Just Group plc | Annual Report and Accounts 2024
36
business review continued
RECONCILIATION FROM OPERATING PROFIT TO IFRS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME The table below presents the reconciliation from the Group’s APM income statement view to the IFRS statement of comprehensive income for the Group.
Statutory accounts format
Other income, expenses and associates £m
Insurance service result £m
Net investment result £m
Other finance costs £m
Quote date difference 2 £m
CSM deferral 3 £m
Adjusted total 4 £m
Reported 1 £m
PBT £m
31 December 2024
New business profit CSM amortisation
460
2
(462)
– – –
(71)
71
Net underlying CSM increase
389
2 (391)
In-force operating profit: Investment return earned on surplus assets Release of allowances for credit default
133
133
133
133
29 71
29 71
29
29 71
CSM amortisation
154
(83)
Release of risk adjustment for non-financial risk/other
3
3
7
(4)
3
Other Group companies’ operating results
(17) (35) (69)
(17) (35) (69)
(17) (35)
(17) (35) (69)
Development costs and other
Finance costs
(69)
Underlying operating profit
504
2 (391)
115
Operating experience and assumption changes Adjusted operating profit before tax Investment and economic movements
(37)
22
(15)
(12)
(3)
(15)
467
2 (369)
100
18
(2)
16
226
(192)
(18) (23)
16
Strategic expenditure
(23)
(23)
(23)
Adjustment for transactions reported directly in equity in IFRS
20
20
20
20
Adjusted profit before tax Deferral of profit in CSM
482
(369)
113
(369)
369
–
Profit before tax
113
113
149 298
(241)
(93)
113
1 The rows and first numeric column of this table present the Reported alternative profit measure (APM) format as presented in the Underlying operating profit section and Reconciliation of Underlying operating profit to IFRS profit before tax section of this review. 2 The Quote date difference adjustment is made because Just bases its assessment of new business profitability for management purposes on the economic parameters prevailing at the quote date of the business instead of completion dates as required by IFRS 17 (see new business profit reconciliation in the additional information section towards the end of this report). 3 The CSM column presents how elements of the APM basis result are deferred in the CSM reserve held on the IFRS balance sheet consistent with the table in the Deferral of profit in CSM section of this review. Under IFRS 17, new business profits and the impact of changes to estimates of future cash flows are deferred in the CSM reserve for release over the life of contracts. 4 The Adjusted total column is then transposed in the columns on the right-hand side into the IFRS statutory accounts Condensed consolidated statement of comprehensive income format. Figures are presented on a net of reinsurance basis. The IFRS profit before tax of £113m (2023: £172m) is reported after deferral of £460m new business profit in CSM (2023: £355m) and assumption changes of £22m increase (2023: £67m reduction) in the balance sheet. The CSM amortisation recognised in the IFRS result of £71m (2023: £62m) reflects the recognition of services provided in the year net of accretion. This is expected to increase as our stock of CSM grows with new business. The pre-tax CSM closing balance stands at £2,328m (2023: £1,959m), as per the table on page 39. Investment and economic movements recognised within IFRS finance costs of £192m (2023: £70m) include a full year’s worth of interest on repurchase agreements of £146m (2023: £70m) that fund the Group’s increased amortised cost portfolio of sovereign gilts that now stands at £4.0bn (2023: £2.5bn). Interest earned on the amortised cost gilts of £135m (2023: £54m) is reported within net investment result. Net interest paid on collateral of £1m is reported gross within net investment result for interest income of £34m and in finance costs for interest paid of £35m. The remaining impact on Net investment result, and IFRS PBT, from investment and economic movements of £57m (2023: 145m) relates to changes in long-term interest rates, and where the impact on the investment portfolio backing insurance contracts does not perfectly match the impact on reserves.
Powered by FlippingBook