Report was led by strong cash generation in UK and good capital levels.
Chesnara increases interim dividend following positive results
- 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.
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