Just Group PLC (LON:JUST) has said it is delaying issuing an interim dividend due to the threat to its finances from proposed changes around lifetime mortgages even though it saw first-half profits jump.
Rules put out for consultation in July by the UK’s Prudential Regulation Authority would require the FTSE 250-listed firm and its rivals to set aside more capital to protect against the risks posed by lifetime - or equity release - mortgages, which enable home-owners to borrow against the value of their property, a loan which is paid back when they die.
READ: Just Group weak as it warns changes to lifetime mortgage rules could hit its capital position
Just Group said it would defer dividends until it had a better clarity on its capital position under the proposed rules.
Rodney Cook, the group chief executive officer, commented: “We are actively planning for a wide range of outcomes from the consultation process. We have a number of capital management options open to us and in evaluating those will seek to optimise shareholder value.”
The comments came as the pensions provider posted an 85.1% jump in adjusted operating profit to £124.4mln, for the six months to June 30, up from £67.2mln a year earlier.
The group’s first-half new business profit increased by 88% to £121mln driven by strong demand for its retirement products and an increase in its new business margin to 10.2%, from 8.9%.