Chesnara PLC (LSE:CSN) shares moved higher in early deals on Thursday as the company said 2021 was “a year of good delivery”.
The life assurance and pensions company proposed a 3% increase to the full-year dividend on the back of a year of strong cash generation.
The board is recommending a final dividend of 14.7p, making the full-year pay-out 22.6p, extending the period of uninterrupted dividend growth to 17 years.
Commercial cash generation shot up to £53.0mln in 2021 from £27.7mln, representing dividend coverage of 156%, the company said in its full-year results statement.
Group cash generation of £20.3mln was lower than 2020’s £27.7mln because of a number of technical items including a temporary increase in capital requirements as a direct consequence of the symmetric adjustment (which requires more capital following periods of good equity growth).
Funds under management grew to £9.1bn at the end of 2021 from £8.5bn a year earlier.
Pre-tax profit improved to £28.8mln from £24.6mln in 2020.
“The business has grown, including through the profitable writing of new business; and we announced two acquisitions, Sanlam Life and Pensions and Robein Leven, which we expect to complete in the first half of 2022,” said Steve Murray, the chief executive officer of Chesnara.
“Looking forward, we have clear line of sight to multiple sources of cash generation and have a variety of growth value levers at our disposal. We remain optimistic about our ability to participate in future M&A, particularly following our inaugural £200mln Tier 2 debt raise," he added.
Chesnara shares were up 2.5% at 305p in the first hour of trading.