Chesnara Share Discussion Threads

[jonwig] 15/12/2011 14:51

Phillis - they didn't exactly say that they would be maintaining the money payout. And of course, the yield has only reached 10% because the share price has fallen!

But the capital adequacy is strengthened and Artemis funds are now above 10%.

[phillis] 15/12/2011 14:37

a reconfirmed 10% yield is pretty persuasive

[jonwig] 12/12/2011 14:07

Perhaps recent weakness was technical, with a large seller in the market. There were a few bot-like trades last week, I seem to remember.

[jonwig] 06/12/2011 19:26

Possibly does rate a 'buy' now - about 15p lower than when I last looked. But why is it going in the opposite direction from the market?

[aleman] 06/12/2011 16:48

Panmure Gordon BUY 22 Nov 2011
2010 34.20 29.05 16.40 -
2011 -1.35 1.78 16.90 -
2012 19.70 14.41 17.30 -
2013 21.50 15.71 17.80 -

Broker Name Withheld 3 BUY 18 Nov 2011
2010 34.20 28.94 16.40 -
2011 3.90 0.74 16.80 -
2012 23.00 15.47 17.30 -
2013 21.60 14.66 17.70 -

(Withheld=Collins Stewart?)

[jonwig] 18/11/2011 18:15

Profit Warning? ...
Profits don't have much to do with it. Dividends are paid out of free cashflow from maturing policies (and, as such, aren't proper dividends).

Still generating cash? ...
The last accounts (H1 to 30 June) showed a decrease in cash of £25.8m compared to an increase of £20.0m for H1 2010 and £37.5m for FY 2010. Not that these statements are at all clear - I welcome any simplification!

So what are the key drivers for investors?

I think the main one is probably the Regulatory Solvency Ratio [RSR]. This was 193% at 30/09 compared with 198% at 30/06, and 330% at 30/06/10 (!).

Remembering that 100% is the minimum, I think they will be concerned to conserve cash.

Where are the headwinds? Possibly the UK gilts market is major. If the UK loses its preferred status of low sovereign bond rates the capital value of a big part of CSN's assets will fall. So assets will fall but liabilities not (guaranteed interim bonuses provided for).

If the UK retains its status, there will be lower returns from incoming premiums, again squeezing assets.

Finally, the EEV ought to be a reliable number, but it's very sensitive to moves in interest rates and equity markets. The drop from £340m (30/06) to £289m (30/09) is a bit savage. The drop in the share price (250p to 180p) is more savage still.

I still hold a few of these, but won't be adding in the current climate.

[retsius] 18/11/2011 09:50

This is me
I am inclined to agree with you.Only a buy for the divvy but this may have to be cut. Charts -- horrible.

[ibrox] 18/11/2011 08:30

Still generating cash and dividend may be maintained,also up until 16th Nov FTSE had recovered 7%.
I guess they are signalling that it depends upon market performance as to whether they make a profit.

[this_is_me] 18/11/2011 07:22

first profit warning - expect more.

[harmonics] 07/11/2011 16:15

what cause that drop this morning, I can't find any news release

[harmonics] 02/11/2011 15:08

I have a good feeling about this stock, good divi (although a bit out of sync in ex date at the moment) Aparently they are looking to buy the 'Save and prosper' unit trust outfit!
I have bought my first stock today

[aleman] 02/11/2011 14:25

This must be Collins Stewart then, I'm assuming.

Broker Name Withheld 3 BUY 14 Oct 2011
2010 77.00 28.94 16.40 -
2011 30.90 3.25 16.83 -
2012 14.60 15.47 17.26 -
2013 14.80 14.66 17.71

[fenners66] 02/11/2011 14:17

Chart reads one way at the moment.
Looking forward to higher yield

[aleman] 02/11/2011 11:39

Just dipped a small toe in the water here with some reinvested dividend income. Look a bit oversold with the dividend looking to be fairly well backed with capital surplus and the directors confident enough to increase the interim. Not going to go mad, though.

[harmonics] 29/10/2011 20:26

Worth buying for the divi.
Why do people accept 2~3% from a bulding soc when you can get 8% from a stock like this?
I might buy on Monday

[bullsvbears] 14/10/2011 12:04

Collins Stewart this morning has upgraded CSN from "hold" to "buy".

[fenners66] 04/10/2011 12:08

What's spooked CSN today?

[jonwig] 31/8/2011 16:04

pvb - the most sensible thing is for them to stick to the knitting and wind up - in maybe 25 years time! Dividends will deplete unless they also do share buybacks.

Of course, the Swedish subsidiary is different, as it's writing new business. But they bought it cheaply and could sell it.

This came through just now (stockmarketwire):

Collins Stewart downgrades Chesnara from buy to hold, target price cut from 270p to 250p.

I don't have any detail on that.

[pvb] 31/8/2011 14:26

It probably needs to be repeated regularly, that the greatest source of dividend income here is from maturing policies, and therefore is a repayment of capital.

So how does this pan out long term? Or do they eventually morph into another kind of company? eg fund management.

[jonwig] 31/8/2011 11:24

It probably needs to be repeated regularly, that the greatest source of dividend income here is from maturing policies, and therefore is a repayment of capital.

So long as the EEV is substantially ahead of the share price (it is) and the capital buffer is sufficient (it is), the income will represent good value.

[soi] 31/8/2011 11:13

Vatacarma

Assuming the final divi is increased by a similar %, i.e. 2.6% to 10.9
would make total year divi of 16.85, making 7.87% annual yield.

Whether my assumption of a continuing divi increase is correct open to debate but they seem to have managed it for the last 7 years.

All the Best

soi