Just Group’s defined benefit sales are down 90 per cent year-on-year, according to its first quarter results.
According to the company’s business update for the three months ended March 31, 2019, DB sales were £26m for the first quarter of 2019, down from £249m in March 2018.
The company stated the drop was due to a temporary reduction in DB activity which already showed signs of rebounding.
So far in Q2 DB transactions are at £300m and Just is expecting sales in this area to return to the level seen in the second half of 2018, when they reached £469m.
For the quarter ended September 2018 Just Group reported DB sales of £363m followed by £233m in Q4 to December 2018.
David Richardson, interim group chief executive of Just, said: "Although it was a quiet start to the year, DB transaction volumes in Q2 have been good. Given the strength of our pipeline, we remain comfortable that DB sales for the year will be similar to the annualised rate seen in H218."
Just Group’s first quarter retirement income sales dropped 59 per cent to £184m, from £454m in Q1 2018, due to lower sales of bulk annuities.
Total new business sales of £276m in Q1 2019 have halved on the previous quarter, however sales from drawdown have only decreased by £1m to £12m.
In March, Just Group cancelled its dividend and announced capital raising plans to strengthen its balance sheet following the introduction of the Prudential Regulatory Authority’s capital rules on the treatment of equity release mortgages, which come into force December 31, 2019
Due to this, shares in the company fell.
Today Just Group stated it will shut its loss-making US operation as it looks to break even.
Mr Richardson said: "Our capital position has been much improved by the £375m raised in March, and we are absolutely focused on achieving capital neutrality by 2022.
"We have a plan in place to ensure we achieve this target, which includes a number of actions we will be taking over the course of this year.
"These include a renewed focus on cost control, the closure of loss making operations such as the US, reductions in new business lifetime mortgage backing ratios and a shift towards more capital efficient assets."
Just Group chief executive Rodney Cook is to step down from the post to plan for his retirement in June, the provider announced on April 30.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know