Chesnara Interim Results: Cash Generation Jumps

Chesnara (LON:CSN) reported robust interim results for 2025 on Thursday, highlighted by a significant increase in cash generation and strategic progress with the acquisition of HSBC Life (UK).

Chesnara shares have climbed around 0.9% so far in the session after opening slightly lower.

Cash Generation rose 26% to £37 million in the first half of 2025, driven by organic capital generation and effective management actions.

The company's Eligible Own Funds stood at £632 million, accompanied by an increased Solvency Coverage Ratio of 207%, which it said provides substantial headroom for strategic M&A activities and future growth opportunities.

The interim dividend saw a 3% increase to 7.70p per share, marking over 20 years of uninterrupted dividend growth, unrivaled among UK and European listed insurers.

The “transformational” acquisition of HSBC Life (UK), announced on July 3, 2025, is expected to generate incremental lifetime Cash Generation exceeding £800 million, more than three times the consideration of £260 million.

This acquisition will add approximately £4 billion in Assets under Administration (AuA) and around 454,000 policies, bringing Chesnara's total expected AuA to £18 billion and policies to approximately 1.4 million.

The successful completion of a Rights Issue and Restricted Tier 1 (RT1) Issue in July raised £290 million, supporting the HSBC Life (UK) acquisition.

The Group's leverage ratio remained unchanged at 31%, but is expected to decrease to 25% following the HSBC Life (UK) transaction and the RT1 Bond issuance. Group Centre liquidity stands at £126 million, with divisional remittances of £56 million received during the first half of 2025.

The company's IFRS Capital Base was £441 million, with growth in the Contractual Services Margin and Insurance Result before shareholder dividends. Economic value (‘EcV') was reported at £517 million, with positive contribution from operating and economic variances. New Business Contribution remained steady at £5 million.

CEO Steve Murray stated, “We have made significant progress against our strategy, announcing the acquisition of HSBC Life (UK).

“This is a transformational deal, supporting a planned one year step-up in the dividend and reinforcing sustainable long-term growth.”

Looking ahead, Murray believes the company is strongly positioned with the “financial firepower and track record to execute on our active pipeline of opportunities.”