The Phoenix Group reported a record cash generation of £1.7 billion and its first ever organic dividend increase of 3% in its financial results for 2021.

The company’s share price increased 1.41% to 634.8p in early morning Monday trading on the back of the strong financial report.

The FTSE 100 firm reported a final dividend of 24.8p and a total dividend of 48.9p in 2021.

The insurance provider further announced £6.3 billion revenue, an increase from £4.7bn in 2020.

The company reported that its increased dividend cost of £0.5 billion per annum remained sustainable over the long-term, with £11.8 billion in long-term free cash from the group available to shareholders.

The firm also announced its new dividend policy, which “intends to pay a dividend that is sustainable and grows over time.”

The group mentioned that the organic growth from its open business adequately offset the natural run-off from its heritage business after its record cash generation of £1.18 billion, which proved ‘the wedge’ hypothesis for the company.

The firm also attributed its growth to a record level of Bulk Purchase Annuities (BPA) premiums contracted in 2021 at £5.6 billion, more than double its 2020 rate of £2.5 billion.

The Phoenix Group saw momentum in its workplace business and won 41 smaller schemes on the back of leveraging its Standard Life brand acquisition last year.

The company is reportedly targeting a 2022 cash generation target range of £1.3 to £1.4 billion and a three-year 2022-2024 target of £4 billion.

“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 Phoenix Group CEO Andy Briggs.

“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%.”

“Phoenix has also today announced a new dividend policy which sets out our intention to pay a dividend that is sustainable and grows over time.”

Analysts pointed to new business as the key driver in the Phoenix success story, and further highlighted the attractiveness of their dividend yield.

“This is a pivotal moment for Phoenix,” said Steve Clayton, fund manager of the HL Select UK Income Shares fund.

“Ever since the Standard Life acquisition the group has been talking about ‘proving the wedge’.”

“The revelation that new business is now more than offsetting the natural decline of the acquired legacy books upon which the group is built shows that the group is now driving its own destiny organically.”

“The dividend increase announced today leaves the stock trading on a very attractive yield of 7.8%.”

“Phoenix’s challenge is now to prove that they can indeed maintain their new business capabilities and support the growth of their dividend into the future.”

AstraZeneca’s drug to cure early breast cancer, Lynparza was approved in the US.

Lynparza is the first and only approved drug to aid patients with BRCA-mutated HER2-negative high-risk early breast cancer and have already used chemotherapy.

Lynparza was created by AstraZeneca and Merck’s (MSD) olaparib drug. The drug gained approval of the FDA after the results from OlympiA Phase III trial was presented at the 2021 American Society of Clinical Oncology Annual Meeting.

Professor Andrew Tutt, Global Chair of the OlympiA Phase III trial said, “today’s approval of olaparib is great news for patients with a specific inherited form of breast cancer.”

“OlympiA has shown that identifying a BRCA1/2 mutation in women with high risk disease opens the additional option of eligibility for olaparib treatment, which reduces the risk of recurrence and improves survival for these breast cancer patients.”

The trial results showed that Lynparza has statistical improvements in the treatment of early breast cancer with improvements in invasive disease-free survival, reduced risk of invasive breast cancer recurrences, second cancers or death by 42% as opposed to a placebo.

The drug also showed improvements in the stats for overall survival and reduced the risk of death by 32% versus placebo.

“Lynparza reduces the risk of disease recurrence in these high-risk patients and now new data confirm it also significantly extends patients’ lives versus placebo,” said Dave Fredrickson, Executive Vice President, Oncology Business Unit, AstraZeneca.

Breast Cancer Treatment

Breast cancer is a biologically diverse tumour where an array of factors play a role in their unique development.

BRCA1 and BRCA2 are genes which make protein and repair DNA damage. If the BRCA genes changed in any way, the protein production is altered resulting in DNA damage remaining and cells becoming unstable.

Around 2.3m patients were diagnosed with breast cancer in 2020 with 91% diagnosed at an early stage in the US and 5-10% found the BRCA mutations.

More about Lynparza

Lynparza (olaparib) is a PARP inhibitor and a pioneer in the treatment to block DNA damage response in cells or tumours harbouring a deficiency in homologous recombination repair, for patients with mutations in BRCA1 or BRCA2.

FDA approved diagnostic tests will select patients to be treated by Lynparza.

The approval of the drug begins in the US and extends to EU, Japan and many other countries with patients with the BRCA gene provided they’ve been treated with chemotherapy as suggested by OlympiAD Phase III trial.

Following the approval of Lynparza in the US, AstraZeneca will collect a ‘regulatory milestone payment’ of $175 million from MSD, which will be recorded as Collaboration Revenue in Q1 of 2022.

The Czech cybersecurity firm, Avast, has halted the accessibility to their products in Russia and Belarus just like McDonald’s and Starbucks.

The group’s marketing and sales operations have also been terminated with boiling geopolitical tensions.

In 2021, Ukraine, Russia, and Belarus generated around 1.5% of Avast’s total revenue.

Avast is continuing and expanding their offerings in Ukraine by providing free licence extensions to paying subscribers. Apart from the freemium products, users have free access to the premium products like the premium antivirus pack.

Avast has employees in both Russia and Ukraine and is actively working to protect and sustain them as a priority.

With fake tweets and misinformation being circulated, Avast believes that with fake tweets and misinformation being circulated, Ukraine should have access to an internet connection which is secure and unrestricted to share important updates about the war.

Even though Avast has suspended all business in Russia, the security of the employees in the distressed region remains a priority for the firm.

Avast has donated $800,000 through their employee donation matching program and Avast Foundation to organisations like People in Need.

Avast is assisting Ukrainian companies by collaborating with local charities for volunteer work to mitigate cyber risks.

Avast shares were trading at 640p practically unchanged following the news of suspended business in Russia.

The FTSE 100 rose on Friday in a volatile week of trading that ultimately saw Londons leading index post strong gains for the week.

The FTSE 100 was up 1.3% at 7,191 going into the close on Friday. The FTSE 100 closed last week 6,987.

The Russia invasion of Ukraine, and subsequent sanctions on Russia, continued to drive volatility in commodity prices which was responsible for much of the swings in FTSE 100 shares.

The FTSE 100’s miners and oil majors were among this week’s top performers.

UK GDP

Although the strength of the UK economy has little impact on the earnings of FTSE 100 companies, investors would have been encouraged by a 0.8% increase in activity in January.

The economy enjoyed a boost at the start of 2022 as consumer spending in retail and dining increased as consumers emerged from an Omicron-induced slow down in December.

UK GDP grew 0.8% with growth across all sectors, with services up 0.8%, production up 0.7% and construction up by 1.1%.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said, “The economy shook off the shackles of Omicron in January with sectors across the board bursting back to health, pushing output 0.8% above its pre-pandemic level.”

However, there were concerns the economy could slow as a result of higher inflation and energy prices due to the Ukraine conflict.

“The conflict in Ukraine has caused already hot commodity prices to heat up again, with households and businesses already feeling the temperature. As lockdown savings dwindle, and higher tax and energy bills are set to land, it’s set to put downward pressure on growth in the months to come,” said Streeter.

Pearson Takeover

Pearson shares soared on Friday, up almost 20% to 778.6p following a takeover approach by US Apollo for the education publishers. Pearson was the FTSE 100 top riser after they said the bid ‘significantly undervalued’ the company and planned to deliver their strategy.

Polymetal rose 12.3% to 169.4 as the beleagered stock continued to see interest from optimistic buyers hopeful for a comeback for the company as the war in Ukraine continues to cast doubt over the Russia-focussed gold miner.

Berkeley Group shares were up nearly 2% to 3,822p after the group restored confidence by addressing the impact of inflationary pressures. The group said that they were experiencing rising input costs due to inflation, however the increase sales price of their developments and business overseas has kept them on track to meet their annual guidance.

The top fallers included Fresnillo, which dropped 3.7% to 737p as the company’s shares continue to suffer following new labour laws in Mexico and a drop in gold and silver prices.