Just Group (JUST) H1 2024 earnings summary

Executive summary

• Underlying operating profit rose 44% to £249m for H1 2024, driven by 30% growth in new business sales to £2.5bn and strong operational gearing, with return on equity at 15.6%.

• Tangible net asset value per share increased to 240p, up 26% over 18 months, and the interim dividend rose 20% to 0.7p per share.

• Consistently outperformed profit growth targets, expecting to double profits two years ahead of plan.

• Both DB and retail businesses showed strong, proportionate growth in volume, with DB sales up 31% to £1.9bn and retail sales up 28% to £0.6bn.

• New business profit grew 38% to £222m, with margins improving to 9.0% from 8.5%.

Financial highlights

• New business sales up 30% year-over-year to £2.5bn, with DB at £1.9bn and retail at £0.6bn.

• Operating profit up 44% to £249m; new business profits up by more than a third to £222m.

• Underlying EPS increased to 18.0p (H1 2023: 12.9p); statutory EPS decreased to 4.6p (H1 2023: 7.3p).

• Solvency II capital coverage ratio stable at 196%.

• New business margin improved to 9.0% (from 8.5% in H1 2023); new business strain at 1.5% of premium.

Outlook and guidance

• Full-year 2024 operating profit is expected to substantially exceed previous guidance of doubling 2021’s £211m in three years.

• Second half expected to see similar sales volumes, with a shift to larger deals likely to reduce margin.

• Cash generation for 2024 likely flat versus 2023 due to lower risk margin release, with growth expected from 2025 in line with asset growth.

• Confident in continuing to deliver compounding growth and maintaining mid-teens IRR.

• Long-term growth opportunities in both DB and retail markets, supported by demographic and regulatory trends.