Phoenix Group Holdings plc - Revision history

>Jeff at 00:50, 25 November 2024

2024-11-25T00:50:16Z

>Jeff at 16:11, 17 November 2024

2024-11-17T16:11:38Z

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167.98.221.1 at 16:01, 17 November 2024

2024-11-17T16:01:03Z

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167.98.221.1: /* Financials */

2024-11-17T15:55:47Z

Financials

Show changes

167.98.221.1: /* Team */

2024-11-17T15:37:49Z

Team

← Older revision		Revision as of 16:37, 17 November 2024
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	== Team ==		== Team ==
	As of 2024, the key members of the leadership team at Phoenix Group Holdings include:		As of 17th November 2024, the key members of the leadership team at Phoenix Group Holdings include:

			=== Board ===
			'''Sir Nicholas Lyons – Chair of the Group Board'''

			Nicholas has wide-ranging experience across the financial services industry, both in executive and non-executive roles. He started his career in banking at Morgan Guaranty Trust Company of New York UK (later JP Morgan LLP), where he held various roles including Assistant Vice President of Equity Capital Markets, he later moved to Lehman Brothers International Limited where he was Global Co-Head of Recruitment, Training and Career Development and Managing Director of the Financial Institutions Group. Nicholas has extensive Non-Executive Director (‘NED’) experience, including Chair of Miller Insurance Services LLP, Senior Independent Director of Pension Insurance Corporation plc and Catlin Group Limited and NED of Friends Life Group Limited and Convex Group Limited. Nicholas is a member of the Chartered Insurance Institute. Having taken a sabbatical to complete a year long term as Lord Mayor of the City of London, Nicholas returned to his role as Group Chair of the Board on 1 December 2023.

	'''Andy Briggs – Group Chief Executive Officer'''		'''Andy Briggs – Group Chief Executive Officer'''

	Andy ~~Briggs~~ has been the CEO of Phoenix Group ~~since 2015~~ and ~~leads~~ the ~~company~~'~~s strategic direction~~, ~~focusing on growth through acquisitions~~ and ~~operational efficiency~~.		Andy joined Phoenix Group in 2020 with over 30 years of experience in the insurance industry. He has held senior executive roles across multiple business areas in the industry including CEO of UK Insurance and Global Life and Health at Aviva plc; CEO of Friends Life Group Limited; Managing Director of Scottish Widows; CEO of the Retirement Income Division at Prudential plc and Chair of the Association of British Insurers (‘ABI’). Andy is a Fellow of the Institute of Actuaries and also acts as the UK Government’s Business Champion for Older Workers.

			'''Karen Green – Senior Independent Director'''

			Karen has significant financial services experience. She has held a number of senior executive roles including Chief Executive Officer of Aspen UK (comprising the principal insurance and reinsurance companies of the Aspen Insurance Holdings), Principal of MMC Capital Ltd (now Stonepoint Capital LLC) and Director of Corporate Development of GE Capital Europe Ltd. Karen has significant NED experience, including as Chair of the Audit and Remuneration Committees at Admiral Insurance Group plc, a former Council member and Chair of the Investment Committee at Lloyd’s of London, NED at Great Portland Estates plc and Risk and Audit Committee Chairs at Miller Insurance Services LLP.

			'''Eleanor Bucks – Independent Non-Executive Director'''

			Since 2021, Eleanor has been Chief Investment Officer of Lloyd’s of London. Prior to this, she was at Legal & General plc holding several roles including: Chief Operating Officer of Legal & General Capital, Managing Director of Direct Investments and Real Assets and Chief Investment Officer of Legal & General Retirement. Eleanor serves as Chair on the suite of Lloyd’s Investment Platform funds and has held executive directorships as Chair of Legal & General Investment Management Alternative Investment Fund Manager and Director of Legal & General’s Single-Family Build-to-Rent business. Eleanor is a Fellow of the Institute of Actuaries.

			'''Mark Gregory – Independent Non-Executive Director'''

			Mark has 25 years of experience in the financial services industry. Most recently, Mark was CEO of Merian Global Investors Limited (‘Merian’). Preceding this, he held roles at Legal & General Group plc including: Group CFO, CEO of Savings and Managing Director of With Profits, at Asda Limited as the Divisional Director for Finance and the Business Development Director and at Kingfisher plc as a Senior Financial Analyst. His NED experience consists of roles as NED and Chair of the Risk Committee at Direct Line Insurance Group plc and NED at Entain plc and Merian.

			'''Hiroyuki Iioka – Shareholder Nominated Director, MS&AD'''

			Hiroyuki is the appointed representative of one of Phoenix Group’s major shareholders, MS&AD Insurance Group Holdings, Inc ('MS&AD'). He has over 35 years of experience and is currently Senior General Manager for the International Business Planning Department at MS&AD. His previous roles include General Manager for the Asian Life Insurance Business Department at Mitsui Sumitomo Insurance Company Limited (Japan) and Assistant General Manager for MSIG Holdings (Europe) Limited. Hiroyuki’s NED experience includes roles as NED of ReAssure Group plc, Mitsui Sumitomo Insurance (London Management) Limited and an Alternate NED of Challenger Limited (Australia). Hiroyuki is a Chartered Member of the Securities Analysts Association of Japan and Certified International Investment Analysts.

			'''Katie Murray – Independent Non-Executive Director'''

			Katie has over 30 years of experience gained across the financial services industry and is currently Group Chief Financial Officer (‘CFO’) of NatWest Group plc, having also acted as Deputy Group CFO. Prior to this, Katie spent a number of years at Old Mutual plc, where she held various senior executive roles including Group Finance Director of Old Mutual Emerging Markets, Director of Finance – Group Chief Accountant and Head of Group Planning and Analysis. She was also a Senior Audit Manager at KPMG LLP. Katie is a member of the Institute of Chartered Accountants in Scotland.

			'''John Pollock – Independent Non-Executive Director'''

			John has vast financial services experience from a career of over 35 years at Legal & General Group plc (‘L&G’), most recently as CEO of Legal & General Assurance Society. John’s previous positions at L&G include CEO of Protection & Annuities, Group Executive Director of Product & Corporate and Director of UK Operations. His NED experience includes roles as Chair of Cofunds Limited and Suffolk Life Limited and NED of Cala Group (Holdings) Limited. John has also acted as Deputy Chair of the Financial Conduct Authority (‘FCA’) Practitioner Panel, Life Insurance Member of the Financial Ombudsmen Service Industry Panel and has been a member of the Life Insurance Committee of the Association of British Insurers. John is a Fellow of the Royal Geographical Society.

			'''Belinda Richards – Independent Non-Executive Director'''

			Belinda has extensive financial services and strategy experience from a 30-year career. She was Senior Partner and Global Head of Merger Integration and Separation Advisory Services at Deloitte LLP. Prior to this, Belinda was Vice President of Post-Acquisition Integration and Separation Services at Ernst & Young LLP and Principal of Corporate Finance and Strategic Advisory Services at KPMG LLP. Her NED experience includes roles as NED and Chair of the Audit Committee of Avast plc and William Morrison Supermarkets plc, SID of Grainger plc and NED of Aviva Life & Pensions UK Limited and Friends Life Group Limited.

			'''David Scott – Shareholder Nominated Director, abrdn plc'''

			David is the appointed representative of one of Phoenix Group’s major shareholders, abrdn plc (‘abrdn’). He has over 35 years of financial services experience and is currently Chief Enterprise Technology Officer at abrdn. His previous roles include Chief Security and Resilience Officer and Group Digital & IT Strategy Director at abrdn, Group Operations & IT Director at Bankhall Investment Management and Head of IT at Aegon Asset Management UK. David’s NED experience includes roles as NED of Origo Services plc and Chair of the University of St Andrews Students Association. He is a Fellow of the Institute of Directors, a Full Professional Member of the British Computer Society, and a Chartered IT Professional.

			'''Maggie Semple, OBE – Independent Non-Executive Director'''

			Maggie is currently a business owner and co-founder of three businesses; The Experience Corps, Maggie Semple Limited and I-Cubed Group Ltd. Prior to this, Maggie acted as Director of Learning Experience at the New Millennium Experience Co and Director of Education and Training for the Arts Council England. She began her career in education as a teacher and later an education inspector and has received an OBE for her services to learning. Maggie’s NED experience includes roles as NED of PwC Business Restructuring Services, JN Bank UK Limited, McDonald’s Restaurants Limited and as an Ambassador of the Black British Voices Project.

			'''Nicholas Shott – Independent Non-Executive Director'''

			Nicholas brings recent and relevant financial services experience having retired in 2021 from Lazard & Co Limited, where he spent over 30 years. There he held various positions including, European Vice Chairman and Head of UK Investment Banking. In his early years, Nicholas worked in the national newspaper sector in various management positions such as General Manager of the Evening Standard and Sunday Express and Group Marketing Director of Express Newspapers. Nicholas is a Special Adviser to the Chair and Board of the Daily Mail and General Trust plc and has been a NED for the Home Office.

			=== Executive committee ===
			'''Andy Briggs – Group Chief Executive Officer'''

			'''Stephanie Bruce – Interim Group Chief Financial Officer'''

			'''Arlene Cairns – Life Chief Financial Officer & Group Performance Director'''

			'''Andy Curran – Chief Executive Officer, Standard Life'''

	'''~~Clare Bousfield~~ – Group Chief ~~Financial~~ Officer'''		'''Mike Eakins – Group Chief Investment Officer'''

	~~Clare Bousfield oversees financial strategy, capital management, and reporting, ensuring the group~~'~~s financial health and sustainable growth.~~		'''Dean Galligan – Chief Capital Officer'''

	'''~~Keith Skeoch~~ – ~~Chairman~~'''		'''Tom Ground – Chief Executive Officer, Retirement Solutions'''

	~~Keith Skeoch is the Chairman~~ of ~~Phoenix Group~~ and ~~has significant experience in financial services. He provides leadership and governance to the board.~~		'''Claire Hawkins – Director of Corporate Affairs and Brand'''

	'''~~Ian McKenna~~ – Chief Risk Officer'''		'''Brid Meaney – Group Chief Risk Officer'''

	~~Ian McKenna is responsible for overseeing risk management at Phoenix Group, ensuring that operational, financial, and regulatory risks are effectively managed.~~		'''Jackie Noakes – Chief Operating Officer'''

	'''~~Paul Brewer~~ – Chief ~~Operating~~ Officer'''		'''Jonathan Pears – Group Chief Risk Officer'''

	~~Paul Brewer manages the operational aspects of Phoenix~~ Group~~, including business integration from acquisitions and optimising customer service.~~		'''Sara Thompson – Group People Officer'''

	~~The leadership team is supported by various senior managers responsible for specific business areas such as investments~~, ~~legal~~ and ~~compliance, and technology.~~		'''Colin Williams – Chief Executive Officer, Pensions and Savings'''

			'''Quentin Zentner – Group General Counsel'''
	== Financials ==		== Financials ==
	{\| class="wikitable"		{\| class="wikitable"

167.98.221.1: /* What are the assumptions used to estimate the return figure? */

2024-11-16T20:27:19Z

What are the assumptions used to estimate the return figure?

← Older revision		Revision as of 21:27, 16 November 2024
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	\|What is the expected dividend in the next period (i.e., the next year)?		\|What is the expected dividend in the next period (i.e., the next year)?
	\|53.75p		\|53.75p
	\|		\|Phoenix's most recent full-year dividend is 52.65p (FY23). Multiply that by the below growth rate (1.75%) equates to 53.75p per share.
	\|-		\|-
	\|What is the required rate of return or cost of equity?		\|What is the required rate of return or cost of equity?

>Ethan: /* What are the assumptions used to estimate the return figure? */

2024-11-16T18:44:15Z

What are the assumptions used to estimate the return figure?

← Older revision		Revision as of 19:44, 16 November 2024
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	=== Dividend Discount Model ===		=== Dividend Discount Model ===

	As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that the crowd suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the discounted dividend valuation approach.		As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that the Stockhub crowd suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the discounted dividend valuation approach.

	==== What's the expected return of an investment in Phoenix using the discounted dividend valuation approach? ====		==== What's the expected return of an investment in Phoenix using the discounted dividend valuation approach? ====
	The crowd estimates that the expected return of an investment in Phoenix over the next five years is 134%, which equates to an annual return of 19%. In other words, an £1,000 investment in the company is expected to return £2,343 in five years time. The assumptions used to estimate the return figure can be found in the table below.		The Stockhub crowd estimates that the expected return of an investment in Phoenix over the next five years is 134%, which equates to an annual return of 19%. In other words, an £1,000 investment in the company is expected to return £2,343 in five years time. The assumptions used to estimate the return figure can be found in the table below.

	==== What are the assumptions used to estimate the return figure? ====		==== What are the assumptions used to estimate the return figure? ====
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	\|What is the expected growth rate of dividends?		\|What is the expected growth rate of dividends?
	\|1.75%		\|1.75%
	\|Since Phoenix's inception, its dividend CAGR is 1.75%, so the crowd suggests using that amount here.		\|Since Phoenix's inception, its dividend CAGR is 1.75%, so the Stockhub crowd suggests using that amount here.
	\|-		\|-
	\|Which financial forecasts to use?		\|Which financial forecasts to use?
	\|The crowd		\|The Stockhub crowd
	\|The only available forecasts are the ones that are supplied by the crowd (the forecasts can be found in the financials section of this report), so the crowd suggests using those.		\|The only available forecasts are the ones that are supplied by the Stockhub crowd (the forecasts can be found in the financials section of this report), so the Stockhub crowd suggests using those.
	\|-		\|-
	\|What's the current value of the Phoenix company?		\|What's the current value of the Phoenix company?
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	\|Which time period do you want to use to estimate the expected return?		\|Which time period do you want to use to estimate the expected return?
	\|Between now and five years time		\|Between now and five years time
	\|The crowd suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.		\|The Stockhub crowd suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
	\|}		\|}

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	\|171%		\|171%
	\|}		\|}







	*
	* This model is most suitable for companies with '''stable and predictable dividend policies''', such as Phoenix Group, but it may not fully capture other aspects of value, such as potential capital gains or market changes.

	== Appendix ==		== Appendix ==

>Ethan: /* What are the assumptions used to estimate the return figure? */

2024-11-16T18:42:07Z

What are the assumptions used to estimate the return figure?

← Older revision		Revision as of 19:42, 16 November 2024
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	==== What's the expected return of an investment in Phoenix using the discounted dividend valuation approach? ====		==== What's the expected return of an investment in Phoenix using the discounted dividend valuation approach? ====
	The crowd estimates that the expected return of an investment in Phoenix over the next five years is ~~ccc~~%, which equates to an annual return of ~~ccc~~%. In other words, an £1,000 investment in the company is expected to return ~~£ccc~~ in five years time. The assumptions used to estimate the return figure can be found in the table below.		The crowd estimates that the expected return of an investment in Phoenix over the next five years is 134%, which equates to an annual return of 19%. In other words, an £1,000 investment in the company is expected to return £2,343 in five years time. The assumptions used to estimate the return figure can be found in the table below.

	==== What are the assumptions used to estimate the return figure? ====		==== What are the assumptions used to estimate the return figure? ====
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	!Commentary		!Commentary
	\|-		\|-
	\|Which ~~type of multiple~~ do you want to use?		\|Which model do you want to use?
	\|~~Growth-adjusted EV/sales~~		\|Gordon growth model
	\|~~For~~ the ~~numerator, the crowd believes that to account for the different financial leverage levels of its peers, it's best to use enterprise value~~ (EV)~~, rather than price. For the denominator, the crowd believes that because it expects Phoenix to reinvest almost all of its revenue back into the business over the five year forecast period~~ and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, the crowd suggests valuing its company using the EV/sales ratio. However, the crowd thinks that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple, rather than the EV/sales multiple.		\|The CFA institute recommends using the Gordon growth model (GGM) for companies with stable and predictable dividend policies.
	\|-		\|-
	\|~~In regards to~~ the ~~growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use?~~		\|What is the expected dividend in the next period (i.e., the next year)?
	~~\|Year 5~~		\|53.75p
	~~\|The crowd suggests that with sales forecast to grow exponential over the five year forecast period, it's best to use forward-looking data, rather than historic data.~~		\|
	~~In regards to the growth-adjusted EV/sales multiple, for the sales figure, the crowd suggests that~~ in ~~order to account for the forecasted exponential growth of the business, it's best to use one at the end of~~ the ~~forecast~~ period (i.e. ~~Year 5~~).
	\|-		\|-
	\|~~In regards to~~ the ~~growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use~~?		\|What is the required rate of return or cost of equity?
	\|~~Year 6, from now~~		\|8.64%
	\|The ~~crowd suggests that~~ for the ~~sales growth figure, it's best to use Year 6~~.		\|The assumptions for this can be found in the cost of equity table in the appendix of this report.
	\|-		\|-
	\|~~In regards to~~ the growth~~-adjusted EV/sales multiple, what multiple figure do you want to use~~?		\|What is the expected growth rate of dividends?
	\|0.~~19x~~		\|1.75%
	\|~~In the crowd~~'s ~~view~~, ~~Freetrade closest peers are AJ Bell~~, ~~Hargreaves Lansdown, Robinhood Markets, Inc, Avanza Bank Holding AB and The Charles Schwab Corporation~~.		\|Since Phoenix's inception, its dividend CAGR is 1.75%, so the crowd suggests using that amount here.
	\|-		\|-
	\|Which financial forecasts to use?		\|Which financial forecasts to use?
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	\|-		\|-
	\|What's the current value of the Phoenix company?		\|What's the current value of the Phoenix company?
	\|~~£225 million~~		\|£5.03 billion
	\|As at ~~13th June 2023~~, the current value of its company at ~~£225 million~~.<ref name=":9">https://www.telegraph.co.uk/business/2023/06/13/freetrade-stock-trading-start-up-valuation-plunge/</ref>		\|As at 16th November 2024, the current value of its company at £5.03 billion.<ref name=":9">https://www.telegraph.co.uk/business/2023/06/13/freetrade-stock-trading-start-up-valuation-plunge/</ref>
	\|-		\|-
	\|Which time period do you want to use to estimate the expected return?		\|Which time period do you want to use to estimate the expected return?
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	The main inputs that result in the greatest change in the expected return of the Phoenix investment are, in order of importance (from highest to lowest):		The main inputs that result in the greatest change in the expected return of the Phoenix investment are, in order of importance (from highest to lowest):

	#The growth~~-adjusted EV/sales multiple~~ (the default ~~multiple 0~~.19);		#The expected growth rate of dividends (the default rate is 1.75%);
	#~~Freetrade Year 5 sales figure~~ (the default ~~figure~~ is ~~£777 million~~); and		#The expected dividend amount in the next period (the default amount is 53.75p); and
	#~~Freetrade Year 6 sales growth~~ rate (the default rate is 63%).		#The required rate of return or cost of equity (the default rate is 8.64%).

	The impact of a 50% change in those main inputs to the expected return of the Phoenix investment is shown in the table below.		The impact of a 50% change in those main inputs to the expected return of the Phoenix investment is shown in the table below.
Line 2,553:		Line 2,552:
	!50% better		!50% better
	\|-		\|-
	\|The growth~~-adjusted EV/sales multiple~~		\|The expected growth rate of dividends
	\|~~1972~~%		\|75%
	\|~~4044~~%		\|134%
	\|~~6116~~%		\|413%
	\|-		\|-
	\|~~Phoenix Year 5 sales figure~~		\|The expected dividend amount in the next period
	\|~~1972~~%		\|17%
	\|~~4044~~%		\|134%
	\|~~6116~~%		\|251%
	\|-		\|-
	\|~~Phoenix Year 6 sales growth~~ rate		\|The required rate of return or cost of equity
			\|106%
	\|~~1972~~%		\|134%
	\|~~4044~~%		\|171%
	\|~~6116~~%

	\|}		\|}

Line 2,577:		Line 2,574:


	~~To calculate the value of '''Phoenix Group''' using the '''Dividend Discount Model (DDM)''', we need to follow the basic formula for a '''Constant Growth Dividend Discount Model''':~~		*

	~~Value of the Stock (V)=r−gD1~~

	~~Where:~~

	* ~~D1 = the expected dividend in the next period (i.e., the next year).~~
	* r = the required rate of return or cost of equity.
	* g = the expected growth rate of dividends.

	~~=== Step-by-Step Calculation ===~~

	~~# '''Find Expected Dividend (D1)'''~~
	~~#* Let’s assume Phoenix’s expected dividend in the next period is '''£0.30 per share''' (this is an assumption, so you should replace it with actual forecast data if available).~~
	~~# '''Cost of Equity (r)'''~~
	~~#* From earlier, we estimated Phoenix's '''cost of equity''' (using CAPM) to be around '''8.9%'''.~~
	~~# '''Dividend Growth Rate (g)'''~~
	~~#* Phoenix’s dividends have been relatively stable, with moderate growth. Let’s assume an expected dividend growth rate of '''2%''' per year.~~

	~~=== Putting it into the formula: ===~~
	~~V=0.089−0.020.30=0.0690.30 V≈4.35~~

	~~=== Interpretation: ===~~
	The value of Phoenix Group based on the '''DDM''' is approximately '''£4.35 per share''', assuming the expected dividend for the next year is £0.30, the cost of equity is 8.9%, and the growth rate of dividends is 2%.

	~~=== Important Considerations: ===~~

	* The accuracy of this model is highly dependent on the accuracy of the '''dividend forecast''', '''cost of equity''', and '''growth rate'''. Any changes to these assumptions would significantly affect the outcome.
	* This model is most suitable for companies with '''stable and predictable dividend policies''', such as Phoenix Group, but it may not fully capture other aspects of value, such as potential capital gains or market changes.		* This model is most suitable for companies with '''stable and predictable dividend policies''', such as Phoenix Group, but it may not fully capture other aspects of value, such as potential capital gains or market changes.

>Ethan: /* Dividend Discount Model */

2024-11-16T17:55:40Z

Dividend Discount Model

← Older revision		Revision as of 18:55, 16 November 2024
Line 2,494:		Line 2,494:

	=== Dividend Discount Model ===		=== Dividend Discount Model ===

			As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that the crowd suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the discounted dividend valuation approach.

			==== What's the expected return of an investment in Phoenix using the discounted dividend valuation approach? ====
			The crowd estimates that the expected return of an investment in Phoenix over the next five years is ccc%, which equates to an annual return of ccc%. In other words, an £1,000 investment in the company is expected to return £ccc in five years time. The assumptions used to estimate the return figure can be found in the table below.

			==== What are the assumptions used to estimate the return figure? ====
			{\| class="wikitable"
			\|+Key inputs
			!Description
			!Value
			!Commentary
			\|-
			\|Which type of multiple do you want to use?
			\|Growth-adjusted EV/sales
			\|For the numerator, the crowd believes that to account for the different financial leverage levels of its peers, it's best to use enterprise value (EV), rather than price. For the denominator, the crowd believes that because it expects Phoenix to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, the crowd suggests valuing its company using the EV/sales ratio. However, the crowd thinks that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple, rather than the EV/sales multiple.
			\|-
			\|In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use?
			\|Year 5
			\|The crowd suggests that with sales forecast to grow exponential over the five year forecast period, it's best to use forward-looking data, rather than historic data.
			In regards to the growth-adjusted EV/sales multiple, for the sales figure, the crowd suggests that in order to account for the forecasted exponential growth of the business, it's best to use one at the end of the forecast period (i.e. Year 5).
			\|-
			\|In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use?
			\|Year 6, from now
			\|The crowd suggests that for the sales growth figure, it's best to use Year 6.
			\|-
			\|In regards to the growth-adjusted EV/sales multiple, what multiple figure do you want to use?
			\|0.19x
			\|In the crowd's view, Freetrade closest peers are AJ Bell, Hargreaves Lansdown, Robinhood Markets, Inc, Avanza Bank Holding AB and The Charles Schwab Corporation.
			\|-
			\|Which financial forecasts to use?
			\|The crowd
			\|The only available forecasts are the ones that are supplied by the crowd (the forecasts can be found in the financials section of this report), so the crowd suggests using those.
			\|-
			\|What's the current value of the Phoenix company?
			\|£225 million
			\|As at 13th June 2023, the current value of its company at £225 million.<ref name=":9">https://www.telegraph.co.uk/business/2023/06/13/freetrade-stock-trading-start-up-valuation-plunge/</ref>
			\|-
			\|Which time period do you want to use to estimate the expected return?
			\|Between now and five years time
			\|The crowd suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
			\|}

			==== Sensitivity analysis ====
			The main inputs that result in the greatest change in the expected return of the Phoenix investment are, in order of importance (from highest to lowest):

			#The growth-adjusted EV/sales multiple (the default multiple 0.19);
			#Freetrade Year 5 sales figure (the default figure is £777 million); and
			#Freetrade Year 6 sales growth rate (the default rate is 63%).

			The impact of a 50% change in those main inputs to the expected return of the Phoenix investment is shown in the table below.

			{\| class="wikitable sortable"
			\|+Phoenix investment expected return sensitivity analysis
			!Main input
			!50% worse
			!Unchanged
			!50% better
			\|-
			\|The growth-adjusted EV/sales multiple
			\|1972%
			\|4044%
			\|6116%
			\|-
			\|Phoenix Year 5 sales figure
			\|1972%
			\|4044%
			\|6116%
			\|-
			\|Phoenix Year 6 sales growth rate

			\|1972%
			\|4044%
			\|6116%

			\|}







	To calculate the value of '''Phoenix Group''' using the '''Dividend Discount Model (DDM)''', we need to follow the basic formula for a '''Constant Growth Dividend Discount Model''':		To calculate the value of '''Phoenix Group''' using the '''Dividend Discount Model (DDM)''', we need to follow the basic formula for a '''Constant Growth Dividend Discount Model''':

>Ethan: /* Financials */

2024-11-16T14:07:24Z

Financials

Show changes

← Older revision		Revision as of 01:50, 25 November 2024
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	\|What's the estimated current size of the total addressable market?		\|What's the estimated current size of the total addressable market?
	\|$1,300,000,000		\|$1,300,000,000
	\|Here, the total addressable market (TAM) is defined as the global ~~brokerage~~ market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (6th May 2023), in terms of revenue, is $1.3 trillion.		\|Here, the total addressable market (TAM) is defined as the global life insurance, pensions, retirement solutions market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (6th May 2023), in terms of revenue, is $1.3 trillion.
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	\|What is the estimated company lifespan?		\|What is the estimated company lifespan?
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	\|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?		\|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?
	\|3%		\|3%
	\|Research shows that the growth rate of the global ~~brokerage~~ market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.		\|Research shows that the growth rate of the global life insurance, pensions, retirement solutions market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
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	\|What's the estimated company peak market share?		\|What's the estimated company peak market share?
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	\|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>		\|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>

	In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub crowd estimates that with Phoenix's operating cash flows negative (-), investing cash flows ~~negative~~ (-) and its financing cash flows ~~positive~~ (+), the company is in the ~~first~~ stage of growth (i.e. the '~~introduction~~' stage), and, therefore, it has a total of ~~four~~ main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.		In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub crowd estimates that with Phoenix's operating cash flows negative (-), investing cash flows positive (+) and its financing cash flows negative (+
			-), the company is in the fourth stage of growth (i.e. the 'decline' stage), and, therefore, it has a total of one main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.
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	\|What proportion of the company lifecycle is represented by growth stage 1?		\|What proportion of the company lifecycle is represented by growth stage 1?