08/01/2008
OAP-focused life assurance provider Just Retirement admits that market conditions are ‘difficult’ and that profits for the current financial year are likely to be delivered below expectations.
The Reigate-based insurer provides annuities, including enhanced annuities for smokers and others who are statistically likely to die early, and equity-release services to people approaching retirement age. Ongoing upheaval in the capital markets has, however, rendered financial advisers and potential customers overly cautious.
Furthermore, chief executive Mike Fuller acknowledges that the company’s margins, which are by design affected by interest rate moves, will decline at its annuity business, with a slight offsetting via margin increases from equity release. As a result of all this, he admits, profits are likely to come in 5% to 10% lower than the company had hoped.
On the plus side, results for the third quarter of the year have shown an 18% increase on the corresponding period to £196.2m to take first-half sales to £387m, with equity release growing at 92% in the period. Fuller pointed to a ‘marked increase’ in quotations and applications in the final weeks of the calendar year and says new product initiatives have been well received.
Fuller also thought it necessary to stress that the company has ‘no exposure either to such mortgages or to structured funding vehicles’.
Despite growing fast and increasing annual pre-tax profits to June from £3.6m to £29.5m, Just’s shares have found no support in an unforgiving financial environment and have tumbled from a peak of 305p to 115p. Growth Company Investor advises continued avoidance.
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| Market cap: | £337.99m |
| PE Forecast: | n/a |
| Share price: | 115p |
| AIM | £204.69m |
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