Chesnara PLC (LSE:CSN) proposed a 3% increase to the full-year dividend after completing the Sanlam Life & Pensions and Robein Leven transactions last year and the acquisition of Conservatrix's insurance portfolio this January.
The life and pensions consolidator extended its record of dividend growth to 18 years with a final payment of 15.16p per share, making a total dividend of 23.28p.
Commercial cash generation more than doubled to £46.6mln in 2022, representing 133% dividend coverage, despite volatile market conditions.
Cash balances at group holding companies increased to £108.1mln from £46.1mln, of which more than £100mln was said to be available for future acquisitions and to support the dividend strategy.
Economic value fell to £511.7mln from £624.2mln due to economic conditions, including the fall in equity markets and widening of credit spreads, partly offset by the positive impacts of the acquisitions. Taking the Conservatrix acquisition into account, the economic value rose to £532.3mln or 354p per share.
A Solvency II ratio of 197% was reported as of the end of December, materially above its normal operating range of between 140-160% and the 152% seen a year earlier.
The fully-listed group said the increase was driven in part by the issue of £200mln of Tier 2 subordinated debt in February 2022.
It provides “significant headroom for future M&A activity”, with chief executive Steve Murray saying the company remains “optimistic about our ability to participate in future M&A and continue to be highly confident in our ability to finance and execute such transactions on attractive terms for both vendors and our shareholders”.
He said the completion of three transactions over the past 12 months has shown “real momentum” behind the acquisition strategy, with the wider business performing well despite the high level of market volatility reducing the group's economic value.