Chesnara reports strong cash generation, though earnings dip

Chesnara reported strong cash generation and continued dividend growth in its interim results on Tuesday, although its earnings dipped compared to last year.

The London-listed company said it generated £29m in commercial cash in the first half of the year, up from £22m during the same period in 2023.

Its solvency ratio remained robust at 201%, comfortably exceeding its target range of 140% to 160%.

The company said its economic value (EcV) stood at £508m as of 30 June - a slight decline from £525m at the end of 2023.

Chesnara reported EcV earnings of £20m before the impact of foreign exchange and dividend payments, down from £33m in the prior year, which had included acquisitions.

In terms of new business, Chesnara reported a commercial value of £5m for the first half, compared to £6m in the same period last year.

IFRS pre-tax profit came in at £13m, down from £15m year-on-year.

Despite the decline in profit, the company still raised its interim dividend by 3%, now offering shareholders 8.61p per share, making for 20 consecutive years of uninterrupted dividend growth.

“The group has yet again delivered strong cash generation and generated positive organic EcV earnings,” said group chief executive officer Steve Murray.

“This financial performance over the first half of the year, combined with our robust solvency position, has allowed us to extend our track record of uninterrupted dividend growth to 20 years, unrivalled across listed UK and European insurers.”

Murray said the company’s people also continued to deliver on its major operational programmes, including the introduction of Consumer Duty for UK closed books.

“We have continued to be active in assessing potential acquisitions, our merger and acquisition pipeline remains positive and we continue to have material firepower to deploy on opportunities.”

At 1149 BST, shares in Chesnara were down 1.52% at 259.5p.

Reporting by Josh White for Sharecast.com.