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Just Retirement H1 profit rises sharply; to pay dividend in 2007 UPDATE
AFX
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(Adds detail, CEO comments, analyst reaction)
LONDON (AFX) - Shares in AIM-listed specialist life assurer Just Retirement Holdings PLC surged after the group reported a sharply higher maiden interim profit, and pledged to pay its first dividend to shareholders later this year.
Just Retirement, which offers annuities and housing equity release schemes to people approaching retirement, said its pretax profit for the six months to Dec 31 2006 came in at 18.7 mln stg under IFRS accounting rules, up from 1.5 mln stg in the same period a year earlier.
The improvement was driven by a strong demand for annuities, with premiums over the six months surging to 271.1 mln stg from 94.5 mln stg last time.
Just Retirement specialises in 'enhanced' annuities, which offer higher monthly payments to smokers and other customers who are statistically likely to die before they reach full average life expectancy.
By 11.10 am, Just Retirement shares were up almost 6 pct at 257 pence, valuing the group at about 757 mln stg.
'We remain buyers of Just Retirement for the near-and-long-term growth potential in its two existing markets, and the scope it has to add value with new products,' analysts at Deutsche Bank, Just Retirement's house broker, wrote in a note.
In an interview with AFX News, Just Retirement chief executive Mike Fuller said the group expects to expand its 54 pct share of the UK enhanced annuity market, which is itself growing at 8-9 pct a year.
'We will be growing our share of a strongly growing market,' he said. Fuller added that he did not expect competition from UK insurance giants Aviva PLC and Prudential PLC, who dominate the mainstream annuities market, as any move into enhanced annuities would force them to offer better terms to many of their existing customers.
'They're not going to cannibalise their huge market shares by offering better conditions for one set of people,' Fuller said.
Just Retirement, which was spun out of life insurer Britannic in August 2004 and listed on the London Stock Exchange's junior AIM market last December, also said it plans to make its first payout to shareholders in the autumn.
Fuller said shareholders will be paid a dividend for the year to June 30 2007 in October or November, although the group has yet to decide on the size of the payment.
myles.neligan@thomson.com
mn/tc/mn/slm
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