Just Group PLC (LSE:JUST) shares jumped 9% on Tuesday morning as it announced a 15% hike in the dividend after profits were stronger than expected last year and "strong momentum" was reported in the first quarter of 2023, including its largest pension transaction to date.
The retirement products group reported underlying operating profit of £249mln for calendar 2022, up 19% compared to the previous year and 2% ahead of the average analyst estimate of £246mln.
Net asset valuer fell 12% as a result of a decline in the bond portfolio following the rise in interest rates and widening credit spreads, but the solvency ratio improved to 199% from 164% as capital requirements declined, bringing forward future cash profits/capital.
The surplus stood at £1.37bn, versus the £1.17bn reported a year ago.
A better-than-expected full-year dividend of 1.73p per share was declared and the FTSE 250-listed company said the "very favourable" defined benefit (DB) market backdrop and a £6bn pipeline means it expects "substantial" DB sales growth in 2023, also reiterating confidence in achieving 15% annual growth in underlying operating profits on average over the medium term.
Just Group chief executive David Richardson said the firm had a "record start" to the new year with strong defined benefit (DB) volumes and a return to growth in Guaranteed Income for Life sales, seeing a "significant long-term opportunity in both of the DB and retail markets, driven by near and long term structural growth drivers".