JRP Group has set aside £5 million to cover the cost of redundancies following the merger of Just Retirement and Partnership.
In the combined company’s first financial results since the merger was completed in April, JRP Group posted a pre-tax operating profit of £50.6 million in the first six months of the year.
By comparison, Just Retirement and Partnership would have posted a £32.7 million operating profit in the same period last year.
A note in the results said JRP Group had set aside £5 million to cover the cost of redundancies that arise as a result of the merger.
In a scheme document sent to shareholders last November, Just Retirement said it would cut 5% of the 1,200 jobs at the merged company in the first six months of the deal. It then said it would cut another 10% to 15% over the subsequent two years.
A further update, published in March this year, warned the number of job cuts could rise ‘over and above’ its initial estimate.
Today’s update did not include any update on the number of jobs it will cut. However, JRP Group said it had increased its target for savings from the deal from £40 million to £45 million by 2018.
The merged company said it managed to achieve £15 million of annual savings from the deal in the six months to 30 June. This offset the £15.9 million acquisition costs it reported in the results.
New business boost
JRP Group also benefited from a boost to new business figures following the merger.
Figures which included Partnership’s sales in the first three months of the year, before the merger was completed, recorded total new business sales of £948.7 million. In the same period last year the two companies together would have recorded new business sales of £922.6 million.
The biggest increase in sales came from lifetime mortgages. JRP Group said lifetime mortgages represented £321.8 million in the first six months of the year, 57% higher than Partnership and Just Retirement recorded in the same period in 2015. Between the two companies lifetime mortgages accounted for £204.8 million in the first half of last year.
Rodney Cook, chief executive of JRP Group, said the company’s new business margin, which hit 5%, improved as direct result of the merger.
‘Our new business margin is starting to demonstrate the opportunity we have for potential further improvement as we deliver the cost synergies,’ he said.
Source: CityWire