Phoenix Share Discussion Threads

[lauders] 11/1/2018 01:46

Nice to see some recent strength here. Wonder if it means anything or we will go back down again to the usual 750p range. Not had any news for a while.

[grahamburn] 06/1/2018 15:32

IMO there are probably better options for acquiring other closed funds for Aviva as Phoenix's portfolio are closer to run off.

However, note my proviso.... "probably".

[my retirement fund] 06/1/2018 15:25

Aviva could easily take out Pheniox

[lauders] 06/1/2018 14:29

I noted that too grahamburn. It will be interesting to see what transpires now. Either they have to pay more or as mentioned already a possible merger may be an option. I don't have a crystal ball.

[grahamburn] 06/1/2018 14:17

Yes, Lauders, but as I pointed out on here (3 December) and others picked up yesterday, the fact that there is now heavyweight competition in the closed funds market in the shape of Aviva and possibly others, it will be much harder for Phoenix to pick up those funds at realistic prices.

[lauders] 06/1/2018 12:20

Point taken jonwig. However, do we really expect no more acquisitions? The company have been saying they are looking out for more so I doubt we would have to worry about the ten year point anyway.

[jonwig] 06/1/2018 09:08

Yes, I'm using Lauders' ten year holding time. Would it always be 50p, though? Fewer policies to pay out cash flows.

I'm no actuary, though it's a career I wish I'd pursued.

[rcturner2] 06/1/2018 08:46

jonwig, you make a good point, but the response to that would be that the current assets with no acquisition will pay the 50p annually for much longer than 10 years.

[jonwig] 06/1/2018 06:50

Lauders - if the company makes no further acquisitions, its cashflows and dividends will come solely from maturing policies: PHNX will be in run-off - a wasting asset.

Ask yourself, "How much would I pay to receive 50p pa for the next ten years?" Depending on your discount rate the answer would be about 390p (5%) or 310p (10%). It would, of course be 500p with no discounting.

You can then add any residual value or assume the dividend stream continues unchanged for more than ten years. The problem is that the net present value of PHNX shares is almost certainly below the current share price.

The company will know more precise answers, and outside analysts will have a pretty good idea, but the point I'm making boils down to saying that the current share price assumes assumes more acquisitions.

[lauders] 06/1/2018 02:38

An older article I missed till now:

In comparison, he also owns Phoenix Group, a specialist in closed life insurance company acquisitions, which is currently yielding 7.5 per cent.

“They have just made a number of acquisitions including AXA Life and Abbey Life and, given their core competency of being a closed life consolidator, they have got the expertise to drive synergies and better cashflows out of those acquisitions,” Smith said.

“Given that they have delivered in the past and these acquisitions were made in the last 18 months actually that sustains your cashflow payments from the business certainly out to the next 10 years.

“I am reasonably secure that you will get that 7.5 per cent dividend in the medium-to-longer term and that is where I am happy to buy those higher level payers above the 6 per cent range.”

10 years or so will do me fine and that is without any other acquisitions or mergers which I don't think will be the case ;-) The yield is under 7.5% at the current offer price though.

[skinny] 05/1/2018 11:19

From yesterday :- Deutsche Bank Hold 775.50 875.00 800.00 Downgrades

[garycook] 05/1/2018 09:11

I would prefer LGEN to T/O PHNX.

[jonwig] 05/1/2018 09:04

If it does happen, a nil-premium merger might be the choice.

[garycook] 05/1/2018 08:50

jonwig,Yes can see AV,taking out PHNX.

[jonwig] 05/1/2018 08:45

Thanks for that, speeds. Are they mixing up life and general? Two different species.

Closed book market getting tighter - yes, I think so now that Aviva seems to be buying them, and has more firepower than Phoenix. Maybe consolidate the consolidators, then!

[speedsgh] 05/1/2018 08:09

Deutsche Bank upbeat on European insurance sector, raising price targets for a swathe of UK names -

The bank's analysts said insurers "look reasonably positioned – cushioned against market weakness by strong balance sheets and on PEs that are well within the long-term trading range”

Deutsche Bank has issued an upbeat note on the European insurance sector at the start of 2018, raising price targets for a swathe of UK names including Admiral Group PLC (LON:ADM), esure Group PLC (LON:ESUR), Legal & General Group PLC (LON:LGEN), Prudential PLC (LON:PRU), St James’s Place PLC (LON:STJ), and RSA Insurance Group PLC (LON:RSA).

In a note to clients, the German bank’s analysts said: “Strong balance sheets provide underpin; rising yields offer optionality.”

They added: “DB's strategists are generally cautious on the year ahead, but insurers nonetheless look reasonably positioned – cushioned against market weakness by strong balance sheets and on PEs that are well within the long-term trading range.”

The analysts concluded: “Overall, we feel the sector can modestly outperform in 2018, particularly if bond yields rise (as DB expects) – though given our cautious top-down view, our preference is for higher-quality/safer stocks.”

They noted that many of the higher-quality insurance stocks performed well in 2017, and selectively they see this momentum continuing, highlighting Prudential.

The analysts also analysed the downside in UK insurers from UK political risk, concluding that for most stocks the impact of a hard Brexit, for instance, is manageable.

They said that, in this regard, the December rally in UK insurers looks justified, while Aviva PLC (LON:AV.) and - to a lesser extent - L&G still look oversold.

In contrast, the analysts downgraded their rating for Phoenix Group Holdings PLC (LON:PHNX) to ‘hold’ from ‘buy’, primarily reflecting their perception that “the market for UK closed book acquisitions has become more competitive, implying less potential accretion on future deals.”

[lord gnome] 19/12/2017 20:40

Me too Hyden, but a decent bid for PHNX would allow me to take profits here and recycle elsewhere. Idle speculation on my part - but you never know. We might just wake up to a 7.00am RNS one day giving us a nice present.

[hyden] 19/12/2017 20:37

Now that is interesting Lord Gnome. PHNX have always traded at a wide discount to EV so it wouldn't surprise me at all. FLG were acquired by AV. a while back and I recall bid rumours about a tie up between FLG and PHNX. Furthermore, FLG were part of the Resolution group of companies and Resolution formerly owned a large part of the current PHNX book, which was acquired by Pearl and then becoming PHNX. Interesting.

The problem for me is that I hold both and the combined entity would be just over 10% of my portfolio which is way too high for my liking.

[lord gnome] 19/12/2017 20:25

Interesting to see that holdings notification from Aviva after close tonight. Mostly nominee holdings, I know, but I have been speculating on a possible bid from PHNX from our friends in Norwich. It could make a good fit and Aviva are rumoured to be interested in closed book work. Anyone else have any thoughts?

[lauders] 19/12/2017 01:12

That's what I am here for too pj fozzie. Income is the main motive but capital gains in a healthy share price would not be turned away either ;-) Perhaps we will get some news in the early year about another acquisition? The BOD have said they are on the look out for any opportunities. The June 2018 change of registration will also help in a big way?

[pj fozzie] 18/12/2017 15:50

> Merry Christmas all hope this rockets next year

I'm happy if they just continue to pay regular dividends, increasing annually. That would be just lovely :-)

Cheers,
PJ

[stevenrevell] 17/12/2017 09:14

Merry Christmas all hope this rockets next year

[grahamburn] 03/12/2017 15:26

From their recent presentation it looks like Aviva are moving into acquiring closed funds as well.

Healthy competition for Phoenix.... or not, as the case may be.

[lauders] 02/12/2017 01:01

Probably not a high percentage fenners66!

More from PHNX:

Danny Dowd, Head of Retirement Propositions for Phoenix Life continues: “Offering customers the option of taking a one-off lump sum is a win-win situation. It offers customers a greater degree of control, but also enables us to free up resources that go into administrating small annuities.

I can see how this would free-up resources. Hope those considering it get some good advice though.