Standard Life owner Phoenix Group hails ‘very strong’ first half despite economic woes

The life and savings group said it was confident about its outlook for the rest of the year after cash generation rose 8.9% to a record £950m in the six months ending June, compared to the same period last year.

He told shareholders he expects cash generation to be at the high end of his target range of £1.3 billion to £1.4 billion for the whole of 2022.

Phoenix said this was supported by new business, with cash generated from new customers more than doubling to £430m in the half-year.

The update comes a week after the group continued its recent wave of acquisitions with a £248m takeover of Sun Life UK.

Phoenix raised its interim dividend by 3% to 24.8 pence per share when it released its half-year results.

The company also said it had begun the migration of £15bn of pension assets and 1.5m members to Standard Life’s flagship sustainable fund.

Phoenix Group Chief Executive Andy Briggs said, “Phoenix performed very well in the first half despite a challenging macroeconomic environment. We once again delivered a record set of financial results, which were underpinned by the solid progress we made across all of our strategic priorities.

View of part of the Standard Life building on Lothian Road in Edinburgh.

“We generated strong cash generation of £950m and maintained our resilient balance sheet. We also generated both organic growth, with £430m of new business coming from our Open business, and inorganic growth, with the announcement of our acquisition of Sun Life of Canada UK for £248m . »

He added: “We have worked tirelessly to ensure that we can support our customers and colleagues affected by the rising cost of living – building on our program of activities for our most vulnerable customers and offering a range of support to our colleagues, including one-off payment. As the UK’s largest long-term savings and pensions company, we are guided by our fundamental social purpose. »

Steve Clayton, fund manager at Hargreaves Lansdown’s HL Select, said: “This is a solid set of numbers from Phoenix that show the company is performing well against all of its key objectives. Cash generation is up and acquisitions have delivered on their expectations in terms of synergies. The group has excess cash and capital, so expect further acquisitions down the road.

“The business hedges risk where possible and had little impact when markets fell in the first half. Crucially, Phoenix said this morning it has virtually no inflation exposure, having covered its costs and product exposures.

“No doubt analysts will ask them later about how long this cover will last. But at present this protection against rising costs puts Phoenix in an enviable position compared to most UK companies.

He added: “The group is writing large and growing new volumes of business, showing how much it has come from the simple consolidation and liquidation of former closed-book life insurance companies.”

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