Phoenix has achieved a cash generation of £287m in the first half of 2019, down from £349m in the six months to 30 June 2018.

Publishing its half year results, it said its group operating profit was £325m for H1 2019, compared to £216m for the same period in 2018. It said it expects the full year results to be towards the upper end of its cash generation target range of £600m-£700m.

During the period, £0.5bn of bulk purchase annuity liabilities were contracted, and a £1.1bn buy-in from the PGL Pension Scheme was successfully completed. £0.5bn of illiquid assets were also sourced, taking allocation of illiquid assets backing annuity liabilities to 22 per cent.

The group also saw regulatory approval for two master trust schemes, looking after over 240,000 customers and £5bn assets under administration, enabling Phoenix to access this rapidly growing market.

The group has a Solvency II surplus of £3bn as at 30 June 2019, down slightly from £3.2bn at 31 December 2018. Its shareholder capital coverage ratio of 160 per cent as at 30 June 2019.

New business contributed to £116m from UK Open and Europe, compared to £100m in H1 2018. Assets under administration totalled £245m as at 30 June 2019, compared to £226m at 31 December 2018.

Commenting on the results, Phoenix Group CEO, Clive Bannister, said: “I am delighted to announce our H1 2019 results today which demonstrate Phoenix’s commitment to meeting the targets it has set. Having delivered £287m of cash generation year to date, Phoenix expects to be towards the upper end of the £600 - £700m 2019 target range. We also continue to make good progress across all phases of our transition programme and remain on track to meet the £1.2bn total synergy target announced in March.

“Whilst net inflows into our Open businesses are down overall year on year reflecting market uncertainty from Brexit and a tail off in DB to DC transfers, contributions to our auto-enrolment workplace schemes have increased, and new annuity business in our Heritage segment has been strong. The £250m of incremental long-term cash generation from this new business in H1 2019 brings sustainability to Phoenix and its dividend.

“The life insurance sector continues to consolidate and the M&A pipeline remains strong. We are ready to do deals that meet our acquisition criteria and I am confident that Phoenix will continue to be the market leader in this consolidation process.”

It said it expects to pay an interim dividend of 23.4p per share on 30 September 2019.

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