Phoenix Group Holdings PLC (PHNX)

[monabri]

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).

Sounds promising! Thank you for the update.

Edit..the sp was up 3.15% today.

Edit 2.....the FTSE had a good day too.

[idpickering]

Phoenix Group HY23 reporting update.



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

Ian (I hold).

Sounds promising! Thank you for the update.

Edit..the sp was up 3.15% today.

You’re welcome. I agree with you.

Ian.

[Dod101]

What a strange announcement from Phoenix. Why would they announce that when the actual half year results will be made only four days later?

Dod

[daveh]

What a strange announcement from Phoenix. Why would they announce that when the actual half year results will be made only four days later?

Dod

Because they won't be the complete results and the new IFRS17 results are going to be 10 days late, published on the 28th September.

[Dod101]

What a strange announcement from Phoenix. Why would they announce that when the actual half year results will be made only four days later?

Dod

Because they won't be the complete results and the new IFRS17 results are going to be 10 days late, published on the 28th September.

Still cannot see the point in the announcement. They could have told us that when they announce the half year results surely. In any case Legal and General announced their half year results including the new IFRS numbers maybe a month ago? It does not fill me full of confidence.

Dod

[MickR]

Because they won't be the complete results and the new IFRS17 results are going to be 10 days late, published on the 28th September.

Still cannot see the point in the announcement. They could have told us that when they announce the half year results surely. In any case Legal and General announced their half year results including the new IFRS numbers maybe a month ago? It does not fill me full of confidence

Dod

Perhaps they were being asked to clarify there position, or maybe put down some rumours ahead of the initial announcement. Doubt they would make any statement without good cause or reason

Mick

[idpickering]

2023 Interim Results.

Phoenix Group is executing on its strategy, delivering strong organic growth and resilient cash generation

We are delivering sustainable organic growth
· 106% year-on-year increase in H1 incremental new business long-term cash generation to £885m (H1 2022: £430m).

· Comprises £665m from Retirement Solutions (H1 2022: £282m) and £220m from our capital-light fee-based businesses (H1 2022: £148m).

· 72% year-on-year increase in new business net fund flows to £3.1bn (H1 2022: £1.8bn).

· Phoenix is now on track to deliver positive Group net fund flows from 2024, for the first time in its history.

We continue to deliver high levels of dependable cash generation

· £898m1 of cash generation2 (H1 2022: £950m); now confident of delivering at the top-end of our £1.3bn-to-£1.4bn target range for the year.

· £12.5bn of Group in-force long-term free cash increased by c.£0.4bn (FY22: £12.1bn) with strong growth both organically and through M&A, more than offsetting our annual uses of cash.

Our resilient balance sheet supports investment in growth

· 180%3,4 Solvency II Shareholder Capital Coverage Ratio ('SCCR') (FY22: 189%4) remains at the top-end of our target range of 140-180%, providing capacity to invest in growth opportunities, as we have done in the first half.

· £3.9bn3 Solvency II Surplus at 30 June 2023 remains resilient (FY22: £4.4bn).

We have the financial flexibility to support our strategy, including the capacity to raise further debt

· We have proactively de-levered our balance sheet through the repayment of £772m of debt since the end of 2020.

· Alongside updating our Fitch leverage ratio calculation for IFRS 17, we have also updated the calculation to include the policyholder estate for market consistency, and this was agreed with Fitch as part of our annual review.

· Our restated FY22 Fitch leverage ratio is 25%5, which is at the bottom of our 25-30% target range, and leverage is not a constraint to our M&A ambitions.

A sustainable dividend that grows over time
· The Board has declared a 2023 Interim dividend of 26.0 pence per share, equal to the 2022 Final dividend, which is a 5% year-on-year increase (H1 2022: 24.8 pence).

· The Board will assess the level of the 2023 Final dividend alongside the Full Year results next year.

Dividend details

The declared 2023 Interim dividend of 26.0 pence per share is expected to be paid on 23 October 2023.

The ordinary shares will be quoted ex-dividend on the London Stock Exchange as of 28 September 2023. The record date for eligibility for payment will be 29 September 2023.

https://www.investegate.co.uk/announcem ... ts/7760513

Ian (I hold).

[Dod101]

Thanks Ian. I have held this company for some years but I have never been altogether clear about it. These results do not help to clarify anything for me but given their track record to date I have to have confidence in them. All seems good but they seem to me to be a complicated group.

Dod

[idpickering]

Thanks Ian. I have held this company for some years but I have never been altogether clear about it. These results do not help to clarify anything for me but given their track record to date I have to have confidence in them. All seems good but they seem to me to be a complicated group.

Dod

Thanks for your input Dod, and you're welcome. I agree with the gist of your comments, and like you, I've held PHNX for years. I topped up my holdings of PHNX earlier this year, but overall, ignoring the dividends paid by the group to me, (which is why I bought them in the first place), I'm still 'in the red' with with my PHNX shares.

Despite that, I intend 'hanging on in there', and have no intention of selling my PHNX shares.

Ian.

[Dod101]

In common with the much smaller Chesnara and the comparable Legal & General, despite the generous dividends, the share price is very weak. I really do not know why but for income seekers they must all be very obvious choices and maybe one day their capital values will be recognised.

Dod

[ayshfm1]

I have the same problem. Hold all those, all under water, all on monster dividends and all appear to be OK, not that many understand these businesses properly. You are left wondering what you don't understand but the market does (maybe the bright sparks that do understand them are screaming dump to the companies they advise). All appear bargains, so I continue to clip the dividends and hold.

[monabri]

Surprisingly, the LT/ KK Budget was almost a year ago. ( Tempus Fugit) ..that's when the LDI issue came about ( don't really understand it personally). If we compare the share price performance of LGEN and PHNX with a FTSE100 tracker ( Vanguard's VUKE - blue curve) then we can see how much out of favour/ nervousness there is.

PHNX's results above look pretty good and in other times we would be thinking to ourselves.." Good choice of a HYP share" and thanks for the 5% dividend increase.




Edit. Total Returns plot added.





Source: https://www.hl.co.uk/funds/fund-discoun ... ion/charts

[idpickering]

PHNX's results above look pretty good and in other times we would be thinking to ourselves.." Good choice of a HYP share" and thanks for the 5% dividend increase.

Thanks for your input. Your sentence above is much my way of thinking about being a PHNX shareholder, and a HYPer too. The later is not for discussion here obviously.

Ian.

[MickR]

Tempus in the Times gives a brief overview of their figures today, and gives a Buy Recommendation. I Hold at about 3% of my portfolio, but I'm way overweight in the sector with Aviva and LGEN so won't be topping up, but sorely tempted.

[formoverfunction]

Phoenix takes stake in Hambro Perks in push to invest pensions in private companies (FT)


https://archive.ph/d35uJ

[idpickering]

Phoenix Group Holdings plc: Half Year 2023 Results.

Phoenix Group today publishes its Half Year 2023 Interim Financial Report, which includes the Group's HY23 IFRS financial statements.

The Group previously published its 2023 Interim Results on Monday 18th September, across its core financial metrics of cash and capital. During the first half the Group delivered strong organic growth as it more than doubled incremental new business long-term cash generation to £885 million, while delivering ongoing dependable cash generation with £898 million remitted in the period, and continued to maintain a resilient balance sheet.

As a reminder, the Group trades ex-dividend today, reflecting an Interim dividend of 26.0 pence per share.

Overview of HY23 IFRS results

· IFRS 17 is a global accounting standard that was implemented on 1 January 2023 and is an accounting change which does not alter the underlying economics of our business. As a result, IFRS 17 does not change our strategy or dividend, and we will remain focused on delivering cash and capital.

· As a result of our successful track record of delivering value-accretive M&A and subsequent integration activity, c.95% of our business was recognised at fair value on transition, which results in the establishment of a lower Contractual Service Margin ('CSM') and also increases the volatility in our shareholders' equity.

· IFRS adjusted shareholders' equity (inclusive of a £2.0bn CSM net of tax) was £4.8bn at 30 June 2023, down £0.4bn since 31 December 2022 (£5.2bn) due to a reduction in shareholders' equity. This reflects an IFRS loss after tax attributable to shareholders for HY23 of £261 million and payment of the Final 2022 dividend of £260 million, partly offset by positive Other Comprehensive Income movements on the Group's currency hedges and pension scheme liabilities.

· The Group's CSM (gross of tax) at 30 June 2023 was £2.7bn and this grew 5% in the first six months of the year (31 December 2022: £2.6bn), primarily due to new BPA business written and the acquisition of the Sun Life of Canada UK business, partly offset by the release in the period. It represents a significant store of future profits and is expected to release into the P&L at c.5-7% per annum over time.

· Adjusted operating profit before tax under IFRS for HY23 was £266 million, which is a 5% year-on-year increase (HY22: £254 million). This primarily reflects an increase in the CSM release from both BPA new business and positive assumption changes relating to the prior year.

· The Group's HY23 Fitch leverage ratio remained stable at 25% (Restated FY22: 25%), which is at the bottom of our 25-30% target range, and leverage is therefore not a constraint to our M&A ambitions.

https://www.investegate.co.uk/announcem ... t-/7782653

Ian (I hold).

[idpickering]

Availability of Interim Financial Report.

In accordance with Listing Rule 9.6.1, Phoenix Group Holdings plc's Interim Financial Report for the half-year ended 30 June 2023 has been submitted to the National Storage Mechanism where it will shortly be available for inspection

https://www.investegate.co.uk/announcem ... t-/7784267

Ian.

[Dod101]

After that buy recommendation (see higher up this thread), in today's Times Patrick Hoskings is commenting on the loosening of the rules to do with the Solvency 2. As he says, all part of the drive to get institutional investors to become more adventurous in backing productive parts of the UK economy.

The relevant bit for this thread is that, apparently, Phoenix has applied to the High Court to combine Standard Life with Phoenix Life. This involves transferring the assets and liabilities of Standard Life, currently still run as a separate business under the Phoenix Holdings umbrella, with the Phoenix Life funds. It seems that this has uncovered the fact that Standard Life has always been run much more conservatively than Phoenix (no surprise there)
Phoenix uses something called a 'matching adjustment', about which I currently know nothing, but it means, critics claim, that of Phoenix's capital of £3.7 billion, £2.2 billion is due to MA and is therefore an invention. That would bring its solvency ratio down from a reported 161% to a seriously unhealthy 37%.

It seems that the MA rules create capital which does not really exist and is used to a greater or lesser extent by most/all life insurers. I will try to understand this but my point at the moment is that Phoenix Holdings seems to be particularly exposed, and this might be relevant for anyone thinking of buying into Phoenix. I hold it but my exposure has always been less than for Legal and General or Chesnara, both of which I also hold.

I would be delighted if anyone who understands all of this could contribute because it seems to me to be important.

Dod

[idpickering]

After that buy recommendation (see higher up this thread), in today's Times Patrick Hoskings is commenting on the loosening of the rules to do with the Solvency 2. As he says, all part of the drive to get institutional investors to become more adventurous in backing productive parts of the UK economy.

The relevant bit for this thread is that, apparently, Phoenix has applied to the High Court to combine Standard Life with Phoenix Life. This involves transferring the assets and liabilities of Standard Life, currently still run as a separate business under the Phoenix Holdings umbrella, with the Phoenix Life funds. It seems that this has uncovered the fact that Standard Life has always been run much more conservatively than Phoenix (no surprise there)
Phoenix uses something called a 'matching adjustment', about which I currently know nothing, but it means, critics claim, that of Phoenix's capital of £3.7 billion, £2.2 billion is due to MA and is therefore an invention. That would bring its solvency ratio down from a reported 161% to a seriously unhealthy 37%.

It seems that the MA rules create capital which does not really exist and is used to a greater or lesser extent by most/all life insurers. I will try to understand this but my point at the moment is that Phoenix Holdings seems to be particularly exposed, and this might be relevant for anyone thinking of buying into Phoenix. I hold it but my exposure has always been less than for Legal and General or Chesnara, both of which I also hold.

I would be delighted if anyone who understands all of this could contribute because it seems to me to be important.

Dod

Thanks for this Dod. I can't answer your question and would be interested in reading a post from whom we might get some clarification too.

Ian.

[Alaric]

It seems that the MA rules create capital which does not really exist and is used to a greater or lesser extent by most/all life insurers.

An alternative way of lookimg at it is that it enables insurers to value liabilities like annuity outflow at a higher discount rate. So if the Gilt yield is 4%, it may enable the liabilities to be valued at 5% thus stating them at a lower value. In the interests of complicating the financial ststements, the liabilities are stated at their Gilt valuation and the invested assets at market value which is lower but there's a phantom asset added which is the difference between the two valuations. With the relative certainty of annuity outgo insurers don't feel the need to lock their assets into Gilts when higher returns are available in other fixed interest securities with higher credit risks and lower marketability.