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Phoenix seeks £600m capital boost in 2012

Announcing results for Q1, Phoenix said it was “on track” to generate between £500-£600m in cash.

By Donia O'Loughlin | Published May 04, 2012 | comments

With-profits consolidator Phoenix Group has said it is well on its ways to meeting its cash generation target of £500-600m for 2012, following today’s (4 May) announcement it has generated £100m of cash between 1 January 2012 and 4 May 2012.

According to group chief executive Clive Bannister, around a quarter of the £100m 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 following court approval.

In its Q1 interim statement, the firm said that its insurance group directive surplus, the remainder of group capital after the company’s regulatory capital requirement has been accounted for, has stayed stable at £1.3bn at the end of March 2011.

Phoenix said that £388m of net third party assets inflows generated by Ignis Asset Management, brought group total assets under management to £71.6bn at 31 March, slightly less than the £72.1bn at the end of 2011.

Mr Bannister said: “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.

He said: “We continue to focus on restructuring, risk management and operational management activities which will accelerate cash generation and enhance MCEV [market consistent embedded value - the present value of the contribution of the covered business to shareholder distributable earnings] during the remainder of 2012.”

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