Phoenix Group Holdings PLC (PHNX)

[Dod101]

Very good. I assume when they mention 'bulk purchase annuities' that is the same as what Legal & General calls PRT ,'Pension Risk Transfer'. Of course I could be wrong.

They are though I think not quite in the same class as L & G.

Dod

[idpickering]

Very good. I assume when they mention 'bulk purchase annuities' that is the same as what Legal & General calls PRT ,'Pension Risk Transfer'. Of course I could be wrong.

They are though I think not quite in the same class as L & G.

Dod

Thanks for your input. I agree with your sentiments on this, and your later point re LGEN too. As for your question re bulk purchases, I'm not sure about that. PHNX are down 0.5% as I type, so barely a wiggle. tbh I thought they'd rise as the results look good imho. I'm not looking at buying more PHNX currently though, as I have a 'full' holding already, which I'm happy to continue hanging onto for the long term

Ian.

[Alaric]

Very good. I assume when they mention 'bulk purchase annuities' that is the same as what Legal & General calls PRT ,'Pension Risk Transfer'.

The same market anyway. I might suspect that Legal & General have some more nuanced versions of bulk annuity purchase. That might where the assets stay wholly or partly with the pension fund, but L&G pay out on longevity.

Writing annuity business can require a lot a of capital. It's so that the annuity can remain in payment even if things go wrong.

[Dod101]

Very good. I assume when they mention 'bulk purchase annuities' that is the same as what Legal & General calls PRT ,'Pension Risk Transfer'.

The same market anyway. I might suspect that Legal & General have some more nuanced versions of bulk annuity purchase. That might where the assets stay wholly or partly with the pension fund, but L&G pay out on longevity.

Writing annuity business can require a lot a of capital. It's so that the annuity can remain in payment even if things go wrong.

Yes and of course that is one reason that they always emphasise the Solvency Ratio (where incidentally L & G is much higher than Phoenix) Anyway out of interest I will try to research the point re annuities.

I hold both companies.

Dod

[monabri]

https://www.telegraph.co.uk/business/20 ... naissance/

(Possibly paywalled)

"Andy Briggs, chief executive of pensions giant Phoenix Group, said he has been in talks with the Government about investing in nuclear power infrastructure and is exploring how it could support the creation of new plants.His support is unusual for the industry, with pension companies traditionally avoiding nuclear because of the huge up-front costs involved."

"Mr Briggs also warned that ministers need to give private sector investors greater clarity on returns around the investment if the FTSE 100 company is to back future projects. He said: “We’re in ongoing dialogue regularly [with Government] on this. To date, we haven’t made significant investments into nuclear, [but] it’s something we would consider.”

"Kwasi Kwarteng proposed a new funding model while business secretary which is focused on enabling British pension funds, insurers and other institutional investors to fund nuclear power in the UK."

[idpickering]

Trading Statement.

Phoenix Group delivers another year of strong organic growth in 2022 and sets a new 2025 organic growth target at its Capital Markets Event

· Phoenix Group expects to deliver c.£1.2 billion of incremental new business long-term cash generation in 2022 through organic growth

· Phoenix Group also remains on track to deliver 2022 cash generation at the top end of its target range of £1.3 to £1.4 billion

· Today's Capital Markets Event will outline the strong progress Phoenix Group has made in building its organic growth capabilities and will provide a deep-dive into its strategy to deliver future organic growth

· Phoenix Group is setting its first incremental new business long-term cash generation target of c.£1.5 billion by 2025, which is a c.25% increase on the strong performance in 2022

https://www.investegate.co.uk/phoenix-g ... 00066736I/

Ian.

[idpickering]

Phoenix Group announces strong full year 2022 results and a 5% dividend increase.

2022 financial highlights

Growing our dependable cash generation

· £1,504m of cash generation1 in 2022 (FY21: £1,717m), which exceeds our £1.3bn-to-£1.4bn target range for the year.

· £12.1bn of Group in-force long-term free cash has increased by c.£0.3bn (FY21: £11.8bn) as our business grew year-on-year. This cash, which will be released over time, ensures our growing dividend is sustainable over the very long term.

Maintaining a resilient Solvency balance sheet

· £4.4bn 2 Solvency II Surplus at 31 December 2022 (FY21: £5.3bn), with our comprehensive risk management approach limiting the Solvency II Surplus economic impact to £(0.4)bn, in line with our published sensitivities.

· 189% Solvency II Shareholder Capital Coverage Ratio2,3 ('SCCR') (FY21: 180%3) is currently above our target range of 140-180%, providing significant capacity to invest into growth.

Delivering record organic growth

· £1,233m of incremental new business long-term cash generation (FY21: £1,184m) comprises £934m from our Retirement Solutions business (FY21: £950m) and £299m from our capital-light fee-based businesses (FY21: £234m).

· £4.8bn of BPA premiums (FY21: £5.6bn) which generated a broadly stable level of incremental new business long-term cash generation, but with 20% less capital invested; capital strain reduced further to 5.8%4 (FY21: 6.5%).

· £2.4bn of Workplace net fund flows (FY21: £0.2bn) and 53% increase in incremental new business long-term cash generation to £212m (FY21: £139m), as we retain our existing clients and benefit from new joiners to existing schemes and increased member contributions.

Strong dividend growth in 2022

· The Group's dividend policy is to 'pay a dividend that is sustainable and grows over time'.

· 5% increase in the Final 2022 dividend to 26.0 pence per share is recommended by the Board, comprising:

§ 2.5% organic dividend increase reflecting the Group's strong strategic and financial performance in 2022; and

§ 2.5% inorganic dividend increase that reflects the value from the Sun Life of Canada UK acquisition, which is expected to complete in April 2023 with regulatory approval now received.

· 50.8 pence per share Total 2022 dividend (FY21: 48.9 pence per share).

Dividend details


The recommended Final 2022 dividend of 26.0 pence per share is expected to be paid on 10 May 2023.

The ordinary shares will be quoted ex-dividend on the London Stock Exchange as of 30 March 2023. The record date for eligibility for payment will be 31 March 2023.

https://www.investegate.co.uk/phoenix-g ... 00066625S/

Heads up, the PHNX CEO is being interviewed on Bloomberg TV shortly.

Ian (I hold).

[MickR]

thanks

Tempus in the Times has a buy recommendation on these today, and looking at the above announcement, all looks rosy. However, looking at the Sharecast summary of the result on HL, it's headlines are

(Sharecast News) - Insurance firm Phoenix Group said on Monday that pre-tax losses had widened in the twelve months ended 31 December amid a fall in assets under administration.
Phoenix posted a pre-tax loss of £2.26bn, a significant widening of the prior year's loss of £688.0m, while IFRS losses after tax ballooned to £1.76bn from £688.0m.

The FTSE 100-listed group's deeper losses come as assets under administration fell to £259.0bn from £310.0bn, principally due to a roughly £46.0bn reduction in asset values, as well as £2.67bn of adverse investment return variances and £522.0m pounds of charges for amortisation and impairment of intangibles.

However, on an IFRS basis, adjusted operating profits grew to £1.24bn, up from £1.23bn in 2021, leading Phoenix to recommend a 5% increase its final dividend to 26.0p per share, resulting in full-year dividend of 50.8p per share - up from 48.9p per share last year.

to be fair, I've no idea what IFRS does or means to the figures, so can someone clarify if this is a good or bad set of results

Mick (I hold)

[monabri]

"Phoenix Group, the FTSE 100 life insurer, has created a 50-strong team of analysts and specialists to examine what projects it can invest in once Jeremy Hunt relaxes EU-era rules in the insurance industry, The Telegraph understands. "

( source..paywalled)

https://www.telegraph.co.uk/business/20 ... -big-bang/

Areas under consideration for investment : wind farms, social housing, care homes and university campuses.

"A Phoenix spokesman said: “We are working closely with the PRA, our industry peers and the Treasury to ensure that Solvency 2 changes allow us to invest quickly and safely in the type of projects that will best serve society and support government ambitions to boost productivity, level up the country and support the transition to net zero."

The article indicates that Phoenix Group expect the relaxation of Solvency 2 to be implemented by this time next year.

[Dod101]

"Phoenix Group, the FTSE 100 life insurer, has created a 50-strong team of analysts and specialists to examine what projects it can invest in once Jeremy Hunt relaxes EU-era rules in the insurance industry, The Telegraph understands. "

( source..paywalled)

https://www.telegraph.co.uk/business/20 ... -big-bang/

Areas under consideration for investment : wind farms, social housing, care homes and university campuses.

"A Phoenix spokesman said: “We are working closely with the PRA, our industry peers and the Treasury to ensure that Solvency 2 changes allow us to invest quickly and safely in the type of projects that will best serve society and support government ambitions to boost productivity, level up the country and support the transition to net zero."

The article indicates that Phoenix Group expect the relaxation of Solvency 2 to be implemented by this time next year.

That is helpful thank you. The sort of thing that L & G has been discussing as well. Just as long as the relaxation does not cause problems with overall security. This is probably fine, but these days we all need to be cautious about relaxation of banking/financial rules. I do not see Phoenix in quite the same light in terms of security as I do say Legal & General. L & G is very much old school; Phoenix does not have the same ring of authenticity about it. I am a little more cautious. The point is that these companies are not charities and usually the bonus of the CEO is at the forefront.

Few MPs I am sure have any idea or interest in this but they love investments in say windfarms.

Dod

[MrFoolish]

Few MPs I am sure have any idea or interest in this but they love investments in say windfarms.

Dod

Onshore wind has gone nowhere in the last few years because the MPs in this current government have indulged NIMBY objectors. I believe a grand total of two wind turbines were put up in the last 12 months.

[Dod101]

Few MPs I am sure have any idea or interest in this but they love investments in say windfarms.

Dod

Onshore wind has gone nowhere in the last few years because the MPs in this current government have indulged NIMBY objectors. I believe a grand total of two wind turbines were put up in the last 12 months.

If so, that is just fine by me. We have too many in my area already. Anyway very large wind farms are being built in the North Sea. They are not attractive there either but they are usually less obtrusive.

Let us not get distracted though, the subject is the possible relaxation of rules relating to financial security in the insurance industry, not what any freed up funds might be used for.

Dod

[monabri]

Few MPs I am sure have any idea or interest in this but they love investments in say windfarms.

Dod

Onshore wind has gone nowhere in the last few years because the MPs in this current government have indulged NIMBY objectors. I believe a grand total of two wind turbines were put up in the last 12 months.

Onshore = 10 in the UK ...2 in England in 2022.

https://www.euronews.com/green/2023/02/ ... -to-change

[MrFoolish]

If so, that is just fine by me. We have too many in my area already. Anyway very large wind farms are being built in the North Sea. They are not attractive there either but they are usually less obtrusive.


Dod

I'm curious to ask, which forms of energy production do you find to be acceptably attractive?

[monabri]

I had a quick look at Greencoat UK Wind (UKW)....the reported net margin is "very" attractive so I can perhaps see why PHNX ( and others) might be interested to invest in offshore wind.

https://www.gov.uk/government/news/uk-s ... ooperation

https://www.renewableuk.com/page/UKWEDhome

[Dod101]

If so, that is just fine by me. We have too many in my area already. Anyway very large wind farms are being built in the North Sea. They are not attractive there either but they are usually less obtrusive.


Dod

I'm curious to ask, which forms of energy production do you find to be acceptably attractive?

I understand your question and you already know the answer but for instance a nuclear power station, whilst not attractive, does not need to spread itself all over an attractive hillside in usually a very prominent location, opposite another one across the valley. And of course a hillside is covered in an array of these turbines, not just the odd one. And as we all know they do not produce electricity all day every day.

To be honest, if you need to ask..............

Dod

[MrFoolish]

I'm curious to ask, which forms of energy production do you find to be acceptably attractive?

I understand your question and you already know the answer but for instance a nuclear power station, whilst not attractive, does not need to spread itself all over an attractive hillside in usually a very prominent location, opposite another one across the valley. And of course a hillside is covered in an array of these turbines, not just the odd one. And as we all know they do not produce electricity all day every day.

To be honest, if you need to ask..............

Dod

I agree with you about nuclear power stations. But plenty of people will complain about those too - whether it's the construction traffic, the dumping of warm water into the rivers, or the view of pylons from their windows. You don't mind pylons do you?

[Dod101]

I understand your question and you already know the answer but for instance a nuclear power station, whilst not attractive, does not need to spread itself all over an attractive hillside in usually a very prominent location, opposite another one across the valley. And of course a hillside is covered in an array of these turbines, not just the odd one. And as we all know they do not produce electricity all day every day.

To be honest, if you need to ask..............

Dod

I agree with you about nuclear power stations. But plenty of people will complain about those too - whether it's the construction traffic, the dumping of warm water into the rivers, or the view of pylons from their windows. You don't mind pylons do you?

I cannot complain about pylons. They were there before I was (Just about, anyway) and you know, when they were building the relatively recent line from Beauly in the Highlands to the central belt of Scotland (mainly to bring the wind generated electricity to where it was needed) they put quite a few of the cables underground at huge expense in the most sensitive areas.

Dod

[idpickering]

Phoenix Group completes the acquisition of Sun Life of Canada UK.

Further to the announcement of 04 August 2022, Phoenix Group Holdings plc today announces the completion of the acquisition of SLF of Canada UK Limited ("Sun Life of Canada UK") from Sun Life Financial Inc.

https://www.investegate.co.uk/phoenix-g ... 02201063V/

Ian (I hold).

[idpickering]

Phoenix Group HY23 reporting update.

Phoenix Group will announce a strong first half performance across its core financial metrics of cash and capital on Monday 18 September, as planned. The results are expected to be in line with or ahead of published consensus metrics. The announcement will also include an update on the impact of the transition to IFRS 17 as at 31 December 2022.

The Group will publish its 2023 Half Year IFRS financial statements on Thursday 28 September, in order to complete its final procedures on the IFRS results ahead of publication, including auditor review. This reflects the operational complexity of IFRS 17 for Phoenix.

https://www.investegate.co.uk/announcem ... te/7755591

Ian (I hold).