Just out

Just Group published its 2018 results this morning. It’s all over the financial press but the headlines are

  • Dividend cancelled for 2018.
  • Dividends expected to recommence in 2019 financial year but at a ‘rebased level’, approximately one third of the 3.72p total dividend paid during the 2017 financial year, subject to the usual constraints.
  • The firm plan to raise £300m in debt and around £80m in an equity placing. The company will issue about 94m new shares, equivalent to 10 per cent of the total already in issue.
  • They report a loss of £86m for the year because of “changes to property assumptions in light of the economic and financial uncertainty caused by Brexit.” The ‘change to property assumptions’ appears to be the change referred to on p.52, where the rate of assumed future house price growth changes from 4.25% in 2017 to 3.8%.
  • Deferment rate assumption drops from 0.5% to 0.3% (p.9), somewhat against the direction of travel set by PRA.  The rate will have to increase to 1% by year-end 2021 (p.26)

The shares fell by nearly 15% this morning, to 84p.

Interesting that losses could be caused by house prices failing to rise by as much as forecast. As we commented yesterday, that is a bit bonkers. How much do they lose if house prices actually start falling?