Phoenix profits edge higher in 2013

26th Mar 2014 07:55

- Cash generation exceeds targets- Profits up two per cent, AuM and dividend flat- Ignis sold to Standard Life, gearing to fallClosed life funds consolidator Phoenix Group left its 2013 full-year dividend payout unchanged after operating profits rose two per cent and assets under management (AuM) were stable."I am delighted to announce a set of very strong results for 2013 - a year in which we have successfully met or exceeded all our performance targets," said Chief Executive Clive Bannister.Operating profit totalled £439m last year, up from £429m in 2012, while AuM were flat at £68.6bn. The dividend was held at 26.7p per share.Operating cash generation totalled £817m in 2013, up from £690m the previous year and ahead of Phoenix's targeted £650-750m range.Gearing, defined as gross shareholder debt as a percentage of the gross market consistent embedded value, fell by 11 percentage points to 44%."Today we have set stretching new targets for 2014 and beyond. I am confident that we will continue to deliver value for all our stakeholders through the efficient management of our existing business and our renewed focus on growth," Bannister said.These targets include £500-550m operating cash generation in 2014 and a long-term cash generation target for 2014-2019 of £2.8bn.The news came alongside the announcement that Phoenix has sold its Ignis Asset Management division to Standard Life for £390m as part of its planned reduction in gearing levels and diversification of its financing structure. Gearing should fall to 39% following the deal, below the 40% target which was planned for 2016.Phoenix also signed a long-term strategic asset management alliance with Standard Life Investments, and agreed to share value resulting from any further Phoenix assets becoming managed by the new Ignis owner.The stock was up 3.9% at 737.5p in early trading on Wednesday.BC