Phoenix Group hits key financial goals in H1 2022

It’s a promising year for Phoenix Group (Phoenix) as it has already hit its key financial goals for the six months to June 30, 2022 (H1 FY22) by delivering a record set of financial results and making clear strategic progress.

Phoenix delivered record cash generation of £950 million in H1 FY22, up from £872 million in the first half of 2021 (H1 FY21), making it confident of delivering at the top-end of its £1.3 billion to £1.4 billion target range for the year.

The group also saw record new business long-term cash generation of £430 million in H1 FY22, more than double the £206 million in H1 FY21. The latest figure comprises £282 million from bulk purchase annuities (compared to £80 million in H1 FY21) and £148 million from its capital-light fee-based businesses (compared to £126 million in H1 FY21).

Phoenix also remained resilient during the first half of FY22 by retaining its strong solvency balance sheet, with an S2 surplus of £4.7 billion (down from £5.3 billion in H1 2021 after the repayment of its £450 million debt) and a shareholder capital coverage ratio of 186% (above the top-end of its 140% to 180% range) – providing it with significant capital to reinvest into organic and inorganic opportunities.

Phoenix group CEO Andy Briggs commented that the group had been working tirelessly to ensure it supports customers and colleagues impacted by the increased cost-of-living, for example, by developing its activities for its most vulnerable customers and offering support to its colleagues, including a one-off payment.

“Phoenix has performed very strongly in the first half of the year despite the challenging macro environment. We have once again delivered a record set of financial results, which was underpinned by the strong progress we have made across our strategic priorities,” Briggs said. “As the UK’s largest long-term savings and retirement business, we are driven by our core social purpose.”

Despite the uncertain economic backdrop, Phoenix is confident about its growth for the rest of the year as it focuses on leveraging major trends in the UK long-term savings and retirement market across mergers and acquisitions (M&A), BPA, workplace, and individual pensions and savings.

Furthermore, the group expects to:

• Deliver cash generation at the top-end of its £1.3 billion to £1.4 billion target range for the year;
• Continue operating within its target ranges for its SCCR (140% to 180%) and leverage ratio (25% to 30%);
• Deploy its target cash allocation into BPA of c.£300 million in 2022, with £1.1 billion of premiums already contracted in H2, and a further £1.1 billion of premiums in exclusive discussions, including the Pearl Pension Scheme;
• Deliver further organic growth in 2022 with incremental new business long-term cash generation of more than £800 million; and
• Progress the regulatory approval process for the Sun Life of Canada UK acquisition, targeting completion in Q1 2023.