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(Alliance News) - Phoenix Group Holdings PLC on Friday unveiled "ambitious" new targets as it reported annual results which met and, in some areas, surpassed City expectations.
Shares in Phoenix Group jumped 9.3% to 533.40 pence each in London on Friday morning. It was the best performing stock in the broader FTSE 100, which was up 0.3%.
In 2023, the London-based life insurance provider reported total cash generation of GBP2.02 billion, up 35% from GBP1.50 billion the year prior.
This was above the company's upgraded target of GBP1.8 billion, which was also the market consensus.
New business long-term generation rose to GBP1.51 billion from GBP1.23 billion, meeting City expectations, and achieving its 2025 target two years early.
Phoenix said this included strong growth from its Pensions and Savings business to GBP395 million from GBP249 million and an increase in its Retirement Solutions business to GBP1.07 billion from GBP934 million.
Phoenix said its solvency II surplus of GBP3.9 billion remained "resilient," and included a well-flagged GBP70 million consumer duty provision following a review of its back book products ahead of the July 2024 compliance deadline.
In 2022, the solvency II surplus was GBP4.4 billion.
IFRS adjusted operating pretax profit increased 13% to GBP617 million from GBP544 million, driven by strong growth in its Pension and Savings business, ahead of the GBP599 million consensus.
Phoenix said its pretax loss narrowed to GBP164 million from GBP3.51 billion.
Phoenix announced an ambition to grow operating cash generation by around 25% to GBP1.4 billion in 2026 from GBP1.1 billion in 2023, after which it is expected to grow at a mid-single digit rate over the long term.
These "ambitious" growth targets will support a new "progressive" and sustainable dividend policy, it said.
Phoenix increased the final dividend by 2.5% to 26.65 pence per share from 26.0p last year. This took the total payout to 52.65p from 50.8p, up 3.6%.
Total cash generation is targeted of GBP1.4 billion to GBP1.5 billion in 2024 with a 3-year target of GBP4.4 billion across 2024-26.
Phoenix intends to repay at least GBP500 million of debt by the end of 2026, and is aiming for GBP900 million of IFRS adjusted operating profit in 2026.
Around GBP250 million of annual cost savings are expected by the end of 2026.
By Jeremy Cutler, Alliance News reporter
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