratio due to a high concentration of ERM in Just Group's asset portfolio. The potential capital impact of the revised valuation methodology for the ERMs under PS31/18 has thus been significantly reduced.

However, Fitch believes that by virtue of its concentrated exposure to ERMs, Just Group remains exposed to residual uncertainty related to the final impact of the changes proposed in PS31/18. These changes include future increases in the deferment rate and volatility parameters used in Just Group's ERM valuation model. In addition, sustained adverse house price movement compared with the group's ERM model assumptions could dampen the group's reported S2 ratio over time.

Just Group's S2 solvency capital requirement coverage ratio remained broadly stable at 142% at end-1H18 after a notional allowance for transitional measures (end-2017: 139%). Fitch continues to view Just Group's capitalisation, as measured by Fitch's Prism factor-based model (Prism FBM) as 'Extremely Strong', at end-1H18. The group's financial leverage ratio (FLR) weakened to 25% at end-1H18 (end-2017:17%) following Just Group's GBP230 million Tier 3 subordinated debt issuance in February 2018.

Fitch assesses Just Group's business profile as strong, with a strong franchise in an annuity market that is underpinned by sound economic fundamentals. We believe that UK annuity writers, including Just Group, were able to adjust new business pricing to accommodate the possible outcomes of CP13/18. The group has previously indicated that it has already made adjustments to new business pricing and product features in response to CP13/18. Therefore, we do not expect the new policy statement to have any additional impact on new business.

RATING SENSITIVITIES

- The ratings would likely be downgraded in the event of a weakening of the group's capitalisation as evidenced by a decrease in the group's S2 ratio to below 130%, a prolonged fall in the group's Prism FBM to the low end in the 'Very Strong' category or the group's FLR weakening to above 30% on a sustained basis.

The ratings could also be downgraded as a result of a sustained weakening in the group's financial flexibility, as evidenced, for example, by the group's fixed charge coverage declining to below 3x (6.2x in 1H18).

Deterioration in the group's business profile may also lead to a downgrade.

An increase in product and geographical diversification could lead to the ratings being upgraded. However, we view this as unlikely over the medium term.

[eumaeus] 11/12/2018 16:47

752 - as I have said before, no one is paying us. I am retired from the Bank, Kevin is a professor at Durham. Could you, or a moderator, retract that comment.

Thank you.

PS 31/18 was a fine paper, by the way. One of their best.

[horndean eagle] 11/12/2018 13:45

Bit disappointing we haven't had much more of a bounce given we got a pretty benign outcome. Im guessing JUST is also being used as a proxy for a house price collapse post brexit so that might be at play.

[dasv] 11/12/2018 11:52

that's gotta hurt, shorters. ouch.

[scrapheap] 10/12/2018 18:09

There's a piece on Just in the FT including Barclays analyst comments AND also a piece in LEX which would be especially interesting but I haven't got access!

might buy the paper tomorrow though!

[qs99] 10/12/2018 14:05

LIke the words "compelling" buying opportunity....DYOR

[topvest] 10/12/2018 14:00

Looks to be very good news. May take a while to recover all the lost ground, but it looks like there is no need for an equity issue and the dividend policy can be resumed with the final results. The PRA need to learn lessons from this episode. The only thing that they have achieved is higher prices for customers and shareholders to lose money due to scaremongering.

[scrapheap] 10/12/2018 13:33

Broker Panmure Gordon agreed that the key point is that the PRA has confirmed that transitional relief for technical provisions for pre-2016 business will be recognised for the remaining period to 31 Dec 2031, and that the company "now has breathing space".

Analysts at RBC Capital Markets said the outcome is positive news for Just Group, in particular, "but also for Aviva and L&G, who also hold ERM assets, but to a lesser extent", calculating them to be less than 5%.

"We calculate that the new approach will only reduce the Solvency II ratio by 3% points to 139%."

With Just Group's share price down 40% since the announcement, from 135p, despite business results that were 30% ahead of consensus over the nine months to 30 September, RBC said: "The business is flying, in our view, and the removal of uncertainty around the ERM consultation allows management to focus on key areas of growth, including, bulk annuities which we see as the best structural growth opportunity in Europe and a market where we believe £30bn is the new norm. This creates a compelling buying opportunity in our view."

[scrapheap] 10/12/2018 11:42

Analyst Numis said the new requirements were only likely to add £100 million to Just's capital requirements, much lower than the range of £160 million to £876 million it predicted in July. 'Overall this appears a good announcement for Just Group and removes a considerable amount of the uncertainty faced by shareholders,' Numis added.

[qs99] 10/12/2018 10:22

Surprised more not on the BB....

[qs99] 10/12/2018 09:14

Any broker notes out? be interesting to see if they start putting positive noises out about this update and how it could affect divi policy in the future. Could help drive more demand (or not as the case may be!), but initial 20% up is very positive opening view IMO...DYOR

[qs99] 10/12/2018 09:02

Looks pretty good IMO...DYOR

[1fraser] 10/12/2018 08:10

Next stop 120

[18bt] 10/12/2018 07:55

Gives more wiggle room going forward and major benefit in leaving TMTPs in place.

[qs99] 10/12/2018 07:38

Yes JUST seem to be happy with it from reading it? Let's see what Mr Market think. DYOR

[18bt] 10/12/2018 07:28

Revisions to CP13/18 announced by PRA. Seems particularly beneficial to pre SII written business. Need to read further.