JRP Group expects margin to exceed 6% due to pricing and risk selection

Maryam Cockar Sharecast | 02 Feb, 2017 08:57 | | |

money-256298_640
  • 138.90
  • 0.65%0.90
  • Max: 139.40
  • Min: 136.90
  • Volume: 748,482
  • MM 200 : n/a
17:20 28/03/17
  • 18,953.34
  • 0.28%53.33
  • Max: 18,960.74
  • Min: 18,848.69
  • Volume: 0
  • MM 200 : n/a
17:18 28/03/17
  • 8,297.60
  • 1.01%82.84
  • Max: 8,313.51
  • Min: 8,197.75
  • Volume: 0
  • MM 200 : n/a
17:18 28/03/17
  • 4,055.34
  • 0.62%24.86
  • Max: 4,058.34
  • Min: 4,025.67
  • Volume: 0
  • MM 200 : n/a
17:18 28/03/17
  • 3,997.19
  • 0.62%24.46
  • Max: 3,999.83
  • Min: 3,968.33
  • Volume: 0
  • MM 200 : n/a
17:18 28/03/17

Financial services firm JRP Group, which was formed by the merger of Just Retirement and Partnership in April last year, reported that its margin for 2016 will exceed 6%.

The FTSE 250 company said that its business margin for 2016 should grow more than expected and exceed 6%, up from 3.6% on a pro-forma basis from the previous year, due to pricing and risk selection, as well as on mortgage yields.

Pro forma sales, as if the merger had taken place on at the ginning of 2015, were up 2% for Guaranteed Income for Life, following post-pension freedoms and choice. The company said that its addressable market is expected to grow in 2017, boosted by growth in the open market.

While, pro forma defined benefit de-risking revenue fell 24%, following the high sales in the second half of 2015 ahead of the introduction of Solvency II, a European Union law that codifies and harmonises insurance regulation. However, pro forma defined benefit sales were up 37% compared to pro forma 2014 sales.

Lifetime Mortgage advances, on a pro forma basis, were down 6% due to lower defined benefit sales, but the company said that at 32%, Guaranteed Income for Life and defined benefit sales were ahead of its 25% target.

The run rate cost synergies due to the merger came in at £30m per annum from the £45m targeted by the end 2018, which was ahead of schedule and will contribute to profit margins for the 2017 financial year..

Chief executive Rodney Cook said: "The transformation of our business since the merger is more than delivering the expected benefits. We have adapted the business rapidly in 2016 to the new regulatory environment. This will continue into 2017, with our primary focus on growing earnings by using our combined IP for better risk selection and by driving down costs.

“The Guaranteed Income for Life market is continuing to stabilise, and we remain confident that, following further regulatory intervention by the Financial Conduct Authority, more Guaranteed Income for Life customers will shop around, rather than just taking their pension saving company's in-house offering. This means our addressable market for Guaranteed Income for Life should increase, and several pension companies are creating Guaranteed Income for Life panels on which we expect to feature.”

He said the company took advantage of favourable economic conditions in the first nine months of 2016 for Lifetime Mortgages and then intentionally managed back sales in the final quarter. The Lifetime Mortgage market grew by more than 30% in during the year, and remains attractive with favourable underlying dynamics.

Shares in JRP Group were up 2.59% to 150.40p at 0826 GMT.

More news

28 Mar US close: Markets finish higher as traders look to tax reform

US equity markets finished in the green on Tuesday as investors dealt with the uncertain legislative future under the Trump administration and eyed more speeches by Fed officials.

28 Mar Bonds: Treasuries slip as US consumer confidence at highest since 2000

These were the movements in some of the most widely-followed 10-year sovereign bond yields:

28 Mar FX round-up: Sterling sold lower ahead of Article 50 as S.Africa's rand dives

Sterling had a torrid time on key crosses Tuesday as a pall of pre-Brexit nerves again weighed on sentiment, although the British unit's downcast performance was well and truly outpaced by hefty falls in South Africa's already besieged rand.

28 Mar Sector movers: China news boosts commodity stocks

Commodity-related stocks paced gains in the market on Tuesday amid favourable news for the sector out of China and from key OPEC producer Iran.

28 Mar Europe close: Stocks ride gains in oil higher

European stocks rode gains in oil prices higher on Tuesday, recovering from losses in the previous session amid little major local data as concerns subsided about US president Donald Trump's ability to push through his fiscal policies.

28 Mar London close: Nothing much ado amid investor caution on Brexit-eve day

Stocks in London drifted through Brexit-eve day to a positive bias as investors displayed caution ahead of Prime Minister Theresa triggering Article 50 of the Lisbon Treaty on Wednesday.

28 Mar Director dealings: XL Media chief shuffles his stake

XL Media chief executive Ory Weihs rearranged his shareholding in the AIM-listed, dividend paying digital performance marketing company, by selling £4.9m of indirectly held shares and simultaneously buying £1.1m worth of stock directly.

28 Mar Carnival speeds to strong start fuelled by demand for Caribbean cruises

Cruise ship operator Carnival reported better than expected revenue yields for the first quarter and said bookings for the rest of 2017 were well ahead of the prior year with prices rising faster than costs.

28 Mar Wednesday preview: Triggering Article 50 is only the beginning

On Wednesday, Theresa May will fire the trigger on the two-year negotiating process to separate Britain from the European Union by triggering of Article 50 of the Lisbon treaty - though the bloc's response and hence the major market response is not likely until Friday.

28 Mar Scottish Parliament expected to back indyref2

The Scottish Parliament is expected to back the Scottish Nationalist Party’s motion to hold a second independence referendum within two years.