Goldman Sachs JUST U.S. Large Cap Equity ETF Price & Performance (JUST)

Our DB and Retail businesses have both contributed to this growth. In particular, the DB business had a breakthrough year completing our largest transaction to date the £1,800,000,000 G4S scheme. Our markets have structural growth drivers, and we have all the capabilities in place to take advantage of our competitive position. We've achieved significant growth with a very low new business strain. Our balance sheet is more resilient and more robust with a solvency ratio of 204%. Which provides significant headroom for future growth. And finally, we know the importance of a dividend to shareholders. And given the confidence in our business, and its future prospects, we have again increased it by 20%. I want to pause a moment here and reflect a little on our achievements over the past three years. In early twenty twenty two, we made a pledge to effectively double profits over a five year period. We have, I think by any objective measure, substantially exceeded that pledge and more than doubled profits three years rather than £5,500,000,000.0 of profit demonstrates the effective and decisive execution of our strategy and gives us a substantial base to build from. I'd like to say thank you to our talented colleagues across the group who are responsible for consistently delivering excellent results. [indiscernible] And we will build on that success to date by capturing the tremendous opportunities available to us in both markets.

As a reminder, in DB, we are still at the relatively early stages of capturing some of the potential £1,000,000,000,000 market opportunity with around £50,000,000,000 per annum being de risked. As the G4S transaction demonstrates, we are now better positioned in this market. In retail, more than £1,000,000,000,000 of savings from people reaching retirement age over the next decade, will be moved from the savings phase to the spending phase of life. As a retirement specialist, we are very well positioned to benefit from the long term demographic and structural drivers of growth. And over time believe that we can play a bigger role in helping more customers. I'll say more about this shortly. On this slide, we've grouped the schemes into four categories depending on their relative level of funding compared to insurer buyout level. At the top, around £400,000,000,000 of uninsured liabilities are now over 100% funded. Some of these schemes are reevaluating their options. But for the majority, the opt for an insurer solution most will transact in the next five years, and the remainder over the following five years. The next category are those on a journey to securing full funding within a longer time period and we expect them to access the DB de risking market over the next five to years or so.

And the bottom two much smaller categories representing around 10% of the opportunity, we'll be looking for innovative solutions, which we could in time provide. [indiscernible] Our DB business is now a whole of market service. We transact with large schemes, small schemes and everything in between. On the left, a reminder of why that is important. Large schemes those over £1,000,000,000 have contributed more than half the market's new business premiums over the last two years. So having broader access to that market segment materially increases the opportunity set available. To us. Small schemes, those under £100,000,000 account for around 10% of the market by volume, although this has significantly increased over the last few years. In order to have a whole of market, Tier one DB business, there are some very different capabilities that are needed at each end of the market. Over the last few years, we have invested to develop the capabilities needed to transact with larger schemes of which asset management and reinsurance skills are prominent. At the same time, we have worked hard to maintain our competitive advantage to win smaller schemes. Our technology enabled leadership through our Beacon price monitoring and bulk quotation service is extremely important.

But success is also a function of proposition. Service, [indiscernible] and relationships, and we've worked hard over a long period to develop a market leading position in all these critical areas. Just as now firmly established as a top tier whole of market business with opportunities to grow in all segments of the market. And so are we. We achieved £4,300,000,000 of funded sales last year, up 43% year on year and a five year growth rate of 30% per annum. All at very attractive IRRs. We transacted a record 129 deals during the year, No insurer has previously reached this volume in any single year. This is a significant increase on the 80 transactions completed in 2023 and '56 the year before. Our activity levels reflect how prior investment in people, technology, and market insight has equipped us to take advantage of the opportunities available. And our total DB premiums including the £1,000,000,000 of DB partner sales, were £5,400,000,000 last year, That's over 11% market share. So let's now take a look at what's happening in another buoyant market retail. There has been a real sea change in advisor behavior. The initial catalyst for this was long term interest rates rising back to more normalized levels in 2022.

Higher rates make our guaranteed income products more attractive to customers. There are other underlying changes in advisers' behavior taking place too. [indiscernible] They are adjusting their advice models to meet the requirements of consumer duty, which was further reinforced by an FDA review of Furthermore, their advice models are changing as their customers age and shift their focus from saving during their working life to spending during their retirement. Now it's relatively early days for many of these firms. But for those who are more advanced in adjusting their advice models, This is resulting in more frequent conversations with their clients about the relevance and attractiveness of Guaranteed Income Solutions. And of course, this is further supplemented by an increasing volume of assets reaching retirement age each year. Putting all this together, we've seen giftful sales across the market double in the last two years, Our giftful sales have risen by similar proportion over the period. And importantly, our medical underwriting expertise continues to equip us to select the most profitable risks in what is now a much greater opportunity pool. Over the next decade, the retail market provides significant opportunities for Just. So I think it's worth just spending some time looking down the road and unpacking [indiscernible] Starting on the left, you'll see the stock of investment assets held by people in The UK aged 55 and older, available to support them in retirement is around £2,000,000,000,000 and growing [indiscernible] Importantly, you'll see that's made up of both pension and non pension assets.

Now baby boomers receive income from generous defined benefit pensions in addition to their state pension. However, the next generation of retirees, Generation X, Just draw on other assets to provide their retirement income given fewer of them have DB pensions. So in addition to pension benefits, they must draw from cash resources, [indiscernible] general investment accounts and property equity to aggregate sufficient funds to cover the outgoings of the typical Gen X household. The bar chart in the middle of this slide shows the transfer just DC assets from savers into the spending phase. Which we primarily participate. That flow at the moment is roughly £60,000,000,000 per annum, but is expected to increase. That rate of increase will be about 10% per annum, and so will add up to a total of over £1,000,000,000,000 of DC assets reaching retirement age over the next decade, with other non DC assets on top of that. So there's a significant opportunity over the next two decades to help Generation X navigate the challenges of aggregating their assets [indiscernible] and tax efficiently generating income to meet the households' needs. We want to play our part in helping many of these 14,000,000 potential customers, and we're investing to explore how we might best achieve this opportunity.

So in summary, the DB and retail markets have short medium, and long term opportunities There are millions of customers with unmet needs and for a retirement specialist, such as Just we feel really well positioned to help them. And fulfill our purpose in the process. Through brilliant execution, we have successfully captured the opportunities available and created significant shareholder value over the past three years. The structural drivers of growth in our markets remain intact. We continue to develop and expand our business model and our capabilities in those markets. We are confident in our ability to grow earnings at an attractive rate from this significantly higher level. And this earnings growth will translate directly into increases in shareholder value. Over the past two years, the tangible net asset value has grown by 30%, or 64p to254p per share. We are committed to consistently compounding the value of the business and translating exceptional operating performance into an attractive return on equity in excess of our target of 12% and as a result, generating significant shareholder value. And with that, I'll hand over to Mark. Thank you, David, and good morning to you all.

So as David mentioned, we continue to see significant opportunities to deploy our capital and capabilities into our markets. And thus deliver our strategic objectives both now and into the future. So let's start with one of my favorite slides, which neatly demonstrates our consistent and strong performance. Outstanding growth delivered sustainably. As you can see on the top left, sales grew 34% in 2024, delivering a five year compound growth rate of 25%. And the chart on the bottom left shows how that growth continues to be disciplined. A focus on returns and shareholder value. High growth, and an 8.7% margin which is in line with the average over the period. [indiscernible] Moving to the right hand side in capital, We have an increasingly resilient and stable capital base, with a large buffer. As important as the absolute capital strength, [indiscernible] that our capital sensitivities in particular to interest rates and property, continue to reduce from historic levels due to management actions.

A high and stable capital surplus a Finally, the graph on the bottom right shows one of the key pillars of our success, [indiscernible] In a competitive market, we have demonstrated superb execution and delivered 1.3% new business strain. [indiscernible] Over the last five years, we have consistently beaten our target of less than 2.5% of premium. When we operate in buoyant markets, price with discipline [indiscernible] and maintain good cost control, we can comfortably fund attractive levels of new business growth from our own means. Underlying operating profit is up 34% to $5.00 £4,000,000 with earnings per share up a similar amount [indiscernible] to 36p. And let's go through the main drivers. New business profits were up by 30% to £460,000,000 driven by volumes The margin of 8.7% is an excellent result particularly given the tight credit markets in 2024. [indiscernible] Our pricing discipline and market insight enables continued focus on risk selection. This is augmented by an excellent performance from our growing asset management team. In force operating profit is up a quarter primarily driven by the investment return on higher stock of surplus assets. Growing balance sheet, provides a growing source of recurring profit.

Other group company results and development expenditure increased as we continue to invest in proposition development and infrastructure to enable us to scale and build the business for the future. Finance costs were broadly unchanged [indiscernible] Our business plans include increased issuance in the future as our balance sheet grows. [indiscernible] In 2024, we were very pleased to refinance two bonds, [indiscernible] a single new £400,000,000 Tier two at an attractive coupon. Pleasingly, return on equity rose by 1.8 percentage points to 15.3% well above our greater than 12% target that we set in March. The business is firing on all cylinders with our new with our low strain new business model, combining with asset asset and liability origination, to drive returns at our mid teens or above IRR.

Targets. As we execute this strategy, it will allow us to significantly add to existing shareholder value. Much of this growth comes in the from the growth in CSM, The stock of CSM continues to grow rapidly up 19% over the year. And from this growing stock, a predictable portion amortizes into the in force profit which then flows into statutory profit. The scale of our new business profits versus the size of the current business really drives the growth in CSM stock. As the chart on the top right demonstrates, the £460,000,000 of new business profit is three times the scale of the release from the in force. And on the bottom right, a reminder of how all this is combined grow the tangible net asset value to £2,600,000,000 Here, we show the key components of the Solvency II Surplus movement during the period. And a reminder that the closing surplus and ratio are pro form a taking into account the post year end €155,000,000 Tier three repayment that has already been refinanced in September 2024. Cash generation grew to £119,000,000 and from this, we funded 5.3 of million pounds of new business through £71,000,000 of capital strain. Adding £33,000,000 of management actions, primarily the implementation of an internal model in relation to the partnership business, resulted in total of 81,000,000 of organic capital generation.

Given the growth in the balance sheet, these organic or operating items lead to a small reduction in the ratio. Moving forward, we expect that cash generation will grow in line with growth in the balance sheet. In addition, we have substantial surplus cash capital available to support our growth ambitions. Moving now to the right hand side of the chart. [indiscernible] The circa 80 basis points increase in interest rates had a relatively small negative impact on the surplus, but a positive effect on the capital coverage ratio. Offsetting the positive management actions, were €42,000,000 of regulatory costs in relation to the final leg of the Solvency UK reforms. In aggregate, these operating and non operating movements have translated to a very healthy solvency capital coverage ratio of 204%. In order to participate in the growth opportunities available, we need to have the right investments to support new business pricing, deliver reliable and secure returns to shareholders. On this slide, we give a picture of how our investments capabilities have evolved significantly over the last five years. At the beginning of this evolution, we took most of our public credit management in house, At the same time, we expanded our roster of private credit managers we rotated the illiquid origination side of our business.

During 2023, we started sourcing additional illiquid asset classes ourselves, during 2024, that grew significantly to 1,300,000,000 of ill liquids through our expanded investments capabilities. These assets have attractive risk reward characteristics relative to public markets, such as the charge over the asset, which provides rating stability, In addition, our external asset manager origination provides optionality to flex allocations between different asset classes. Our investment strategy has enabled us to keep pace with the very strong growth in premiums over the last five years, [indiscernible] while at the same time increasingly diversifying the investments portfolio. [indiscernible] All in all, around 80% of new assets sourced in 2024 and also 80% of our €27,000,000,000 investment assets on our balance sheet, are managed internally. As we grow, we're investing more UK pension money back into The UK. And we're keen to do more and play an even greater role part of the industry's £100,000,000,000 investment pledge following the Solvency UK reforms. [indiscernible] We can now invest up to £250,000,000 at a time and we have a strong preference for UK assets that are matching adjustment compliant and preferably inflation linked. On this slide, you can see examples of The UK investments we've made this year.

Higher education, social housing, financing hospitals. And the latter two were internally sourced with triple digit million ticket sizes. So in conclusion, a very strong set of results that the team should be very proud of underpinned by strong capabilities to continue delivering into the future. I'll hand back to David for his concluding remarks.

Great. Good stuff. Thank you, Mark. I've now deliberately repeated this slide from last year. [indiscernible] Just remind you how important this subject is to me and to our leadership team and in fact a theme that investors often ask me about. With talent in high demand, how do we attract and retain high quality people? Now when we speak with prospective recruits about joining Just, there are typically three areas they pick out that attract them to us beyond the role itself. [indiscernible] First of those is our purpose. We help people achieve a better later life. And that's why we exist. This resonates strongly with most people. Secondly, they are keen to join a growing and successful business. And thirdly, they are attracted by a culture driven by impactful behaviors and the environment that we've built at Just which they hear about. Within a relatively small industry. And these behaviors are shown on the left hand side. [indiscernible] We believe that our strong and distinctive culture is a strict strategic differentiator that empowers us to attract new talent, whilst also creating an environment that builds a real sense of belonging amongst our existing colleagues. And as demonstrated by the results today, this collective talent enables us to consistently deliver.

Excellent results. [indiscernible] We've delivered what I hope you agree are another set of excellent results. We are exceptionally well positioned to convert the opportunities available so that we may help more customers and continue building substantial value for shareholders. We can only achieve these outcomes when customers place their trust in Just. Our colleagues always put the customer first and we are acutely conscious of the responsibility that entails. Have a proven track record of being both innovative and disciplined and that's equipped us to consistently exceed the promises we've made. We've developed a winning formula one which will ensure we fulfill our purpose to help people achieve a better later life. I'm putting all this together we're more optimistic than ever about the future. [indiscernible] [indiscernible] So I think now we can move to questions. If you could simply raise your hands and wait for the microphone before For those of you who have joined the webcast, please type in your question and we'll read those shortly. So, Mantip, I think you're first on the draw. Good morning, everyone. Mandeep Jagpal, RBC Capital Markets. Three for me, please. First one on pipeline.

You wrote a significant number of transactions on the Beacon platform last year, a very attractive margins. [indiscernible] you be able to give an indication of the net additions to that platform? So even with all these deals going through, have more schemes coming on than going off. And then on the dividend growth of 20%, could you provide some color of the decision making framework that gives you the confidence to make this substantial increase? And then on growth, Mark mentioned that Just will fund new business growth through its own means. Just a clarification here, is there a particular metric you had in mind, for example, positive underlying organic coupler generation? Or is this just the same same as before where you mean you have enough capital more broadly for your overall growth plans?

Okay, great. So thank you for that Mandeep. I'll let Mark pick up the second and third ones around dividend growth. And how ultimately we think about funding for growth. In terms of DB pipeline, probably a few things to comment on there. First of all, as you said yourself in the question, Beacon, which is very much our market leading bulk quotation service that we offer across the market, continues to go from strength to strength. We've now got well over 300 schemes loaded onto that system with a regular addition every single month. Also, as I mentioned in my comments, by doing our first ever a greater than £1,000,000,000 deal in 2024, We've now opened up that segment more fully to us. So we see a number of attractive opportunities at the end of the market. So you put it together, our pipeline is strong and we remain confident about our growth plans for the year ahead. The only thing that's probably worth noting is that the DB market does tend to be more weighted towards the second half of the year. And I'd say looking at it's only early March, but looking at the pace at which transactions are moving through the pipeline, I think that may be particularly the case in 2025.

Still early to say, but that's kind of the early signals at this stage.

Yes. So on dividend, so I mean, we consider all the normal things that you would imagine we consider. So we look at cash, earnings, capital, all of those things, and we look at it over the medium term as well. So we don't Just look at the coverage in one year. We look at overall business planning horizon, and that's we get to a position where we're very comfortable with the dividend and the dividend growth. What I would say is that as you know, dividends are a very small amount of our surplus generation and we use most of the surplus that we generate to invest in new business, and that will continue to be the case. So very much at the moment, we're looking at very attractive markets in both of our core markets. And as such, we're really looking to utilize our surface generation to continue to grow the business rather than materially create dividend as a material component of our of our capital usage. But to demonstrate confidence in the longer term value of this business. Why we want to increase by the rate that we have. And the comment around growth through our means it's very similar to the point made last time.

We have the capital availability on the balance sheet today. To make our growth ambitions real. So I mentioned we might well become a net issuer of debt over time as we grow. Certainly it's within our means to grow as we want to.

Can you Just I think it was Barry just about next. I'll get to you, Larissa.

Good morning. It's Barry Korn from Pammi O'Libram.

I've got three questions, but congratulations on a good set figures despite the reaction to share price this morning. It's good. First question in terms of targets, obviously, you achieved the big target within three years around five. Why have you not set any new targets given how confident you are clearly? Second question is on balance sheet. You've desensitized the balance sheet. I wonder if you could give some details of what you've done during the year, please? And thirdly, the Swansea coverage ratio has been impacted by £42,000,000 regulatory change. Can you just tell us what that is, please?

Yes. Again, I'll lead off on the first one. And then invite Mark into contribute to that and to the last two. So look, as you said in your question, Barry, when we just indulge me with a little bit of history for Krogerwood, who may not have been around, three years ago, we set this target that we would double profits over a five year period. Clearly, we've gone a lot further than that. We've increased our profits by a factor of 2.4 we've done it in three years rather than five years. So it was important when we set that target back three years ago that after a period of turnaround, we were demonstrating not just our confidence in future execution, but that we were setting a very clear target against which we could be measured and against which we could build credibility of delivery. And I think having substantially outperformed that and done it in three years rather than five, we feel we've kind of ticked those boxes. And so how we feel about it is, and I've said in my comments, we have got a tremendous new business franchise and great capabilities supporting that. And we feel confident that that together with the market opportunities will allow us to grow earnings at an attractive rate from this much higher level than anyone had anticipated a few years ago.

We feel good about that and we also feel good about the ROE target, which I mentioned remains. Then Mark, if you want to add anything Maybe just to say, so if you look at consensus both in terms of earning growth and ROE over the coming years. Double digit earnings growth and mid teens ROE growth we're certainly very comfortable with their consensus is So we're not looking to change any consensus views at all. We're very comfortable that we're continuing to be a growth business from this point forward. [indiscernible] [indiscernible] sensitivities. So primarily through management actions, So if you think of the two that have come down the most interest rates and property, So with interest rates, we have extended our interest rate hedging on the solvency balance sheet. So if you remember, we hedge IFRS. So we hedge TNAV and we essentially take the interest rate exposure out on TNAV. In order to also hedge the Solvency II ratio, have a portfolio of held to maturity gilts and we've extended that to reduce that interest rate sensitivity to the solvency ratio. And on property, it is predominantly driven by the lower investments in LTM's as a proportion of the asset.

Portfolio over time. So this year, we originated something like £300,000,000 of LTM's in versus £5,300,000,000 of premiums. So it just it keeps diluting the LTM portfolio and therefore the property risk There's a £42,000,000 change.

Oh, yes, sorry. That was the third question, the 42,000,000 reg change. That was the final part of the Solvency UK reforms, which was essentially they call them the fundamental spread add ons So it is where we look through our asset portfolio and where we think we need to add a bit of prudence into the risk reduction. We do that. It's a one way gate effectively the way that it works. So you don't take anything off where you think there's overprudence, but you're allowed to put something on.

Larissa, please.

Thank you and congratulations from my side as well for beating most of the targets well, sorry, most of the expectations today. Three from my side. The first one congratulations on the very big deal that you did in the second half of last year. However, the regulator has targeted Funded Re as an area of interest. What are your thoughts about using funded RE going forward? The second one on margins. Very robust margins despite the bigger deal. How should we think about margins as gilt rates come down? And also if credit spreads don't widen concurrently? And then the third one, if you can give us little bit of color on how you see the issue on ground rents moving and whether you have and how you think about your provision in that regard? Thank you. Same pattern. I'll do the first one. [indiscernible] pick up the lash R2, So funded REIT, yes, the PRA issued its subsidiary statement on expectations it has on firms who enter into funded re transactions, we feel comfortable with what we're doing that our risk practices management and controls around that absolutely comply with the supervisory statement. And just more generally, each time we have entered into a funded re transaction in the past, always done that in a very much open book basis with the regulator.

So we've kind of shared that with them. Shared our views and answered any questions they have on that. So we know they've been very clear at PRA top of the house. That this is a kind of thematic issue for them across the sector. [indiscernible] have always viewed Funded RE as a potential option to enhance margins but not something on which our profitability or margins are our future expectations are dependent on. That was always the case in the past, and that remains the case in the future. And we will continue to use Funded Re only if it's attractive and in moderation.

So picking up on the two questions. So the first one on margin, you asked about GIL rates and credit. GIL rates themselves probably don't directly impact margins so much. They can at the edges impact demand because it changes, particularly on the retail side, the attractiveness of the product sometimes, but margin wise relatively stable. Credit, we are seeing tight public credit markets particularly at the moment and that does have a little bit of a reduction in margin, but not substantial And as you saw, we delivered 8.7 in 2024, and we had tight credit markets through most of that period. So we're confident that over the medium term, our margin is is as it has been in the last few years. So we're not looking at margin erosion. On ground rents, so no particular news on the specific issue that that we were talking about last year. So if you remember, we have a small portfolio where we financed some ground rents about £150,000,000 So pretty small. There's been absolutely no no news and almost a lack of news on that topic. So nothing in particular. The government did release a white paper earlier in the week around common hold.

Which is particularly focused on new builds. So the impact of essentially not having leasehold properties in the future. And there were some components about people being able to buy out their their freeholds. But ultimately, nothing that's in any way changed our are worry about that topic or exposure.

Thank you. What could you say on average? Yes, Ria?

Thank you. Ria Sjia, Deutsche Bank. Three questions. So the first, just on development costs and strategic expenditure.

Development costs in particular did tick up quite a bit year on year. So I mean, what are your expectations for this going forward? Because until now, it's been ticking up a couple of million per year. The second one is around cash generation, but also capital generation. I think, Mark, you said that capital generation should grow with the balance sheet going forward. If you could just clarify that, but also cash generation. I remember you did say from 2025 onwards, cash would also grow with the book. So just a clarification on that. And then the third one is also back to growth ambitions and the attractive growth rates. And it's good to see that Mark's happy with where the market and consensus is. But there was also a medium term guidance of growing profit by 15% over the medium term. I just want to see if that's still in play and what medium term means for you?

Okay. Mark, do you want to open up on the questions on expenditure? Cash generation.

Yes, happy to. So yes, you're right. So our development costs and our strategic costs actually, but predominantly our development costs increased over the year. And what that is, is that is us investing in our capabilities. So that is us ensuring that where we have things that we're ahead of the market on, we're continuing to invest, we're not resting on our laurels, and where we think we need to build new operation capabilities, we are doing that. We're doing it from a position of strength. So you shouldn't rest on your laurels. You should continue to invest in the business. Strategic costs are definition a bit more strategic and those are things where predominantly we're looking at new propositions. And David sort of alluded to it in his comments. Particularly around the retail space where we think there's more we can do over the medium term in that retirement market. Thing I would say particularly with the development costs, I mean, we still delivered over 15% ROE, including those costs. So we are ensuring that are only investing an appropriate amount of money in in that activity. On your comment on cash and capital, so to reiterate that and be clearer, cash generation will grow in line with the balance sheet.

So the cash that comes off our in force book to which we then decide what we do with it [indiscernible] will grow as the balance sheet grows and you'll see that over time.

Great. And thanks for the clarifying question on the 15% profit growth target. That was the one I was referring to three years and that was essentially guiding to doubling over five years. So given that we've kind of significantly exceeded that, its effect Just a little bit of emphasis to Mark's comments on development and strategic expenditure. I hope to most people in the room, it's fairly self evident that that is the right thing to do, to invest for the future. And it's also investing in the capabilities that allow you to continue to grow in a sustainable way When you've got a business which has more than doubled its sales in a three year period, it's it's not just a nice to have, it's an imperative to develop in your system so that you can grow, or continue to grow. However, it's all about longer term taking this position of strength we've got and using that to build for the future. So I think we're pretty short sighted if you were not doing that right now. We've got absolutely loads to go at. You look at the comments that I made on the DB market, you could think about that as a £900,000,000,000 opportunity over the next fifteen years.

So a long way to run. But it's now you need to be building for the future. And to play into those trends that I spoke about for Gen X, which themselves are going to play out over the next fifteen, twenty years. [indiscernible] I'll get to Andreas next. [indiscernible] I can. The first one, is on the share price. What do you think the market is missing today It feels like the double digit earnings growth is still a sensible pledge. And so when do you think you might hit this 70 p of earnings or GBP 1,000,000,000 in sort of absolute pound amounts? The second question is on growth. It feels like the opportunity set for you across the retirement space, so both bulks and retail is huge. I'm just wondering if there are any self imposed or other constraints that you face internally in terms of growing? The final one is on Beacon. Can you just talk to how Beacon works and whether that tech can be leveraged into the retail IFA space? I know you're your development spend is in direction. So just curious if you can provide any more color on that?

Okay. Let me speak to each of those and Marco also absolutely welcome to join in on the growth point as well. Well, share price, I'm not going to particularly comment on because there's a lot of people in the room better better qualified to do that. And the only thing I would just again emphasize is what Mark have already said, which is that we feel we can really grow earnings from this substantially higher level at attractive rates, comfortable consensus, double digit profit growth, that's in that over the short term and ROEs, which as Mark said are kind of in the kind of the mid teens. So that's all stuff we're comfortable with. In terms of Beacon, it's not really transferable to the retail space and actually, frankly, given the opportunity set, there's £100,000,000,000 worth of schemes with less than £100,000,000 of assets, which BIGGEST is not exclusively pointing at small schemes, but is particularly valuable there. We want that focused on the DB market. We continue to invest in it. You must keep moving to stay ahead. Hopefully, the numbers that sit have supported the fact that we're not just staying ahead, but if anything, slightly extending that lead.

However, we are also investing in the retail space and systems as well. So I'll be an example of the development expenditure that Mark was explaining. And we are investing in systems so that we can serve advisors in, frankly, a much more suitable way for 2025. A lot of the ways that we're Just serves advisors today was built a long time ago. So we're trying to make that step forward.

Growth, any self imposed constraints it's just a balancing act. So there's no hard limit. As Mark has said, not only are we retaining most of our surplus capital, we're generating support growth.

We've also got surplus capital with 204%. It's more about doing it in a way we are kind of expanding the whole balloon at the same time, your capabilities, your asset origination, your reinsurance, your business development capabilities, but also about maintaining a pricing discipline. Don't chase volumes in the market. If the opportunities present themselves, we will absolutely strike. But we're not imposing any hard limits or anything like that. I think Andreas, you've been patiently waiting?

Yes. Thank you. I'm going to ask for the Peel Hunt.

I'm just thinking about the comments you made about new propositions. Obviously, you've been in a one basically one product company, you sell annuities, I just wonder where you're thinking about diversifying your product set Are you looking into that? And if so, what types of other solutions are you thinking about offering in the future to diversify capital requirement. It's come down. I just wonder whether that's purely due to the movement in interest rates or were there any sort of management actions you're considering just to keep that capital requirement at a low level as you grow your asset base?

Andreas, I'll pick up the first one and Mark let you answer the second one. At So I think probably the right way to think about that future opportunity set is always concentrate on the Just. So be customer led in all of your thinking. And as I kind of alluded to, what you've got with Gen X is a cohort, an enormous cohort people who are going to be getting to retirement and not only have they not got the safety net of a substantial defined benefit or final salary pension scheme fall back on, They also tend to have more complex multi generational households. So you've got parents who are living a lot longer, You've got kids who are hanging around the house a lot longer, and everything that goes on around that. So they've got a disparate range of savings or multiple D part sizes, other savings, long cash You look at the industry numbers, a crazy amount of money in cash. So I think there's a huge opportunity. To help those people who've got complex solutions to solve, a mix of investments available to help them really engage with retirement as a life phase they should get excited about, but which does have some complexities in which we can help them on.

So that for me is less about new products, certainly new products in the industry. I think the industry has got the right product set give or take. Might have to reshape the odd bits here and there. For me, it's more about how do you engage [indiscernible] in that at scale using technology. High net worth can still be served at the high touch approach by financial advisors, but how can we bring tech to serve mass market. Mass affluent in a way that really allows them to step into retirement with confidence [indiscernible] From that SCR movements, So you're right, the rates have brought the SCR down because we hit the ratio. So rates go up and both the own funds and SCR come down to keep the ratio at stable. The one other thing to call out is the partnership internal model. So over the second half of last year, we moved the partnership business, our kind of closed small entity onto the group internal model. And that released approximately £60,000,000 of SCR, predominantly because you can then allow for the diversification between between the different businesses. And that's when you get into the appendices, that's what you see on Page 29 in the management actions and the other items.

That's the main thing going on there.

Hi, thank you. I'm William Hawkins from KBW. Just one question from me. Could you talk maybe slightly following up on what you've just been saying? Talk a bit more about the commercial product mix trends in the Giffle book? I think two, three years ago when we were first talking about the inflation spike, you were very much reassuring that your product was kind of effectively a level annuity. Which is great for the company, tougher for the customer. Presumably, there's a much more of a shift towards some kind of ratchet annuity product with a guaranteed increase in the annuity or maybe more inflation linkage in the annuities. So I'm just kind of wondering how you're seeing demand moving and product evolution?

Thank you.

Yes.

So first of all, yes, we do offer inflation linked annuities. We offer annuity that step up in fixed compound increments, so fixed percentage increases. And we still find though that the general propensity of customers is to buy level annuities. And part part of the reason of that is as they look at their immediate needs, that's what they're solving for. But also, certainly, as you get to slightly wealthier clients, and some form of fixed income will be part of an overall retirement strategy. And so it will be blended with them remaining invested in growth assets which under their package or advice they get from their financial intermediary that's where they feel they get that kind of inflation protection as well. So no massive change on that front in the particular guaranteed income for life market. [indiscernible] Thanks very much. Dom on ABNP Paribas, Exane. Really Just one question with a couple of sub parts. The new business strain is remarkably low, much lower than your than your targets. And consistently so. When you reflect back on the last few years, are you surprised by this? And then also could you just diagnose why it's been so low so consistently?

And then are you not tempted to take on a bit more risk, use a bit more of that enormous capital headroom? Maybe add to your new business profit metrics? Thank you.

Do you want to open up on that one? Happy to. So So you're right, we have historically had a low new business strain model since we introduced that target of having below two and 5% of strain. And there's a couple of different things that go into that. Predominantly pricing. So you've been restrained effectively as the difference between the premium you charge and the reserves and capital you put up. And so it's really the the pricing bit that changes that and that is impacted by competition and it's also impacted by market conditions at the time, that sort of thing. But we absolutely focus on it. It is really a core part of our of our business model because we want to grow sustainably. We want to continue be able to invest more, but get the highest return for the investments that we are making. So much so that it is a core part of compensation schemes, for example. Would we be happy to take more risk We're not looking to change the 2.5%. So even though we've been well under that, we would happily I think, if it was two, we'd still be totally happy that that was well below our target.

So So within that range, I think we're very happy to make sure we invest.

But think we just want to keep making sure we invest each one of our pounds in the highest returning place that we can invest it. And that's the mechanism that supports that.

Super. Before I got any other question, Mike's last question. Sorry, Abhijit, only had two out of Panu and Abram. So, Mark, we'll let you have the final say. Sorry about that. Mark, it's Mark Sverdek in Jefferies. Two for me, please. So first on the billion plus market. To what extent can you go alone there, noting that the partner on the last transaction you work with is now looking to set up in The UK on its own. And to what extent is that relationship sort of done now? Given that they're probably a competitor for you? And then secondly, on leverage, Mark, you mentioned that you expect the net issue of debt going forward. You provide three measures of leverage in the deck. The Fitch is extremely generous, let's just actually be open about that. So what leverage [indiscernible] net issuance? Thank you. Do you want to go leverage first?

I'll take the first one. So you're right, we in the debt we show our IFRS solvency to and Fitch. And I think the market looks predominantly at both IFRS and Solvency II, so therefore, so do we. And we're comfortable with where both of those ratios are at the moment. And as we grow, we would expect them to to come down. So where the ratios are today, we're totally comfortable with. We're not looking to particularly increase them. So if you imagine the range between $27,000,000 and $32,000,000 the two numbers today, that feels like a sensible place. Would we ever go one or two percentage points above that if we could see that we have a lot of growth to grow into? Maybe, but we're not looking to lever the balance sheet in any particular way.

And on your question on billion pounds plus deals, you've could we do those on our own? Absolutely. And I'm just going to echo in my comments from earlier. There's no dependence in the business model on Fundedry. It's an option, and can be an incredibly valuable option, but no, we absolutely have the capabilities. Mark gave you a little flavor there of how we're in [indiscernible] capabilities. So yes, very excited about what we might build at that larger deal space over time. Listen, thank you all for your attention and your questions. We've got a few minutes at the end if you want to just catch up over to these and some pace you left the back. But thank you very much for your