Phoenix Share Discussion Threads

[jonwig] 25/3/2013 14:16

Funnily enough, they made a statement on 30/01 concerning the 'dividend capacity' of £125m for 2013 and annual increment of £10m; this suggests dividend ceiling of 55.6p this year, increasing by 4.5p per year thereafter.

What surprised me a bit listening to the webcast is that no-one questioned just what 'dividend capacity' was, nor even referred to dividend payments.

And what surprises me even more is that there is no reference at all to this phrase or equivalent in last week's results!

As I said, I sent a question down the line but it wasn't received - nor any others.

[philo124] 25/3/2013 12:43

Yep, has proved a good investment over the last 6 months.

[zcaprd7] 25/3/2013 12:23

Blimey, that's a fair old target price?

[scburbs] 25/3/2013 10:35

"Phoenix Group Holdings (LON: PHNX)'s stock had its "overweight" rating reiterated by equities research analysts at JP Morgan Cazenove in a research note issued to investors on Monday. They currently have a $14.33 (941 GBX) price target on the stock.

... Analysts at Deutsche Bank upgraded shares of Phoenix Group Holdings to a "buy" rating in a research note to investors on Monday. They now have a $11.81 price target on the stock, up previously from $9.44. ... JPMorgan Chase reiterated an "overweight" rating on shares of Phoenix Group Holdings ... now have a $14.21 price target on the stock."

[jonwig] 23/3/2013 07:00

grim, an interesting question, one which I've thought about in the past but not since the re-financing.
This is my take - there may be more:

Company-specific.
Management have consistently delivered on targets and have the sense to under-promise and over-deliver (words they use themselves). I think they've earned their competence stripes.
If they fail to make suitable acquisitions, the existing books will wind down and begin to see erosion in MCEV, hence share price That won't particularly worry shareholders, as the dividends will be thrown at us, but it will mean the goose is suffering premature old age.

Market background.
The share price always seems to get hammered when the equity market falls. At least that's been my impression, but I see Digital Look quotes a beta of 1.01.
Actually, the way the business works, equity prices should be less of a threat than with open life companies.

Regulatory threats.
I have the impression that EU regulators are being less aggressive towards life companies than was feared. I can't substantiate that, though.

Treatment of policy holders.
A couple of policy holders have posted here to air grievances. I've no problem in principle with that, and there may of course be a general problem specific to PHNX - I don't know.
If there is, the FSA might cut rough but how much that would affect the share price I can't say.

All this is in the light of the very real fears last year that (a) management were being over-ambitious and (b) they would have re-financing problems. Look at last summer and where the share price was!

[jonwig] 23/3/2013 06:43

One broker note issued yesterday, from what I can discover:

22 Mar Investec Buy at 649.50 Target 734.00p unchanged Reiterates

[grim] 22/3/2013 19:49

What are the possible downsides/threats for this company?

[jonwig] 22/3/2013 17:00

Robsy - see post #570. It's £10m pa not 10%.

Of course, dividend paying capacity could mean they will use some to pay down debt instead, or make acquisitions for cash.

It does look good, doesn't it.

[robsy2] 22/3/2013 16:48

Ok dividends If you look at the slides on the website ,page 7 says we get 26.7 now +27%.Good.
Pages 20 and 21 give us the plan going forward, 125mGBP allocated for dividends in 2013 and a 10% per annum increase therafter.
Not sure what that is per share given the rights issue... Jonwig Where are you?!?
It all looks good though IMO!
R2

[zcaprd7] 22/3/2013 16:45

Good day. Ended on the highs. Chart looking good for an attack at the 3 year highs...

[scburbs] 22/3/2013 10:59

Worth noting that the 40% target for gearing by 2016 would represent c.£700m of debt repayments assuming a constant MCEV at £2.33bn. This happens to be the amortisation of the Pearl facility plus the Impala target amortisation, i.e. the 40% target doesn't appear to require anything beyond that which is already planned.

This should hopefully leave them free to pay dividends in line with the allowed amounts.

[terryfallon1] 22/3/2013 10:58

Greetings from sunny Malaga! Sunny here as well. Very pleased.

[jonwig] 22/3/2013 10:47

I've just watched the webcast - quite impressive.

At ~35mins they brought up the question of consolidation - ie. takeovers. They will be very cautious about any deals ... need to enhance current shareholder value and not worsen gearing. They are not dependent on doing deals.
The potential target closed-life market is about £200bn.

I sent a question (re dividend policy) from a form on the website but it didn't arrive ... nor did any others!

[scburbs] 22/3/2013 08:25

Looks good to me. I have added a few more at this bargain level.

Cashflow target up and Phoenix Life surplus of over £500m puts them on course to meet the £650-750m cashflow target for 2013 (I was expecting a significantly reduced target for 2013 vs 2012 as they had the annuity transfer benefit, but they have increased it!).

[jonwig] 22/3/2013 07:36

Well, we didn't find out!
I can't locate any explicit dividend policy in the results.

It does look as though they plan incremental debt repayments: gearing to fall from 48% to 40% by end of 2016.

Webcast at 9:30am.

[jonwig] 21/3/2013 18:25

We'll find out tomorrow!!

[renew] 21/3/2013 17:52

Thanks Jonwig
I bought in under the impression they were paying 26.7p. * 2
Cant remember why I believed that now.

[jonwig] 21/3/2013 12:01

They don't actually say so (I'm going by the RNS of 30/01):

The dividend conditions have been amended to provide a dividend capacity of £125 million for dividends declared in respect of 2013, with capacity to increase by £10 million p.a. thereafter.

So £135m divided by 224.6m shares is 60p/sh for 2014.

They might not keep 1:1 interim:final, and might reserve some capacity for debt amortisation.

[renew] 21/3/2013 09:36

Why is the dividend unclear?
I thought they had stated 26.7p * 2 ?

[jonwig] 21/3/2013 07:27

Good - there can't be any surprises on the operating front (surely ...) as the Impala facility was rescheduled after the year end.

But I hope they will clear up just what what will be the new base level of the total annual dividend.

[jeff h] 20/3/2013 20:24

Results Friday

[philo124] 20/3/2013 17:59

Bought some more.

[zcaprd7] 13/3/2013 11:47

Looks like we are filling the gap...