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Investing.com -- Chesnara Plc (LON:CSN) on Thursday reported a 26% increase in commercial cash generation for the first half of 2025, reaching £37 million compared with £29.2 million a year earlier and ahead of the £22 million estimate from RBC Capital Markets.
The life and pensions consolidator said results were supported by contributions from its U.K. and Netherlands operations, while Sweden was negatively affected by the stronger U.S. dollar due to its higher proportion of unit-linked business.
The board declared an interim dividend of 7.70p, a 3% increase from 7.48p in the prior year period.
Chesnara said the dividend is covered 1.4 times by earnings, extending its record of annual dividend growth over the past 20 years.
The Solvency II capital ratio stood at 207% at the end of June, compared with 203% a year earlier and ahead of the company’s target range of 140% to 160%.
The increase was attributed to organic capital generation and management actions.
Eligible Own Funds decreased to £632 million from £643 million at the end of 2024, reflecting costs tied to merger and acquisition activity and Solvency II technical adjustments, which the company said are expected to unwind with the acquisition of HSBC Life.
Group profit before tax under International Financial Reporting Standards fell to a £5 million loss from a £13 million profit in the first half of 2024. Commercial new business profit rose slightly to £5 million from £4.9 million.
The closing contractual service margin increased to £192 million, up 22% from £158 million a year earlier. Assets under administration remained unchanged at £14 billion.
Chesnara said it has more than £200 million of available capital for acquisitions, including £85 million from an undrawn revolving credit facility.
The company said it is reviewing opportunities, likely outside the U.K., to avoid disruption to the integration of HSBC Life .
RBC Capital Markets reiterated its “outperform” rating on the shares and maintained a price target of 320p, citing the stronger-than-expected cash generation, dividend growth and M&A capacity.