Phoenix Group lifts financial guidance after strong 2024

Operating cash generation (OCG) totalled £1.40bn in 2024, up 22% year-on-year, helped by the strong delivery of recurring management actions, which are expected to produce around £300m in excess cash per annum, the company said.

With the £1.4bn OCG target being achieved two years early, Phoenix has now lifted its three-year OCG target from £4.4bn to £5.1bn over 2024 to 2026, and expects to grow OCG by a further mid-single digital percentage per annum going forward.

"We therefore expect to generate excess cash of £1.1bn across 2024-26 and this will be allocated in accordance with our capital allocation framework, with a clear focus on deleveraging," the company said.

Adjusted operating profits were up 31% at £825m in 2024, helped by profitable growth in both Pensions and Savings, and Retirement Solutions. The adjusted operating profit guidance for 2026 has been raised to £1.1bn from £900m previously.

The board recommended a 2.6% increase in the final dividend to 27.35p per share, taking the total payout for the year to 54p, up from 52.65p in 2023.

"We are ahead of plan from both a strategic and financial perspective, delivering Operating Cash Generation of £1.4bn two years ahead of our 2026 target," said chief executive Andy Briggs. "We continue to operate in the top half of our Shareholder Capital Coverage Ratio range and our strong cash generation has enabled us to repay debt whilst also investing in our business."

Phoenix repaid £250m of debt during the period, keeping its SII leverage ratio flat at 36%, with a further $250m repaid in February. The company is targeting a SII leverage ratio of around 30% by the end of 2026.

Shares were up 6.3% at 557p by 0908 GMT.