Phoenix Group Holdings PLC on Monday hailed a strong 2024 performance and ‘good progress’ in the execution of a three-year strategy.

The London-based insurer and pensions provider reported a pretax loss of £1.11 billion for 2024, swinging from profit of £262 million in 2023.

Its attributable loss totalled £1.45 billion, swinging from profit of £78 million.

‘Economic variances’ hurt its bottom line by £1.30 billion, compared to a £377 million boost in 2023. These have ‘primarily arisen as a result of higher yields and a rise in global equity market’.

Total income shrunk 8.7% to £20.37 billion from £22.30 billion. Adjusted operating profit climbed 31% to £825 million from £629 million.

Phoenix noted a 34% improvement in retail gross inflows to £5.1 billion in 2024 from £3.8 billion in 2023.

‘We made good progress in 2024 executing our 3-year strategy, delivering sustainable and profitable growth in both our Pensions & Savings and Retirement Solutions businesses. This has supported strong 2024 financial performance across our key metrics of cash, capital and earnings,’ Chief Executive Officer Andy Briggs said.

‘We are ahead of plan from both a strategic and financial perspective, delivering operating cash generation of £1.4 billion two years ahead of our 2026 target. We continue to operate in the top half of our shareholder capital coverage ratio range and our strong cash generation has enabled us to repay debt whilst also investing in our business.’

The CEO continued: ‘Our strong performance in 2024 and the operating momentum we have built will support us in delivering our growth strategy and have led us to upgrade our cash generation and adjusted operating profit targets through to 2026. Delivery will give us the financial flexibility to reduce our leverage, while also sustaining our progressive dividend for shareholders.’

Phoenix now expects operating cash generation to grow by a ‘mid-single digit percentage’ per year going forward, after it achieved its 2026 target ahead of schedule.

The firm added: ‘Total cash generation cumulative 3-year target increased from £4.4 billion to £5.1 billion across 2024-26 driven by the sustained growth in operating cash generation. We therefore expect to generate excess cash of £1.1 billion across 2024-26 and this will be allocated in accordance with our capital allocation framework, with a clear focus on deleveraging.’

It is aiming for £1.1 billion in adjusted operating profit in 2026, upped from a previous target of £900 million, and 33% higher than £825 million in 2024. ‘This level of IFRS adjusted operating profit is expected to fully cover our recurring uses and create an excess to fund non-recurring uses. Our aim is for IFRS shareholders’ equity, excluding economic variances, to grow in 2027,’ it said.

Phoenix upped its final dividend by 2.6% to 27.35 pence per share. It raised its total dividend at the same pace to 54.00p from 52.65p.

Phoenix shares rose 6.4% to 557.50 pence each on Monday morning in London.

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