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Phoenix confident after record £950 million cash generation

·2-min read
Andy Briggs, CEO, Phoenix Group   ( Phoenix Group )
Andy Briggs, CEO, Phoenix Group ( Phoenix Group )

Life insurer Phoenix said it is riding out the turbulence in the economy with record cash generation of £950 million in the first half of the year

The company, which has also made its first cash acquisition, the £248 million purchase of Sun Life of Canada UK, said it was confident of delivering “at the top end” of the expectations range of £1.3 billion to £1.4 billion for the full year.

Long term new cash generation of £430 million was double the level of last year. The interim dividend has been hiked 3% to 24.8 pence with a further 2.5% proposed for the full year.

Chief executive Andy Briggs said:“ Phoenix has performed very strongly in the first half of the year despite the challenging macro environment . We have once again delivered a record set of financial results, which was underpinned by the strong progress we have made across our strategic priorities.”

Assets under administration fell from £310 billion to £269 billion in the first half of the year in line with financial markets, but Phoenix said its cash generation was protected by hedging.

Danni Hewson, analyst at brokers AJ Bell , said: “Life insurance group Phoenix may be boring but as record first-half results prove, boring can be beautiful, particularly amid the current turmoil.

“Managing life insurance products which are no longer being actively marketed to customers helps deliver a decent flow of cash and underpins the company’s generous dividends.”

Steve Clayton, fund manager at City investment group HL Select, said: “Crucially, Phoenix say this morning that they have almost no exposure to inflation, having hedged out their costs and product exposures. No doubt analysts will quiz them on how long this hedging will run for.

“But right now, that protection from rising costs puts Phoenix in an enviable position relative to most UK companies.”