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Just Retirement acquisition talks continue

Just Retirement has confirmed talks are ongoing about a possible offer for the group.

The firm announced in November that it had received expressions of interest and revealed today that an announcement will be made in “due course” about a possible acquisition.

The news came as Just Retirement announced its annuity sales for the six months to December 31, 2008 were down 13.1 per cent to £272.1m compared with the same period the previous year.

In its interim results to year-end, the firm reports that its market share shrunk to 4.6 per cent compared to 5.2 per cent in the six months to June 2008.

The firm reported an EEV operating profit of £32.2m, just down on 2007’s £36.9m. On an IFRS basis its underlying profit was £22.6m for the period.

Just Retirement’s solvency ratio sat at 170 per cent at December 31. The firm says it has a low risk investment portfolio comprising 50 per cent gilts, cash and low loan-to-value mortgages. The firm maintained its interim dividend at 0.3p.

CEO Mike Fuller says: “Our selective pricing policy has enabled us to protect annuity margins in the face of strong
competition, albeit at a cost of a small and temporary reduction in sales volumes. We have been able to continue to grow our equity release business at highly favourable margins.

“Despite the impact of the extraordinary economic conditions which have prevailed since the beginning of our financial year, we have been able to protect our capital position.

“Current trading is very encouraging. Since the beginning of 2009, annuity rates have been reducing across the market, as competitors have followed capital preservation and pricing strategies similar to our own. As a consequence, Just Retirement’s competitive position has returned to its traditional level and conversion ratios have improved markedly. The Group is currently experiencing historically unprecedented levels of application activity for annuities which will positively impact fourth quarter
sales.”

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