Phoenix Group Holdings PLC (PHNX)

[idpickering]

Phoenix Group announces the sale of Ark Life Assurance Company

Phoenix Group Holdings plc ("Phoenix" and, together with its subsidiaries, "the Group") today announces that it has entered into an agreement to sell Ark Life Assurance Company DAC ("Ark Life") to Irish Life Group Limited ("Irish Life") for a total cash consideration of €230 million (£197 million) 1 .

The cash consideration represents 0.91x Solvency II Own Funds and is payable on completion, expected by early 20222, subject to customary regulatory and anti-trust approvals. The transaction is not expected to materially impact Phoenix's Solvency or Long-Term Free Cash positions.

This transaction simplifies our European operations and accelerates the cash release from this business. The Group expects to redeploy the capital into higher return growth opportunities to drive incremental future cash generation.

Phoenix continues to progress a range of management actions to maximise shareholder value from its remaining European business, Standard Life International DAC, which provides strategic optionality to the Group over the longer term.

https://www.investegate.co.uk/phoenix-g ... 00040082F/

[idpickering]

Phoenix Group delivers a strong H1 performance - £872m of cash generation, a resilient balance sheet and increased new business LTCG

Financial highlights

Delivering cash

· Strong cash generation1 of £872m in H1 2021 (H1 2020: £433m) has more than doubled reflecting the scale of the enlarged Group; on track to deliver at top end of £1.5bn-to-£1.6bn target range for FY 2021.

· Interim dividend of 24.1p per share declared (2020 interim: 23.4p per share).

And later;

Dividend details

The declared interim dividend of 24.1p per share is expected to be paid on 3 September 2021.

The ordinary shares will be quoted ex-dividend on the London Stock Exchange as of 19 August 2021. The record date for eligibility for payment will be 20 August 2021.

https://www.investegate.co.uk/phoenix-g ... 00112251I/

[Dod101]

Thanks Ian. A 3% increase on the interim from last year and the figures look fine as far as I can tell. They need to settle down now and stop issuing new shares because that has been holding back the dividend per share.

Dod

[Paultry]

Can anyone enlighten me as to why the Phoenix group share price should have decreased from 700p to 617p within 10 days ?

I ask just in case there is something going on that I am entirely unaware of. I realise it went ex-dividend, which would account for a 24p decrease, but the results were good and the dividend increased.

I intend to purchase some more, and at 617p it yields 7.8%

Paul

[monabri]

Can anyone enlighten me as to why the Phoenix group share price should have decreased from 700p to 617p within 10 days ?

I ask just in case there is something going on that I am entirely unaware of. I realise it went ex-dividend, which would account for a 24p decrease, but the results were good and the dividend increased.

I intend to purchase some more, and at 617p it yields 7.8%

Paul

The market might be reacting to the sentence I've picked up on below.

https://www.lse.co.uk/news/PHNX/phoenix ... 4a1z1.html


"On a pre-tax basis, the company swung to £679m loss in the six months to June 30, compared to a profit of £663m a year ago. Phoenix cited an adverse investment return arising on hedging positions, along with increased amortisation charges on intangible assets and higher financing costs."

I do not know what the issue was but it seems a big swing from £660m positive to £679m negative....!!

[monabri]

https://www.thephoenixgroup.com/investo ... sentations



I've marked the line in the Half Year report table....( Investment return variances etc.). I'm not sure what they are saying in their explanation of this not inconsiderable variance...the first table provides " words" to explain the loss relating to accounting losses / adverse hedging . Are they saying that their assumptions regarding interest rate movements need to be revised - the knock on effect seems quite severe!

[Paultry]

Monabri

Thank you for your investigative skills in uncovering what should have been obvious to anyone looking at the accounts. I would have thought that the share price would have plunged when the results were announced on 11th Aug, if the reported loss was considered a catastrophe. Or, was everyone on holiday and no one noticed?

I'm perplexed as to what it means for the future. I'm still keen to add more, but if the price keeps dropping at what point does the dividend become adjusted and then you realise you bought a dud.

To be fair, the share price has hovered around 650p +/- for the last six years, so it is not terribly out of kilter now, and even gained a penny or two in the last hour.

Thank you again, Paul

[idpickering]

Phoenix Group completes £4.0 billion of Bulk Purchase Annuity transactions in H2 2021

Phoenix Group Holdings plc ("Phoenix Group" or "the Group") today announces that it completed four Bulk Purchase Annuity (BPA) transactions during the second half of 2021 covering £4.0 billion of premiums, comprising £3.6 billion of external deals and a further £0.4 billion tranche of the Group's Pearl Pension Scheme.

This equates to total BPA premiums of £5.5 billion contracted for the year (FY20: £2.5 billion). The capital strain for all BPA transactions written in 2021 is currently expected to be c.6.5% (FY20: 9%) and the cash multiple c.2.6x (FY20: 2.3x), with the second half transaction economics reflective of the current low credit spread environment.

This strong performance highlights Phoenix's success in driving organic growth, and reflects the investment the Group is making into both its Open business and internal asset management function. Phoenix is building a market-leading BPA team and asset sourcing capability, which supports a comprehensive BPA solutions offering that is now distributed to the market under the Standard Life brand.

As a result, Phoenix Group now expects to deliver in excess of £1 billion of total new business long-term cash generation for 2021, which will more than offset the run-off of the in-force business (currently c.£0.8 billion of annual cash generation).

https://www.investegate.co.uk/phoenix-g ... 00079956X/

I hold PHNX in my HYP, and am pleased with this news. Steady as she goes is fine by me. I'm likely to top up my holdings soon.

Ian.

[Dod101]

Phoenix Group completes £4.0 billion of Bulk Purchase Annuity transactions in H2 2021

Phoenix Group Holdings plc ("Phoenix Group" or "the Group") today announces that it completed four Bulk Purchase Annuity (BPA) transactions during the second half of 2021 covering £4.0 billion of premiums, comprising £3.6 billion of external deals and a further £0.4 billion tranche of the Group's Pearl Pension Scheme.

This equates to total BPA premiums of £5.5 billion contracted for the year (FY20: £2.5 billion). The capital strain for all BPA transactions written in 2021 is currently expected to be c.6.5% (FY20: 9%) and the cash multiple c.2.6x (FY20: 2.3x), with the second half transaction economics reflective of the current low credit spread environment.

This strong performance highlights Phoenix's success in driving organic growth, and reflects the investment the Group is making into both its Open business and internal asset management function. Phoenix is building a market-leading BPA team and asset sourcing capability, which supports a comprehensive BPA solutions offering that is now distributed to the market under the Standard Life brand.

As a result, Phoenix Group now expects to deliver in excess of £1 billion of total new business long-term cash generation for 2021, which will more than offset the run-off of the in-force business (currently c.£0.8 billion of annual cash generation).

https://www.investegate.co.uk/phoenix-g ... 00079956X/

I hold PHNX in my HYP, and am pleased with this news. Steady as she goes is fine by me. I'm likely to top up my holdings soon.

Ian.

Thanks Ian. I'll take their word for it that this is a 'strong performance'. I hope it wakes up the share price. Of course it sounds as if this is increasing competition with Legal & General, another of those that I hold.

Dod

[idpickering]

Phoenix Group completes £4.0 billion of Bulk Purchase Annuity transactions in H2 2021

Phoenix Group Holdings plc ("Phoenix Group" or "the Group") today announces that it completed four Bulk Purchase Annuity (BPA) transactions during the second half of 2021 covering £4.0 billion of premiums, comprising £3.6 billion of external deals and a further £0.4 billion tranche of the Group's Pearl Pension Scheme.

This equates to total BPA premiums of £5.5 billion contracted for the year (FY20: £2.5 billion). The capital strain for all BPA transactions written in 2021 is currently expected to be c.6.5% (FY20: 9%) and the cash multiple c.2.6x (FY20: 2.3x), with the second half transaction economics reflective of the current low credit spread environment.

This strong performance highlights Phoenix's success in driving organic growth, and reflects the investment the Group is making into both its Open business and internal asset management function. Phoenix is building a market-leading BPA team and asset sourcing capability, which supports a comprehensive BPA solutions offering that is now distributed to the market under the Standard Life brand.

As a result, Phoenix Group now expects to deliver in excess of £1 billion of total new business long-term cash generation for 2021, which will more than offset the run-off of the in-force business (currently c.£0.8 billion of annual cash generation).

https://www.investegate.co.uk/phoenix-g ... 00079956X/

I hold PHNX in my HYP, and am pleased with this news. Steady as she goes is fine by me. I'm likely to top up my holdings soon. This has obviously been well received as the sp is up over 3.5% as I type.

Ian.

Thanks Ian. I'll take their word for it that this is a 'strong performance'. I hope it wakes up the share price. Of course it sounds as if this is increasing competition with Legal & General, another of those that I hold.

Dod

You’re welcome Dod. As you know I hold LGEN too, and competition between them doesn’t bother me. In fact the opposite. It’d keep both on their toes imho, which is good I think. Sp up over 3.5% as I type.

Ian.

[monabri]

My browser offered me the clickbait link from The Herald.

"Edinburgh based Standard Life helps new owner generate huge amounts of cash"

The actual article title is not quite as "over the top "

"Edinburgh's Standard Life helps owner grow pensions business"

https://www.heraldscotland.com/business ... -business/

The new division being Dod's mention of moves into one of LGEN's ( from "closed" ( "zombie") to "open") business areas.

"Phoenix said yesterday that the open business is set to generate more than £1 billion cash in respect of last year’s performance. This will be more than enough to offset the natural decline in the cash generated from closed book operations."

Hopefully this will help establish higher growth in the dividend. In recent years ( history in link below) the increase has been sub 2% with a declining trend in growth.

https://www.dividenddata.co.uk/dividend ... ?epic=PHNX

[idpickering]

Strategic investor update

Phoenix Group Holdings plc ("Phoenix" or "the Group") notes that abrdn plc ("abrdn") has today announced the successful sale of approximately 40 million shares in Phoenix, representing approximately 4% of Phoenix's total issued share capital. The sale was effected by way of an accelerated bookbuild to a range of institutional investors ("the Placing"). abrdn has announced that it intends to return the net proceeds of the Placing to its shareholders.

Following the settlement of the transaction, abrdn's holding in Phoenix will be approximately 10.4% of Phoenix's total issued share capital. Importantly, with abrdn's holding remaining in excess of 10%, the two parties' Relationship Agreement will remain in place which entitles it to appoint a director to the Phoenix Board.

abrdn continues to be Phoenix's core strategic asset management partner and manages c.£165 billion of the Group's assets under administration.

Stephen Bird, CEO of abrdn, commented on the placing:

"Our strategic partnership with Phoenix remains very important to us. This was further evidenced by the simplified and extended relationship we announced in February 2021.

We have therefore reconfirmed our commitment to our remaining 10.4% shareholding in Phoenix which retains our right to appoint a director to the Phoenix Board."

Phoenix's other strategic investor, MS&AD Insurance Group Holdings, Inc. ("MS&AD"), continues to retain a 14.5% shareholding. MS&AD highly values the strategic relationship and shareholding in Phoenix. Its holding remains a key part of MS&AD's long-term strategy to diversify its earnings internationally and MS&AD expects to remain a significant shareholder.

https://www.investegate.co.uk/phoenix-g ... 09119647Z/

[idpickering]

Phoenix Group announces a record set of financial results for 2021, its first ever organic dividend increase of 3% and a new dividend policy

Financial highlights

Delivering cash

· Record cash generation1 of £1,717m in 2021 (2020: £1,713m) exceeds our £1.5bn-to-£1.6bn target range for the year.

· 2021 cash generation includes c.£400m of integration synergies, with integration synergies to date across the Standard Life and ReAssure acquisitions now in excess of £2.5bn.

· Having met our two conditions for dividend growth, the Board is recommending a 2021 final dividend of 24.8p per share, which includes our first ever organic dividend increase of 3% (2021 total dividend: 48.9p per share).

· Our increased dividend cost of c.£0.5bn per annum remains just as sustainable over the long term with c.£11.8bn of Group long-term free cash available to shareholders (after deducting interest on debt to maturity).

Delivering resilience

· Strong balance sheet maintained with a Solvency II Surplus of £5.3bn2 as at 31 December 2021 (2020: £5.3bn3).

· Increased Solvency II Shareholder Capital Coverage Ratio2,4 ('SCCR') of 180% as at 31 December 2021 (2020: 164%3,4); SCCR is currently at the top-end of our target range of 140%-to-180%, which provides significant capacity to invest into both organic and inorganic growth opportunities.

· Fitch leverage ratio5 of 28% as at 31 December 2021 is within our target range of 25%-to-30% (2020: 28%).

Delivering growth

· Record new business long-term cash generation of £1,184m in 2021 (2020: £766m6) means that Phoenix has proved 'the wedge' hypothesis for the first time, with organic growth from our Open business more than offsetting the natural run-off of our Heritage business (currently c.£800m per annum).

· 2021 new business long-term cash generation comprises £950m from our Bulk Purchase Annuities (BPA) business (2020: £522m) and £234m from our capital-light asset-based businesses including Workplace (2020: £244m7).

· Record level of BPA premiums contracted in 2021 at £5.6bn (2020: £2.5bn), which is a 124% year-on-year increase, and reflects the investment we have made into our capabilities, with our capital strain reducing to 6.5% (2020: 9%).

· Clear momentum is also building in our Workplace business, with 41 new smaller schemes won during 2021, due to the investment we are making into our proposition and through leveraging the Standard Life brand acquired in 2021.

Other key financial metrics

· Assets under administration increased to £310bn as at 31 December 2021 (2020: £307bn8).

· IFRS operating profit increased to £1,230m in 2021 (2020: £1,199m).

New dividend policy

· To better reflect that Phoenix is now a growing, sustainable business, the Board has announced Phoenix Group's new dividend policy and now "intends to pay a dividend that is sustainable and grows over time".

https://www.investegate.co.uk/phoenix-g ... 00116359E/

[Dod101]

Thank you Ian. That seems good news from Phoenix although I must say that like a lot of insurance company accounts it is hard work trying to understand it. However taking their comments at face value it all sounds good and a very welcome increase in the dividend.

Dod

[idpickering]

Thank you Ian. That seems good news from Phoenix although I must say that like a lot of insurance company accounts it is hard work trying to understand it. However taking their comments at face value it all sounds good and a very welcome increase in the dividend.

Dod

You’re welcome Dod, and I agree with your comments. As I’ve mentioned before, it is my intention to top up my holdings of PHNX soon.

Ian.

[monabri]

https://www.telegraph.co.uk/business/20 ... -provider/

"A Saudi Arabian prince has taken a £190m stake in Britain’s biggest pension provider as the Gulf state expands its foothold in the City of London.

Saudi royal Alwaleed bin Talal Al Saud revealed he had taken a stake of just over 3pc in Phoenix Group through his Kingdom Holding Company. The investment makes the Saudi royal the sixth biggest investor in Phoenix."


"The Saudi company said that investment was in line with its strategy of investing in global market leaders. Phoenix Group is the UK’s largest long-term savings and retirement business, with 13m customers and £310bn of assets under management.

Investment in the City of London comes as Saudi Arabia races to diversify its economy away from oil under de facto ruler Crown Prince Mohammed bin Salman."

[Dod101]

https://www.telegraph.co.uk/business/2022/07/27/saudi-arabia-invests-190m-britains-biggest-pension-provider/

"A Saudi Arabian prince has taken a £190m stake in Britain’s biggest pension provider as the Gulf state expands its foothold in the City of London.

Saudi royal Alwaleed bin Talal Al Saud revealed he had taken a stake of just over 3pc in Phoenix Group through his Kingdom Holding Company. The investment makes the Saudi royal the sixth biggest investor in Phoenix."


"The Saudi company said that investment was in line with its strategy of investing in global market leaders. Phoenix Group is the UK’s largest long-term savings and retirement business, with 13m customers and £310bn of assets under management.

Investment in the City of London comes as Saudi Arabia races to diversify its economy away from oil under de facto ruler Crown Prince Mohammed bin Salman."

I am surprised that they claim that Phoenix is Britain's biggest pension provider. Certainly their AUM are small beer compared to Legal & General which has £1.3 trillion according their the latest Annual Report. Presumably it hinges on the definition of 'pension provider'

I hold both companies.

Dod

[monabri]

https://www.investegate.co.uk/phoenix-g ... 00079054U/

"Phoenix Group announces the cash funded acquisition of Sun Life UK and a 2.5% dividend increase"


"The value and cash flow generated through this acquisition support a sustainable 2.5% inorganic increase in the Group's dividend, to take effect from and including the 2022 Final Dividend, subject to completion. This demonstrates the significant value to shareholders of smaller, cash funded M&A.

Ahead of the Full Year results, the Board will assess if organic business growth delivered over the year can fund a further sustainable dividend increase for 2022.

In future years, we intend to simplify our dividend communications by announcing any dividend increase at the time of our Full Year results, which will combine both organic and inorganic growth, rather than providing separate dividend guidance on announcement of future M&A."

[Dod101]

https://www.investegate.co.uk/phoenix-group-hldgs--phnx-/rns/phoenix-group-to-acquire-sun-life-uk/202208040700079054U/

"Phoenix Group announces the cash funded acquisition of Sun Life UK and a 2.5% dividend increase"


"The value and cash flow generated through this acquisition support a sustainable 2.5% inorganic increase in the Group's dividend, to take effect from and including the 2022 Final Dividend, subject to completion. This demonstrates the significant value to shareholders of smaller, cash funded M&A.

Ahead of the Full Year results, the Board will assess if organic business growth delivered over the year can fund a further sustainable dividend increase for 2022.

In future years, we intend to simplify our dividend communications by announcing any dividend increase at the time of our Full Year results, which will combine both organic and inorganic growth, rather than providing separate dividend guidance on announcement of future M&A."

Small beer but nevertheless it sounds good. I cannot understand why they would announce a dividend increase at the same time and it is surely sensible to consider the results as a whole after they have drawn up their full acciunts.

Dod

[idpickering]

2022 Half-Year Results.

Phoenix Group announces record half year 2022 results, delivering growing, resilient cash and a 3% dividend increase.

Financial highlights

Delivering cash

· Strong first half cash generation1 of £950m in H1 2022 (H1 2021: £872m); now confident of delivering at the top-end of our £1.3bn-to-£1.4bn target range for the year.

Delivering resilience

· Strong balance sheet with a Solvency II Surplus of £4.7bn 2 at 30 June 2022 after a £450m debt repayment (FY 2021: £5.3bn) and a Solvency II Shareholder Capital Coverage Ratio2,3 ('SCCR') of 186% (FY 2021: 180%3).

· Our hedging and credit risk management approach limited the Solvency II surplus economic impact to just £(0.2)bn.

· Fitch leverage ratio4 reduced to 27% at 30 June 2022 reflecting active deleveraging (FY 2021: 28%).

· Phoenix manages a high-quality c.£34bn shareholder credit portfolio, which is 98% investment grade and with only 19% in BBB; our exposure to cyclical sectors is low at only c.3% and high quality with an average credit rating of A-.

· Phoenix has no material exposure to inflation, with our key product and cost exposures hedged.

Delivering growth

· Record first half new business long-term cash generation of £430m, more than double H1 2021 at £206m.

· H1 2022 new business long-term cash generation comprises £282m from our Bulk Purchase Annuities (BPA) business (H1 2021: £80m) and £148m from our capital-light fee-based businesses (H1 2021: £126m).

· Strong performance in the first half in BPA, with £1.6bn of premiums contracted, a 280% increase on H1 2021 (£0.4bn). Capital strain reduced further to 6.2% (FY 2021: 6.5%) with £102m of capital invested.

· Investment in our Workplace business has delivered clear momentum with net inflows of £1.7bn in H1 2022 (H1 2021: £0.2bn net outflow), with 42 new schemes won in the first half, compared to 16 in H1 2021.

Announced our first ever cash funded acquisition

· Announced the acquisition, subject to regulatory approval, of Sun Life of Canada UK for £248m, which equates to an attractive price to shareholder Own Funds ratio of 83%.

· Expect to deliver c.£470m of incremental long-term cash generation, with c.£125m of synergies targeted, net of costs.

· Simplified integration with their policy administration undertaken by our strategic outsourcing partner, TCS Diligenta.

· The value and cash flow expected to be generated through this acquisition support a sustainable 2.5% inorganic increase in the Group's dividend, to take effect from and including the 2022 Final Dividend, subject to completion.

Dividend approach

· The Board has declared an Interim dividend of 24.8p per share, equal to the 2021 Final dividend, which is an increase of 3% year-on-year (H1 2021 Interim dividend: 24.1p per share), reflecting the 2021 organic dividend increase.

· Ahead of the 2022 FY results, the Board will assess if organic business growth can fund a further sustainable dividend increase, in addition to the 2.5% inorganic dividend increase proposed for the Sun Life of Canada UK acquisition.

· In future years, we intend to simplify our dividend communications by announcing any potential dividend increase at the time of our Full Year results, which will combine both organic and inorganic growth.

And later;

Dividend details

The declared Interim dividend of 24.8p per share is expected to be paid on 12 September 2022.

The ordinary shares will be quoted ex-dividend on the London Stock Exchange as of 25 August 2022. The record date for eligibility for payment will be 26 August 2022.

https://www.investegate.co.uk/phoenix-g ... 00069383V/

I hold and topped up earlier this year.

Ian.