Chesnara PLC (CSN)

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Sell: 302.00p|Buy: 303.00p|Change: 11.86 (4.08%)

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Chesnara swings to loss but has "firepower" ahead of HSBC Life UK buy

(Alliance News) - Chesnara PLC on Thursday said it remains confident for the immediate future, despite swinging to a loss in the first half of 2025, as it prepares to buy HSBC's life insurance business.

The Preston, England-based life and pensions consolidator joined the FTSE 250 index earlier in August, filling the gap left by the acquisition of Assura PLC by Primary Health Properties PLC.

Chesnara swung to a pretax loss of GBP4.6 million in the six months that ended June 30 from a profit of GBP12.8 million a year prior.

Net investment loss widened to GBP21.4 million from a net return of GBP811.8 million the previous year.

Insurance revenue remained flat at GBP136.0 million, while insurance service expenses decreased to GBP136.7 million from GBP138.2 million on-year.

Chesnara described conditions in the first half as "positive but less favourable" than the previous year.

It raised its interim dividend per share by 2.9% to 7.70 pence from 7.48p.

Back in July, the firm completed a GBP140 million rights issue to support the planned purchase of HSBC Life UK Ltd from HSBC Holdings PLC.

Chesnara now expects to increase dividends for 2025 and 2026 by 6%. For 2024, Chesnara paid a total dividend of 24.70p, up 3.0% from 23.97p in 2023.

Buying HSBC Life will benefit Chesnara's financial position, according to the pensions consolidator. The GBP260.0 million acquisition of the bank's life insurance branch is expected to close in early 2026.

Following the deal, Chesnara sees leverage reducing to 25%, down from 31% in the first half of 2025, which was unchanged from the previous year.

HSBC Life adds about GBP4 billion in assets under administration to Chesnara, bringing total AuA to GBP18 billion, Chesnara said. It is targeting GBP800 million in lifetime incremental cash generation from the takeover, with roughly GBP140 million expected in the first five years.

"This is a transformational deal, supporting a planned one year step-up in the dividend and reinforcing sustainable long-term growth. Looking ahead, we are strongly positioned with the financial firepower and track record to execute on our active pipeline of opportunities," commented Chief Executive Steve Murray.

Chesnara shares were down 1.1% at 283.81p on Thursday morning in London but are up 25% in the past 12 months.

By Holly Munks, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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