With Legal & General's investment performance having improved from last year's £37.7bn loss to a £38.2bn return, pre-tax profits returned to the black. And, at the operating level, and on an IFRS basis, operating profits rose 87 per cent to £1.1bn.
Still, the group is facing issues. In the annuity business, and while net cash there jumped from £108m to £364m, first-half pricing conditions allowed new business to be secured without the usual upfront costs. Higher than assumed mortality rates helped, too. The unit's operating profit was, therefore, turned around to £545m from last year's £40m - but in circumstances that are unlikely to be repeated. Although, at the savings operation, a £23m cash outflow was turned into an inflow of £33m, thanks to decreased new business strain (the upfront cost of writing new business) from £161m to £77m. That reflects a continuing shift in the sales mix towards less capital intensive products.
Prior to these figures Panmure Gordon was expecting a pre-tax profit of £834m for 2010, EPS of 13.6p.
| LEGAL & GENERAL (LGEN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 86p | MARKET VALUE: | £5,042m | |
| TOUCH: | 85-86p | 12-MONTH HIGH: | 94p | LOW: 36p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 72p | EMBEDDED VALUE: | 114p | |
| Year to 31 Dec | Gross life premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 4.08 | 1.59 | 14.3 | 5.28 |
| 2006 | 4.29 | 2.02 | 24.1 | 5.55 |
| 2007 | 4.79 | 0.79 | 11.2 | 5.97 |
| 2008 | 5.89 | -2.15 | -17.9 | 4.06 |
| 2009 | 5.28 | 1.24 | 14.8 | 3.84 |
| % change | -11 | - | - | -5 |
Ex-div: 14 Apr Payment: 1 Jun | ||||
