LONDON An increase in the sale of individual annuities boosted JRP Group's first-half operating profit by an above-forecast 12 percent, the London-listed firm reported on Thursday, sending its shares soaring.
JRP, which specialises in annuities for those who have medical conditions that reduce their life expectancy, was formed by Just Retirement's purchase of rival Partnership Assurance in April.
Pensions reforms introduced in Britain last year have removed the obligation for over-55s to use their pension pots to buy an annuity, which provides a fixed income for life.
This has dented the sale of individual annuities. But a rise in the number of people shopping around for the best annuity rate boosted sales in the first half, JRP Chief Executive Rodney Cook said on a results news conference call.
Individual annuity sales rose by 17 percent to 397 million pounds ($524 million) in the six months to June 30.
The firm has also increased its focus on sales of @bulk annuities", which insure defined benefit, or final-salary pension schemes.
JRP's sales of bulk annuities were 164 million pounds, nearly half the sales seen in the first half of 2015, but the firm said it had sold over 330 million pounds in bulk annuity premiums since the end of June.
"Brexit has not had a negative impact on that market segment and our pipeline of business is stronger than ever," Cook said.
JRP's shares had fallen 35 percent since Britain voted in June to leave the European Union, as falling gilt yields were seen hurting annuity sales and investment income.
The shares were up 15 percent at 0802 GMT at 111.3 pence, the biggest gainer in the FTSE 250 index.
The results were "showing some resilience to the expected Brexit impact", analysts at JPMorgan Cazenove said in a client note.
Operating profit rose an above-forecast 12 percent to 48 million pounds ($63.6 million) on a pro-forma basis - merging the accounts of the two companies from the beginning of the year - which the company said was above analysts' forecasts of 42 million pounds.
The firm said its solvency ratio was 134 percent of the minimum capital requirement to cover underwriting, investment and operating risks.
JRP also raised its cost-saving target to at least 45 million pounds on an annualised basis by the end of 2018, up from a previously-announced 40 million pounds.
The firm said it would pay an interim dividend of 1.1 pence, in line with forecasts.
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(Reporting by Carolyn Cohn; Editing by Sinead Cruise, Greg Mahlich)