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Interim Results

Chesnara has good first half

28 August 2015 08:20

Chesnara reports a good first half performance complemented by the positive impact of the Waard Group acquisition.

IFRS profit before tax rose to £30.4m (six months ended 30 June 2014: £27.4m). This includes a gain of £16.2m recognised on the acquisition of the Waard Group.

Other highlights:

- Net cash generation of £56.7m (six months ended 30 June 2014: £15.6m). The net cash result includes £15.3m from the operating activities of the business, this is primarily from the UK business although Movestic has made an inaugural positive contribution. In addition, the total cash result includes the one-off benefit of £39.9m arising from the Waard Group acquisition.

- 3.0% increase in interim dividend compared with 2014. Recommended interim dividend of 6.61p per share (2014: 6.42p per share). This increase represents the eleventh successive rise in interim dividends.

- EEV of £441.2m (31 December 2014: £417.2m). Growth of 10.6% driven by the combined impact of earnings of £44.9m plus a model adjustment of £5.9m, less dividend payments of £15.1m and foreign exchange losses of £11.7m on the Movestic business.

- EEV earnings net of tax of £44.9m (six months ended 30 June 2014: £47.3m). EEV earnings in the period supported by a £21.6m gain on acquisition of the Waard Group, and continued value emergence from the in-force books in the UK and Sweden.

- Movestic EEV new business contribution of £2.4m (six months ended 30 June 2014: £5.8m). Decrease driven by a challenging unit linked market where competitors are continuing to offer traditional plans with high guaranteed returns against a backdrop of the low interest rate environment. We retain our focus on profitable unit-linked business.

- Group solvency ratio of 271% (31 December 2014: 284%). After taking account of the interim dividend and the increased solvency requirements following the acquisition of the Waard Group, strong Group solvency has been retained. Subsidiary solvency ratios remain strong and above internal targets, with CA plc at 211% (31 December 2014: 176%); Movestic Liv at 408% (31 December 2014: 376%) and Waard Leven at 766%.

- Group wide Solvency II 'dry-run'. A group-wide 'dry-run' of the Solvency II position of its insurance subsidiaries has been delivered. The results reaffirm the view that Solvency II is not expected to impact adversely the overall solvency position of the Group. In applying Solvency II across the Group the "standard formula" has been used in calculating the Solvency Capital Requirements of each subsidiary and the "dry-run" has been performed without applying any transitional measures.

At 8:20am: (LON:CSN) Chesnara PLC share price was +10.25p at 350.25p

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