Phoenix Group Holdings (PHNX.L), the UK's consolidator of closed life and pension funds, reported Friday a loss for full year 2011, reflecting unfavorable investment return variances and economic assumption changes on long-term business.
The company noted that financial markets in 2011 were volatile and global economic growth was subdued and expects the uncertainty to continue during 2012.
Clive Bannister, CEO of the company said, "Phoenix has continued to make considerable progress in 2011, despite the volatile market conditions. We have achieved or exceeded all of our 2011 financial targets including cash generation, gearing and MCEV enhancement, demonstrating the resilience of the Phoenix business model."
"The generation of £810 million of cash, above the mid-point of our target range, and our improved group capital position reinforces our confidence in our ability to progress discussions with our lenders, as we look to align the maturity of our debt to the profile of our long term cashflows," Bannister added.
Despite the challenging market conditions experienced in 2011, the company has reiterated its operating cash generation target of 3.2 billion pounds for the six year period of 2011 to 2016.
Phoenix noted that during the year, a number of parties approached it regarding a possible transaction with the Group, but no formal offers were made.
In addition, Ron Sandler, Chairman of the company has indicated his intention to retire from the Board during the course of 2012 once a suitable successor has been identified.
For the full year, the closed life funds and asset management services provider posted a loss before the tax attributable to owners totaling 177 million pounds, compared to a pre-tax profit of 6 million pounds in the previous year.
The company noted that Phoenix Life business had unfavorable investment return variances and economic assumption changes totaling 338 million pounds in the year. Group operating profit before tax increased to 387 million pounds from 373 million pounds in the prior year.
On a per share basis, loss was 76.2 pence, compared to earnings of 20.1 pence per share last year.
Total revenue, net of reinsurance payable, declined to 6.48 billion pounds from 7.52 billion pounds in the prior year. Net premiums written were 1.39 billion pounds, lower than 1.45 billion pounds in the preceding year.
Net investment income also dropped to 4.92 billion pounds from 5.91 billion pounds a year ago.
As at December 31, 2011, Group assets under management increased to 72.1 billion pounds from 69.6 billion pounds in 2010.
The board has also recommended a final dividend of 21 pence per share, bringing the total dividend for the year to 42 pence per share, unchanged from last year.
PHNX is currently trading at 563.4 pence, up 13.4 pence or 2.44 percent, on a volume of 14 thousand shares on the LSE.
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