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Annual Results

Chesnara hit by low bond yields

31 March 2015 08:43

Chesnara posts an IFRS profit before tax of £28.8m for the year to the end of December - down from £60.6m in 2013.

Chesnara said this was primarily driven by a significant reduction in Government bond yields over the year.

The group says it remains committed to delivering competitive returns to both its shareholders and policyholders, and continues to focus on:

- the core business of maximising value from the in-force life and pensions book

- value enhancement through writing profitable new business in Sweden

- making further life and pensions acquisitions where they meet stringent assessment criteria

Financial highlights include:

- Gross cash generation of £42.6m (2013: £49.7m). Cash is generated primarily from the UK business, which has remained resilient to falling bond yields in the year.

- Net cash generation of £71.1m (2013: £36.7m). Net cash generation includes a benefit of £27.4m arising from the Part VII transfer of Protection Life.

- 2.9% increase in total dividend compared with 2013. Recommended final dividend of 11.98p per share results in total dividend for the year of 18.40p per share (2013: 17.88p per share). 2.9% increase represents the tenth successive rise in annual dividends.

- EEV of £417.2m (2013: £376.4m). Growth of 10% driven by earnings of £44.2m and December 2014 equity raise of £34.5m, offset by dividend payments of £20.7m and Swedish Krona exchange losses of £17.3m.

Chief executive John Deane said: "Chesnara has a very clear strategic focus: delivering value from the in-force book, writing profitable new business and making strategic acquisitions in the Life and Pensions sector. 2014 has seen delivery in all three areas, particularly the Part VII transfer of Protection Life, improvements in new business profitability in Sweden and our acquisition of the Waard Group. Our results have been delivered against a headwind of low bond yields.

"Having completed the orderly handover from Graham Kettleborough I look forward to building on the past successes of the business with a strong and dedicated team for the benefit of our policyholders, investors, staff and other stakeholders.

"In light of the operational achievements and good financial results in the year, the Board is therefore pleased to recommend a final dividend of 11.98p per share, resulting in a full year dividend increase of 2.9% over 2013.'

At 8:42am: (LON:CSN) Chesnara PLC share price was -14.37p at 340.63p

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