Economic value (EcV) was down 1% in H1 at £630m (419p per share), after payment of the final dividend of £21m and £24m FX loss, and was consistent with our FY21E forecast of £634m. A stricter measure, Own Funds per share, rose slightly from 378p at FY20 to 382p, above our FY21E forecast of 375p. DPS increased by 3% to 7.88p, the 17th consecutive annual increase. The Solvency II ratio dipped from 156% at FY20 to 153% versus our FY21E forecast of 158%. This largely reflected increased capital requirements due to strong equity markets, a factor that had supported solvency in H1 20 when markets fell, and that we had flagged as likely to reverse in our sector preview. By division, the UK performed strongest, helped by higher equities and yields, while Scildon showed good recovery in capital position due to markets, helped in part by a new reinsurance cover, with an EcV operating loss due to the ongoing impact of guarantees due to low lapses. The Swedish symmetric adjustment meant rising markets were a large cash negative and impacted solvency, but of greater concern was an increase in transfers out, spurred by one very aggressive mutual competitor, after rules on transfer fees were changed last year, which had a £25m negative impact due to future transfer assumptions. At a group level, underlying cash generation from the UK (adding back a £6m symmetric adjustment hit due to rising markets) and Waard in Holland was £22m, which would cover the full year dividend 1.3x on an annualised basis. We also note the recovery in Scildon’s capital position means it could pay a dividend to the centre in H2. Both underline a good outlook for dividends. The company has taken a £100m RCF in July (£31m used), and says it is “increasingly optimistic that good [M&A] opportunities are available for us”. Chesnara offers an attractive 8% dividend yield.