Governance Financial Statements
Strategic Report
09
Our underlying operating profit has grown by 34% to £504m, driven by very strong growth in shareholder funded sales, up 36% to £5.3bn. Our DB and retail businesses contributed to this excellent performance, and both are operating in markets that are benefitting from long- term structural growth drivers. We are committed to compounding the growth in value of the business. During 2024, we have delivered 36.3p of underlying earnings per share and increased the Group’s tangible net asset value by 30p to 254p per share. DEFINED BENEFIT DE-RISKING BUSINESS (SHAREHOLDER FUNDED) SALES UP 43%, TOTAL DB SALES UP 57% Our DB business generated another record year of transactions, with total sales up 57% to £5.4bn. This total includes our largest transaction to date, a £1.8bn full Buy-in with the Trustee of the G4S Pension Scheme, covering the benefits of c.22,500 pensioner and deferred members. This transaction, our first above £1bn, demonstrates that we have all the capabilities in place to deliver de-risking solutions across the DB market. During 2024, we completed 129 transactions, a significant increase on the 80 we completed in 2023 and more than double the 56 completed in 2022. This number is a record year for any company in the history of the DB market as we completed over one third of the total market transactions. We have used technology to meet growing market demand and use of our bulk quotation and price monitoring service, Beacon, continues to increase. It is now being used by all major employee benefit consultants and Beacon has the capacity to provide services to every DB pension scheme in the UK. Pension scheme de-risking is helping to support growth in the UK economy by enabling UK corporates to focus on growing their businesses and by investing the assets in productive finance. Read more about our DB business on P18–20 GUARANTEED INCOME FOR LIFE SALES UP 16% After a very strong return to growth in 2023, I am delighted that our retail business has shown further excellent progress in 2024, with GIfL sales up 16% to £1.0bn. Market demand has been strong as the appetite of advisers to lock-in security for their clients continues to grow. Strong consumer demand is also evidenced by the activity levels in our GIfL broking business, the largest in the UK. The number of advisers sourcing quotes from Just has increased rapidly over the last two years and continues to provide increased opportunities to utilise our medical underwriting intellectual property to select the most attractive risks. SCALABILITY OF OUR INVESTMENTS CAPABILITY Our successful illiquid origination strategy enabled us to source £2.4bn of illiquid investments during 2024, a 40% increase year on year, at attractive spreads above equivalent public assets. We are continuing to broaden our capabilities, with £1.0bn of this total sourced internally by our expanded Investments team, in addition to £0.3bn of funded lifetime mortgages via our retail business. Our illiquid investments in 2024 included social housing, We help people achieve a better later life, that’s our purpose and why we exist. We fulfil that purpose by delivering market-leading products and award-winning services to our customers. In 2024, more than 90,000 people became new customers of one of our businesses. We are now in a privileged position to be helping record numbers of customers, and we are investing to explore how we can help more people, with unmet needs, across the wider retirement markets. infrastructure and private placements. OUR PURPOSE AND OUR CUSTOMERS
SUSTAINABILITY We are committed to a sustainable strategy that protects our communities and the planet we live on. The most material impact we can make to reduce carbon emissions is through the decisions we take with our £27bn investments portfolio, which accounts for over 99% of our carbon footprint. Compared to our 2019 baseline, we have now reduced these emissions by 36%, which is excellent progress on our journey to achieving our net zero target. OUR PEOPLE We are harnessing the power of our highly talented, ambitious and engaged colleagues to deliver strong business growth and fulfil our purpose. Our focus is on ensuring we have the right capabilities for today and the future, delivering an exceptional colleague experience and enhancing the skills of our people managers. I am very pleased we’ve made excellent progress in two key focus areas. Our colleague engagement score has continued to increase and is now 8.3 (2023: 7.9). We have exceeded our 2026 target, two years early, to increase the number of females in senior positions to 40%. I would like to thank all my colleagues for their significant efforts in providing outstanding support to our customers – directly and indirectly – and delivering these excellent results. It’s always a team effort and my colleagues make Just a brilliant place to work. FINANCIAL PERFORMANCE, UNDERLYING OPERATING PROFITS UP 34% In 2024, underlying operating profit is up 34% to £504m, driven by strong new business performance further augmented by robust growth in recurring in-force profit, which combine to deliver a 15.3% return on equity. We incurred operating experience variances, the cost of strengthening the maintenance expense assumption, together with strategic costs as we invest to develop new propositions. These were partially offset by investment and economic profits and adjustments for items accounted for in equity, resulting in an adjusted profit before tax of £481m for 2024 (2023: £520m). After allowing for deferral of profit into the CSM balance sheet reserve, the IFRS profit before tax is £113m (2023: £172m). Our disciplined approach to risk selection means we can fund our growth ambitions from our own resources, maintain a strong buffer of capital and reward shareholders with a growing dividend. We will pay a final dividend of 1.8 pence per share, giving a total of 2.5 pence for the year, representing 20% year-on-year growth. IN CONCLUSION Over the last three years underlying operating profit has more than doubled as we successfully executed our strategy. We are confident in our ability to grow at attractive rates from this elevated level. We have multiple opportunities available and structural growth in our chosen markets. Our DB and retail businesses are both contributing to our excellent performance, reflecting our continuing investment in technology and talent. We have a growth mindset, and we’ve developed a winning formula – one which will ensure we fulfil our purpose, to help people achieve a better later life. This formula is delivering sustained growth in the value of the business. With a clear purpose and vision, we’re shaping a future that’s not just bigger and better—but brighter.
DAVID RICHARDSON Group Chief Executive Officer
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