Phoenix Share Discussion Threads

[stun12] 05/3/2019 12:52

EPS is on page 478 of about 3000 (!). EPS basic is 66.8p, diluted is 66.7p for a P/E of about 10.8x based on a 720p share price. Not sure how that compares with the others you mentioned, but it certainly doesn't sound expensive.

[jonwig] 05/3/2019 12:51

riverman - I agree with you on that. They used to use a measure of embedded value, but gave up with Solvency II. Neither eps nor nav are much use, as accounting rules (IFRS) are poor at capturing long term assets such as pensions, policies, etc.

Solvency surplus and capital coverage ratio are pretty standard measures of safety, and cash generation reflects the ability of the insurance companies to transfer surplus funds to the parent (hence our dividends).

Eps were 66.8p comparted with a 6.3p loss (!) last year. (Income statement.)
NAV was £5,161m on 721m shares - so 716p. (Balance sheet.)

I can't comment on LGEN or AV. as I know little about either.

[riverman77] 05/3/2019 12:27

Impressive looking results,although I'm struggling a bit to find the best way to value these - I couldn't see an EPS or nav per share figure (at least in the headline figures, perhaps they are buried elsewhere in the report). How do these compare with LGEN or AV in terms of valuation?

[garycook] 05/3/2019 11:37

Skinny,Same with me.Great share and Management.So glad to have taken up the RI,s

[skinny] 05/3/2019 09:14

These have just become my biggest holding by value, over taking BP.

[schofip] 05/3/2019 09:12

Re Post 3182.
Hope you are all enjoying the best christmas present you "did" ever get. If not it is still not too late to treat yourself.

[cwa1] 05/3/2019 08:48

I DO like the phrase: Brexit preparations complete

Perhaps they can give Theresa a call and help sort her minor problems out next?

[lauders] 05/3/2019 08:46

I would say it means "When possible it will be progressive" speedsgh.

This part seems to indicate it will be possible ;-)

Looking ahead

Despite our expectation that market conditions will remain turbulent leading up to and beyond Brexit, we look ahead with optimism as Phoenix's hedging programme brings resilience to the Group' solvency position and cash generation. Additionally, the Group's capital-light new business capability brings added sustainability to Phoenix's cash generation.

Simultaneously, the drivers for consolidation in the life insurance sector are increasing and we believe institutions will look to divest their capital intensive closed business to consolidators such as Phoenix. Phoenix has a proven track record of delivering value accretive acquisitions and I am confident that the Group is well placed to take advantage of these growth opportunities as and when they arise.

Phoenix will enter the FTSE100 Index on 18 March 2019. Entry into this index is recognition of the progress Phoenix has made as an organisation.

I would like to take this opportunity to thank all my colleagues for their hard work and commitment in what has been another hugely successful year for Phoenix and our investors for their continuing support. I look forward to working with you all in 2019.

NICHOLAS LYONS

CHAIRMAN

Like the fact that they seem to have BREXIT covered whatever happens!

[stemis] 05/3/2019 08:45

Well it's just gone up 3.5%

[speedsgh] 05/3/2019 08:40

Under DIVIDEND POLICY...

"Given the long-term run-off nature of the Group's Heritage business, the Board continues to consider it prudent to maintain a stable and sustainable dividend policy."

Does 'stable' mean non-progressive? Genuine question.

[lauders] 05/3/2019 08:36

Happy with those results! A long term hold looks right here. See you have a serial down-ticking stalker jonwig so I ticked you up LOL. Why anyone would mark a post down that empthasizes the safety aspect of a company I have absolutely no idea! Pretty sad IMHO.

[ianood] 05/3/2019 08:33

Very pleasing and very understated as usual!

[edmundshaw] 05/3/2019 08:04

Excellent results. I expected good results, but these are somewhat better than my expectations... Seems clearly undervalued.

Looking forward to listening to the presentation!

[jonwig] 05/3/2019 07:59

Operationally, they look to have smashed through their targets.
The bits which I'm keenest on are the 'safety' aspects:

Shareholder Capital Coverage Ratio of 167% as at 31 December 2018 (147% pro-forma as at 31 December 2017).

Fitch Ratings affirmed the Group's ratings at A+; "stable" outlook. Leverage ratio 22%.

[robsy2] 05/3/2019 07:31

Yes, annual divi now running at 46.8p a share.

[rcturner2] 05/3/2019 07:19

Excellent results.

[skinny] 05/3/2019 07:03

.

2018 Highlights

· £664 million of cash generation2 in 2018 (2017: £653 million). The Group has delivered £1.3 billion cash generation in 2017 and 2018, exceeding the upper end of its cash generation target range of £1.0 billion - £1.2 billion for this period.

· Solvency II surplus of £3.2 billion3 as at 31 December 2018 (£2.5 billion pro-forma as at 31 December 2017).

· Shareholder Capital Coverage Ratio of 167%4 as at 31 December 2018 (147% pro-forma as at 31 December 2017).

· Proposed final dividend of 23.4p per share, a 3.5% increase on the 2017 final dividend.

· Group operating profit of £708 million (2017: £368 million).

· Assets under administration of £226 billion as at 31 December 2018 (31 December 2017 pro-forma: £240 billion). Net business inflows of £3.9 billion on UK Open and European businesses.

· New business contribution5 of £154 million (2018 pro-forma) demonstrates value accretive nature of Open new business in the UK and Europe.

· Fitch Ratings affirmed the Group's ratings at A+6; "stable" outlook. Leverage ratio 22%7.

New cash generation targets

· 2019 cash generation target of £600 - £700 million8.

· Long-term cash generation target for 2019 - 2023 of £3.8 billion.

Acquisition of the Standard Life Assurance businesses
· Acquisition of the Standard Life Assurance businesses completed on 31 August 2018.

· Total synergy target (net of £150 million transition costs) increased by £500 million from £720 million to £1,220 million:

- Capital synergies new target of £720 million (increased from £440 million); with £500 million delivered to date; and

- Capitalised cost synergies new target of £650 million (increased from £415 million); reflecting an increase from £50 million to £75 million per annum.

Delivering on strategic priorities

· Successfully entered bulk purchase annuity market contracting £0.8 billion of liabilities in 2018.

· AXA and Abbey Life integrations completed ahead of plan and targets, delivering cost synergy benefits of £27 million per annum and cumulative cash generation of £968 million.

· Diligenta selected as Phoenix's partner to deliver a single, digitally enhanced outsourcer platform to a further 2 million legacy-Phoenix policies.

· Brexit preparations complete.

· On-shoring project completed with UK plc in place.

Commenting on the results, Group CEO, Clive Bannister said:

"2018 was a very successful year for Phoenix in which we exceeded our cash generation targets, further improved our capital resilience and transformed the business through the acquisition of the Standard Life Assurance businesses.

These results show the strength of our Group and have enabled us to again increase our short and long term cash generation targets.

The transition of the Standard Life Assurance businesses continues to progress well and today we increase the total cost and capital synergy target by 70% from £720 million to £1.2 billion. Our end state operating model will incorporate the best of both legacy businesses and our management bench strength and strategic options as a combined Group have increased significantly.

Phoenix's substantial new business flows across both our Heritage and Open businesses through our Strategic Partnership with Standard Life Aberdeen bring increased sustainability to our long term cash generation. We are confident about our opportunities to grow in the future both organically and through BPA and acquisitions."

Presentation

There will be a presentation for analysts and investors today at 8.30am (GMT) at:

J.P. Morgan, 1 John Carpenter Street, London, EC4Y 0JP

A link to a live webcast of the presentation, with the facility to raise questions, and a copy of the presentation will be available at www.thephoenixgroup.com

[lauders] 04/3/2019 11:10

Hope we have a good set of results tomorrow and the recent positive trend continues. GLA!

[jonwig] 28/2/2019 17:34

RCT - that figures, if you reckon most funds today are either trackers or closet trackers!

[rcturner2] 28/2/2019 16:54

The most recent research on this subject has shown that there is very little effect anymore from being included in an index.

[edmundshaw] 28/2/2019 15:42

I listened to a talk some twenty years ago by a L&G tracker fund manager. Yes they buy and sell in advance, and work actively in other ways to avoid getting obviously shafted by index changes. The less well run trackers do this ineffectively which is one reason they track poorly and often lose money compared to the index they are supposedly tracking.

[zangdook] 28/2/2019 13:47

I don't know if the index funds buy in anticipation, but if they base their buying on the formal list there may be a boost on March 18.

[pj fozzie] 28/2/2019 12:26

Yeah - well "technically" you're correct. But what's a few days between friends....

[zangdook] 28/2/2019 10:56

If I interpret this correctly, it will be from March 18 but technically isn't yet. I may have it wrong.

[pj fozzie] 28/2/2019 09:17

The definitive confirmation: hxxps://www.ftserussell.com/files/press-releases/ftse-uk-index-series-quarterly-review-march-2019

Phoenix is now a FTSE 100 company :-)

Cheers,
PJ