Chesnara Share Discussion Threads

[eggbaconandbubble] 21/5/2019 16:29

Sounds good to me, so infect more reason to query where the share price is in a lull.

[jonwig] 21/5/2019 15:41

Chairman - from the 2018 results:

The structure of the group, with 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.

If each operating entity is sufficiently capitalised according to Solvency2 rules, there's no problem about the domicile of the holding company. Back-office can be rationalised, front office not.

[chairman2] 21/5/2019 14:54

This is a typical stock that will tread water until Brexit is resolved.

acquisitions have been focussed on Europe and it is far from clear whether
a UK-based insurance Co can or will have any passport in the EU. thankfully
acquisitions are mostly kept intact as local cos - but cost savings depend
on small integration efficiencies and capital/solvency planning from the
centre

[eggbaconandbubble] 21/5/2019 11:34

The share price here just seems to have lost its mojo without any apparent reason. Might be a buying opportunity but I have enough already.

[al101uk] 11/4/2019 09:14

Ex-Div today.

[speedsgh] 02/4/2019 13:49

Chesnara PLC cashed up and looking for more deals -

Chesnara PLC's (LON:CSN) chief executive John Deane talks Proactive's Andrew Scott through their 2018 results. Economic value fell 13% to £626mln due to falling bond and equity prices and a stronger pound with an economic loss for the year of £60.9mln. The dividend for the year rose 3% to 20.67p and its solvency ratio strengthened to 158% of its regulatory requirement following the cash generation of £47.8mln. Deane says they're now in a strong position to make more acquisitions.

[jonwig] 30/3/2019 06:17

IC comment:

Chesnara (CSN) reported a two-thirds rise in cash generation for 2018, which supported a 3 per cent rise in the dividend. However, cash generation was impacted slightly by a fall in the value of bonds within the Scildon portfolio, partly offset by the release of capital from UK with-profits funds. However, a rise in the Solvency II ratios for Movestic and Waard meant the group’s Solvency II ratio rose to 158 per cent from 146 per cent the prior year. Buy.

[eggbaconandbubble] 29/3/2019 09:59

If everyone had a good idea of when the ex-div date was it would avoid that shock horror of suddenly seeing the share price drop for no apparent reason.

As happens to me once in a while!

[luderitz] 29/3/2019 08:26

Yes you make a good point I wonder why they do it?

[thamestrader] 29/3/2019 07:55

Many company reports bury dividend info, especially the dates, deep down in the small print. Likewise on their websites, the dates are often not included in the financial calendar, which would seem the obvious logical place, but buried away elsewhere.

Should be given much more prominence IMHO.

[jonwig] 29/3/2019 07:25

Here are the FY results:



Positive: solvency improved from 146% to 158% (that's the key number for me).
Negative: ECV fell from £723m to £626m...

Economic Value in the period has been more affected by economic conditions with total value falling by £97.0m. The majority of the loss is directly due to economic conditions. Operating losses of £22.8m including the impact of the strengthening of Scildon mortality assumptions, have also contributed to the reduction. Foreign exchange losses of £5.8m have emerged in the period, largely as a result of a weakening of Swedish krona. These factors, coupled with the payment of £30.4m of dividends have resulted in a 13.4% reduction in EcV since the start of the year.

Scildon (was L&G Netherlands) might be a bit of a problem for them - seems to be mainly responsible for ECV fall.

Had to read almost to the end before I found the dividend dates: 13.46p, ex 11/04, pay 24/05.

Overall, market reaction might be a bit cautious.

[jonwig] 22/3/2019 16:32

Euro and Swedish krone.

[zeppo] 22/3/2019 14:40

How do currency rates affect this share?

[eggbaconandbubble] 22/3/2019 10:58

Results due. Now looks like the only thing of interest to be happening on 29th March!

[speedsgh] 19/3/2019 10:17

Nice to see a bit of positivity returning to the share price prior to results a week on Friday (29 Mar). Now back above 200 SMA.

[speedsgh] 04/3/2019 15:45

29 Mar 2019 - Results Announcement
11 Apr 2019 - Final Ex Dividend Date
24 May 2019 - Final Dividend Payment

[jonwig] 31/12/2018 12:39

EI - yes, financials do underpreform, so it's important to distinguish which companies might be genuinely distressed rather than just going with the market flow.

As it happened, the insurance sector weathered the GFC pretty well: wasn't AIG the only major casualty?

[essentialinvestor] 31/12/2018 07:54

Not sure there is anything mystifying.
CSN tends to underperform during market corrections, as in 2011
and 2016 post referendum. Many 'financials' do the same.

[sogoesit] 31/12/2018 07:45

Thanks for your input jonwig.
I am not an “insurance expert” either and use CSN as a bond proxy (and cash bank alternative) so it always concerns me when the share price takes these “mystifying221; diversions!
I think you are correct that, in the longer term, the solvency ratio is the best test of the value and stability of the share price However, other players in the market appear, every now and then, to drop the share price in the short term. Whether this is based on fundamentals, share liquidity or other reasons I know not but I expected, and expect, CSN to be more stable through market cycles.
Maybe there is more irrationality in the market than I, as a mere amateur, can rationalise? ;-)
Best wishes all for a prosperous 2019!

[jonwig] 27/12/2018 17:26

The share price here has often shown mystifying behaviour, so the question is how to value the company. Insurance accounting is still pretty opaque for me, but maybe a key number is "solvency ratio".

Solvency ratio was 157% at 30/06, meaning (roughly) that it would fall to the critical 100% if supporting assets fell by 36%. Since these will be bonds rather more than equities, that's pretty unlikely. (Isn't it?)

The SR has varied between 143% and 148% since end-2015. At 30/06/15 it was 271%, but that predates Solvency 2 so isn't really comparable. Another factor is FX gains/losses. Actually I don't think these matter, as SKR, say, is kept to service the Swedish arm, and changes only when account are drawn up in GBP.

It's worth saying that CSN uses external fund managers (Schroders, I think), as does PHNX (SLA).

They used to quote an embedded value, but that's stopped, and they now quote "Economic value" - EV per share at 30/06/18 was 467p, though this isn't a recognised measure. The company has net cash (ie. debt is irrelevant).

So when FY results to 31/12 are published in March I'd be surprised if the SR fell by more that 10% (ie. to 141%), and I'd be comfortable with that.

[spittingbarrel] 21/12/2018 16:43

360.5 paid for 73,000!

[mister md] 21/12/2018 16:42

nice reversal today

[sogoesit] 21/12/2018 10:14

Many thanks alter ego... my scrolling missed that!
I shall revert to closer reading as the sensitivities, on page 126 of the 2017 Annual Report, surprised me.

Gabster points to an opportunity on the yield and that's the reason I was taking a look again.
CSN is about 7% of my portfolio. I consolidated in CSN after selling out of PHNX some time back.

To do with the Italian Bonds (I assume) this comment is also made in the Overview/Scildon Section of the Half Year 2018 (page 9):
"When assessed in terms of levels of cash generated in the period we have, with the exception of Scildon, delivered broadly in line with expectations. £16.1m of cash emerged from the UK division during the period which, together with £26.8m of previously constrained surplus released from the with-profits fund, resulted in total cash significantly in excess of recent dividend payments. Movestic has increased its level of surplus resulting in a further £7.3m of cash generation. Scildon has reported negative cash generation of £2.3m. This is primarily due to the impact of valuation pressures on its fixed interest investments. The result in the period does not in itself impact our view regarding the future cash generation of the business."

PS: Anyway, Italian Bonds are now improving following the budget deal with their EU masters:

[alter ego] 21/12/2018 09:59

Sogoesit,

"All divisions have made positive contributions, with the exception of Scildon, where operational gains were offset by the impact of losses on Italian bond holdings."

from latest half year report