Phoenix Group profits rise as it sees higher company pension scheme demand
- Operating profit for the half year was up by 5% year-on-year to £266m
Phoenix Group profits rose in the first half, driven by demand from company pension schemes.
The insurance company, which has historically specialised in managing books of life insurance businesses that are closed to new customers, posted an operating profit growth of 5 per cent year-on-year to £266million in the six months to 30 June.
Phoenix Group shares closed down by 6.97 per cent, or 35.4p, at 472.4p, although the stock price was dented by going ex-dividend today, with investors due to pick up a 26p final payout.
The insurance company revealed that its operating profit for the half year to 30 June was up by 5 per cent year-on-year to £266million
The London-based company previously reported a 72 per cent increase in new business net fund flows to £3.1billion in the six months to June, up from £1.8billion at the same time last year.
Incremental new business long-term cash generation also rose by 106 per cent year-on-year to £885million.
In a statement, CEO Andy Briggs said: ‘Phoenix has delivered a strong financial performance in the first half of 2023, with our organic growth accelerating as we invest into our growth propositions, which is funded by our high levels of predictable cash generation and is underpinned by our resilient balance sheet.
‘We have delivered strong cash generation of £8981 million in the period and are on track to deliver at the top-end of our 2023 target range of £1.3-to-£1.4 billion.’
The group’s losses skyrocketed by £1billion last year following a decline in the value of assets backing the company’s pension schemes.
The firm reported a £1.76billion loss for 2022, up from £709million the previous year, as increasing yields, inflation and a widening of credit spreads impacted its investment returns.
Losses were further impacted by an accounting discrepancy from retirement schemes that were the subject of buy-ins
Briggs added: ‘We have also maintained our resilient SII balance sheet, with a SII surplus of £3.9 billion and a Shareholder Capital Coverage Ratio of 180%, which are after the investment of surplus capital into growth.
‘Our incremental new business long-term cash generation has more than doubled year-on year to £885 million, and with a buoyant BPA market and real momentum building in our workplace business, I am confident we will achieve another year of strong organic growth.’
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