Just sees profits rise after merger savings

Just sees profits rise after merger savings

Annuity and pension provider Just saw its profits increase by 5 per cent as it delivered higher than expected savings from its recent merger.

In its first full-year results since the company was formed - from the merger between Just Retirement and Partnership - Just posted a net profit of £155m for 2017.

The company was able to deliver savings of £52m from the merger, which was in excess of both the original target of £40m and the revised target of £45m.

Rodney Cook, the company's chief executive, said these savings "contributed materially" to Just's profitability.

He said: "With the building blocks of our strategy firmly in place we can face the future with renewed confidence. Our medically underwritten pricing model works particularly effectively when we have more risks to choose from, and the outlook in our three key markets is supportive.

"Our focus is shifting back from integration to innovation, and we are investing in our business to grow in new areas and to diversify our sources of revenue. The results in 2017 reinforce our belief that we have a sustainable business model in growing markets which will deliver well into the future."

Across the company's three markets of annuities, drawdown and lifetime mortgages, the first of these accounted for the greatest amount of sales at £1.88bn, a 4 per cent increase on the previous year.

Drawdown sales increased by 103 per cent to £51m while there was £510m of lifetime mortgage loans advanced, a fall of 9 per cent.

Within Just's retirement income sales, defined benefit de-risking solutions accounted for the greatest amount in sales, increasing 6 per cent to £997m, while annuities increased by 5 per cent to £820m.

Care plan sales were down by 26 per cent to £71.6m because of "political uncertainty" in relation to the provision of social care around the time of last year's general election.

During last year's general election campaign, prime minister Theresa May had originally pledged to raise the limit for assets people need to receive council funding towards their care to £100,000 from £23,250 but said the value of someone's home would be included in this.

After a backlash the policy was dubbed the "dementia tax" and Mrs May U-turned to promise there would be an "absolute limit" on the amount people paid for social care.

Just said its adjusted operating profit, which excluded "short-term economic and investment changes", increased by 35 per cent to £220.6m.