Chesnara ‘adds shareholder value’
CHESNARA, the Preston-based holding company for the life insurer Countrywide Assured, said recent acquisitions had fuelled strong growth in shareholder value.
In December the firm completed its £63.5m purchase of insurance and pensions firm Save & Prosper from JP Morgan.
In the year to December the group reported a pre-tax profit of £34.2m, including profit of £15.9m from acquisitions, mainly from Save & Prosper. This was down on 2009’s £44.7m, which included an acquisition profit of £25.1m. After stripping out the benefit of acquisitions profits fell 6% to £18.3m.
The group said its European Embedded Value (EEV) – the measure of a life insurer’s value – jumped from £262.5m to £354.6m during the year. Chesnara said this was largely down to the acquisition of Save & Prosper at a discount. It means shareholder equity stands at 308.8p a share compared to 258.7p.
Chief executive Graham Kettleborough said: “The key event in 2010 was the acquisition of Save & Prosper. This acquisition, secured at a significant 39% discount to its embedded value, brings an immediate uplift to shareholder value and provides an excellent fit with our existing UK operations.
“Challenges continue in our Swedish business. However, its relaunch, re-branded as Movestic together with the launch of a number of new product features, fund launches and the capabilities secured from the Aspis transaction are providing encouraging signs with regard to sales. Positive investment market conditions have helped, both in the UK and in Sweden, where funds under management have grown significantly, to support the very welcome improvement in embedded value.
“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 have recommended an increase in the final dividend to 10.6p per share, taking the total dividend for the year of 16.4p per share, up 2.8%.
