Phoenix Group Reports Increased Operating Profit for Despite First-Half Loss

2 min read | September 16, 2024 01:00 AM PDT | By Team Kalkine Media

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Phoenix Group Reports Increased Operating Profit for Despite First-Half Loss — Image source: Shutterstock

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Phoenix Group Holdings Plc, an Financial sector stock, reported a wider first-half IFRS loss after tax of £646 million, compared to a £245 million loss during the same period last year. The increased loss is attributed to £698 million in adverse economic variances, primarily driven by higher interest rates and global equities.

Operating Profit Growth Despite Losses

Despite the wider loss, Phoenix Group Holding Plc (OTC:PNXGF) saw a 15 percent increase in its IFRS adjusted operating profit, which reached £360 million, compared to £313 million a year ago. This growth was largely fueled by its Pensions and Savings and Retirement Solutions divisions, both of which contributed to profitable business growth.

Operating cash generation for the period also rose by 19 percent to £647 million, supported by surplus growth from ongoing business activities and consistent delivery of management actions. The company generated total cash of £950 million, up from £898 million during the same period last year.

Debt Repayment and Dividend Increase

The company reported a debt repayment of £250 million for the period, continuing its goal to repay at least £500 million by the end of 2026. Additionally, the Board declared an interim dividend of 26.65 pence per share for 2024, reflecting a 2.5 percent increase from the previous year.

Focus on Long-Term Financial Targets

Looking ahead, Phoenix Group remains focused on executing its strategy and is on track to meet its long-term financial targets. The company aims to achieve £900 million in IFRS adjusted operating profit by 2026, along with £250 million in annual run-rate cost savings. Phoenix also set a goal of reaching £1.4 billion in operating cash generation by the same year.

For 2024, the company expects total cash generation to be at the upper end of its target range of £1.4 billion to £1.5 billion. Over the next three years (2024-2026), the company aims to generate £4.4 billion in total cash.

SunLife Sale Discontinued Amid Market Uncertainty

In a separate development, Phoenix announced that it has decided to discontinue the sale process of its SunLife business, citing ongoing uncertainty in the protection market. The company will now focus on enhancing the value of SunLife within the broader group.

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