Phoenix Group expects to beat cash generation target

Phoenix Group said it expected to beat the upper end of its cash generation target as the closed life funds company posted flat profits for the first half.

The FTSE 250 company said it generated £349m of cash in the six months to the end of June, down from £360m a year earlier. It said it would exceed the top end of its cash generation target of £1bn to £1.2bn for 2017 and 2018.

Operating profit for the first half was £216m, little changed from £215m a year earlier. The company set aside £68m to cap fees for unitised non-workplace pensions.

Phoenix agreed in February to buy Standard Life's insurance business for £2.9bn and has been working towards that deal since. It raised £950m in July to fund the acquisition, which is expected to complete at the end of August.

Clive Bannister, Phoenix’s chief executive, said: "The group has delivered strong cash generation; and expects to exceed its 2017-2018. Our commitment to improving customer outcomes is evidenced by the introduction of fee caps on unitised non-workplace pensions following a similar move with workplace schemes in 2017.

"Having received enormous support from our investors I am delighted to announce that we anticipate completion of the acquisition of Standard Life Assurance on 31 August 2018."