Phoenix (PHNX) has raised the target for synergies it expects to extract from its acquisition of Standard Life Aberdeen’s (SLA) open-book insurance business by £500m to £1.22bn. That is primarily the result of capital synergies, including implementing the group's equity and currency hedging strategy and internally restructuring indemnity benefits. The SLA purchase also boosted cumulative cash generation for 2017 and 2018 to £1.3bn, exceeding its target range of between £1bn and £1.2bn. That allowed management to raise the final dividend by 3.5 per cent and set an annualised rate of 46.8p from 2019.
Management is aiming to generate between £600m and £700m in cash this year and an aggregate £3.8bn during the five years to 2023. The annual dividend will be reviewed upon the completion of further acquisitions, which the life insurer is “eager” to complete, says chief executive Clive Bannister. The group also entered the bulk annuity market last year, completing three deals with an aggregate value of £0.8bn.
Analysts at JPMorgan Cazenove raised their forecasts for adjusted EPS for 2019 to 57.59p, up from 51.92p.
| PHOENIX GROUP (PHNX) | ||||
| ORD PRICE: | 718.5p | MARKET VALUE: | £5.18bn | |
| TOUCH: | 717.8-718.5p | 12-MONTH HIGH: | 735p | LOW: 538p |
| DIVIDEND YIELD: | 6.4% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 716p | SOLVENCY II RATIO: | 167% | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p)* |
| 2014 | 0.98 | 465 | 79.3 | 43.7 |
| 2015 | 0.90 | 152 | 70.0 | 43.7 |
| 2016 | 0.99 | -70 | -31.6 | 43.8 |
| 2017 (restated) | 1.30 | -7 | -6.3 | 46.2 |
| 2018 | 2.65 | 259 | 66.8 | 46.0 |
| % change | +104 | - | - | -01 |
| Ex-div: | 21 Mar | |||
| Payment: | 7 May | |||
| *Adjusted for 7:15 rights issue on 26 June 2018 | ||||
