Phoenix Share Discussion Threads

[topvest] 03/9/2010 17:51

Nice jump today. Excellent!

[jonwig] 03/9/2010 17:49

Just as an illustration, RSL is expected to join the FTSE100 this month - MCap £3662m.

PHNX is at £1241m, so we've still a way to go for inclusion in the top index! (I can't find anything confirming PHNX promotion except Sandler's comment.)

[jonwig] 01/9/2010 17:55

Dunno - maybe find the recalculation date and see. Maybe here?

[197300] 01/9/2010 14:56

see two 125k and one 250k buys at 703. maybe they are buying before thay get on the ftse250. can trackers do this?

[jonwig] 01/9/2010 09:35

FT Comment:

Phoenix proposes higher dividend payments

By Adam Jones

Published: August 27 2010 10:44 | Last updated: August 27 2010 20:19

Phoenix Group Holdings, the life assurer formerly known as Pearl, hopes its cash generation will help persuade its lenders to give it more freedom to increase dividend payments.

The group, which is on course to enter the FTSE 250 index next month, pleased the market on Friday as it reported a substantial improvement in first-half profits and upgraded its guidance on expected cash inflows.

Phoenix manages "zombie" life assurance funds – investments that were made to back old insurance policies – rather than writing new business.

In the coming months, the Cayman Islands-incorporated group said it wanted to persuade lenders to ease restrictions on dividend payments that were imposed in a debt restructuring last year.

"They don't need to hold on to the purse strings as tightly," said Jonathan Moss, chief executive, arguing that the curbs reflected a nervousness about the group that should now have been eased.

Phoenix said acquisition opportunities would then probably be considered in 2011, although it did not rule out pursuing a deal before the conclusion of talks with lenders.

Ron Sandler, Phoenix chairman, said inclusion in the FTSE 250 would boost the company's profile in the City following its premium listing on the London Stock Exchange earlier this summer. "We are beginning to become a mainstream UK equity," he said.

Phoenix's pre-tax profit was £196m in the first half of 2010, a swing back from a £37m loss a year earlier. Operating profit was £176m, up from £30m.

Market consistent embedded value – a measure of a life assurer's worth that includes expected future profits – rose 7 per cent over the six months to June 30 to £1.962bn.

Full-year cash inflows were likely to be at the top of its previous target range of £625m-£725m, Phoenix said, boosted by internal fund restructuring, tax gains and other measures.

An interim dividend of 21p has been proposed. Shares in Phoenix rose 4½p to 681p.

FT Comment

Ron Sandler is careful not to overstate how far Phoenix has come since the debt restructuring last year. Its market capitalisation is still only about half its £2bn embedded value, for instance. That said, if it can loosen its loan constraints, that could add to the positive momentum the shares have enjoyed in recent weeks.

[jonwig] 01/9/2010 09:34

197300 - I hope you made the right decision, too!

So far they have delivered precisely what they promised. The debt restructuring will be the hard bit - to achieve everything they want, that is.

[197300] 31/8/2010 16:53

sold wtb, bt and rsl to buy more of these at 700 hope i made the right decision, only tinme will tell.

[jonwig] 29/8/2010 09:41

A key phase in their development from now is the repayment of (I think) 10% of their debt in order to give freedom to pay higher dividends.

One aspect of their debts hasn't been raised (though I haven't heard the podcast yet) - the maturities of their syndicated loan of £2,260m (2009AR, p118).

This is repayable in bits between April 2011 and November 2016. The interest rate is pretty benign for now: LIBOR + 200bps.

Very roughly, they get cash inflows of £700m and outflows of £400m so the repayment schedule will need to be renegotiated. It would be good to hear something about their plans here.
All I see is "Simplification and restructuring of banking arrangements" as part of their agenda for the future.

EDIT: repayment schedule was mentioned as part of the debt discussions. Also there is no hard and fast "10% rule" - that's just an indicator of good faith.

[dangersimpson2] 27/8/2010 09:20

I've given them a call and strangely they don't seem to want to trade the stock apart from on its Amsterdam listing until it actually goes into the FTSE250!! But thanks for your help anyway.

Cheers,

Danger

[jonwig] 27/8/2010 08:47

Hi, Danger - I bought before they moved to a London premium listing so can't answer your question.
However, this should settle the matter:



Your broker probably hasn't updated its systems.

[dangersimpson2] 27/8/2010 08:40

Hi jonwig,

Following today's results I was going to pick up a small amount in an isa for the yield and discount to MCEV, however my execution only ISA broker (iii) has them listed on the Amsterdam exchange only and tradable in Euro's.

I would have thought the premium listing and potential entry into the FTSE250 would make them:

a) Purchasable in sterling on the UK market.

b) ISA'able

What's your experience of trading PHNX? Is my broker just slow to catch up and worth a phone call or am I missing something obvious? I'd rather not pay the extra fee and take on the currency risk if its simply a case of my broker being slow on the up take, and I'm not going to move my ISA to buy a single company.

Cheers,

Danger

[jonwig] 27/8/2010 07:24

Strong results which exceeded my expectations (apart from cash inflows where I was a bit ott):



H1 divi of 21p looks good - I'd expect the same at H2 and increases next year: "A £22 million voluntary debt prepayment was made in respect of one of the Group's main credit facilities in the first half of 2010. Scheduled repayments of the Group's main facilities commence in 2011.

FTSE 250 entry probable at next month's sort-out.

The share price *ought* to respond with a value approaching the MCEV of £1962m - ie. 1190p. To be fair, it won't, but a 25% discount would still be 890p.

Yield at current share price is 6.3%.

[jonwig] 19/8/2010 12:49

Nope - FTSE 250 next month I understand.

[looky] 19/8/2010 12:47

will this go into the FTSE100 index?

[robsy2] 17/8/2010 10:00

Volume is much higher now they have the full UK quote.127000 shares traded yesterday in London.
If they can deliver on their targets then the share price should respond well.
The business model suggests to me that we can be reasonably certain that they can deliver.
There is value here.
LOOKING FORWARD TO THE PROGRESS REPORT ON 27TH
R2

[jonwig] 17/8/2010 09:22

What I want to see:

• Group MCEV above £1,950m. (It shouldn't be lower than last reported £1827m as discount rates have dropped and markets have risen.) With 165m shares that would be 1180p. Target is £300m increase for FY.

• Cash inflows for 2009 were £716m, and for Q1 2010 were £270m. Would be good to see H1 around £450m. Target is improvement of £225m for FY.

• Total bank debt is £2,760m Target is to reduce this by 10% pa to enable review of dividend cap. Need reassurance that this is on target.

• Current dividend cap is €50 pa. Would like to see at least 9p interim and reassurance of progress in removing cap.

Anything else?

[jonwig] 16/8/2010 14:09

But not all that much volume in Am or Lon. The market must be either indifferent or sceptical they will meet their targets.

[robsy2] 16/8/2010 10:13

Here we go !
R2

[197300] 03/8/2010 10:33

hi, glad to hear from you, thought i must have fallen asleep and missed armageddon. i bought these just before they went on to the ftse at 650 and thought i might make a handy 10% plus. there seems to be no, or very little trading in these at the moment

[jonwig] 03/8/2010 07:24

Of course, but there's no point waffling about nothing. H1 numbers and outlook on 27/08.

[197300] 02/8/2010 21:09

hello!
is there anybody out there?

[jonwig] 05/7/2010 07:00

Phoenix Group, the "zombie" life fund business formerly known as Pearl Group, is looking to raise cash from its £10bn book of annuity policies so that it can explore closed life fund acquisitions more quickly, according to people familiar with the group.



Also note ...

...the group's priority was to pay down its remaining debt through ordinary operating cash flows. They said it would take six-to-nine months to pay off the 10 per cent needed to give the group more operating freedom.

That means dividend restraint eased very quickly.

Also Ron Sandler interview:

[jonwig] 29/6/2010 14:21

mct - are these the shares from warrant conversion? In which case they would be free, and the stated purchase price just the conversion price for tax purposes.
(Osmond was the biggest warrant holder, I think.)

Robsy - I'm expecting an e-mail from my broker (TDW) soon. I'll pass on the gist if there's any likely complication.

[mctmct] 29/6/2010 13:05

Significant director purchase.

[robsy2] 28/6/2010 09:40

Yes good news.I have bought the € quoted stock... any idea what I have to do if anything?
R