Chesnara raises dividend despite slump in earnings

CHESNARA, the listed Lancashire-based holding company which owns life assurance businesses in the UK and Sweden, has declared ‘mixed’ half year results.

The Preston-based group – the name behind Countrywide Assured (CA), City of Westminster Assurance, Sweden’s Movestic Livförsäkring AB and most recently Save & Prosper Insurance – said profits in the six months to the end of June slipped to £3.8m from £12m last time.

Despite this slump – which it blamed on equity market volatility and the “falling yield curve” it raised its half-year dividend by 2.6% to 5.95p per share and said it was confident of further growth and continues to target acquisitions.

Chief executive Graham Kettleborough, said: “Challenging equity and bond markets have given rise to mixed results. However the resilience of our underlying business has again enabled us to deliver a reliable and progressive dividend stream.”

At the end of the trading period, shareholders’ net equity had increased year-on-year from £156.8m to £196.3m.

Chairman Peter Mason said: “The first half of the year has been characterised by continuing economic uncertainty and this, together with the associated impact on global investment markets, has had an overall adverse effect on our reported results.

“It is, however, pleasing that CA’s cash generation, on which the group currently relies to support its dividend policy, has shown a measure of resilience in the face of these pressures.”

Mason said the £63.5m acquisition of Save & Prosper Insurance has been integrated well since the deal last December and that this business is being merged into CA.

“This will result in further capital and operating synergies which will
support our short to medium-term dividend capability,” he said.