- Phoenix Group saw adjusted operating profits rise by 31% to £825m last year
Phoenix Group shares topped the FTSE 100 Index on Monday after the firm posted higher-than-anticipated profits.
Britain’s biggest savings and retirement business saw adjusted operating profits rise by 31 per cent to £825million last year, compared to analyst forecasts of £734million.
Earnings growth was driven mainly by its pensions and savings division, where they soared by two-thirds to £316million on the back of increasing operating margins and assets under administration.
Phoenix also achieved its £1.4billion operating cash target two years earlier than planned, bolstered by surpluses from its growing segments and management actions.
Total cash generation hit £1.8billion, around £250million down on the prior year but far above Phoenix’s target range of between £1.4billion and £1.5billion.
Following the performance, the firm has increased its three-year cumulative cash generation target over the 2024 to 2026 period from £4.4billion to £5.1billion.
Soaring performance: Phoenix Group shares topped the FTSE 100 Index on Monday morning after the firm posted higher-than-anticipated profits.
It has also recommended a 2.6 per cent uplift in its final dividend to 27.35p per share, taking its total dividend to 54p per share.
Andy Briggs, chief executive of Phoenix, said: ‘Our strong performance in 2024 and the operating momentum we have built will support us in delivering our growth strategy and have led us to upgrade our cash generation and adjusted operating profit targets through to 2026.
‘Delivery will give us the financial flexibility to reduce our leverage, while also sustaining our progressive dividend for shareholders.’
Shares in the London-based group, which owns the ReAssure and Standard Life brands, climbed by 8 per cent to 566p, their highest figure since last September.
Phoenix specialises in buying and managing ‘closed books’ – life insurance policies that are closed to new businesses but still have premium-paying customers.
It has benefited in recent years from the expansion of the UK bulk annuities market, where employers transfer their pension obligations to insurers.
Interest rate hikes have slashed the value of pension scheme liabilities and improved their funding ratios, making de-risking schemes more affordable.
Phoenix wrote £5.1billion of bulk annuity premiums last year, including a £300million transaction with two pension schemes belonging to technology consultancy Unisys and an £880million buy-in with the Rolls-Royce & Bentley Pension Fund.
It had additionally planned to sell its SunLife business, which it acquired from French insurance giant AXA in 2016, citing ‘current uncertainty in the protection market.’
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