# Phoenix Group deliver strong organic growth, maintaining resilient balance sheet

- Link: https://www.directorstalkinterviews.com/phoenix-group-deliver-strong-organic-growth-maintaining-resilient-balance-sheet/4121128478
- Published: 2023-09-28T08:39:21+01:00
- Author: Amilia Stone

**[Phoenix Group Holdings plc](https://www.directorstalkinterviews.com/ftse-company/phoenix-group-holdings/phnx.l)**(
LON:PHNX) today publishes its Half Year 2023 Interim Financial Report, which includes
the Group’s HY23 IFRS financial statements.

The Group previously published its 2023 Interim Results on Monday 18th September,
across its core financial metrics of cash and capital. During the first half the
Group delivered strong organic growth as it more than doubled incremental new business
long-term cash generation to £885 million, while delivering ongoing dependable cash
generation with £898 million remitted in the period, and continued to maintain a
resilient balance sheet.

As a reminder, Phoenix Group trades ex-dividend today, reflecting an Interim dividend
of 26.0 pence per share.

**Overview of HY23 IFRS results**

·    IFRS 17 is a global accounting standard that was implemented on 1 January 2023
and is an accounting change which does not alter the underlying economics of our
business. As a result, IFRS 17 does not change our strategy or dividend, and we 
will remain focused on delivering cash and capital.

·    As a result of our successful track record of delivering value-accretive M&
A and subsequent integration activity, c.95% of our business was recognised at fair
value on transition, which results in the establishment of a lower Contractual Service
Margin (‘CSM’) and also increases the volatility in our shareholders’ equity.

·   IFRS adjusted shareholders’ equity (inclusive of a £2.0bn CSM net of tax) was
£4.8bn at 30 June 2023, down £0.4bn since 31 December 2022 (£5.2bn) due to a reduction
in shareholders’ equity. This reflects an IFRS loss after tax attributable to shareholders
for HY23 of £261 million and payment of the Final 2022 dividend of £260 million,
partly offset by positive Other Comprehensive Income movements on the Group’s currency
hedges and pension scheme liabilities.

·   The Group’s CSM (gross of tax) at 30 June 2023 was £2.7bn and this grew 5% in
the first six months of the year (31 December 2022: £2.6bn), primarily due to new
BPA business written and the acquisition of the Sun Life of Canada UK business, 
partly offset by the release in the period. It represents a significant store of
future profits and is expected to release into the P&L at c.5-7% per annum over 
time.

·    Adjusted operating profit before tax under IFRS for HY23 was £266 million, 
which is a 5% year-on-year increase (HY22: £254 million). This primarily reflects
an increase in the CSM release from both BPA new business and positive assumption
changes relating to the prior year.

·   Phoenix Group’s HY23 Fitch leverage ratio remained stable at 25% (Restated FY22:
25%), which is at the bottom of our 25-30% target range, and leverage is therefore
not a constraint to our M&A ambitions.

All page references in this document refer to the Phoenix Group Holdings plc Interim
Financial Report 2023.

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