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Chesnara (LSE:CSN) reported strong cash generation and continued dividend growth in its interim results on Tuesday, although earnings showed a decline compared to the previous year.
The London-listed insurance company generated £29 million in commercial cash during the first half of the year, an increase from £22 million in the same period in 2023. Its solvency ratio remained robust at 201%, comfortably exceeding its target range of 140% to 160%.
As of June 30, the company’s economic value (EcV) stood at £508 million, reflecting a slight decline from £525 million at the end of 2023. Chesnara reported EcV earnings of £20 million before accounting for foreign exchange impacts and dividend payments, down from £33 million in the prior year. The previous year’s figure included contributions from acquisitions.
In terms of new business, Chesnara’s commercial value for the first half was £5 million, compared to £6 million during the same period last year. The company’s IFRS pre-tax profit was £13 million, a decrease from £15 million year-on-year.
Despite the drop in profit, Chesnara increased its interim dividend by 3%, offering shareholders 8.61p per share. This marks the 20th consecutive year of uninterrupted dividend growth.
Group Chief Executive Officer Steve Murray commented, "The group has yet again delivered strong cash generation and positive organic EcV earnings." He added that the company’s financial performance for the first half of the year, combined with its strong solvency position, has enabled it to extend its track record of uninterrupted dividend growth to 20 years—an achievement unmatched among listed UK and European insurers.
Murray also highlighted ongoing operational achievements, including the implementation of Consumer Duty for UK closed books. He noted that Chesnara remains active in evaluating potential acquisitions, with a positive merger and acquisition pipeline and substantial resources available for future opportunities.
At 11:49 BST, Chesnara shares were down 1.52% at 259.5p, reflecting market reactions to the company’s performance and outlook.
