UK share markets continued to trade sideways on Thursday as the ongoing Covid-19 crisis dampens investor confidence. The FTSE 100 for instance was last trading just half a percent higher from Wednesday’s close around 6,780 points.
Market appetite for Just Group (LSE: JUST) has been much stronger today however. In fact, its share price was ripping 17% higher on Thursday following a positive reception to a full-year trading update. The financial services giant was last trading at 80.5p per share. This is the most expensive the UK share has traded at since late last February.
Defined benefit market sales boom
Just Group has rocketed on news that annual sales soared 12% in 2020 to come in at £2.15bn. This was driven by a 22% increase in defined benefit de-risking premiums, the UK company said, to £1.51bn. This more than offset a 7% decline in guaranteed income for life products, which dropped to £637m.
The financial services provider, which specialises in retirement income, is reaping the rewards of what it described as a “buoyant” defined benefit pensions market. Just Group reported that 2020 was the second-highest year for market transaction volumes. It added that defined benefit de-risking sales of above £1bn during the second half resulted in a record six months.
Just Group also gave investors plenty to look forward to in 2021 too. It described the defined benefit pension market pipeline as “very strong.” It also noted that demand for guaranteed income for life products has continued to recover, following Covid-19-related sales disruption during the early part of the year. Sales here during the second half of 2020 were similar to those reported during the corresponding 2019 period.
What Just Group said
To cap off a stellar trading update, Just Group said its Solvency II ratio had improved 9% year-on-year during the second half of 2020. This was up from 145% as of the end of June, thanks to a £177m debt issue in October.
Chief executive David Richardson commented: “I am pleased that we continued to deliver on our commitments to shareholders during 2020 to improve the Group’s capital position. We have also taken steps to improve balance sheet resilience and reduce our exposure to UK property prices.”
Just Group sold £540m worth of lifetime mortgage balances in 2020. The UK share completed a third no negative equity guarantee (NNEG) hedge covering £280m worth of lifetime mortgages as well.
“I am also delighted with the new business performance, where the strong pipeline we indicated at the time of our interim results in August has converted well,” Richardson continued. “We have maintained strong pricing discipline throughout, which is reflected in further reductions in our capital strain percentage on new business.”
He added: “We have a strong pipeline of new business and we start the year with increased confidence.”
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2021