Phoenix Group said today (16 September) that the planned sale of its SunLife business is to be discontinued “given the current uncertainty in the protection market”.
In the half year results statement, it highlighted how SunLife was “a leading provider of financial protection products direct to the over 50s market in the UK and a valuable asset which contributes to the Group’s new business growth”.
But it reported that “given the current uncertainty in the protection market, the Board has decided to discontinue the sale process and will focus on enhancing the value it generates within the Group”.
Phoenix said its overall operating cash generation was up 19% at £647m (H1 2023: £543m), driven by increased surplus from our growing business and strong delivery of recurring management actions.
Total cash generation was £950m (H1 2023: £898m) and Phoenix said it was “confident of delivering at the top-end of our £1.4-1.5bn target range in 2024”.
IFRS adjusted operating profit increased 15% to £360m (H1 2023: £313m5), driven by profitable growth in both Pensions and Savings (£149m) and Retirement Solutions (£210m).
IFRS loss after tax of £(646)m (H1 2023: £(245)m), primarily due to £(698)m of adverse economic variances from higher interest rates and global equities which are the consequence of its SII hedging approach.
IFRS shareholders’ equity therefore reduced to £1.8bn (FY 2023: £2.7bn6 restated), but the reduction in interest rates since June reversed some of the economic variances and this reversal would continue as interest rates reduce further, it said.
Phoenix Group CEO, Andy Briggs (pictured) said: “Phoenix’s vision is to be the UK’s leading retirement savings and income business, and I am pleased with the initial progress we have made in executing on our 3-year strategy, as our 2024 interim financial results demonstrate.
“We have delivered 19% growth in Operating Cash Generation and remitted total cash generation of £950 million in the first half. We have generated 3%pts of recurring Solvency II capital and our resilient balance sheet has enabled us to repay £250 million of debt and to invest in our business.
“Strong growth in our capital-light Pensions and Savings business in particular has supported a 15% increase in operating profit. The Board has declared an Interim dividend which is a 2.5% year-on-year increase.
“I am confident that as we continue to execute on our strategy we are building a growing business that is on track to deliver our financial targets and create shareholder value.”
Phoenix further reported +3%pts of recurring Solvency II (SII) capital generation in H1, supported by recurring Own Funds growth.
The £3.5bn SII surplus “remains resilient (FY 2023: £3.9bn), after planned £0.25bn debt repayment and c.£0.2bn investment into our strategic priorities”, it said.
There was also £250m of debt repayment in the period, in line with its intention to repay at least £500m by the end of 2026; SII leverage ratio reduced to 35% (FY 2023: 36%), with (2)%pts debt repayment benefit partly offset by a reduction in Regulatory Own Funds from higher interest rates due to its SII hedging approach.
