Phoenix Share Discussion Threads

[kenny] 14/7/2014 09:23

Thanks guys for the advice. I have never before filtered anyone but have been moved to do so in relation to hvs. Now that I have done it to hvs, it feels good because, after all, I will hardly be missing any deep insightful analysis!

[rcturner2] 14/7/2014 08:54

Kenny, understandable viewpoint. The quality of posters is often a good guide to a share's prospects!

[speedsgh] 14/7/2014 08:51

Kenny - Just use the filter button on hvs. I did a long time ago + i now sit in blissful ignorance of anything that he is saying. If we all ignore him, he will doubtless move on to pastures new soon enough.

[hvs] 14/7/2014 07:54

Very good analysis scburbs,

Very very clear, hope it sinks in.

[scburbs] 13/7/2014 09:25

Kenny,

If you assume recurring operating profit of £250m p.a.

"And going forward we would expect underlying recurring Phoenix Life operating profits to be in the region of £250m." (page 6)

hxxp://www.thephoenixgroup.com/~/media/Files/P/Phoenix-Group-V2/Attachments/pdf/FY13%20Results%20Presentation%20Transcript%20-%20amended2.pdf

Then they have £90m of pension/expenses and £90m of interest (page 27) leaving £70m clear cash flow from profit.

hxxp://www.thephoenixgroup.com/~/media/Files/P/Phoenix-Group-V2/Attachments/results-presentations/FY-2013-Investor-Presentation.pdf

With the dividend (currently £120m p.a.) being covered by cashflow (plus there being over £1bn of cash!) it is very safe (strategy change aside), albeit there is perhaps £50m uncovered by recurring earnings ignoring management actions.

However, management have a target for incremental MCEV increases of £300m over 2014 to 2016 and, therefore, MCEV should be increasing (all things being equal) to the end of 2016.

The current gap between MCEV and market cap is c.£1.15bn. At a possible £50m p.a. I think the capital erosion is safe for a while especially as the capital value (currently £11.63/share) in the business is likely to go up over the next 2-3 years!

[hvs] 12/7/2014 12:57

Kenny u better off with a building society then NO WORRIES .

Let us do the worrying.

[jonwig] 11/7/2014 17:28

IEnny_correct its ROC as cash generation comes from maturing policies_ no further acquisitions means rundown to zero

But acquisitions means econs of scale and need to carry less reg capital_ p
lus. Lengthening life of co.

IFRS ACC's not best_ mcev clearer I think

Lousy typing on a mobility sorry
O

[kenny] 11/7/2014 17:08

Thanks Aleman. I am going to make an effort over the next few weeks to study the accounts(!?!?) to try and understand the position.

Before I decide whether or not to invest, I need to get comfortable that the share price does not glide downwards, over a number of years, as annual dividends, which include part capital, are paid.

I am uncertain if new acquisitions would help the situation rather than defer the problem I previously identified - if it is indeed a problem because my previous analysis may be wrong in suggesting this to be a problem. Probably need to spread sheet it to see the historical effect on the MCEV figure as cash has previously been received, in order to guess the future effect when cash is released. With the various historical acquisitions, I have a feeling this might prove to be impossible! For example, it is all very well generating cash "early" but presumably that has a knock on effect by lowering future potential profits.

Anyone got detailed broker reports which address these aspects?

[aleman] 11/7/2014 16:32

Kenny
11 Jul'14 - 14:26 - 1103 of 1109 0 0


Broker forecasts are for EPS of 36.13p for 2014 and 30.05p for 2015, with dividends of 56.07p and 58.54p.

Surely this means that a significant part of the dividends are return of capital?

Correct - but there is a lot more capital than there is share price!

[rcturner2] 11/7/2014 14:45

Start at post 1020 and read forward from there.

[kenny] 11/7/2014 14:42

RCTurner2 - thanks, I will do so. Much appreciated.

[rcturner2] 11/7/2014 14:41

Kenny we have been over this before on the thread, I suggest that you read back through for the explanation.

[hvs] 11/7/2014 14:37

lol !!!!!!

Study the accounts.

[kenny] 11/7/2014 14:36

Not at the expense of the capital being eroded?

[hvs] 11/7/2014 14:31

Why worry ?

Dont u like divis , money in the pocket ?

[kenny] 11/7/2014 14:26

Broker forecasts are for EPS of 36.13p for 2014 and 30.05p for 2015, with dividends of 56.07p and 58.54p.

Surely this means that a significant part of the dividends are return of capital?

[skinny] 07/7/2014 13:50

Appointment of Corporate Broker

Phoenix Group Holdings today announces the appointment of HSBC Bank plc as Joint Corporate Broker alongside J.P. Morgan Cazenove.

Clive Bannister, Group Chief Executive, said:

"We are delighted to announce the appointment of HSBC as our Joint Corporate Broker. Phoenix has a longstanding relationship with HSBC across a range of products and we are looking forward to working with them as we continue our development as the UK's leading specialist closed life fund consolidator."

[strathroyal] 04/7/2014 13:27

Thanks for the heads up, saved my making a mistake as I was all set to buy into RQIH.

[jonwig] 04/7/2014 07:27

Couldn't be RQIH, which is involved in active general Lloyds syndicates and non-life run-offs.

So who/what is RGIH?

EDIT: ah, I see what you mean - "Phoenix Asset Management" have a stake in RQIH, but Phoenix AM are nothing to do with "our" Phoenix.

We weren't told why the Swiss Re closed book merger fell through. On price, presumably?

[devoncop] 03/7/2014 17:34

danger

I agree with you. Given regulatory shenanigans in the UK I can actually see a purchase abroad giving access to closed books overseas and taking advantage of a very strong sterling rate at present but it will be interesting to see which way they jump.

[dangersimpson2] 03/7/2014 16:54

I assume you mean Randall and Quilter? RQIH. Would be interesting since hold there as well however bit of a tiddler for PHNX I would think they are more interested in large closed books which they can administer more cheaply and offset assets to free regulatory capital not buying other insurance companies out right. Also I always assumed that the holdings of Phoenix Asset Management are the investments of client funds and their fund manager believes RQIH to be undervalued not an investment at the corporate level...unless you can show me I'm wrong on that one?

[strathroyal] 03/7/2014 14:49

And presumably RGIH is the No. 1 target as they have recently upped their stake twice in this co. in June. Not a particularly large potential buy however.

[devoncop] 02/7/2014 17:09

Mergers and acquisitions specialist and that fact specifically commented on by the Chairman . Appointment announced shortly after PHNX bolster their capital position. . . Coincidence?

[hvs] 02/7/2014 12:58

Very good appoitment. Plenty of experience there.