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The market reacted with enthusiasm to Phoenix Group’s full-year results in the middle of March. After an indifferent start to 2025, the shares jumped by more than 10 per cent in response to the company’s strong cash generation and upgraded guidance.
Tom Ground, chief executive of Phoenix’s retirement solutions business, took advantage of the change in sentiment. The day after the group published its figures, he sold 92,360 shares for 583p each — or a total of £538,000. Ground joined Phoenix in January 2021 from Aviva, where he headed up the annuities and equity release division.
The outlook for Phoenix isn’t clear-cut. On the one hand, the FTSE 100 insurer is making excellent progress with its transformation programme. Growth was ahead of expectations in 2024, and the upgraded guidance means the company now expects £1.1bn of operating profit in 2026, up from £900mn. It has also raised its three-year cash generation target from £4.4bn to £5.1bn.
Tight cost control and a booming annuities market are helping to get the group back into growth mode, while assets under administration are rising in the pensions and savings division.
However, some investors have been spooked by big balance sheet shifts. In 2024, Phoenix’s IFRS shareholder equity more than halved to £1.2bn. Management blamed this on its hedging strategy, which is designed to protect cash flow and solvency capital, and asserted that it would not affect the progressive dividend payouts. New chief financial officer Nic Nicandrou expects shareholder equity to grow organically from 2027 onwards.
The accounting quirk underlines the complexity of the life insurance sector, however, and will remain offputting for some investors.
