# Chesnara Plc: Showing good operational progress

- Link: https://www.directorstalkinterviews.com/chesnara-plc-showing-good-operational-progress-3/4121248923
- Published: 2026-04-17T08:38:00+01:00
- Author: Amilia Stone

**Chesnara plc **(LON:CSN) has announced its 2025 results. The headline figures 
were presented on a new basis, with operating capital generation (OCG), cash remittances
and adjusted operating profit replacing the previous measures. The new KPIs showed
a strong year, with good operating performance, higher cash generation and a much
stronger balance sheet. OCG grew from £79m in 2024 to £94m in 2025, with SII Own
Funds boosted by the capital raises ahead of the HSBC Life acquisition. The proposed
final dividend of 14.80p is, as previously indicated, a 6% increase on the rebased
2024 figure.

 * **Acquisitions:** There were no major updates on HSBC Life, now rebranded as 
   Chesnara Life or Scottish Widows Europe. The former was completed in January 
   2026, while completion for the latter will take place around the end of 2026.
   Chesnara continues to work on possible new acquisitions.
 * **Estimates:** The new metrics mean that there is a change from previous years.
   We focus on the OCG alongside SII Own Funds. We introduce forecasts of £99m for
   the former in 2026 and £112m in 2027. Gains on the transactions will boost Own
   Funds by over £100m in 2026E.
 * **Valuation:** With a price at 1.0x of its forecast post-transaction Net SII 
   Own Funds, Chesnara is trading around its asset value. However, a prospective
   dividend yield of 8.0%, with good prospects of continued growth, suggests an 
   undervalued stock, in our view.
 * **Risks:** Ultimately, the company remains tied to movements in financial markets
   and adverse developments in operational areas. Making a large acquisition also
   brings some execution risk, but Chesnara has good experience in managing smaller
   deals successfully.
 * **Investment summary:** Chesnara has three pillars for delivering value, under
   a responsible risk-based management. A close analysis reveals that Chesnara is
   making good progress in delivering these pillars. In our opinion, the yield appears
   high for a dividend that is both secure and growing.

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