Legal & General delivered an impressive performance in 2012, pushing net cash generation up by 11 per cent to £846m and worldwide sales by 7 per cent to £1.9bn. Operating profits on an IFRS basis rose from £1bn to £1.06bn, and shareholders have been rewarded with a 35 per cent hike in the dividend payout. Headline profits were a little lower, though, as the previous year's £185m investment variance gain was turned into a £2m loss.
All four operating divisions performed well, with investment management leading the way, with a 14 per cent rise in operating profits to £234m. And while net inflows were down from £6.6bn to £3bn, assets under management rose 5 per cent to £371bn. In the risk division, the group secured its first £1bn pension bulk annuity scheme, while overall sales rose 30 per cent to £498m.
General insurance sales were robust, which helped to turn last year's £8m operating loss into a profit of £42m. And benign weather prompted a sharp improvement in the combined ratio (of claims to premium income) from 106 per cent to 88 per cent.
Subject to revision, Investec is forecasting 2012 operating EPS of 14.3p (14.5p in 2011).
| LEGAL & GENERAL (LGEN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 131p | MARKET VALUE: | £7.7bn | |
| TOUCH: | 131-132p | 12-MONTH HIGH: | 132p | LOW: 86p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 89p | EMBEDDED VALUE: | 147p | |
| Year to 31 Dec | Gross life premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 4.79 | 0.79 | 11.2 | 5.97 |
| 2008 | 5.89 | -2.15 | -17.9 | 4.06 |
| 2009 | 5.28 | 1.07 | 14.8 | 3.84 |
| 2010 | 5.35 | 1.09 | 14.1 | 4.75 |
| 2011 | 5.72 | 0.96 | 12.5 | 6.40 |
| % change | +7 | -12 | -11 | +35 |
Ex-div: 18 Apr Payment: 23 May | ||||
