Chesnara (CSN) H2 2024 earnings summary

Executive summary

• Delivered strong financial and operational results, with growth in cash generation, future value, and dividends, supported by efficient management, value-accretive M&A, and sustainability embedded across all priorities.

• Maintained a robust solvency position and increased Economic Value per share, while expanding assets under administration through acquisitions.

• Demonstrated a leading dividend growth track record in UK and European insurance, with a 3% increase in 2024 and a 9% dividend yield.

• Completed a second portfolio acquisition from Canada Life and advanced integration and platform migration initiatives in the UK and Netherlands.

Financial highlights

• Cash generation increased 14% year-over-year to GBP 60 million, with 1.6x coverage of the shareholder dividend.

• Solvency II coverage ratio at 203%, well above the 140%-160% operating range; IFRS leverage at 31%.

• Economic value earnings grew 17% to GBP 69 million; Economic Value increased to GBP 531 million; IFRS Contractual Service Margin rose to GBP 176 million.

• Profit before tax increased to GBP 21 million from GBP 2 million in the prior year.

• Assets under administration grew 27% to GBP 14 billion, driven by M&A.

• Final dividend increased by 3% to GBP 24.7 per share.

Outlook and guidance

• Confident in future growth with multiple levers for sustainable cash generation, including further M&A and management actions.

• Strong pipeline for M&A in 2025, with a positive start to the year and continued focus on value-accretive transactions.

• Majority of UK in-force book to migrate to new platform by early 2026, targeting operational efficiency and improved customer experience.

• Legal merger of Dutch businesses targeted for start of H2 2025, expected to drive cost synergies and capital management opportunities.

• Expectation of reliable organic cash generation to cover long-term debt and dividends, with further upside from future M&A.