Shares in Phoenix Group dropped on Monday as the financial services giant axed plans to sell its SunLife division.
At 562p per share, the FTSE 100 firm was last 2.5% lower in start-of-week trading, making it the index’s biggest faller.
Phoenix — which put SunLife on the chopping block back in June — said that “given the current uncertainty in the protection market, the board has decided to discontinue the sale process and will focus on enhancing the value it generates within the group.”
It described SunLife as “a leading provider of financial protection products direct to the over 50s market in the UK and a valuable asset which contributes to the group’s new business growth.”
Three months ago, Phoenix said it was exploring a possible sale “having received a number of initial expressions of interest from third parties.”
SunLife contributed pre-tax profit of £16 million in 2023. It was acquired from AXA in 2016 alongside some other financial services businesses for £375 million.
Solid Results
The news accompanied half-year results which showed Phoenix grow adjusted operating profit 15%, to £360 million. The company noted that this reflected “profitable growth” in both its Pensions and Savings and Retirement Solutions divisions.
Operating cash generation rose 19% year on year to £647 million. The Footsie firm said this was “driven by increased surplus from our growing business and strong delivery of recurring management actions.”
Total cash generation rose to £950 million from £898 million in the corresponding 2023 period. Recurring own funds growth, meanwhile, pushed recurring capital generation under Solvency II rules 3% higher.
Phoenix’s shareholder capital coverage ratio dipped 8% basis points over the period, to 168%. However, this remained within the group’s target range of 140% to 180%.
The company lifted the interim dividend to 26.65p per share, representing a 2.5% year on year improvement.
“On Track”
Commenting on those half-year numbers, chief executive Andy Briggs said “I am pleased with the initial progress we have made in executing on our three-year strategy, as our 2024 interim financial results demonstrate.”
“I am confident that as we continue to execute on our strategy we are building a growing business that is on track to deliver our financial targets and create shareholder value,” he added.
Phoenix said it was on track to achieve operating cash generation of £1.4 billion in 2026. Total cash generation of £1.4 billion to £1.5 billion is tipped for 2024, and £4.4bn during the three years to 2026.
The firm’s adjusted operating target of £900 million in 2026 remains unchanged.