Chesnara increases interim dividend following positive results

Report was led by strong cash generation in UK and good capital levels.

Article updated: 30 August 2018 9:00am Author: Ian Forrest

  • The dividend rises 3% compared with 2017
  • Operating profit was up 64% to £27.3m along with group cash generation of £48.6m, but the shares remained unchanged in early trading
  • We recommend Chesnara as a ‘buy’ for high risk income seekers

International life insurance and pensions group Chesnara reported a 64% rise in its underlying operating profit today to £27.3m along with good cash generation in the UK and a 3% increase in the interim dividend.

There was also good news on the solvency ratio, a key measure which indicates the company’s ability to pay dividends, which rose from 146% to 157%. Economic value dropped 3% to £700.8m, mainly due to dividend payments and a £16.4m foreign exchange loss attributed to the weakening of the Swedish krona.

These figures suffered a little by comparison with those for the same period in 2017 when the company acquired Legal & General’s Dutch business, but Chesnara reported some progress in that country with a 29% increase in term contracts at its Scildon business in the period.

These are clearly a mixed set of figures and the shares remained unchanged in early trading. While the drop in economic value is a concern the key measures for income-seeking investors remain positive and the business has the potential to build a strong proposition in its particular market segment, so we continue with our 'buy' recommendation for those willing to accept a higher level of risk.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.