STRATEGIC REPORT
GOVERNANCE
financial statements
21 SHARE CAPITAL The allotted, issued and fully paid ordinary share capital of Just Group plc is detailed below:
Merger reserve £m 597.1
Share premium £m
Share capital £m 103.9
Total £m
Number of £0.10 ordinary shares 1,038,537,044
94.6
795.6
At 1 January 2022
165,888
–
0.1
–
0.1
In respect of employee share schemes
At 31 December 2022
1,038,702,932 1,038,128,556
103.9 103.8
94.7 94.5
597.1 597.1
795.7 795.4
At 1 January 2021
In respect of employee share schemes
408,488
0.1
0.1
–
0.2
At 31 December 2021
1,038,537,044
103.9
94.6
597.1
795.6
The company does not have a limited amount of authorised share capital.
The merger reserve is the result of a placing of 94,012,782 ordinary shares in 2019 and the acquisition of 100% of the equity of Partnership Assurance Group plc in 2016. The placing was achieved by the Company acquiring 100% of the equity of a limited company for consideration of the new ordinary shares issued. Accordingly, merger relief under Section 612 of the Companies Act 2006 applies, and share premium has not been recognised in respect of this issue of shares. The merger reserve recognised represents the premium over the nominal value of the shares issued. Consideration for the acquisition of the equity shares of Partnership Assurance Group plc consisted of a new issue of shares in the Company. Accordingly, merger relief under Section 612 of the Companies Act 2006 applies, and share premium has not been recognised in respect of this issue of shares. The merger reserve recognised represents the difference between the nominal value of the shares issued and the net assets of Partnership Assurance Group plc acquired.
22 TIER 1 NOTES
Year ended 31 December 2022 £m
Year ended 31 December 2021 £m
322.4
At 1 January
294.0 325.0
– – –
Issued in the year
Issue costs, net of tax Redeemed in the year
(2.6)
(294.0)
At 31 December
322.4
322.4
On 16 September 2021 the Group issued £325m 5.0% perpetual restricted Tier 1 contingent convertible notes, incurring issue costs of £2.6m, net of tax, and concurrently redeemed its £300m 9.375% perpetual restricted Tier 1 contingent convertible notes issued in 2019 (£294.0m net of issue costs, net of tax) at a cost of £341.0m, net of tax. The loss on redemption of the 2019 notes of £47.0m (net of tax) was recognised directly in equity. During the year, interest of £16.9m was paid to holders of the 2021 notes (2021: interest of £25.2m to holders of the 2019 notes). The 2021 notes bear interest on the principal amount up to 30 September 2031 (the first reset date) at the rate of 5.0% per annum, and thereafter at a fixed rate of interest reset on the first call date and on each fifth anniversary thereafter. Interest is payable on the notes semi-annually in arrears on 30 March and 30 September each year which commenced on 30 March 2022. The Group has the option to cancel the coupon payment at its discretion and cancellation of the coupon payment becomes mandatory upon non-compliance with the solvency capital requirement or minimum capital requirement or where the Group has insufficient distributable items. Cancelled coupon payments do not accumulate or become payable at a later date and do not constitute a default. In the event of non-compliance with specific solvency requirements, the conversion of the Tier 1 notes into ordinary shares could be triggered. The Tier 1 notes are treated as a separate category within equity and the coupon payments are recognised outside of the profit after tax result and directly in shareholders’ equity.
23 INSURANCE CONTRACTS AND RELATED REINSURANCE Insurance liabilities
2022 £m
2021 £m
18,332.9 (1,981.1) 16,351.8
Gross insurance liabilities Net reinsurance assets Net insurance liabilities
21,812.9 (2,533.5) 19,279.4
Reinsurance in the table above includes reinsurance assets net of reinsurance liability positions that can arise on longevity swaps which are presented as liabilities in the Consolidated statement of financial position.
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