- Operating profits increase
- Cash generation disappoints
- Rebranding as Standard Life
After a strong run year-to-date, life insurer and asset manager Phoenix Group (PHNX) met profit-taking after posting a mixed first-half trading update.
The shares fell as much as 43p or 6.4% to 627p before stabilising around 637p for a loss of 32p or nearly 5%, leaving them with a gain of 25% since January.
STEADY PROGRESS
For the six months to the end of June, the group reported a better-than expected operating profit of £451 million, up 25% on the same period last year, partly thanks to a substantial increase in cost savings.
Operating cash generation was up 9% on the previous year at £705 million, but total cash generation was down 17% at £784 million, missing forecasts.
The firm said it had enjoyed ‘continued operating momentum’ in its core businesses of pensions and savings, where it grew average AuA (assets under administration) by 5% to £187.9 billion, and in retirement solutions, including annuities, where it saw a 10% increase in service margin and a 36% increase in operating profit.
‘This is a strong first half performance with progress against all key financial metrics we use to drive the business, demonstrating continued momentum towards our 2026 targets,’ said chief executive Andy Briggs.
‘We are increasingly well placed to serve our customers' retirement needs and create further customer and shareholder value as we fulfil our vision to become the UK's leading retirement savings and income business.’
2026 REBRAND
The firm announced two further strategic changes, bringing management of annuities in-house and rebranding itself next year.
As part of the evolution of its annuities business, the group is moving to an in-house model to leverage the scale of its asset management division ‘to optimise customer outcomes and enhance returns’.
As a result, £20 billion of its £39 billion annuities portfolio will be moved in-house, adding to the £5 billion currently managed directly.
Also, from March 2026, the group name will be changed to Standard Life, ‘bringing our most trusted brand to the forefront and demonstrating our commitment to helping customers secure a better retirement,’ said the chief executive.
Phoenix Group bought the Standard Life brand, which can trace its history back some 200 years, from Aberdeen Group (ABDN) in 2021.
Disclaimer: The author owns shares in Phoenix Group
