178 | Just Group PLC | Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
18. INVESTMENT PROPERTY
Year ended 31 December 2023 £m
Year ended 31 December 2022 £m
40
At 1 January
70
(8)
Net loss from fair value adjustment
(30)
At 31 December
32
40
Investment properties are leased to commercial tenants. Investment properties are valued using discounted cash flow analysis using assumptions based on the repayment of the underlying loan. The valuation model discounts the expected future cash flows using a discount rate which includes a credit spread allowance associated with that asset. The redemption and default assumptions are derived from the assumptions for the Group’s bond portfolio. Minimum lease payments receivable on leases of investment properties are as follows (undiscounted cash flows): 2023 £m 2022 £m Within 1 year 1 1 Between 1 and 2 years 1 1 Between 2 and 3 years 1 1 Between 3 and 4 years 1 1 Between 4 and 5 years 1 1 Later than 5 years 127 128 Total 132 133 19. FINANCIAL INVESTMENTS The Group’s financial investments that are measured at fair value through the profit or loss are either managed within a fair value business model, or mandatorily measured at fair value. The Group’s financial investments that are measured at amortised cost are held within a business model where the intention of holding the instruments is to collect solely payments of principal and interest. During the course of 2023, the Group purchased – in several transactions – nominal Gilts with a total value of ~£2.5bn with maturities between 10 and 30 years and the average weighted yield of ~4.2% (at the time of purchase). The purchase of these Gilts was financed through repurchase operations (“repos”). At the inception, repo maturities were from 12 to 21 months. The purpose of this purchase was to reduce the duration gap between the Solvency II and the IFRS exposure (Gilts were booked under the amortised cost basis under the IFRS). The table below summarises the classification of the Group’s financial assets and liabilities.
Fair value
Amortised cost £m
Mandatory £m
Designated £m
Total £m 546
31 December 2023
546
Cash available on demand
–
–
2,549
8,058
18,816
29,423
Financial investments
60
60
Other receivables
–
–
Total financial assets Underlying assets
3,155
8,058
18,816
30,029
35
35
– Investment contracts
–
–
3,155 3,155
8,058 8,058
18,781 18,816
29,994 30,029
– Other
Total financial assets
35
35
Investment contract liabilities
–
– –
686
686
Loans and borrowings Other financial liabilities
– – –
3,101
2,487
5,588
20
20
Other payables
–
Total financial liabilities
3,807
2,487
35
6,329
Powered by FlippingBook