Today (March 7), Only a group (LSE: Just), The FTSE 250 The financial services provider has published the results of 2024 and despite reporting a vast augment in profit, investors reacted badly.

Comparing 2024 from 2023, the results show a 34% augment in profit at the basis of 504 million GBP, an augment in retirement sales by 36% and improvement of refund from capital. As a result, directors were able to announce a 20% dividend augment.

At first glance, the actions seem to be an opportunity. The profit per share was 36 pence, which means the price ratio to profit (p/e) only four.

To sum up the performance, the head of the group commented: “Three years ago we made double profits in five years. We have significantly exceeded this goal in just three years and as a result we have created a significant value of the shareholder. “

So why did the company’s shares fall so much? At some point they fell by 15% before slight recovery.

Various standards

I suspect that this has something to do with the operate of alternative measures of performance by the group. They can give various results than statutory ones used by accountants, determined according to financial reporting standards.

A look at the company’s accounts shows that the reported profit after taxation was 80 million GBP. It was 49 million GBP (38%) lower than in 2023 and is very different from its basic profit of 504 million GBP.

The basic profit per share for 2024 was 6.5 pens. Using this measure, the actions have the ratio of P/E around 23. Again, it is kilometers from the header number.

To assist investors understand the variability of these numbers, reconciliation was ensured.

Most of the difference explain “Deployment of profit in CSM“(369 million GBP), which is excluded from base profits. This applies to a margin of contractual services, a bucket in which profits are postponed and reported at a later date.

Accounting standards require that profit from up-to-date activities reflect the life of the contract. However, when reporting its headlines, the company prefers to turn it all at once.

Of course, there is nothing wrong with any approach. Directors do not hide anything, they simply choose another method of interpreting their results.

What does all this mean?

In my opinion, this makes it complex for investors to understand numbers.

However, one thing that never lies is cash. Either it exists or not. In 2024, the group reported a significant augment in cash generated from operating activities. In general, money balances increased by 54%.

In addition, in my opinion, there are other reasons to consider investing in a group. It grows quickly and the company describes the market conditions as “buoyant“. In addition, with a capital range of 204%, its balance remains solid.

But there is a risk.

Sales of pension may leisurely down if the interest rates fall as expected. And the group operates on a very competitive market, which is sensitive to wider economic conditions. There are also better income reserves.

To sum up, I’m still undecided. That is why I will continue to monitor the company’s results – taking into account both alternative and statutory funds – in the coming months, in order to re -check the investment case later in the year.