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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