Phoenix Share Discussion Threads

[masurenguy] 21/3/2017 00:59

Tempus in The Times.

Phoenix Group
As a business Phoenix is predictable to a fault. The company said a year ago that it would generate £2bn of cash between 2016 and 2020. It then bought two more closed assets, one from Axa, the French insurer, for £373m and the Abbey Life business from Deutsche Bank for £933m. The Phoenix model is to buy such closed or “zombie” funds and get cashflow from the inevitable cost savings. The savings from the Axa business are running ahead of expectations; Abbey Life has only been with the company since the year end but the omens are promising enough.

So Phoenix has lifted its 4 year cash generation target to £2.8bn. Phoenix is sufficiently confident, and the business is sufficiently predictable, for it to forecast a halfway dividend of 25.1p this year, up by 5% on last time. On the assumption that the same will be paid at the final stage the shares offer a guaranteed yield of 6.3%, about as good as it gets.

Phoenix raised the funds to buy Abbey Life in a rights issue at 729p. The shares added another 6p to 797 ½ p. The only question is the timing of the next deal, but there will be one.

My advice Buy. Why - Company’s long-term record speaks for itself

[garycook] 20/3/2017 23:44

PHNX,Yes a good sound core holding.

[rcturner2] 20/3/2017 15:37

boonkoh, Phoenix always seems to have been valued conservatively, which is a boon for long term investors. I am very happy to hold here, I would rather keep the steady valuation and draw the income.

[boonkoh] 20/3/2017 15:33

Surprised it has not risen more today. 6%+ current yield and management guiding further increases in dividend for FY2017. Consolidation of acquired books going to plan.It's almost like a pseudo-bond investment over the long term, but with a tasty 6% yield.

[essentialinvestor] 20/3/2017 12:56

Congrats folks, sold mine too soon.

Just wanted to say thank you for some of the posts on here which prompted
me to look at PHNX more closely and buy, but not sell at this lovely price!.

Very much appreciated.

[jonwig] 20/3/2017 11:16

yupa - thanks. Last two acquisitions were below £1bn each.

[edmundshaw] 20/3/2017 10:00

Thanks for the reminder, Yupa. The numbers are certainly stacking up for that sort of value-enhancing acquisition.

[yupawiese2010] 20/3/2017 09:54

Jonwig.

Back in January, - Deutsche had the following to say.

As you will observe in the last paragraph , conclusion was that any potential deal up to £1 - 1.5 billion could be done with cash / debt


Link.

From Citywire:

"Deutsche likes Phoenix’ fire power

Deutsche bank has upgraded its recommendation for Phoenix Group Holdings (PHNX), believing the market under-estimates the life insurance consolidator’s capacity to make another value-enhancing acquisition this year.

Insurance analyst Oliver Steel lifted the stock to ‘buy’ from ‘hold’, but lowered his share price target to 835p from 870p, explaining the purchases of the AXA Wealth and Abbey Life legacy pension businesses last year left Phoenix in a strong position to snap up another closed book of policies this year.

‘Phoenix has finally emerged from seven years of balance sheet recovery with the announcement of two acquisitions in 2016. We think investors are under-estimating the rapid improvement in solvency and debt capacity over 2017e- 2018e,’ said Steel.

‘Specifically, we think a hypothetical £1 billion - £1.5 billion acquisition could be funded principally out of cash and debt rather than equity, adding either side of 25% to future value - something that in our view is not sufficiently reflected in the current share price. Reflecting this, we lift our recommendation to “buy” with a 835p price target,’ the analyst said.

[jonwig] 20/3/2017 08:30

"We believe there will be further consolidation in the UK life industry. We continue to explore opportunities as they arise."

It would have to be financed by equity, I would think. So if it's any size, another rights issue (rather than a smaller placing) would be on the cards. I wouldn't mind that!

[fenners66] 20/3/2017 08:19

Glad they summarised the above at the start - 10 minutes later still have not got to a P&L account - such a convoluted report.

[masurenguy] 20/3/2017 07:54

Looking good !

[rcturner2] 20/3/2017 07:28

Yes very happy with that. As I said above, anything below 750p was a bargain.

[garycook] 20/3/2017 07:23

Final,s look very good,and with forward guidance,and with a forward 50.2p dividend,or 6.3% Yield at current share price Also looking for more acquisition,s.

[deepe] 20/3/2017 07:22

Results are out and looking good:

 £486 million of cash generation2 (2015: £225 million), meeting the Group’s 2016 cash generation target
 Solvency II surplus of £1.9 billion3 as at 31 December 2016, compared to £1.3 billion as at 31 December
2015
 Shareholder Capital Coverage Ratio of 170% as at 31 December 20164 (154% as at 31 December 2015)
 Group operating profit of £351 million (2015: £324 million)
 Proposed final dividend of 23.9p per share, an equivalent 5% increase on the 2015 final dividend5

[dennisten] 17/3/2017 17:46

Looking forward to the results on Monday....

[edmundshaw] 13/3/2017 08:08

Results in a week. Hopefully that will boost the share price...

[garycook] 13/3/2017 07:48

Yes 4% of the fund.Shows confidence in PHNX,by Mark Slater,and his MFM Income fund.

[masurenguy] 13/3/2017 07:38

Phoenix is currently the largest individual holding in the Mark Slater MFM Income Fund.

[woodhawk] 03/3/2017 13:23

Indeed! I was talking near term, though.

[garycook] 03/3/2017 13:18

And higher long term £9/10,in time.

[woodhawk] 03/3/2017 12:07

Exactly what I thought, Gary. Potential 6%+ divi and excellent growth prospects... and less volatile than some of my other holdings :-) Could easily break out to 800p, I would have thought?

[garycook] 03/3/2017 12:02

Woodhawk,Welcome more the merrier.But a bit more quiet than the GVC thread.The dividend not sure until results,but should be between 45/50p,around a 6% yield.Great core holding.

[woodhawk] 03/3/2017 11:29

Just decided to join you here - very nice prospective dividend yield.

[mozy123] 16/2/2017 11:28

Theres a pearl assurance house building in a town near me. Looks empty!