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It would be reassuring to see some large director purchases. Recent buys from Simon Callendar & the Cosmen affiliates, why no others? It might begin to restore some confidence & change the sentiment here if they were to do so. SP could certainly do with a boost. Anyway good luck with your investment here, hope it fares better than mine.
The shorters here have often been a prelude to a leg down in the sp. Unfortunately more often right than wrong with this share. Probably the likely FTSE250 expulsion a factor in their increase. Hopefully nothing else, right?
CFO James Stamp rightly had to go, but next in line is Garat. He is also culpable & accountable for the recent & present business performance. Garat & Stamp were singing from the same hymn sheet & the market saw right through their BS. Further guidance misses will not be tolerated & Garat is running out of road. Will give credit when & where it is due but atm Garat has lost my confidence & I would certainly vote for a replacement. I sincerely hope the new CFO can turn things around as I too am also underwater here.
Dread to think where this SP would be if the Cosmens & Co had not been purchasing? No doubt Grant & Stamp would or should have been long gone had they not been doing so. Anyway here we are now waiting…waiting….waiting for a turnaround or a takeover. Hopefully the new CFO will steer the company fortunes to prosperous waters. If not Grant has got to be the next out. GLA
I think Ignacio is serving a purpose atm, that is if you were considering a takeover bid. Question is when, 2024 or early to mid 25? Surely a turnaround at some point in the future. So when would you act? Gotta be fairly soon….or an opportunity missed?
Yep. The US pushes over the guests & spoils the party. Then the US recovers while everyone else is still dusting themselves down wondering WTF did we do? Happens so often, it’s almost comical.
Hopefully a recovery tomorrow.
From The Times part 2 ‘ So far, Phoenix has set aside £70 million to cover a possible charge, which is only 0.6 per cent of its long-term free cash.
Investors should also beware that while payouts have stolen the limelight, shareholder equity has suffered. Although Phoenix has consistently delivered operating profits, non-operating costs (such as amortising intangible costs from mergers and acquisitions) mean the company has a basic loss per share of 13.8p. Shareholders’ equity has dropped from £5.8 billion in 2021 to £2.5 billion in 2023, and is expected to fall further, although management has maintained that it will remain positive.
But Phoenix’s investment case is its status as a cash machine, and the market prices it as such. The shares trade at a forward price to earnings ratio of 12, higher than the other London-listed insurers Legal & General and Prudential, both at around 10. Analysts now forecast a 9.8 per cent forward dividend yield, and with new, higher cash targets and a commitment to deleveraging the balance sheet, this looks enticing.
Advice Buy
Why Well-supported generous dividends, with aims to improve balance sheet’
From The Times part 1. ‘The insurer Phoenix Holdings has the third highest dividend yield in the FTSE 100 at 9.5 per cent, behind only Vodafone and British American Tobacco. It is little wonder that it has come to be a favourite among retail investors, now a fixture in brokers’ most popular buys. The company spent £530 million on shareholder payouts last year alone, which represents around a tenth of its market value. This is a huge sum, and investors would be right to approach with caution.
Phoenix manages the pensions, savings and investments of about 12 million people in Britain and Europe. It has four businesses: the first is “pensions and savings”, which manages defined contribution workplace pension schemes. The second is “retirement solutions”, which is its defined benefit pension scheme and annuity division. Then there is “Europe and other”, which covers operations in Ireland and Germany. Finally, there is “with-profits”, which is the management of legacy pensions and savings policies. This is closed to new business.
Phoenix’s model is based on acquiring old portfolios of life policies, then optimising the cost and capital requirements for running them. The closed portfolios shed cash as their policies mature, so they naturally shrink. This has historically meant that business needs to be replaced through mergers and acquisitions. Phoenix has been particularly successful at this, and is most well-known for its £3.3 billion purchase of Standard Life Aberdeen’s insurance division in 2018. At the end of last year Phoenix completed the Part VII transfer of this business, the final step in its integration, which boosted its cash generation by £400 million It is by this metric that the market judges whether Phoenix’s dividend is sustainable. Happily for investors, cash generation has been very high. It surpassed £2 billion last year, and management recently updated its target range to between £1.4 billion and £1.5 billion in 2024, and a cumulative £4.4 billion from 2024 to 2026. Phoenix’s Solvency II coverage ratio, which is the key gauge of an insurer’s balance sheet, also stands at a healthy 176 per cent. Meanwhile, cash turned out by new business was £1.5 billion in 2023, an increase from £1.2 billion the year before.
Overall then, the dividend looks well covered. There has been some concern around Phoenix’s balance sheet, as leverage is relatively high compared with peers. But last month the company revealed a plan to reduce leverage by at least £500 million, and has set out a target for a Solvency II ratio under 30 per cent by the end of 2026, down from its current 36 per cent.
Investors should note that there is some risk around the financial regulator’s new “consumer duty” framework, which could impact heritage policies in its portfolio, as some older clients may find they do not have good transparency on how much they are paying in management fees on their retirement savings.’
@Silkymoves “What makes you so confident they aren’t going bankrupt? ”
Because there is an ever increasing stakeholder likely building to buyout the business. So it will probably be taken over before bankruptcy enters into view, IMO.
@Pokerchips “The BOD have walked into a highly indebted business in a period of increasing debt payments and more expensive bond restructuring and any BOD unfortunately cannot just change that in a short period of time , and being a labour intensive business operating in labour challenged markets doesn't make it easier either within the US and UK”
That why you should not reinstate a dividend.
ATB
@Pokerchips I do not expect the BOD to be insulated from stakeholder influences. Saying that I also would not expect them to sacrifice other vested interests unless there is an underlying bias or weakness. Perhaps I should lower my expectations of the current MCG bard members? The BOD & SP will be judged in the prosperity or demise of the business, time will tell. GLA
@Pokerchips It is the BOD responsibility to act & make decisions in the best interests of the business. The BOD authorised the dividend when it was perhaps not prudent to do so. Is the CEO & members of the BOD a puppet(s) to the Cosmens?
@ Pokerchips Are you saying the recent BOD decisions & actions are part of a master plan by invested parties? Sabotage of the SP cloaked in incompetence at the behest of certain stakeholders? Surely not, I am shocked and amused.
MCG BOD looking to sell an asset after reinstating then removing the dividend within a short timeframe. WTF, sorry but my confidence in the current CEO & CFO is zero. My only reason for remaining invested here is surely things can only get better, right?
When I look at the MCG vs FGP 5 yr charts, I think to myself what could have been & WTF. There needs to be an update on the update soon otherwise this SP is going to drift lower & lower. Hoping for the best, expecting the worst with this BOD.