LONDON (ShareCast) - (ShareCast News) - Phoenix Group trounced some analysts' forecasts for cash generation at the half-year stage with the company adding that the benefits of some of its recent acquisitions were flowing in more quickly than expected.
The company's operating profits more than doubled to £215m over the latest six-month stretch.

That saw cash generation at the closed life assurance fund consolidator hit £360m over the six months to 30 June (Numis: £330m), up from £147m one year ago.

In particular, management highlighted how cash generation from its 2016 acquisition of Axa had exceeded its target for £250m within six months from completion.

Phoenix also raised its guidance for cost synergies from AXA to between £13m and £15m per year, versus an original forecast of £10m, adding that it was also on track to achieve expected cost synergies of £7m per annum from its purchase of Abbey Life.

Targets for cash generation over the next three years were also maintained, with executives at the firm aiming for a total of £2.8bn over the 2016 to 2020 period.

Its Solvency II surplus for the Phoenix Group Holdings was pegged at £1.7bn, which was in-line with analysts' estimates.

Looking ahead, the company indicated it was eyeing further acquisitions, emphasising how its business model allowed it to harness capital and cost synergies quickly.

On that note, the firm said the UK's closed life market - with over £300bn of potential assets - continued to be its main hunting ground for further acquisitions, although the bulk annuity market was described as a "potential complementary source of annuity back books".

"The key advantage of the operating model is the rapid delivery of capital and cost synergies, ensuring Phoenix can deliver value from serial acquisitions as the closed life market in the UK consolidates," the company said in a statement.

The interim dividend was set at 25.1, a 5% increase on its final 2016 payout, as expected by analysts.

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