By Carolyn Cohn
LONDON (Reuters) -A boom in demand for pension insurance boosted profits in Britain's Just Group (LON:JUSTJ), putting it on track to meet earnings targets ahead of schedule, and sending its share price soaring on Friday.
Just specialises in annuities, pensions which pay a fixed income for life, and has benefited from a surge in demand for insurance for corporate pension schemes known as bulk annuities.
High interest rates have boosted demand for corporate and individual annuities.
Just said it expected to achieve its target of doubling 2021 profits of 211 million pounds ($270.40 million) in 2024, two years ahead of its original plans, "given how much we've outdelivered and given how strong the prospects are this year and beyond that," Chief Executive David Richardson told Reuters.
Its shares were up 7.6% at 0932 GMT, making it the top gainer in the FTSE 250 index and on course for its best performance in a year.
Consultants expect the UK bulk annuity market to hit record levels at more than 50 billion pounds this year, with more entrants expected. Mutual life insurer Royal London said on Friday it was entering the market.
Just's underlying operating profit for 2023 rose 47% rise to 377 million pounds ($482.82 million), helped by high levels of new business and above a forecast 362 million pounds, according to a company-compiled consensus forecast.
Panmure analysts said in a note ahead of the market open that Just was vulnerable to a takeover if its share price failed to break out of the current trading range.
Industry observers say private equity firms, which are among those looking to enter the bulk annuity market, have shown interest in Just in the past.
"There's no doubt that private equity is interested in how they can enter the defined benefit derisking (bulk annuity) market," Richardson said. "We can't let that distract us."
Just said it would pay a dividend of 2.08 pence per share, up 20% and above a forecast 1.97 pence.
($1 = 0.7803 pounds)