Preston-based life and pensions consolidator Chesnara plc said on Wednesday it remains well capitalised as it proposed an increase in its dividend and revealed its 2019 profit soared to £96.1 million from £27 million in 2018.
Chesnara administers about one million pension policies in the UK, the Netherlands and Sweden. Chesnara operates as Countrywide Assured in the UK, as The Waard Group and Scildon in the Netherlands, and as Movestic in Sweden.
In a Covid-19 update to accompany its 2019 results, Chesnara said: “Based on the closing market position on 31 March 2020, our solvency cover ratio is estimated at approximately 163% (31 December 2019: 155%), after allowing for the payment of a proposed dividend of £20.8m (13.87 pence per share) which represents a 3% uplift on the 2018 final dividend.”
Chesnara chairman Luke Savage said of the group’s 2019 results: “Economic value has increased by 7%, with earnings of £104.0m significantly exceeding the payment of the total 2019 dividend and a foreign exchange loss of £28.8m.
“From an IFRS results perspective, the profit before tax of £96.1m is significantly up on the comparative result in 2018 of £27.0m.
“This is predominantly due to the strong Scildon results, which benefited from valuation gains in its bond portfolio as a result of narrowing spreads.”
Chesnara CEO John Deane said: “Historical investment decisions have given us a balanced risk profile as a business.
“Prudent, yet progressive, historical dividend payments, a low gearing ratio (11%) and a keen focus on operational resilience have resulted in the business being able to cope well with the challenges of Covid-19 and provide our customers, investors and other stakeholders with a strongly capitalised business that provides stability and security in these uncertain times.
“Colleagues are able to work from home whilst still providing good levels of customer service.
“The solvency of the group has held up well which has enabled us to continue our dividend strategy without compromising the financial stability of the business.”