Chesnara Share Discussion Threads

[solarno lopez] 16/11/2017 16:38

Thanks Jonwig

[jonwig] 16/11/2017 16:34

It's SETS trading, and the same was happening almost exactly two years ago. Look at the trades; 3 shares or similar, multiple times. Someone (or ones) is trying to manipulate the order book with, maybe, a large trade off-market in the background.

PTGint - remember, with SETS and direct market access, you can buy on the bid and sell on the offer. (Just like a market maker.) So every buy is a sell, and vice-versa!

The EV last reported of £700m equates to about 470p/sh and PHNX, a close equivalent, is up today. Relax.

EDIT: the latest broker note I can find is Panmure, 31/08, upgrade target to 452p. Buy.

[ptgint] 16/11/2017 16:13

and more buys than sells today, as well !?

[solarno lopez] 16/11/2017 12:15

Yes its an odd drop after being firm for a few months

[solarno lopez] 16/11/2017 11:13

it certainly is with todays fall

[johnroger] 26/10/2017 16:54

Finding it hard to break the 400 barrier!

[solarno lopez] 10/10/2017 08:20

And we have crossed the line !

[arf dysg] 14/9/2017 14:41

400p has a magnetic attraction.

[pvb] 13/9/2017 21:52

No longer.

[luderitz] 08/9/2017 13:34

400p seems to be it's ceiling at the mo.

[speedsgh] 07/9/2017 10:58

FCA on treatment of long-standing customers review -

On 3rd March 2016 the Financial Conduct Authority announced investigations into six firms as a result of its thematic review into the fair treatment of long-standing customers.

The FCA has today announced that the investigation into Police Mutual has been closed with no further action. The investigations into Scottish Widows, Prudential, Countrywide Assured, Old Mutual and Abbey Life are continuing and no decisions regarding these firms have been reached by the FCA at this stage. No inferences should be drawn from the closure of the Police Mutual case concerning the continuing investigations. The FCA will update the market when decisions are made regarding the status of the remaining investigations.

Police Mutual is a company which has no financial instruments admitted to trading. However, the FCA is making this announcement on a RIS because the initial announcement on 3rd March 2016 of the investigations into all six firms was made on a RIS.

[fenners66] 07/9/2017 09:13

1 other but narrowly defined

[retsius] 07/9/2017 08:28

I note the Co. says this morning that the FCA has closed one investigation. How many others are there?

[chairman20] 03/9/2017 09:30

This management is pretty transparent.

PI's have no need to second guess them

that's very unusual

[maddox] 02/9/2017 09:06

Hi Guys,

Reading the runes.....

The dividend yield is already generous and forecast increases are pretty mediocre, particularly so in view of the obvious cash accumulation. What is also crystal clear is that management have an alternative use for that cash - further acquisitions. This comes through as the primary business objective loud and clear. It is from acquisition, consolidation and cash extraction that we can expect to see share price progress. This strategy comes with a measure of uncertainty as to attractive targets being available, pricing and execution risk.

In the meantime, we have that very attractive current yield to compensate us. So, nice yield and capital growth on offer - gets my vote.

Regards, Maddox

[sogoesit] 31/8/2017 10:05

Thanks for feed-back, gents.
Yes, ok, I can see the further acquisition logic for valuation (although I expect most people would price that in when they see it on the rails and coming down the track...).
Meanwhile 400p is about right for a 5% yield, imv.
(Just considering my annual accumulation here as it has become a bit underweight).

[jonwig] 31/8/2017 09:01

Sogoesit - they're increasing their divi forecasts as well: 2017-20.00p, 2018-20.56p, 2019-21.11p.

Headline eps will fall next year, as the L&G contribution was an exceptional.

It's not just yield, they think valuation should be based on disc/prem to EcV and are optimistic about further acquisitions esp. in the Netherlands.

[speedsgh] 31/8/2017 08:55

Bear in mind that PG are joint broker to CSN so are bound to hold a somewhat bullish view.

[sogoesit] 31/8/2017 08:31

Thanks for PG views... but I wonder why they think CSN is worth a 4.4% yield at 452p?
Deane mentions further Dividend potential from Movestic but I can't remember CSN ever yielding that.

[speedsgh] 31/8/2017 07:47

Interims also provide some useful comment on the outlook for further acquisitions...



Acquisition outlook

The successful completion of the Scildon acquisition contributed positively to the acquisition outlook due to increased scale and presence in the Netherlands, and we are well-positioned to take advantage of any future acquisition opportunities.

From a UK perspective we have seen a gradual increase in closed book market activity which, in our view, is driven in part by reduced uncertainty regarding Solvency II and regulatory developments.

The environment in which European life insurance companies operate continues to increase in complexity. In particular, in May 2017 "IFRS 17 Insurance Contracts" was issued, which is a fundamental overhaul of the way in which insurance contracts are accounted for under international accounting rules. We believe this contributes to the factors that exist that will drive further consolidation, namely larger financial organisations wishing to re-focus on core activities and remove operating complexities, and the desire to release capital or generate funds from potentially capital intensive life and pension businesses.

Chesnara is a well-established life and pensions consolidator with a proven track record. This, together with a good network of contacts in the adviser community, who understand the Chesnara acquisition model and are mindful of our track record and good reputation with our regulators, ensures we are aware of most viable opportunities in the UK and Western Europe.

Our financial foundations are strong, we have a proven and stringent acquisition assessment model, and we continue to have strong support from shareholders and lending institutions to progress our acquisition strategy. In addition, our operating model which consists of well established outsource arrangements plus efficient, modern in-house solutions, means we have the flexibility to accommodate a wide range of potential target books. With all the above in mind, we are confident that we are well positioned to continue the successful acquisition track record in the future.

[speedsgh] 31/8/2017 07:45

Thanks for the PG note, jonwig. An appreciable increase in TP there.

The company seem fairly confident on the outlook, in their usual understated manner...
"I remain optimistic that Chesnara can continue to deliver against its strategic objectives which in turn fund our well established dividend strategy.

In particular, the UK business remains a robust source of cash, with additional potential to take management actions to enhance the core cash if required. Movestic now has the scale to continue contributing to the cash position and Scildon has significant surplus capital and is also expected to be cash generative on an ongoing basis.

We now have sufficient scale and presence in both the UK and the Netherlands to continue our focus on acquisition activity in those territories. We also remain open minded about new territories but the benefits would need to outweigh the inherent challenge of adding another regulatory environment into our business model. Our balance sheet has further capacity for debt, we have significant levels of surplus capital and recent experience suggests we retain shareholder support for further equity for the right deal. This together with operational capacity means we remain well positioned to act should an opportunity arise that meets our stringent price and risk profile criteria.

Movestic has become an established profitable new business operation and I see potential for Scildon to make improvements to their new business value in the medium term. I believe this will result in a meaningful level of recurring value growth from new business being achieved without an inappropriate shift from our core specialism of acquiring and managing in-force businesses.

The structure of the group, having established regulated entities in several European countries together with the fact we do not trade or share resource across territories, means I remain of the view that whatever the outcome from the Brexit negotiations, we expect it to have little direct impact on our business model.

In light of the above I remain confident that Chesnara is well positioned to continue to provide value to policyholders and shareholders."

[jonwig] 31/8/2017 07:32

Panmure Gordon:

Chesnara has delivered another good set of results that extends its unbroken policy of growing its dividend along with strong growth in Economic Value (EcV). The IFRS pre-tax profit increased to £51.6m (H1 2016: £0.2m) helped by a £20.7m gain from the L&G Nederland acquisition (rebranded “Scildon”;) whilst net EcV earnings increased to £105.8m (H1 2016: £3.5m loss) reflecting a £65.4m gain on acquisition. Cash generation was also good at £46.2m (H1 2016 £13.6m) leading to an increase in the interim dividend to 7.0p/share (+2.94%). The EcV was also better than anticipated at 467.7p/share (30 June 2016: 363.8p, 31 Dec 2016: 402.4p) leading us to increase our target price from 409p to 452p. Buy.

[jonwig] 31/8/2017 07:17

H1 results look very steady. I keep promising myself to read every word of them one day.

Economic Value 467p/sh, so a discount of 19%.

H1 dividend 7p (up from 6.78p) xd 7 Sept, pay 11 Oct.

[johnroger] 14/8/2017 18:51

Chesnara plc, the life assurance group, will be reporting results for the half year ended 30 June 2017 on Thursday, 31 August 2017.