Phoenix Group Reports Wider First-Half Loss but Strong Growth

Phoenix Group Holdings Plc announced a first-half IFRS loss of 646 million pounds, larger than last year's loss. However, adjusted operating profit rose by 15%, and operating cash generation increased by 19%, indicating growth potential amid challenges.

Date: 16-09-2024

AI Rating: 6

Phoenix Group Holdings Plc (PHNX.L) reported its first-half results, revealing a significant IFRS loss after tax of 646 million pounds, widening from last year's loss of 245 million pounds. This data strongly suggests increased financial strain, likely impacting investor confidence negatively.

However, the company achieved a 15 percent increase in adjusted operating profit, amounting to 360 million pounds compared to 313 million pounds from the previous year. This growth in profitability is a positive indicator and could potentially attract investors looking for signs of recovery.

Moreover, the Operating Cash Generation reached 647 million pounds, a 19 percent increase year-over-year, which signals improved cash flow management and operational efficiency. The overall total cash generation was reported at 950 million pounds, increasing from 898 million pounds last year, presenting a favorable position for the company despite the reported losses.

On the debt front, Phoenix Group reported 250 million pounds of debt repayment, aligning with its strategy to reduce debt by at least 500 million pounds by the end of 2026. This aligns with prudent financial management practices appealing to investors.

The company also announced a 2.5 percent increase in their interim dividend to 26.65 pence per share, indicating a commitment to returning value to shareholders, which is typically viewed positively by the market.

Looking forward, CEO Andy Briggs expressed confidence in the company's strategy to build a growing business, aiming for 900 million pounds of IFRS adjusted operating profit by 2026 and a target for Operating Cash Generation of 1.4 billion pounds. These targets showcase a strong commitment to future profitability and could help bolster market sentiment.

Additionally, the decision to discontinue the SunLife sale process reflects a strategic pivot to enhance internal value generation, a move that some investors may view as wise given external market uncertainties.

Stocks: PHNX.L