Phoenix Group hits cash generation target, misses on profit

Britain’s largest closed-life fund consolidator Phoenix Group Holdings said on Wednesday that profits declined in 2015, though it did meet its cash generation target for the year.

The FTSE 250 owner of pension funds closed to new investors reported IFRS operating profit for the calendar year of £324m, down from £483m a year earlier. Phoenix said this reflected the sale of the Ignis business in 2014.

Its cash generation was £225m, a sharp drop from £567m in 2014 but well within the management target of £200m-£250m.

The company looked to improve that figure in 2016, setting a cash generation target of £350m-£450m for the year and a long-term target of £2bn for 2016-2020.

"2015 has been a year of significant milestones for Phoenix. Despite regulatory upheaval in the shape of Pension Freedoms and Solvency II, we have once again met or exceeded all of our financial targets and achieved an investment grade rating,” said group CEO Clive Bannister.

“Phoenix has come a long way in recent years and is now a simpler and more focused business. I believe the impact of regulatory developments will change the landscape of the UK life insurance industry, providing Phoenix with a number of opportunities to grow our business,” he added.

Phoenix Group proposed a final dividend of 26.7p per share, taking the total dividend for 2015 to 53.4p. Both figures were flat on the prior year.