The Phoenix Group Holdings PLC (LON: PHNX) share price rallied 8.69% after the company announced robust full-year 2023 results and a new progressive dividend policy. The company's cash flow generation significantly surpassed expectations in 2023, reaching £2,024 million, well above the forecasted £1.8 billion.
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The increase includes a £400 million uplift from the strategic transactions with Standard Life and Phoenix Life, which were revealed in November. A remarkable advancement in new business cash generation for long-term projects was observed, totalling £1,514 million, surpassing the 2025 goal of approximately £1.5 billion ahead of schedule.
This growth is attributed to the expansion of its Pensions and Savings segment to £395 million and its Retirement Solutions segment to £1,066 million, both of which benefit from improved capital efficiency.
The Solvency II Surplus stood at £3.9 billion, demonstrating resilience despite a slight decrease from the previous year's £4.4 billion. This figure includes a careful allocation of £70 million for Consumer Duty, aligning with product reviews for the upcoming July 2024 adherence.
The SII Shareholder Capital Coverage Ratio was recorded at 176%, maintaining its position in the higher spectrum of the operational range of 140-180%. The company's leverage ratios remained stable, with the SII ratio at 36% and the Fitch ratio at 23%.
The IFRS adjusted operating profit before tax increased 13% year-over-year to £617 million, fueled by a 27% rise in the Pensions and Savings sector to £190 million. Net new business fund flows surged by 72% to £6.7 billion, particularly fueled by robust Workplace flows.
Diminished market volatility resulted in a considerable reduction in IFRS loss after tax to £(88) million from the previous year's £(2,657) million. The Contractual Service Margin expanded by 10% to £2.9 billion, propelled by new business and contributions from Sun Life of Canada UK.
Following strong operational performance, a 2.5% hike in the final 2023 dividend to 26.65p per share has been proposed, bringing the total dividend to 52.65p.
The company aims to continue enhancing cash generation and has introduced a progressive dividend policy. This includes developing a comprehensive customer service offering, improving retail market strategies, and innovating in retirement income solutions.
Phoenix Group share price.
The Phoenix Group share price rallied 8.69% to trade at 529.85p from Thursday’s closing price of 487.50p.
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