Chesnara Share Discussion Threads

[the chartist] 16/6/2005 09:41

He asked me for a date!

I flatly refused of course.

[heidigynne] 15/6/2005 19:42

Ah! google reveals....

[heidigynne] 15/6/2005 19:36

Extract from yesterdays 'Times', [gleaned from AFX press digest] ;-

Further news:
*Lord Callaghan 'told Bank about BCCI's problems'.
*Chesnara (CSN.L) rumoured to become the next target for Hugh Osmond.
*Land Securities (LAND.L) in £360-million LXB deal.

Q.

Hugh Osmond, who is he involved with, please, anyone know?

rgds., h

[diogenesj] 13/6/2005 21:41

Another nice move today on very heavy volume (4m shares traded).

[getscenic] 06/6/2005 17:53

what a find this is, just the thing to sit out a stale market in, plus 9% yield for good measure.
three reporting holdings as well today. 87% take up via placing.
good news!

[tole] 06/6/2005 10:07

Hope we all had an extra fill this morning...Nice break through...


Market miscellany
Edited by Grant Ringshaw (Filed: 05/06/2005)

Chesnara

Take a look at Chesnara, the closed life insurance business spun out from Countrywide. Last month Chesnara paid £47.5m to buy City of Westminster Assurance, a closed book, from Irish Life. The deal is an important first step as Chesnara aims to be a consolidator in the sector. Chesnara is a pure life insurance play.

But the real attraction is the yield - currently 9 per cent. As Chesnara manages its closed books it should be able to release surplus capital, probably within three years, and pay a special dividend. Competition for closed life funds is fierce, but Chesnara says it will not overpay. The shares listed at 112p just over a year ago and have ticked up to 133p. While Chesnara needs further deals to really gain the benefits of scale, it is profitable and looks a solid bet.

[tipodochus] 25/4/2005 13:20

Great news, as long as they dont pay too much, and their previous record shows they wont! A great safe divident, more economies of scale and a quality management. The only problem I can see is that the price is driven too high and the yield suffers.

Tipo

[whynot] 25/4/2005 13:09

25 April 2005

The Board of Chesnara notes the recent press speculation regarding the
potential acquisition by Chesnara of City of Westminster Assurance Company
Limited, the closed life assurance subsidiary of Irish Life & Permanent plc
("Irish Life & Permanent").

As previously stated, Chesnara has looked at a number of potential acquisition
targets. Chesnara confirms that it is in discussions with Irish Life &
Permanent regarding this particular potential transaction but no agreement has
been reached and the outcome of these discussions is not certain. A further
announcement will be made when appropriate.

Chesnara plc Tel: [phone]

[tole] 24/4/2005 10:07

Chesnara closes in on first acquisition
By Grant Ringshaw (Filed: 24/04/2005)


Chesnara, the listed life insurance group, is in exclusive talks to buy City of Westminster Assurance, a closed life fund, from Irish Life & Permanent for around £40m.

The deal would be the first for Chesnara since the business was demerged from Countrywide, the UK's largest estate agency group, in May 2004.

Chesnara has made no secret of its ambitions to buy closed life funds and is understood to have looked at a series of deals in recent months.

Last month Chesnara announced its first profits as a public company, with a full-year pre-tax profit of £4.6m for 2004 against a loss of £15.5m. The figures led to suggestions that the company could step up its hunt for acquisitions.

Chesnara, which manages the policies of more than 200,000 investors, was boosted by lower provisions for endowment mortgage compensation.

A spokesman for Chesnara said: "Since the demerger we have been clear that we are interested in playing a part in the consolidation of the industry. While we will not comment on specific situations we have been actively looking at a number of opportunities."

[tole] 15/4/2005 19:45

INVESTORS CHRONICLE

7 Big Ideas (Cover Story):
*Hot tips from the new master investors.

Tips:
*Buy Zetex (ZTX.L) at 123p - Chesnara (CSN.L) at 133p -
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Delcam (DLC.L) at 228p.

[tole] 13/4/2005 17:36

Scotsman -10/04/2005

Chesnara double play

I HAVE never much cared for companies that buy the closed book businesses of life assurance offices. It's akin in my book to buying a mortician's in the hope that the corpses come back to life.

Chesnara is such a business. It is the quoted holding company of Countrywide Assured. Its strategy is to deliver a reliable dividend stream to shareholders funded from the underlying emergence of surplus from the existing life assurance business. In addition to its own closed books, it scouts round for the closed books of others, in the hope that value can be extracted from the living dead. Last year the group made pre-tax profits of £4.6m.

The shares look interesting. They have been run up to 134p, (from around 100p five months ago) price tagging the business at £118m. This is on talk that the company may itself be attractive to a predator: possibly another company in the same business, such as Resolution Life.

It is never good advice to buy shares on the back of bid rumours. But what interests me is that the business has a small, fixed-cost base and the shares, even after their recent run, are yielding 8.9 per cent.

Certainly worth considering for an income portfolio. And aren't all the best portfolios income-driven these days?

[heidigynne] 31/3/2005 22:32

ydderf,
The same 'going's on' today.
Tis being bought in a Serial way.
One would think there is a 'buy bot' at work.
Note the recurrent 2.5k.s

[A quick 'google' reveals quite a tale within the industry regarding the size of the life book and the outsourcing, for example].
Only fourteen employees now, I understand from the 'finals' and the HQ / office overheads are minimal.
Even at the Numis '£1.33 target', there remains an easy 8+% to relish.
Chesnara may well be being stalked. [imho, of course].
Until the event we should enjoy uploading the dosh to the ISA's.

'Chesnara'?
Sounds like something TVR. ish. Light as a feather and with the acceleration of a cheetah.
rgds.,
H.
ps.
However, one occasionaly observes a TVR parked, awaiting assistance.

[ydderf] 30/3/2005 15:52

what's going on this afternoon with this - smells like something's cooking?

[tole] 25/3/2005 12:49

Also on citywire spotted this - missed this on the day.

Numis has an add rating and 133p price target for Chesnara.

[heidigynne] 25/3/2005 11:12

Hi, grim.
To reply to your particular question......

Yes, there is a 'catch'.
Your post fairly sums it up.
The underlying investment is a 'withering asset'.
And Chesnara is a share in a niche market.


But, should they be able to build their book [as described in the annual report and expanded on via Toles City- wire link above] they may produce at least a 'stable' asset.

H.

[tole] 25/3/2005 10:04

Article on citywire - worth a read and they remain optimistic. Highlights takeover potential.

[grim] 24/3/2005 21:27

So, is there a catch here? What happens in 10 years time if it hasn't been t/o or it has not expanded it's book (at what cost?). Is this just an asset that will dwindle to nothing in 10 years but in the meantime have returned 8% a year?

More thoughts/answers?

PS I am a holder.

regards,
GR

[heidigynne] 24/3/2005 19:29

The Indy had this to say Wed. 23rd.,

'The beauty of closed life funds is that they generate a steady cash flow, in Chesnara's case, providing the funds for its enormous 10% dividend, as well as allowing it to put some extra cash aside.

Already, the company has 25% more capital than it needs to satisfy the regulators, and says it is on the lookout for other small closed life books to buy to add to its existing one.

Chesnara expects 80% of its life customers to disappear - as their policies mature - within 10 years, but by then it will either have been taken over itself or else have bought smaller rivals'.
Buy says the Independent.

rgds.,

H.

[heidigynne] 24/3/2005 14:46

Hi, Tole.

Nice chart, thanks for dropping in.
Feel this will gather momentum as income seekers realise the potential returns.

Rgds.,

H.

[heidigynne] 23/3/2005 21:05

Hi, Interim,
Took a maiden position today, didn't actually spot the Finals till yesterday evening.
Dividend yield is tremendous, even at a higher price than todays close.
Holiday w/e coming up, don't expect they will be reported to a wider audience till next weeks mags. and rags hit the shelves.
Nice to see a co. delivering what they said they would and ensuring all the safety nets are fully rigged.

rgds.,

H.

[interim] 23/3/2005 20:13

Will keep an eye on it.
Look forward to seeing the same quality of posts that you have placed on the FTO thread in recent months.

[heidigynne] 23/3/2005 19:21

The text and notes included with the full year results are exceptionally clear [exhaustive even] and descriptive of this companies aims objectives and successes.
Not only is the dividend policy attractive but the share appears well positioned for capital growth.
Any followers?

rgds.,
H

[heidigynne] 23/3/2005 13:40

Finals yesterday.
Highlights;

22 March 2004
Chesnara plc
* Chesnara moves into profit and exceeds full year dividend forecast

Chesnara, which owns the life assurance business formerly part of Countrywide
Assured Group plc, today reported its first full year results, for the twelve
months ended 31 December 2004. Chesnara is committed to offering investors an
attractive long-term dividend yield from the profits arising from its life
assurance business.

* Profit on ordinary activities before taxation (Modified Statutory Solvency
Basis) of £4.6m (2003: loss £15.5m)

* Final dividend recommended of 7.1p per share making total dividend for year
11.85p (2003:nil), ahead of dividend forecast of 11.825p

* Capital adequacy ratio substantially increased to 190% (1 January 2004:
157%)

* Basic Earnings per share 6.34p (2003: loss of 12.73p)

* Embedded Value now £143.1m, with strong NAV backing of £58.5m (after
dividend payment)

* Full year performance adversely affected by;

* increased provisioning in H1 of £16.6m for mortgage endowment misselling
redress; no further increase in H2

* adjustment of £(6.2)m to Value In-Force to reflect adverse persistency
experience

* Key Retirement Solutions sold for £2.8m (pre-tax)

* Successful outsourcing of back office to Liberata (w.e.f. 1 February 2005)
on favourable terms. Addition of £3m to Value In-Force and mitigation of
potential fixed cost issues


Graham Kettleborough, Chief Executive said:

'This is a good first full year. A strong and steady emerging surplus combined
with tight management of operational costs has meant we have been able to
mitigate the increased provisions we announced in the first half. We have
further strengthened our balance sheet and exceeded our dividend forecast. We
will continue to focus on delivering a steady, progressive and long term yield
to shareholders in a sector where recent corporate activity has highlighted the
value inherent in well-managed life companies.'

Enquiries

Graham Kettleborough
Chief Executive, Chesnara plc 01772 840001

Michael Henman
Cubitt Consulting 0207 367 5106




Notes to Editors:

Chesnara plc, which was listed on the London Stock exchange on 25 May 2004, was
formed to become the holding company of the life assurance activities formerly
owned by Countrywide Assured Group plc. Although substantially closed to new
business it continues to write Guaranteed Income and Growth Bonds and a small
amount of protection business.

[bluetooth] 21/7/2004 11:32

Scorpion -

How do you know? this company has just demeged from Countrywide Assured and has no track record as such - the other "half" Countywide is doing much better at the moment. I would be interested in your thinking.

Bluetooth