PensionsSep 18 2014

Just Retirement sees 19% jump in pre-tax profit

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

Just Retirement has seen its profit before tax jump almost 20 per cent in the year to the end of June, despite almost a 50 per cent fall in individual annuity sales.

Its full year results for the 12 months to the end of June revealed that operating profit fall by three per cent to £97m. However, its profit before tax for the year amounted to £92.8m, a 19 per cent increase on the previous year.

Along with other open market annuity providers, Just Retirement experienced a fall in sales volumes of slightly above 50 per cent compared with the period prior to the Budget.

It said that whilst the decrease was lower than the market estimates, its final trading quarter experienced a 13 per cent decrease in annual individual annuity sales from £1.26m for the year ended 30 June 2013 to £1.106m at 30 June 2014.

Total new business sales £1.75m were up 6 per cent, with increased defined benefit pension scheme de-risking and lifetime mortgage volumes offsetting weak individual annuity sales.

The group reported that prompt action on costs following the Budget meant it could implement £14m of annual targeted savings, while £5m of additional development spending ahead of the new pensions regime has been committed to.

Just Retirement’s results said the focus for the next financial year will be to adapt its market offering to respond to the final shape of the new pension legislation, the form of the government’s ‘guidance guarantee’ and how customers, competitors and intermediaries might react.

It said: “These changes may place our strategy and business plans at risk should our assumptions and developments not flex and adjust to market dynamics.

“The group believes it is well placed to adjust and adapt to the changes in the retirement income market, supported by the brand promise, our innovation credentials, financial strength and commitment to operating responsibly.”

Rodney Cook, group chief executive, called it a year of extraordinary highs and lows.

“The extraordinary challenge of the chancellor’s reforms demands an extraordinary response, and I look forward confidently to the launch of our new customer propositions next year.

“Our development programme is on track, and I believe that we have used our outstanding distribution relationships to ensure that we will be in the vanguard of the reformed secure retirement income market.”

Mr Cook added that: “Our job now is to ensure that we capitalise on our intellectual property by offering products which are compelling.”