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Phoenix Group Holdings PLC (LSE:PHNX), a prominent player in life and pensions, begins the week with sustained momentum in bulk annuity transactions, showing no signs of slowing down.
Recently, Phoenix’s subsidiary, Standard Life, completed another notable acquisition by purchasing WH Smith’s pension scheme. This transaction adds to the ongoing discussions about the company’s cash flow and debt levels, which remain a focal point for analysts.
Swiss bank UBS has highlighted the debt ratio as a critical aspect of Phoenix's upcoming interim results announcement. The company aims to achieve a debt ratio of 30% by the end of fiscal year 2026, based on Solvency II regulations. UBS anticipates that the ratio will be approximately 33% at the close of the first half, indicating that significant efforts will be required to reach the target ratio.
For the interim period, forecasts suggest that Phoenix will report a cash flow of around £600 million and operating profits of approximately £353 million. Analysts are also predicting that the company will maintain a half-year dividend of 26.65p. This anticipated dividend reflects a substantial yield of 9.2%, highlighting ongoing concerns about whether Phoenix’s balance sheet is being stretched too thin.
The upcoming interim results are expected to shed light on the company’s progress toward its financial goals and how it plans to manage its leverage and operational performance amidst its recent expansion activities.
