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||EPS - Basic
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Phoenix Group Share Discussion Threads
Showing 2126 to 2149 of 2150 messages
|Theres a pearl assurance house building in a town near me. Looks empty!|
|Phoenix Assurance building in my home town is now student flats. Now there's a surprise!|
|Oh, Pearl. My first dealing with an insurance company was with Pearl, insured my first bike! A Honda 125. Sadly I wasn't insured for over-revving the engine... :-)|
|Alter ego : Thanks for that. With technology evolving as fast as it is the financial sector will surely change markedly over the next 40 years!|
|rl3487015 here is the history of Phoenix Group
Although Phoenix Assurance (Aka Phoenix Life) is one of the original components along with the Pearl, the Group as it stands today is unrecognisable from the old Phoenix I also worked for.|
|dangersimpson2 :thanks for the comprehensive explanation. I think I am right in saying that this is the same company of old ( my twin sisters first job was working for Phoenix Assurance in 1975) although how the company share capital has evolved over time I am not sure. Seems like the company over time will have plenty of opportunity to prevent it's own extinction. Valuing the company against its open book peers still seems tricky although most commentators suggest it is a great value stock.|
|Roughly speaking they get cash from 2 sources:
1. Run off of the book. This is what MCEV is expected to represent although is highly dependent on a number of assumptions. Companies often trade at a discount to represent the risk of those assumptions being unrealistic.
2. 'management actions' this is where closed book transactions are accretive to the company. Partly by combining the IT systems and getting scale of administration but more importantly combining many policies narrows the variation of outcomes via the law of large numbers and means that the combined book has to hold less regulatory capital than the two books individually. This released capital is then available to management to pay out to shareholders or buy more closed book business.
So while cash flows from 1 will continue during wind down the real added value is from 2. That's why being a closed book consolidator is a good business and the transactions they do are win-win provided that a) there's enough books to consolidate, b) you don't over pay due to competition from other consolidators. The added benefit of 2. as well is that they come within the first few years of completing a transaction so their NPV is much higher than run off cash flows.
So cash flows don't cease if PHNX stop consolidating but they will slow down after a few years of the last completed transaction.|
|Ok, so these companies "run out of business"... providing a yield for that risk along the way... but how long is this time period to run out (knowing that the discounted cash flow beyond, say, 20 years is meaningless in discounted terms but not nominal terms); 25 years, 40 years...?|
|I think it's a real possibility. At present there's a rush to get rid of closed books if they're viewed as non-core. At some point this will slow and companies might well prefer to keep them rather than dispose.
Also, Phoenix and others need to raise funds to buy closed books. They don't want more debt and equity might be hard to come by.
The present MCEV (or 'economic value' as it seems to be called) is a decent enough measure of what investors will get back (future-discounted) as these closed books run off. From memory, a broker marked PHNX as a 'sell' a year or so back based on this possibility*. For myself I wouldn't mind holding it if I knew I'd get back a decent premium to the existing share price.
EDIT: *In post #1688 I think.|
|Not sure I understand your comment rl34870... are you saying people might no longer assure themselves until death and need a service for that?|
|In terms of the companies long term business model,what will be the direction of travel when the closed life book market dries up ? Presumably the yield is only sustainable until this area of business runs out.|
|That would be quite the lump to add. Personally, I'd like to see it happen, though no doubt some volatility in PHNX share price would ensue. Is this why we've had a few days of mild down when the wider market has been ticking up?|
|Prudential to withdraw from UK annuity market and may dispose of its back book:-
|Totally agree,and not before time.|
|great move up this week for PHNX|
|CSN has been strong of late as I mentioned, so thought we may get some
Chesnara's recent acquisition entailed a smaller % equity raise than PHNX,
may be one of the reasons it's trading near an all time high.|
|Looks good for a breakout!|
|Deutsche likes Phoenix’ fire power - HTTP://citywire.co.uk/money/the-expert-view-barclays-itv-and-diageo/a988504?ref=citywire-money-picture-galleries-list#i=5
Deutsche bank has upgraded its recommendation for Phoenix Group Holdings (PHNX), believing the market under-estimates the life insurance consolidator’s capacity to make another value-enhancing acquisition this year.
Insurance analyst Oliver Steel lifted the stock to ‘buy’ from ‘hold’, but lowered his share price target to 835p from 870p, explaining the purchases of the AXA Wealth and Abbey Life legacy pension businesses last year left Phoenix in a strong position to snap up another closed book of policies this year.
‘Phoenix has finally emerged from seven years of balance sheet recovery with the announcement of two acquisitions in 2016. We think investors are under-estimating the rapid improvement in solvency and debt capacity over 2017e- 2018e,’ said Steel.
‘Specifically, we think a hypothetical £1 billion - £1.5 billion acquisition could be funded principally out of cash and debt rather than equity, adding either side of 25% to future value - something that in our view is not sufficiently reflected in the current share price. Reflecting this, we lift our recommendation to “buy” with a 835p price target,’ the analyst said.
Steel’s comments follow a trading update earlier this month in which Phoenix revealed it had generated £486 million of cash in 2016, £117 million from the two acquired businesses. It reports full-year results in March. The shares softened 0.9p yesterday to 743.6p.|
|It's been pointed out elsewhere that my reading of future dividends is incorrect. Did I misread pp 56-57?
As a result of the AXA Transaction, the Board is expecting to increase the final dividend in respect of 2016 to £69 million (equating to an increase of 5 per cent. to the dividend per share).
Given the additional shares to be issued in connection with the Rights Issue, the final dividend in respect of 2016 is expected to increase by a further £25 million to £94 million, resulting in a full year dividend in respect of 2016 of £160 million.
So we'll get a final of £94m on 392.85m shs ... 23.93p.
From what I can see, my figure of 50.1p for 2017 stands, but naturally I'm open to argument.
Sorry about that - age-related brain degeneration. (Not to worry, it's like finding an extra tenner in an old suit!)|
|Added today @733p.|
|As I said before, anything under 750p is a bargain here.|
|Added my first half position today. Too cheap in my book.|