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Interim Results

Chesnara pre-tax profits fall

31 August 2016 09:14

Chesnara reports an IFRS profit before tax of £0.2m for the six months to the end of June - down from £30.4m a year ago.

Chesnara said the current period was adversely affected by a reduction in the yield curve. The prior year result included a gain of £16.2m recognised on the acquisition of the Waard Group. Significant foreign exchange gains not recognised in this financial metric have been made.

Other financial highlights:

- Group solvency ratio of 148% (31 December 2015: 146%). After taking account of the interim dividend the Group solvency ratio has improved slightly and subsidiary solvency ratios remain strong and above internal targets, with the UK at 137% (31 December 2015: 135%); Movestic at 154% (31 December 2015: 154%) and Waard Group at 584% (31 December 2015: 597%). We have not used transitional arrangements.

- Cash generation of £13.6m (six months ended 30 June 2015: £16.8m excluding exceptional cash gain on acquisition of Waard). UK cash generation has been adversely impacted by the reduction in the yield curve, but continued contributions from Movestic and Waard have added to a total half year figure which represents over 50% of the 2015 total dividend.

- Economic Value (EcV) of £459.9m N(31 December 2015: £453.4m). Growth of 1.4% driven by the combined impact of a loss in the period of £3.5m, a dividend payment of £15.6m and a foreign exchange gain of £25.6m.

Chief executive John Deane said: "The Chesnara strategy continues to deliver cash to support our dividend. Whilst the IFRS pre tax profits have been adversely impacted by the reduction in interest rates we have benefited from foreign exchange movements. I am particularly pleased to report that our Economic Value has increased during the period and our Group Solvency ratio has improved.

"The reductions in the yield curve in the UK has dampened the level of cash emerging from the UK books this half year but the overseas divisions have continued their cash generation that funds our dividend strategy.

"In light of the operational achievements and financial results in the period, the Board is pleased to recommend an interim dividend of 6.80p per share, an interim dividend increase of 2.9% over 2015."

At 9:14am: (LON:CSN) Chesnara PLC share price was +5.25p at 335p

Story provided by StockMarketWire.com

Related Company: CSN

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