Legal & General profits exceed forecasts amid new strategy
Boss Antonio Simoes said the company’s half-year financial results reflect the ‘ongoing strength of the business’.
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Legal & General has revealed stronger-than-expected profits and raised its dividend as it pushes ahead with a major overhaul.
Boss Antonio Simoes said the company’s half-year financial results reflect the “ongoing strength of the business”.
The asset management and insurance firm revealed adjusted operating profits of £849 million for the first half of the year, up from £844 million a year earlier and also surpassing analyst guidance.
We are making clear progress on delivering against our strategy, notably in the establishment of a single asset manager
It came as the firm sold £1.2 billion of individual annuities in the period, more than double the total reported a year earlier.
Meanwhile, it saw operating profit in its institutional retirement business lift by 6%.
It witnessed “lower quoting activity” in the broader bulk annuities market but said it is on track due to a “larger than ever” pipeline of work.
It comes two months after bosses revealed plans for a major shake-up to create a “simpler, better-connected L&G”, which included proposals to merge some key divisions and consider the sale of its housebuilding business.
Mr Simoes said: “We are making clear progress on delivering against our strategy, notably in the establishment of a single asset manager.
“We have good momentum in private markets, launching a new fund to offer diversified exposure to defined contribution pension scheme members, and establishing our Affordable Housing fund, leveraging pension capital to build new homes.
“We are encouraged by the action being taken here in the UK to drive institutional capital towards productive assets, alongside progress on addressing structural barriers to investment, such as the planning system.
Looking ahead, we are well positioned to continue to execute our strategy with pace and ambition, delivering growth and value for all our stakeholders
“Looking ahead, we are well positioned to continue to execute our strategy with pace and ambition, delivering growth and value for all our stakeholders.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown, said: “There are a lot of strings to L&G’s bow, with bulk annuities at its core, and the market looks like it’ll stay healthy over the medium term.
“The next challenge is to deliver improved performance from the refreshed Asset Management division, which will carry some execution risk.
“There’s plenty to like here – the balance sheet is strong, and total returns to shareholders are attractive, with a growing dividend and ongoing buybacks too.”
Shares in the company were 1.1% higher on Wednesday morning.
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