Chesnara PLC (LSE:CSN) increased its interim dividend for the 19th year in a row, with a 3% hike as it enjoyed positive commercial cash generation and looked forward to the benefits of a new strategic partnership.
The UK, Netherlands and Sweden life and pensions company posted half-year results showing a solvency position of 205%, up from 197% over the period and well above its 140-160% normal operating range.
An IFRS profit before tax of £16.0 million was reported, flipping from the £54.2 million loss a year ago, and two acquisitions in the period added £55.7 million of contractual service margin.
Cash generation from operations, excluding the effects of currency swings and acquisitions, of £20 million led to cash balances increasing to £127.5 million by the end of June, up from December’s £108.1 million.
Its bank balance provides “substantial resources to fund future acquisitions”, said the company, having added Conservatrix insurance portfolio in the Netherlands and an individual protection portfolio from Canada Life UK during the first half.
A 3% increase to 8.36p per share of the interim dividend was also made.
Chief executive Steve Murray said: “The two acquisitions we delivered in the first half of 2023 show we have continued momentum behind our acquisition strategy.
“The first half of the year has been one of strong delivery including IFRS 17 and our new strategic partnership with SS&C which supports Chesnara's future growth ambitions in the UK.”
SS&C is a new outsourcing partner, taking on the majority of UK operations with 68 staff transferred over and the process underway to migrate UK policies to the new operating platform. Chesnara said this provides “surety over the future operating costs of the business over a 10 year period”.
Murray said the wider business has also “performed robustly despite continuing market uncertainty”, with a strong solvency position and substantial cash balances to fund future acquisitions.
“We remain 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.