Phoenix Group, a prominent FTSE 100 pensions firm, has put an end to the sale of its Sunlife unit amid challenging market conditions. The decision coincides with the company’s announcement of a significant profit surge for the first half of the year.
The company reported that it halted the sale due to “current uncertainty in the protection market,” opting instead to “focus on enhancing the value it generates within the group.” Sunlife, which offers financial protection products such as life insurance to UK residents over 50, was acquired by Phoenix from Axa in 2016 for £375 million. The decision to initiate the sale process was made in June following a strategic review that determined Sunlife was non-essential to Phoenix’s long-term objectives.
This announcement was made alongside Phoenix’s financial results for the first half of the year, which showcased a 15% increase in adjusted operating profit to £360 million, up from £313 million in the previous year. The profit rise was attributed to “profitable growth” in the company’s pensions & savings and retirement solutions divisions. Further, Phoenix reported a 19% boost in operating cash generation to £647 million, citing the “strong delivery of recurring management targets.”
Total cash generation reached £950 million during this period, and the company remains optimistic about hitting the “top-end” of its £1.4 billion to £1.5 billion target for the 2024 financial year. CEO Andy Briggs expressed satisfaction with the company’s performance, stating he was “pleased with the initial progress” of Phoenix’s three-year strategy. He confidently added, “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.”
Moreover, Phoenix has set an operating cash generation target of £1.4 billion for 2026 and an adjusted operating profit target of £900 million. Reflecting its strong financial health, the company declared an interim dividend of 26.65p per share, marking a 2.5% increase from the previous year.
Phoenix Group’s strategic decision to halt the Sunlife sale while focusing on internal value generation aligns with its robust financial performance and long-term objectives. The substantial profit and cash generation figures underscore the company’s strong market position and future potential.