Phoenix Group has reported £147m-worth of cash generation during the first half – up from £110m during the same period last year – putting it on track to achieve its full-year targets.
The closed life fund consolidator’s results for the six months ending 30 June reiterated this goal of reaching £350m to £450m by the end of this year and £2bn between 2016 and 2020.
The group held a total of £921m at the half year stage, up from £706m at the end of last year.
Its acquisition of Axa Wealth’s pensions and protection business remains on track to complete during the fourth quarter of this year and includes net proceeds of £190m raised through a placing of 22.5m shares, together with a new short-term bank facility.
Phoenix toasted “significant benefits” coming from the deal, including net capital synergies of approximately £250m within six months of completion. The transaction is expected to generate cashflows of approximately £300m between now and 2020, with £200m from 2021 onwards.
Group chief executive Clive Bannister said the acquisition will generate additional cash to support the proposed future increase in Phoenix’s dividend.
He added: “Looking ahead, we believe there will be further consolidation in the UK life industry, and we will continue to explore further opportunities as they arise.”
The interim report also covered Phoenix’s progress with regulatory issues it has faced in the past, noting the Financial Conduct Authority’s thematic review of long-standing customers in life insurance.
It stated: “Our customers and the outcomes of their policies are fundamental to our business model and we continue to seek ways to improve.”
It also mentioned the proposed cap of 1 per cent on early exit charges, which was described as not having any material impact.
