Phoenix Group soars with robust financials, sets ambitious growth targets

Insurance giant raises dividend, projects hefty cash flow increase by 2026.

Phoenix Group soars with robust financials, sets ambitious growth targets
Phoenix Group Holdings PHNX

Phoenix Group Holdings (LSE: PHNX) shares surged 9.3% on Friday as the FTSE 100 insurer reported stellar annual results, smashing expectations with a 35% jump in cash generation to £2.02 billion.

The stellar performance prompted the firm to unveil ambitious growth plans, aiming to boost operating cash flow by around 25% to £1.4 billion in 2026 from £1.1 billion in 2023.

The London-based company's new business long-term generation soared to £1.51 billion, up from £1.23 billion, meeting City projections and achieving its 2025 target two years ahead of schedule. This was powered by robust growth in its Pensions and Savings arm to £395 million and a surge in Retirement Solutions to £1.07 billion.

Despite a well-flagged £70 million consumer duty provision, Phoenix's solvency II surplus remained resilient at £3.9 billion, down from £4.4 billion in 2022. IFRS adjusted operating pretax profit climbed 13% to £617 million, exceeding consensus of £599 million, while the pretax loss narrowed to £164 million from £3.51 billion.

To support its "ambitious" expansion plans, Phoenix unveiled a new "progressive" and sustainable dividend policy. The final dividend was hiked 2.5% to 26.65 pence, taking the full-year payout to 52.65 pence, up 3.6% annually. Total cash generation is targeted between £1.4 billion and £1.5 billion in 2024, with a three-year goal of £4.4 billion across 2024-26.

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