Chesnara 2017 interim results
Economic Value (EcV) of £700.4m (31 December 2016: £602.6m).
We completed the acquisition of Legal and General Nederland (which we have since rebranded "Scildon") which created £65.4m of incremental EcV. The closing value, which is after payment of the £19.0m 2016 full year dividend, includes a foreign exchange gain of £11.0m
Economic Value earnings net of tax of £105.8m (six months ended 30 June 2016: £(3.5)m).
The earnings include the aforementioned £65.4m gain from completing the acquisition of Legal and General Nederland. Beneficial economic conditions account for the majority of the remaining profit with continued new business profits in Movestic contributing to modest operating gains.
Movestic EcV new business contribution of £6.5m (six months ended 30 June 2016: £4.0m).
The continued successful focus on higher margin pension transfer business has resulted in a further increase in new business profits. Scildon also writes new business and whilst post acquisition profits were not material for the period and will remain so in the near future, their new business results will be incorporated in this metric going forward.
Group cash generation of £46.2m (six months ended 30 June 2016: £13.6m).
The total group cash generation includes a £6.4m negative short term impact on cash from the Legal and General Nederland acquisition. This is in line with expectations and as cash emerges from Scildon over coming years, the cumulative impact on group cash is expected to become positive in the medium term.
Divisional cash generation of £54.8m (six months ended 30 June 2016: £9.8m).
All divisions have made positive contributions, with the results benefitting from economic conditions and a number of non-recurring management actions.
IFRS profit before tax of £51.6m (six months ended 30 June 2016: £0.2m).
This includes a £20.7m gain on the acquisition of Legal and General Nederland. Economic profits of £14.3m compare to a corresponding loss of £9.3m in the first half of 2016. The underlying core operating profit of £16.6m is higher than in the prior period (2016: £9.5m).
Group solvency ratio of 143% (31 December 2016: 144% Note 3).
We are well capitalised at both group and subsidiary level and have not used any elements of the long term guarantee package, including transitional arrangements.
2.9% increase in interim dividend compared with 2016.
The results in the period support the continued growth of the dividend to 7.00p per share (2016 interim: 6.80p).
