Phoenix expects to beat cash targets as £3.2bn Standard Life Assurance acquisition nears close
Insurer Phoenix Group said today it expects to beat its target for cash generation this year as it announced its half-year results.
Phoenix, which focuses on acquiring life insurance units that are closed for new business, said its acquisition of Standard Life Assurance for £3.2bn was progressing well with the deal expected to close on 31 August.
It said it had generated £349m of cash in the six months to 30 June, which although down on the £360m generated in the same period last year, was still expected to be enough for it to exceed the upper end of its cash generation target of £1bn to £1.2bn between 2017 and 2018.
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Group operating profit was £216m, marginally ahead of the £215m in the same period last year.
Phoenix said its integrations of acquisitions from Axa and Abbey Life were completed ahead of plan and targets, delivering cost synergies of £27m annually and cash generation of £768m.
It also completed its first bulk annuity purchase, a £470m transaction with the trustee of the Marks and Spencer pensions scheme.
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Chief executive Clive Bannister said: "The group has delivered strong cash generation; and expects to exceed its 2017-2018 target having completed the integrations of the Axa and Abbey Life acquisitions.”
Bannister said the Standard Life deal gave it access to the Irish and German markets where it expects to do further deals.
“We believe those markets will consolidate so for the first time we have a chip on the table there from which we can grow,” he said.
it also appointed Nicholas Lyons as its new chair from 1 September, taking over from Henry Staunton.