Just Group leads FTSE fallers after revealing £400m fundraising plans

 
James Warrington
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Pensioners in Retirement
According to new regulation, companies such as Just Group must set aside more capital (Source: Getty)

Retirement services firm Just Group has seen shares fall 11 per cent today after revealing plans to raise almost £400m to comply with new capital requirement rules as it unveiled a heavy loss before tax in 2018.


The firm said it plans a debt offering of £300m and will raise a further £80m from an equity placing equating to almost 10 per cent of its existing share capital.

Read more: Just Group soars on favourable new Bank capital rules

The move comes after new regulation dictated companies such as Just Group must set aside more capital to counteract the risk of equity release mortgages.

Just, which provides life insurance and pensions, also revealed it had fallen to a pre-tax loss of £86m, which it said was driven by changes to property assumptions amid uncertainty relating to Brexit. Last year the firm posted pre-tax profits of £181m.


Chief executive Rodney Cook said: “2018 has been a year of contrasts. We have achieved significant new business profit growth, strong margins and higher sales despite significant uncertainty during the Prudential Regulation Authority’s consultation into equity release mortgages.”

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Just said the new money will give the firm a stronger capital base and will allow it to focus on growing profits.

But shares in Just Group tumbled more than 16 per cent this morning following the announcement, before trimming losses to end the day almost 12 per cent down at 86.3p.

In December the firm welcomed the Bank of England’s final decision on equity release mortgages, saying it offered “greater clarity” for its future operations.