TIDMPHNX TIDMPHNW
RNS Number : 7142C
Phoenix Group Holdings
04 May 2012
Phoenix Group Holdings: Q1 2012 Interim Management Statement 4 May 2012
Phoenix Group Holdings announces cash generation of GBP100
million between 1 January 2012 and 4 May 2012.
Phoenix remains confident in its ability to deliver all of its
2012 financial targets, including cash generation of GBP500 -
GBP600 million.
Financial and operational highlights
-- GBP100 million of cash generation(1) between 1 January 2012 and 4 May 2012
-- Estimated IGD surplus of GBP1.3 billion at 31 March 2012
(FY11: GBP1.3 billion). Estimated IGD headroom increased by GBP0.1
billion to GBP0.5 billion as at 31 March 2012 (FY11: GBP0.4
billion)
-- GBP388 million of net third party asset inflows generated by
Ignis, bringing total Group Assets Under Management to GBP71.6
billion at 31 March 2012 (FY11: GBP72.1 billion)
-- On track to meet all 2012 financial targets, comprising
operating companies' cash generation of GBP500 - GBP600 million,
annual incremental MCEV enhancements of GBP100 million on average
2011 - 2014 and gearing of 43% or below
-- Gained Court approval for the transfer of the business of NPI
Limited to Phoenix Life Limited
Clive Bannister, Group Chief Executive, commented:
"The Phoenix Group continues to demonstrate real operating
strength and I am pleased with the Group's solid financial
performance in the first quarter. I remain confident in our ability
to deliver on our stated 2012 financial targets, and to progress
discussions with our lenders regarding the reterming of our bank
debt on terms which are sensible for all stakeholders.
"The transfer of the NPI business to Phoenix Life demonstrates
our capacity to generate substantial value for both shareholders
and policyholders. It is one of a number of management actions that
we will progress in 2012, which will accelerate cashflow, enhance
MCEV and improve the Group's capital position."
Financial overview
Cash generation
Holding Companies'(3) cash flows Q1 2012 Q1 2011
GBPm GBPm
Cash and cash equivalents at 1 January 837 486
Operating companies' cash generation
Cash receipts from Phoenix Life 3 -
Cash receipts from Ignis Asset Management 3 14
-------- --------
Total receipts of cash 6 14
-------- --------
Uses of cash
Recurring cash outflows
Pension scheme contributions 5 2
Operating expenses 4 11
Debt interest 17 6
Debt prepayment - 21
-------- --------
Total recurring cash outflows 26 40
-------- --------
Non-recurring cash outflows
IT and other business transformation costs - 10
Transaction and restructuring costs 2 2
-------- --------
Total non-recurring cash outflows 2 12
-------- --------
Total uses of cash 28 52
Cash and cash equivalents at 31 March 815 448
GBP6 million of cash was received by the Holding Companies in
the 3 months to 31 March 2012 with a further GBP94 million received
subsequently, mostly from Phoenix Life. This is in line with our
previously announced expectation that 2012 cash remittances will be
weighted towards H2.
Management actions
GBP25 million of the GBP100 million of cash received since 31
December 2011 has been generated through management actions,
including the transfer of the business of NPI Limited to Phoenix
Life Limited.
We continue to focus on restructuring, risk management and
operational management activities which will accelerate cash
generation and enhance MCEV during the remainder of 2012.
Capital
The estimated IGD(2) surplus remained stable at GBP1.3 billion
(FY11: GBP1.3 billion). The estimated IGD headroom has increased by
GBP0.1 billion since 31 December 2011 to GBP0.5 billion at 31 March
2012. Estimated IGD Excess Capital also increased by GBP0.1 billion
from GBP3.1 billion at 31 December 2011 to GBP3.2 billion at 31
March 2012.
The increases in IGD headroom and IGD Excess Capital were
primarily driven by the completion of the transfer of the business
of NPI Limited to Phoenix Life Limited, which became effective
following regulatory and court approvals.
Following this transfer, all the UK life business in the Impala
silo is now within Phoenix Life Limited. Work is underway to
progress a further merger within the Pearl silo.
Ignis
Ignis generated net inflows from third parties of GBP388 million
in the 3 months to 31 March 2012, primarily in the Absolute Return
Government Bond Fund and liquidity and property funds,
demonstrating the continued development of its proposition and
reputation as a manager of third party assets. Third party inflows
partly offset the run-off of the closed life funds, resulting in
total Group Assets Under Management of GBP71.6 billion at 31 March
2012 (FY11: GBP72.1 billion).
Notes
1. Operating companies' cash generation is a measure of cash and
cash equivalents, remitted by the Group's operating subsidiaries to
the Holding Companies and is available to cover dividends, bank
interest and other items.
2. Any references to IGD relate to the calculation for Phoenix
Life Holdings Limited, the ultimate EEA insurance parent
undertaking.
3. The cash flow analysis is presented for the Holding Companies
above the operating companies and includes Phoenix Group
Holdings.
Enquiries
Investors:
Katherine Jones, Head of Investor Relations, Phoenix Group
+44 (0) 20 7489 4879
Media:
Neil Bennett, Maitland
Peter Ogden, Maitland
+ 44 (0) 20 7379 5151
Further information
-- A conference call for analysts and investors will take place
at 9.30am (UK time) today. Dial in number is +44 (0) 20 3059 8125.
Please quote "Phoenix".
Access to the audiocast, with the facility to ask questions,
will also be available via our website www.thephoenixgroup.com. A
replay will be made available on the website.
-- Financial calendar 2012
Interim Results 2012 23 August 2012
Q3 2012 IMS 31 October 2012
-- The financial information contained in this announcement has
not been audited or reviewed by the Group's auditors.
Forward looking statements
This announcement in relation to Phoenix Group Holdings and its
subsidiaries (the 'Group') contains, and we may make other
statements (verbal or otherwise) containing, forward-looking
statements about the Group's current plans, goals and expectations
relating to future financial conditions, performance, results,
strategy and/or objectives.
Statements containing the words: 'believes', 'intends',
'expects', 'plans', 'seeks', 'targets', 'continues' and
'anticipates' or other words of similar meaning are
forward-looking. Forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances
that are beyond the Group's control. For example, certain insurance
risk disclosures are dependent on the Group's choices about
assumptions and models, which by their nature are estimates. As
such, actual future gains and losses could differ materially from
those that we have estimated.
Other factors which could cause actual results to differ
materially from those estimated by forward-looking statements
include but are not limited to: domestic and global economic and
business conditions; asset prices; market related risks such as
fluctuations in interest rates and exchange rates, and the
performance of financial markets generally; the policies and
actions of governmental and/or regulatory authorities, including,
for example, new government initiatives related to the financial
crisis and the effect of the European Union's "Solvency II"
requirements on the Group's capital maintenance requirements; the
impact of inflation and deflation; market competition; changes in
assumptions in pricing and reserving for insurance business
(particularly with regard to mortality and morbidity trends, gender
pricing and lapse rates); the timing, impact and other
uncertainties of future acquisitions or combinations within
relevant industries; risks associated with arrangements with third
parties, including joint ventures; inability of reinsurers to meet
obligations or unavailability of reinsurance coverage; the impact
of changes in capital, solvency or accounting standards, and tax
and other legislation and regulations in the jurisdictions in which
members of the Group operate.
As a result, the Group's actual future financial condition,
performance and results may differ materially from the plans, goals
and expectations set out in the forward-looking statements within
this announcement. The Group undertakes no obligation to update any
of the forward-looking statements contained within this
announcement or any other forward-looking statements it may make.
Nothing in this announcement should be construed as a profit
forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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