Phoenix pulls SunLife sale as first-half profits rise 15%

Pensions, savings and life insurance provider Phoenix reported a 15% increase in adjusted operating profits in the first half and reiterated its medium-term targets for earnings and cash generation.

Phoenix also announced it was pulling the disposal of its SunLife division, which sells financial products to the over-50s, just three months after putting it up for sale given "current uncertainty in the protection market".

Instead, the company said it has "decided to discontinue the sale process and will focus on enhancing the value it generates within the group". It had said back in June that SunLife was no longer deemed a core business and had received "a number of initial expressions of interest".

The news came alongside the group's interim results, which showed an IFRS adjusted operating profit of £360m in the six months to 30 June, up from £313m the year before, driven by by profitable growth in both Pensions and Savings (£149m) and Retirement Solutions (£210m).

However, the headline bottom line after tax recorded a loss of £646m, compared with £698m a year before, due to £698m of "adverse economic variances from higher interest rates and global equities which are the consequence of our SII hedging approach".

Total cash generation in the first half increased to £950m from £898m a year earlier, with the company now aiming to hit the top end of its £1.4-1.5bn target range in 2024.

In terms of earnings, Phoenix reiterated its guidance of hitting £900m in IFRS adjusted operating profit in 2026, helped by £250m of annual run-rate cost savings by the end of that year.

"I am confident that as we continue to execute on our strategy we are building a growing business that is on track to deliver our financial targets and create shareholder value," said chief executive Andy Briggs.