Chesnara plc
Continued dividend growth despite challenging market conditions
30 March 2012
Chesnara today reported final results for the year ended 31 December 2011. These are the first set of results which follow the transfer of the business of Save & Prosper Insurance Limited and its subsidiary Save & Prosper Pensions Limited (together 'S&P'), acquired in December 2010, into Chesnara's principal UK subsidiary, Countrywide Assured plc ('CA').
· Profit on IFRS basis before tax for the year ended 31 December of £22.4m (2010: £18.3m excluding profit of £15.9m arising on acquisitions)
· Reduction in EEV from £354.6m to £294.5m predominantly due to adverse economic experience and assumption changes of £49.4m giving rise to an EEV post-tax loss of £29.8m excluding exceptional items (2010:profit of £18.7m excluding exceptional items)
· Pre-tax operating EEV profit increased to £12.5m (2010: £0.3m)
· Strong cash generation continues at £25.4m (2010: £42.6m including £23.8m arising on acquisition of S&P)
· Shareholder equity on EEV basis (pre proposed final dividend payment) now £2.56p per share (2010: £3.09p per share)
· Earnings per share on IFRS basis of 22.35p (2010: 29.05p)
· Successful operational integration of S&P business and transfer of funds from S&P into CA with strong capital, fiscal and operational benefits
· Solvency ratios remain strong with Group at 198%(2010: 200%), CA at 183% (2010: 213%) and Movestic 245% (2010: 188%)
· Final proposed dividend increased to 10.9p (2010:10.6p). Total dividend for the year increased by 2.8% to 16.85p (2010:16.4p).
· Board remains committed to providing shareholders with an attractive dividend stream
· Acquisition opportunities continue to be examined
Graham Kettleborough, Chief Executive said:
'2011 saw a great deal of uncertainty in the Eurozone which contributed to falls in equity markets and reductions in the yield curve. Both of these had a significant effect but, due to our prudent approach to the management of our businesses and the successful Part VII transfer of S&P, we have emerged in good financial health. The recovery in the markets in early 2012 is welcome and, even if this does not persist, we remain well placed to continue to deliver on our aims.
On the acquisition front we continue to seek suitable opportunities and will continue to be selective and only pursue opportunities which will deliver an acceptable value uplift and/or support Chesnara's future dividend paying capability.
The Board are pleased to recommend an increase in the final dividend to 10.9p per share. This gives rise to a total dividend for the year of 16.85p per share which represents a 2.8% increase.'
