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European-focused life insurer Chesnara PLC (LSE:CSN) has continued its track record of increasing dividends, with a 3% rise in its latest half-year results. This marks the company's 21st consecutive year of dividend increases, a record matched by only seven companies across Europe.
For the six months ending June 2024, Chesnara reported a decrease in profit before tax to £13.4 million from £15.3 million in the previous period. The value of policies in force (Embedded Value of New Business, EcV) also declined to £508 million, compared to £524.7 million previously. The company attributed these declines to the impact of acquisitions, which have affected margins and contributed to a reduction in the IFRS capital base, now at £458 million, down from £487 million.
Despite these challenges, funds under management increased to £11.9 billion, up from £11.5 billion. Chesnara's solvency ratio remains strong at 201%, surpassing its target range of 140-160%. Cash balances stood at £137 million, bolstered by £29.2 million generated during the half-year. Unlike many peers, Chesnara plans to allocate this cash towards further acquisitions rather than share buybacks.
Chief Executive Steve Murray expressed confidence in the company’s future cash generation capabilities. He highlighted ongoing opportunities for growth through risk margin unwinding, investment returns above risk-free rates, synergies from acquisitions, and strategic management actions.
The interim dividend has been increased to 8.61p per share, up from 8.36p, reflecting Chesnara’s commitment to returning value to shareholders while maintaining a robust financial position.
