Financial highlights
Delivering cash
· Strong first half cash generation1 of £950m in H1 2022 (H1 2021: £872m); now confident of delivering at the top-end of our £1.3bn-to-£1.4bn target range for the year.
Delivering resilience
· Strong balance sheet with a Solvency II Surplus of £4.7bn 2 at 30 June 2022 after a £450m debt repayment (FY 2021: £5.3bn) and a Solvency II Shareholder Capital Coverage Ratio2,3 ('SCCR') of 186% (FY 2021: 180%3).
· Our hedging and credit risk management approach limited the Solvency II surplus economic impact to just £(0.2)bn.
· Fitch leverage ratio4 reduced to 27% at 30 June 2022 reflecting active deleveraging (FY 2021: 28%).
· Phoenix manages a high-quality c.£34bn shareholder credit portfolio, which is 98% investment grade and with only 19% in BBB; our exposure to cyclical sectors is low at only c.3% and high quality with an average credit rating of A-.
· Phoenix has no material exposure to inflation, with our key product and cost exposures hedged.
Delivering growth
· Record first half new business long-term cash generation of £430m, more than double H1 2021 at £206m.
· H1 2022 new business long-term cash generation comprises £282m from our Bulk Purchase Annuities (BPA) business (H1 2021: £80m) and £148m from our capital-light fee-based businesses (H1 2021: £126m).
· Strong performance in the first half in BPA, with £1.6bn of premiums contracted, a 280% increase on H1 2021 (£0.4bn). Capital strain reduced further to 6.2% (FY 2021: 6.5%) with £102m of capital invested.
· Investment in our Workplace business has delivered clear momentum with net inflows of £1.7bn in H1 2022 (H1 2021: £0.2bn net outflow), with 42 new schemes won in the first half, compared to 16 in H1 2021.
Announced our first ever cash funded acquisition
· Announced the acquisition, subject to regulatory approval, of Sun Life of Canada UK for £248m, which equates to an attractive price to shareholder Own Funds ratio of 83%.
· Expect to deliver c.£470m of incremental long-term cash generation, with c.£125m of synergies targeted, net of costs.
· Simplified integration with their policy administration undertaken by our strategic outsourcing partner, TCS Diligenta.
· The value and cash flow expected to be generated through this acquisition support a sustainable 2.5% inorganic increase in the Group's dividend, to take effect from and including the 2022 Final Dividend, subject to completion.
Dividend approach
· The Board has declared an Interim dividend of 24.8p per share, equal to the 2021 Final dividend, which is an increase of 3% year-on-year (H1 2021 Interim dividend: 24.1p per share), reflecting the 2021 organic dividend increase.
· Ahead of the 2022 FY results, the Board will assess if organic business growth can fund a further sustainable dividend increase, in addition to the 2.5% inorganic dividend increase proposed for the Sun Life of Canada UK acquisition.
· In future years, we intend to simplify our dividend communications by announcing any potential dividend increase at the time of our Full Year results, which will combine both organic and inorganic growth.
And later;
Dividend details
The declared Interim dividend of 24.8p per share is expected to be paid on 12 September 2022.
The ordinary shares will be quoted ex-dividend on the London Stock Exchange as of 25 August 2022. The record date for eligibility for payment will be 26 August 2022.
https://www.investegate.co.uk/phoenix-g ... 00069383V/
Also posted on Company News here; viewtopic.php?p=522497#p522497
PHNX are very much a mainstay in my HYP, and perhaps that of others hereabouts, so this may be of interest here. I've bought more of the share this year.
Ian.