Adjust for exceptional items and profits at closed-life specialist Chesnara (CSN) grew 9 per cent in 2012 to £24.5m. Moreover, a reversal of the previous year's negative investment return meant that losses of £34.1m on an embedded value basis were turned into a £40.5m gain.
However, the group's operating divisions delivered a mixed performance. Exceptional items trimmed profits at Countrywide Assured from £25.7m to £18.5m, but the Save & Prosper business - acquired in December 2010 - nearly doubled profits to £14.5m, as the previous year's net investment loss of £3.3m was turned into a positive return of £3.6m. And while the annual policy attrition rate (the rate of policy cancellation) rose more than expected from 6.5 per cent to 7.4 per cent, chief executive Graham Kettleborough pointed out that the previous year's rate was unusually low. Moreover, after a lengthy integration, Chesnara's Swedish operation, Movestic, looks to have turned the corner - profits there rose from £0.4m to £1.4m.
Group finances remained in good shape, too, with cash generation up from £31.4m to £41m, including £7m released after the final transfer of funds in S&P into the core business. The group's solvency ratio improved from 198 per cent to 244 per cent, too.
Broker Panmure Gordon expects 2013 pre-tax profit of £21.3m and EPS of 15.76p (from 24.33p in 2012).
| CHESNARA (CSN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 237p | MARKET VALUE: | £272m | |
| TOUCH: | 235-237p | 12-MONTH HIGH: | 239p | LOW: 155p |
| DIVIDEND YIELD: | 7.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 190p | EMBEDDED VALUE: | 271p | |
| Year to 31 Dec | Net premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 77.0 | 22.7 | 19.2 | 15.6 |
| 2009 | 75.1 | 44.7 | 45.3 | 16.0 |
| 2010 | 79.3 | 34.2 | 29.1 | 16.4 |
| 2011 | 87.0 | 22.4 | 22.4 | 16.9 |
| 2012 | 80.2 | 19.7 | 24.3 | 17.4 |
| % change | -8 | -12 | +9 | +3 |
Ex-div: 10 Apr Payment: 22 May | ||||
