Chesnara looks for more M&A chances after strong results

Chesnara, a European life and pensions consolidator, has reported a significant increase in cash generation in the first half of 2025. They saw a 26% rise in cash generation to £37m compared to £29m in the same period the previous year. Despite a decrease in eligible own funds to £632m from £643m in 2024, the Solvency II Coverage Ratio improved to 207% from 203%.

The company considers this increase in the Solvency II Coverage Ratio to be well above its operating range, providing ample room for capital allocation to mergers and acquisitions and other growth prospects. As a result of these strong financial results, Chesnara has proposed a 3% increase in the interim dividend to 7.7 pence per share, marking over 20 years of uninterrupted dividend growth.

Chesnara’s recent announcement of the proposed acquisition of HSBC Life (UK) is expected to contribute about £4bn in Assets under Administration (AuA) and approximately 454,000 policies. This transaction will bring the total expected AuA to £18bn and policy count to roughly 1.4 million for the group. In addition, the legal merger of the company’s Dutch businesses in July 2025 aims to achieve cost savings and potential synergies in the future.

Further strengthening its position, Chesnara was recently admitted to the FTSE 250 Index on August 18. Steve Murray, the group CEO, expressed satisfaction with the progress made in line with the company’s strategy, particularly highlighting the transformative nature of the HSBC Life (UK) acquisition. He emphasized that this deal supports an intended one-year increase in dividends and reinforces sustainable long-term growth for the organization.

Looking ahead, Murray stated that Chesnara is well-prepared with the financial capabilities and a proven track record to capitalize on its active pipeline of opportunities. The company is optimistic about its future prospects and is confident in its ability to drive growth and value creation for stakeholders.

The article was originally published on Investment International, covering Chesnara’s recent financial performance and strategic developments that position them for future growth and expansion. Chesnara’s commitment to executing their strategic vision and leveraging growth opportunities underscores their dedication to creating long-term value and sustainable growth in the industry.