Chesnara announces 208% increase in IFRS pre-tax profit and 3.4% dividend uplift
Chesnara today reported final results for the year ended 31 December 2013. The Group remains committed to delivering value for shareholders, principally through an attractive dividend stream, while maximising returns to its policyholders.
Financial Highlights
IFRS profit of £60.6m before tax, an increase of 208% (2012: £19.7m)
Gross cash generation of £49.7m (2012: £34.0m) giving a Total Shareholder Return (TSR) of 79% for 2013 and 261% over 5 years
Increase of £65.3m in EEV to £376.4m (2012: £311.1m)
EEV earnings net of tax increased by £51.5m to £82.7m (165%) before modelling adjustments (2012: £31.2m)
Recommended dividend of 11.63p per share, an increase of 3.4%. Total proposed dividend increased by 3% to 17.88p - ten years of consecutive growth
Group solvency ratio remains very robust at 194%
Subsidiary solvency ratios also strong and above targets. CA at 218%, PL at 156% and Movestic at 311%
Operational Highlights
Acquisition of protection Life (formerly Direct Line Life Insurance) for £39.3m delivering an EEV gain of £12.3m upon completion in November 2013
Movestic achieves 61.9% increase in like for like new business volumes and £7.2m of new business profit (2012: £2.6m)
Movestic captures 8% of new unit-linked pensions business market share (2012: 5.3%)
Group's regulatory compliance record remains robust
Value enhancing acquisition opportunities in the UK and Western Europe, principally in the £50m - £200m price range, continue to be sought and examined
Statement regarding 2014 UK Budget
In his Budget announcement on 19 March, the Chancellor of the Exchequer announced significant changes which will affect the pensions and annuity markets. Chesnara's UK business does not have a significant exposure to annuities and has not sought to write such business for a number of years. We note the changes to flexibility of pensions arrangements however we are not expecting any immediate or significant change to our book of business, or the value of it.
Graham Kettleborough, Chief Executive said:
'2013 has been an extremely positive year for Chesnara with the Company achieving significant advances across all elements of the business and against key objectives. Focus and commitment to a proven business model is delivering both operational depth and robustness allowing us to report strong financial results for the existing and new books of business throughout both the UK and Swedish operations.
'The Board is therefore pleased to recommend an increase in the final dividend to 11.63p per share, a 3.4% rise.
'Our strong operational platforms and positive indications of support for sources of funding for potential future acquisitions, give us confidence in the continued success of Chesnara through 2014 and beyond, whilst ensuring that we continue to reward the loyalty of our shareholders and policyholders'.
