Chesnara (CSN) delivered a solid first-half performance, although headline numbers were distorted by a number of one-off items as well as currency fluctuations. Figures for the previous first half included a £20.7m gain relating to the acquisition of L&G Netherland, but stripping this out left the underlying core operating profit up almost two-thirds at £27.3m.
The UK business manages around 287,000 policies that are in run-off – so there is no new business written. Surplus regulatory capital is generated as the book matures, with cash generation of £42.9m including £26.8m released from the division’s two ring-fenced with-profit funds.
Movestic is the group’s life and pensions business in Sweden, and is open to new business. Assets under management grew by 6.7 per cent, although sterling’s strength meant that cash generation was cut to £7.3m from £10.6m last year on a constant-currency basis.
L&G Netherland, now branded as Scildon, is undergoing an improvement plan to deliver stronger cash generation, and contract sales were up 29 per cent from a year earlier. However, trading in the first half was affected by widening credit spreads on Italian government bonds, and Scildon reported a £6.5m loss.
Analysts at Shore Capital are keeping their full-year forecasts at 468p of economic value for the December year-end, up from 483p the prior year.
| CHESNARA (CSN) | ||||
| ORD PRICE: | 390p | MARKET VALUE: | £585m | |
| TOUCH: | 387-390p | 12-MONTH HIGH: | 425p | LOW: 335p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 298p* | SOLVENCY RATIO: | 157% | |
| Half-year to 30 Jun | Net premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 66 | 51.6 | 31.2 | 7 |
| 2018 | 116 | 26.5 | 14.6 | 7.21 |
| % change | +75 | -49 | -53 | +3 |
| Ex-div: | 6 Sep | |||
| Payment: | 12 Oct | |||
| *Including intangible assets of £181m, or 121p a share | ||||
