Market Reaction - Chesnara

Time Period Covered: Full Year 2023

- Chesnara reports strong cash generation and a positive outlook for further mergers and acquisitions (M&A).

- Completed the acquisition of Conservatrix's insurance portfolio in the Netherlands and an individual protection portfolio from Canada Life UK.

- Formed a new UK strategic partnership with SS&C Technologies for policy administration.

- Reported strong group commercial cash generation of £53.0m, a 13.7% increase from FY 2022's £46.6m.

- Demonstrated robust solvency at 205%, materially above the 140 - 160% normal operating range, and up from 197% in FY 2022.

- Economic value (EcV) reached £524.7m, translating to 348p per share, up from £511.7m (340p per share) in FY 2022.

- Commercial value of new business grew to £10.1m from £9.5m in FY 2022.

- Proposed a 3% increase to the full-year dividend, resulting in a total 2023 dividend of 23.97p per share.

- IFRS pre-tax profit turned positive at £1.8m, recovering from a £62.1m loss in FY 2022.

- CEO Steve Murray highlighted the momentum behind Chesnara's acquisition strategy and robust performance across the Group despite market volatility.

- Funds under management increased to £11.5bn, marking an 8.5% rise from the start of the year.

- The group’s solvency position remains strong, significantly above the normal operating range, providing substantial headroom for future acquisitions.

- Introduction of IFRS 17 during the period with pre-tax profits of £1.8m, marking a positive shift from the previous year’s restated IFRS pre-tax losses of £62.1m.

- The group continues to focus on its three-pillar strategy: efficient administration of policies, writing profitable new business, and value-adding acquisitions.

Chesnara's share price didn’t really react to their full year's results, which is a surprise, as I found them to be encouraging.

However, it is true that the company has a tendency to slide sideways for long periods and make sporadic jumps from time to time.

The following is a 12-month view of the company's share price movement:

I might investigate Chesnara again soon, to see if they have made sufficient enough progress for a long term investment.