After just two months on the AIM market, Just Retirement have published quite dramatic new business figures. 6 months figures are up 215% and rose 16.4% quarter on quarter. Very popular with IFAs, major part of the business in is annuities. However, what impressed me was their very well conceived equity release product. Reversion products have not had a good name but this seems to be good both for the pensioner and for Just Retirement.

The chart shows the popularity of the share. The flotation raised 63m. Deutsche Bank have major stake. I have taken a very minor one!

Eric

Nice 15p rise today, some 5.5%, so the up-trend is continuing. Anyone interested? With sales of 309.6 in the first six months, I am wondering if anyone has a comparative yardstick. Standard Life new business sales are running at about 2.7 bill. in relation to a share valuation of 4.65 bill. at flotation but, of course, they have other sources of income, e.g. management of funds. Any views?

Eric

added twice yesterday. excellent cash generation, strong EPS growth 06-07 (>90%)..very popular among IFA's..aggressive, young company with a switched on mgt. team. very strong institutional following

EW, this is a company that does appear to be heading in the right direction.

saw this at float and thought it looked interesting. Will look into it in more detailed fashion soon.

Eric, very interesting.

Have you any fundies figures, eg, whats the prospective P/E and PEG please?.

2006-EPS of 7.2p rising to 57m=EPS of 14.6p for 2007 then forecasted to 81M(19.5P) for 2008..but expected to exceed these rather sensible figures. forward p/e to fall to around 12. not bad for earnings growing at just under 100% this year for y/e 07. real cash generator and so well respected within the IFA community.

TMI describes them as a 'powerful growth stock'..think the current pe is around 20 so peg = 0.2-0.25 est

excellent value..heavily over-subscribed at inception and will only develop a stronger following as we move forward. a real takeover target as well for one of the big pension guys..

f18

a decent move today: JR. Bid: 302p Offer: 305p Change: 18.5

Am thinking quite seriously about getting into this one next week.

Looks like some big purchases went through today, dealt mid-afternoon and reported (as sales) after the close:

30/03/07 16:40 302.0 157,157 O 302.0 305.0 Sell 325,493 1,093,358 17,786
30/03/07 16:39 302.0 152,073 O 302.0 305.0 Sell 325,493 936,201 17,786
30/03/07 16:35 302.0 152,073 UT 308.25 300.0 Sell 325,493 784,128 17,786
30/03/07 16:32 280.3 3,700 O 295.0 305.0 Sell 325,493 632,055 17,786

smashed through 280p like a knife through butter to reach an all time high. the company, from a standing start since 2004, as racked up sales from nowt to over 300m to 30.06.06. That is quite incredible achievement and reflects on the quality of the mgt. (ex-britannic)..they have already acheived 310M in the first 6 months of the current year to dec06. if they can achieve another 350-400m then it will prove a rocket booster for the price. run upto FY07..around july-aug07..if they can do 60-65M then that would beat expectations if we assume that deutsche err on the conservative.. that would be special..but someone is buying big IMO..def institutional...

Hi everyone - been lookimg at the interim accounts. Are all life insurance companies like this - embedded value and all that. Not sure I understand how they work yet, without more study. Looks a good strong growth company into a growing market of over 65 year olds.

No hurry, since no funds, but will keep an eye.

You raise a good point about embedded value, Stockdog (which basically means I shall have to read the interims again!). However, I think we can all be fairly certain that this one has a good amount of growth ahead of it. If I was looking to create a SIPP, this would be on my sipping-list.

Embedded Value
The embedded value of a life insurance business is an estimate of the value of both its net assets and the income stream expected from policies already in force.

E = PV + NAV

where E is the embedded value,
PV is the present value of future cash flows on policies already in force and
NAV is the company's NAV with investments valued at market value.

The future profits do not include the value of policies that the company will sell in the future, only those already sold. Policies that the company can expect to sell in the future are an important component of the difference between the embedded value and the actual value of the business to investors.

end

it is the last sentence about the margin between the EV and the Actual value of the business to PI's that gets my mouth watering. NOt an insurance expert but i do know that this company is writing new business hand over fist. all that future profit, which in itself is difficult to forecast, provides the real springboard for this stock.

F18, thanks very much for that clarification. Makes life a bit easier. Agree re mouth-watering, but am still making up my mind about whether to tuck in.

Static at present, but did go up about a penny earlier. 812k traded, which seems respectable.

Fortitude. Thanks for the definitions. I assume that the embedded value is based on actuarial calculations and therefore on the life expectancy of an annuity cluient. As I understand it, RT. are giving better annuity rates based on the life expectancy, e.g. of a smoker. The majors can't match the rates because it would impact on their other business. Bearing in mind the changes in life expectancy, presumably there can be changes down the line but perhaps we can leave that to the shareholders at the time. The strength clearly lies in the excellent relations established with IFA's. Note the comment in the results: "The Exchange Annuity portal, which allows IFAs to obtain real-time quotes for enhanced annuities on-line, went live in November 2006. In addition to increasing volumes of new sales, this also provides the Group with information which is being used to improve our marketing activities and also improve service and efficiency."

My own direct contact with JR. occurred when I was looking at Equity Release. Their offering is unique in the market based on reversion where they take a share in ownership of the property. The share is equivalent to the amount borrowed and increases instead of the client paying interest. Compared with other operators in that market, I concluded that their offering was ethical and, depending on the circumstances of the mortgagee, potentially attractive. FSAs were bending over backwards to promote the product: it soon became clear why - they were getting a very nice commission, thank you very much! Not sure how they account for this in their books, presumably an increase in book value will be taken into profits. This would mean a revaluation, which could take some time, or a closure; but they will be building up a super property portfolio.

Substantial sales today, presumably profit taking, but sp has still moved ahead. JR. must deserve a premium rating which it hardly has yet. Suggest you don't delay stepping in - st and sd!

Eric

Eric, you have a strong point. Spent today's milk money on ATCG, but will not lose track of this one if i can help it.

this stock is screaming to breakout, there's still a teeny selling bias at present but I can feel it in my water..not very scientific i know but i have the facts and then my instincts take over

f18

f18 - an aquarian by nature I see - mouth-watering, feeling it in your water.

Thanks for the expert explanation, although the effect of the mouth-watering was somewhat lost on me on account of the brain-numbing arithmetic. When the feeling returns I too may grow to savour the water. lol!

Eric, ethical maybe, but did you note the 12.2% return on their Equity Release business - nice work if you can get it.

Still watching.

sd likes charts for breakfast so I have updated those in the header. Triggered by F18's comment re break-out. Chart shows the exponential 50 day average which is a pretty uniform rise since launch; so break-out not really needed as still in break-out from launch. Suggest chart is looking for fair market value which could be considerably above current levels. Surely sd can't resist such a juicy prospect!

Thanks, sd, for pointing out the 12.2% margin on equity release business. This is being taken as profit up-front; not sure how the calculation is done. This is anotherr juicy bone as this business is likely to increase very strongly, especially through the tie up with Saga who have a captive market. Note also that the property part-owned is treated as asset backing for annuity sales which I believe implies that they need less liquid capital.

Eric

i see Saga, one of JR.'s many partners is making plans to float its company, should prove very bullish for this stock

Interesting, F18. Saga is a very strong brand and could well be worth a punt in itself. Certainly if Saga grows, that ought to be beneficial to JR.

Still, WDIK and PDYOR, etc.