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Just Group profits lifted by jump in pension buyout deals

Repo buyout boom: Analysts forecast £200bn in buyout deals over the next three years

‘Never been stronger’: Just Group profits rise as rise in pension buy-out deals boosts specialty insurer

  • It has completed the risk reduction of 56 DB pension schemes worth £2.6billion in 2022
  • Higher interest rates have reduced pension plan deficits, making risk reduction more affordable for businesses
  • Underlying operating profit rose 19% to £249m

Shares of Just Group jumped after the specialty insurer boasted it had “never been stronger” as a rise in pension buyouts helped boost profits.

The Surrey-based company has completed de-risking 56 defined benefit pension schemes worth £2.6bn in 2022, nearly double the 29 it completed in 2021 worth of £1.9 billion.

Analysts expect the buyout and pension buyout markets to explode in the coming years as more companies turn to insurers like Just Group to transfer pension liabilities and manage their retirement plans.

Repo buyout boom: Analysts forecast £200bn in buyout deals over the next three years

Repo buyout boom: Analysts forecast £200bn in buyout deals over the next three years

Analysts expect £200bn of takeover deals over the next three years – a similar amount to the total amount for the past decade, according to the group.

The insurer said its short-term pipeline is over £6bn and it expects “a busy year with more medium and large deal opportunities coming our way.” the market”.

“We have never been stronger,” he told investors today as he posted a 19% rise in underlying operating profit to £249m for 2022.

“The sharp rise in interest rates in 2022 had a positive impact as it further reduces the DB [defined benefit] funding shortfalls in the scheme, thereby making risk reduction transactions more affordable,” the group explained.

“Many schemes are already fully funded or approaching it sooner than they had anticipated, and are therefore able to accelerate their risk reduction plans.”

Just Group completed its biggest deal to date worth £513million in February.

And the band added that it had already “signed or is exclusive to a number of other medium-sized deals”.

The company declared a final dividend of 1.23 pence per share, up from 1 pence, bringing the total dividend to 1.73 pence per share.

Shares of Just Group rose 10.5% to 90.70p in Tuesday afternoon trade. They have increased by 20% over the past year.

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