16th Sep 2024 08:47
(Alliance News) - Phoenix Group Holdings PLC on Monday said it is on track to hit financial targets despite a mixed first half.
In the first half of 2024, Phoenix, the London-based insurer and pensions provider, said total income more than doubled to GBP12.33 billion from GBP5.80 billion a year prior.
Its pretax loss, however, stretched to GBP669 million from GBP372 million.
"This primarily reflects adverse economic variances which are a consequence of our solvency hedging approach that protects our cash and dividend, as well as elevated non-operating expenses related to our investment programme and the accounting impact of a buy-out of our internal pension scheme," the company explained.
Net finance expenses totalled GBP2.17 billion, rising sharply from GBP562 million.
Adjusted operating profit increased 15% to GBP360 million from GBP313 million. Phoenix lifted its interim dividend by 2.5% to 26.65 pence per share from 26.0p.
Phoenix said its solvency balance sheet remains "resilient" with shareholder capital coverage ratio of 168% compared to 176% at the end of 2023, in the top-half of its 140% to 180% operating range.
Total cash generation in the half-year amounted to GBP950 million, a rise from GBP898 million a year prior.
"We are confident of delivering at the top-end of our GBP1.4-1.5 billion target range in 2024," Phoenix Group added.
The firm's 3-year target is GBP4.4 billion across 2024 to 2026.
Chief Executive Andy Briggs said: "I am confident that as we continue to execute on our strategy we are building a growing business that is on track to deliver our financial targets and create shareholder value."
Phoenix is targeting GBP900 million of IFRS adjusted operating profit in 2026. The firm expects to deliver GBP50 million of cost savings by the end of 2024 and GBP250 million of annual savings by 2026.
Phoenix also said it had decided not to sell its SunLife Ltd business given the current uncertainty in the protection market.
The proposed sale was announced in June. SunLife provides financial protection products to the over 50s market in the UK and reported profit after tax of GBP16 million in 2023.
Shares in Phoenix Group were down 3.0% at 559.00 pence in London on Monday morning. The wider FTSE 100 was flat.
By Jeremy Cutler, Alliance News reporter
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