Phoenix boosts dividend on 'record' results
Phoenix Group has upped its dividend after annual cash generation exceeded expectations, the blue chip life insurer said on Monday.
FTSE 100
8,044.81
16:49 23/04/24
FTSE 350
4,424.29
16:59 23/04/24
FTSE All-Share
4,378.75
17:14 23/04/24
Life Insurance
5,905.68
16:59 23/04/24
Phoenix Group Holdings
492.00p
16:40 23/04/24
The group, which owns Standard Life and ReAssure, among others, said cash generation for the year to 31 December 2021 was £1.72bn, marginally higher than 2020’s £1.71bn and well above internal targets for between £1.5bn and £1.6bn.
New business long-term cash generation was £1.18bn, compared to £766m in 2020, while operating profits rose to £1.23bn from £1.20bn. Assets under administration were £310bn as at 31 December, compared to £307bn a year previously.
As a result, the firm said it was recommending increasing the final dividend by 3%, its first organic increase, to 24.8p per share. It also announced a shift in dividend policy, with the focus moving from "stable and sustainable" to a sustainable payout that "grows over time".
Chief executive Andy Briggs said: "It has been an outstanding year for Phoenix, with a record set of financial results and a significant strategic progress made as we fully embrace our purpose.
"2021 marked a pivotal moment, with £1.2bn of new business from our open business more than offsetting the run-off of our heritage business for the first time. This demonstrates that Phoenix is a growing, sustainable business and enabled the board to recommend our first ever organic dividend increase of 3%."
Previously, Phoenix - which acquired ReAssure from SwissRe in 2020 in a £3.2bn deal - had relied on mergers and acquisitions to fund payout increases.
Looking to the current year, Phoenix added that it expected to generate new cash of between £1.3bn and £1.4bn. It also confirmed a three-year cash generation target of £4bn.
The firm’s solvency II surplus was £5.3bn as at 31 December, in line with the previous year, while the solvency II capital coverage ratio was 180% compared to 164% a year earlier. SCCR is currently at the top end of Phoenix’s target range of 140% to 180%, the firm noted.