Phoenix (PHNX) beat cash-generation expectations during the first half, prompting management to guide towards the top-end of its £600m-£700m range for 2019. After injecting £250 into its Irish subsidiary as part of Brexit preparations, £287m in cash was generated by operations, equivalent to 1.7 times the final dividend paid out for 2018.
New business written during the first half will contribute £250m in long-term cash generation, equivalent to around 1.5 times the half-year dividend payout. Assets under management were 7 per cent higher as investment returns offset outflows from UK and European heritage businesses. That included a £0.5bn bulk annuity transaction with Marks and Spencer Pension Scheme and inflows into the open book operations as part of its partnership with Standard Life Aberdeen (SLA). However, management reported more challenging trading for the Wrap products as defined benefit to defined contribution pension scheme transfers tailed-off and due to Brexit-related uncertainty.
Around £115m in capital synergies were delivered following its acquisition of SLA’s assurance business last year, taking the total to £615m, or 85 per cent of the expected total.
The Bloomberg consensus forecast is for adjusted 2019 EPS of 51.6p, from 70.2p the prior year.
| PHOENIX GROUP (PHNX) | ||||
| ORD PRICE: | 675p | MARKET VALUE: | £4.87bn | |
| TOUCH: | 674-675p | 12-MONTH HIGH: | 735p | LOW: 538p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 694p* | SOLVENCY II RATIO: | 160% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 (restated) | 1.09 | -42 | -5.5 | 22.6 |
| 2019 | 1.86 | 217 | 3.7 | 23.4 |
| % change | +70 | - | - | +4 |
| Ex-div: | 15 Aug | |||
| Payment: | 30 Sep | |||
| *Includes intangible assets of £4.11bn, or 570p a share | ||||
