2016 has been a year of positive development for the Chesnara group and we have delivered strongly against all of our strategic objectives.
The value of our existing businesses has grown across all territories, with cash emergence sufficient to fund a further increase in the annual dividend, the twelfth successive year of dividend growth.
The increase in value includes an increasingly material contribution from new business profits in Sweden where we have delivered our best ever results.
Finally, the acquisition of Legal and General Nederland, announced in November 2016, represents a continuation of Chesnara’s successful acquisition strategy. The acquisition will create significant scale in the Netherlands making Chesnara a well balanced three territory group. Legal and General Nederland is expected to have a significant positive impact on the Economic Value of the group and will further enhance ongoing cash generation thereby supporting the continuation of our dividend strategy.
2016 FINANCIAL HIGHLIGHTS
IFRS pre tax profit 2016
Good profits have continued to emerge against a backdrop of falling bond yields and equity value growth.
Total Group cash generation 2016
Total group cash generation of £85.4m which includes £48.9m as the direct impact of equity raised to fund the upcoming acquisition of Legal & General Nederland.
Economic value earnings net of tax 2016
Economic value earnings in the year are driven by a combination of strong operating and economic profits, including record new business profits from Movestic.
Increase in Economic Value 2016
The 32.9% growth in economic value includes the impact of equity raised to fund the acquisition of Legal & General Nederland. Growth excluding equity was 18.2%.
Solvency II ratio December 2016
A healthy opening Solvency II ratio which includes no benefits from transitional arrangements and is net of the 2015 final dividend but includes the impact of equity raised to fund the acquisition of Legal and General Nederland. Solvency excluding equity impact is 144%.
2016 PERORMANCE AGAINST STRATEGIC OBJECTIVES
MAXIMISE VALUE FROM EXISTING BUSINESS
18.2% growth in group Economic Value*
*Excludes the impact of equity raised and costs incurred for the acquisition of L & G Nederland.
ACQUIRE LIFE AND PENSIONS BUSINESESS
Acquisition of Legal and General Nederland at an expected 33% discount to Economic Value, creating an expected positive Economic Value impact of c£56m on completion in 2017.
ENHANCE VALUE THROUGH PROFITABLE NEW BUSINESS
Record new business profits from Movestic of £11.7m.