Just Group profits fall as it prepares for combination with BWS

(Sharecast News) - Just Group reported a sharp fall in underlying profit for 2025 on Friday, as it deliberately reduced volumes in an increasingly competitive defined benefit de-risking market, while progressing its proposed acquisition by Brookfield Wealth Solutions. The FTSE 250 retirement income specialist posted underlying operating profit of £305m for the year ended 31 December, down 39% from £504m in 2024, driven by lower new business margins on reduced sales, partly offset by higher recurring in-force profit.

Retirement income sales fell 18% to £4.3bn from £5.3bn.

Defined benefit (DB) new business sales declined 28% to £3.1bn in a market that contracted to around £40bn in 2025 from £48bn a year earlier, according to LCP.

While the group completed an industry record 130 DB transactions during the year, it wrote fewer medium-sized deals, completing five compared with nine in 2024.

New business margins fell to 5.7% from 8.7%, reflecting increased competition, particularly in the second half, tighter spreads, lower volumes and changes in business mix.

By contrast, Guaranteed Income for Life (GIfL) new business sales rose 23% to £1.3bn, as improvements to the adviser proposition supported growth.

The UK GIfL market increased to £7.4bn, with the group highlighting long-term structural drivers underpinning demand for guaranteed income in retirement.

"During 2025, our proactive approach to managing our capital resources, pricing discipline and risk selection meant that we deliberately reduced volume in what was an increasingly competitive Defined Benefit de-risking market," said group chief executive David Richardson.

He added that "industry analysts expect a rebound in the DB market in 2026, driven by renewed demand from sponsors and trustees, and our own pipeline supports this outlook."

Just said the DB market was forecast to reach £40bn to £55bn in 2026 following publication of the Pension Schemes Bill in June 2025, with a strong pipeline of £1bn-plus transactions.

The Solvency II capital coverage ratio fell to 179% at year-end from a pro forma 204% at 31 December 2024, reflecting new business growth and non-operating items, including a tactical decision to accumulate gilts that the group expects to reverse as holdings were recycled into higher-yielding assets.

New business strain rose to 2.7% of premium from 1.3%, slightly above its target of below 2.5%, as competition limited its ability to reprice in a tighter credit spread environment.

Cash generation before new business capital strain increased 9% to £130m.

On an IFRS basis, tangible net assets rose to £2.7bn from £2.6bn, representing 37% growth over three years.

Adjusted profit before tax fell to £120m from £482m, reflecting lower underlying profit, strategic costs, investment and economic losses.

Of the £120m adjusted profit before tax, £238m was deferred to the contractual service margin, resulting in an IFRS loss before tax of £118m compared with a £113m profit in 2024.

Richardson said the proposed combination with Brookfield Wealth Solutions "will be a great outcome for customers, shareholders and our colleagues" and "reflects the strength of the Just platform and the long-term value of the strategy we have developed."

"As previously communicated, we expect the acquisition of Just by BWS to complete during the first half of 2026."

At 1003 GMT, shares in Just Group were up 0.06% at 216.62p.

Reporting by Josh White for Sharecast.com.