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Just plans further cost cuts

Just plans further cost cuts

Just Group is planning to make further cost cuts to its business as part of a plan to achieve capital self-sufficiency by 2022.

At its annual general meeting today (June 13), Just Group will announce that although it has already made its UK income drawdown and US care businesses more efficient, it will continue to make cuts to these areas.

The company is also adapting its business model in light of regulatory changes to "deliver a business which is performing well commercially and operationally".

But it refused to give further details on its plans.

David Richardson, interim group chief executive officer, said: "We have a strong position in attractive markets and will use these positive market dynamics together with our market-leading expertise to reduce new business capital strain. 

"At the same time as developing our strategic and business options, we are sharply focused on using our existing capital base wisely and are committed to achieving capital self-sufficiency by 2022."

All of Just Group’s directors have increased, or are currently in the process of increasing, their shareholdings, which the company said demonstrates their confidence in Just Group’s ability to execute its plan.

Yesterday (June 12), Just Group announced the appointment of chief financial officer Andy Parsons, who will join the company from LV in January.

The company is still in the process of appointing a CEO after Rodney Cook stepped down from the role to plan for his retirement on April 30.

Chris Gibson Smith, chairman of Just Group, said: "My focus is on maximising shareholder value, with no options excluded. 

"This can now be done from a position of increased regulatory clarity, greater capital strength, a valuable new business franchise, all under the leadership of a strengthened management team."

Last month (May 16), Just Group revealed that defined benefit sales were £26m for the first quarter of 2019, down 90 per cent from the £249m in March 2018.

The company stated the drop was due to a temporary reduction in DB activity which already showed signs of rebounding.

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.

amy.austin@ft.com 

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