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Phoenix Group Holdings on Monday lifted its dividend and revealed a new payout policy after an ‘outstanding’ 2021.
For 2021, Phoenix generated an operating profit of £1.23 billion, up from £1.20 billion in 2020, reflecting the contribution of a full year of profit from its ReAssure business and increased bulk purchase annuity new business in the period.
The London-based insurance services provider reported record cash generation of £1.72 billion in 2021, exceeding its £1.5 billion to £1.6 billion target range for the year and just ahead of the £1.71 billion generated in 2020.
‘It has been an outstanding year for Phoenix, with a record set of financial results and significant strategic progress made as we fully embraced our purpose,’ said Chief Executive Andy Briggs.
Phoenix declared a final dividend of 24.8 pence, up 3% on a year before in its inaugural organic dividend increase. This took the year's dividend to to 48.9p, having paid a total dividend of 47.5p in 2020.
‘2021 marked a pivotal moment for Phoenix, with £1.2 billion of new business from our Open business more than offsetting the run-off of our Heritage business for the first time. This demonstrates that Phoenix is a growing, sustainable business, and enabled the board to recommend our first ever organic dividend increase of 3%,’ said Briggs.
Phoenix unveiled a new dividend policy and now ‘intends to pay a dividend that is sustainable and grows over time’.
‘Going forward, we now expect the business to continue growing organically and we also remain committed to M&A, where we see significant opportunities in the marketplace. As a result, the board has evolved the group's dividend policy to reflect that it now has two potential drivers of future dividend increases; organic and inorganic growth. However, the board will, as ever, continue to prioritise the group's long-term dividend sustainability, which is why our dividend policy is to pay a dividend that is sustainable and grows over time,’ said Phoenix.
Shares in Phoenix were up 3.2% in early trade on Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,166.27
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Hang Seng: down 5.0% at 19,531.66
Nikkei 225: closed up 0.6% at 25,307.85
S&P/ASX 200: closed up 1.2% at 7,149.40
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DJIA: closed down 229.88 points, or 0.7%, at 32,944.19
S&P 500: closed down 55.21 points, or 1.3%, at 4,204.31
Nasdaq Composite: closed down 286.15 points, or 2.2%, at 12,843.81
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EUR: down at $1.0942 ($1.0955)
GBP: down at $1.3047 ($1.3075)
USD: up at JP¥117.76 (JP¥117.05)
GOLD: down at $1,968.45 per ounce ($1,982.75)
OIL (Brent): down at $108.94 a barrel ($111.92)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Russia and Ukraine were set for a third round of talks Monday as Moscow's invading forces maintain their devastating assaults across the former Soviet state. The discussions come as Russian troops edge closer to Kyiv and keep up their relentless bombardment of the besieged southern port city of Mariupol, where nearly 2,200 people have been killed in the onslaught, according to local officials. Ukrainian and Russian representatives will meet via videoconference Monday, a Ukrainian presidential adviser and a Kremlin spokesman both said. According to Ukrainian negotiator David Arakhamia, the talks will begin at 0820 GMT. ‘And our goal is that in this struggle, in this difficult negotiating work, Ukraine will get the necessary result... for peace and for security,’ President Volodymyr Zelensky said early Monday, adding that both sides speak every day.
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Seventeen million people in the Chinese tech hub of Shenzhen began their first full day under lockdown Monday, as a key factory making iPhones closed and restrictions spread across Shanghai and other major cities in an effort to extinguish the biggest-ever threat to the nation's zero-tolerance Covid strategy. The southern city of Shenzhen took the measures on Sunday as authorities battled an Omicron flare-up in factories and neighborhoods linked to nearby Hong Kong, which is recording scores of daily deaths as the virus runs rampant. Major Apple supplier Foxconn suspended its operations in Shenzhen, the company said Monday, as the lockdown bit hard into economic activity across the factory hub. Shenzhen is one of ten areas nationwide to issue some level of stay-at-home order. Health officials have warned tighter measures could be on their way, as concerns mount over the resilience of China's ‘zero-Covid’ approach in the face of the highly-transmissible Omicron variant.
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BROKER RATING CHANGES
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JPMorgan cuts Lloyds price target to 56 (63) pence - 'overweight'
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JPMorgan cuts Barclays price target to 220 (270) pence - 'overweight'
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JPMorgan cuts Natwest price target to 230 (270) pence - 'neutral'
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COMPANIES - FTSE 100
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Rio Tinto said it has made a non-binding proposal to the Turquoise Hill Board to acquire the 49% of the issued and outstanding shares of Turquoise Hill that Rio Tinto does not currently own. Rio said Turquoise Hill minority shareholders would receive C$34 in cash per Turquoise Hill share, representing a premium of 32% to Turquoise Hill's last closing share price on the Toronto Stock Exchange. The offer would value the Turquoise Hill minority share capital at $2.7 billion. The offer follows the recent agreement reached between Rio Tinto, Turquoise Hill and the government of Mongolia to move the Oyu Tolgoi project forward, reset the relationship between the partners and approve commencement of underground operations. Further, Rio said it would simplify the Oyu Tolgoi ownership structure, strengthen its copper portfolio, and reinforce its long-term commitment to Mongolia. Chief Executive Jakob Stausholm said: ‘Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term. That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto's copper portfolio.’
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AstraZeneca late Friday said Lynparza treatment has been approved in the US for the adjuvant treatment of patients with germline BRCA-mutated HER2-negative high-risk early breast cancer, who have already been treated with chemotherapy either before or after surgery. The approval, by the US Food & Drug Administration, was based on results from the Olympia phase three trial presented during the 2021 American Society of Clinical Oncology annual meeting and published in the New England Journal of Medicine. Notes Lynparza demonstrated a statistically significant and clinical improvement in invasive disease-free survival, reducing the risk of invasive breast cancer recurrences, second cancers or death, by 42% versus placebo.
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COMPANIES - FTSE 250
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Bodycote said it made good progress in 2021 as the thermal processing services provider benefited from a strong recovery in general industrial markets and completion of its restructuring programme. For 2021, Bodycote swung to a pretax profit £77.5 million from a £1.5 million loss in 2020 on revenue of £615.8 million, up from £598.0 million. Bodycote declared a final dividend 13.8 pence, bringing the total payout to 20.0p. This was up from 19.4p paid out in 2020. The company said its 2020 restructuring programme completed, with permanent cost savings of £20 million delivered in 2021. ‘As we moved into 2022, General Industrial continued to perform strongly, and Civil Aerospace growth has accelerated. Bodycote's Automotive business continued to be impacted by supply chain disruption for our customers, but signs of improvement are evident. And while we expect cost inflation to persist, we will continue to manage its impact on the business. In summary, the board expects further progress in 2022, but remains mindful of the current geo-political and macro-economic landscape,’ said CEO Stephen Harris.
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COMPANIES - GLOBAL
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Sanofi said that a phase two trial of amcenstrant, an investigational selective oestrogen receptor degrader, did not improve progression-free survival for breast cancer patients. The Paris-based healthcare company said the trial compared amcenestrant with an endocrine treatment of a physician's choice in patients with breast cancer. Amcenestrant is an oral selective oestrogen receptor degrader that binds to the oestrogen receptors in breast cancer cells to inhibit their normal function and trigger degradation so they can no longer be used by tumour cells to grow. The study did not meet its primary end point of improving progression-free survival and no new safety signals were found, Sanofi explained.
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Novartis on Sunday noted positive new data for its Zolgensma gene therapy as a treatment for spinal muscular atrophy in children. The Basel, Switzerland-based pharmaceutical company said that a phase three study of Zolgensma showed that children with three copies of the SMN2 back-up gene who were treated presymptomatically achieved age-appropriate motor milestones, including standing and walking. Spinal muscular atrophy is a rare, genetic neuromuscular disease caused by the lack of a functional SMN1 gene. The most severe forms affect muscle functions including breathing, swallowing and basic movement. Severity varies across a spectrum of types corresponding to the number of copies of the back-up SMN2 gene, Novartis explained.
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Monday's shareholder meetings
CYBA PLC - GM re fundraising for Narf Industries acquisition
Helium One Global Ltd - AGM
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