Legal & General (LGEN) delivered a solid performance last year despite a tough economic backdrop and weak consumer confidence. Operating profits edged ahead 3 per cent on an IFRS basis to £1.09bn, helped by a strong investment return and a strong increase in UK protection and individual annuity sales. However, profits on a European embedded value basis slipped 29 per cent to £1.04bn - that's because largely positive one-off gains in the previous year were replaced with negative factors including the impact of regulatory changes in the US and lower returns on in-force business.
Operating profits from income protection and mortgages grew by 14 per cent to £359m, boosted by greater use of automated underwriting which reduced the cost of writing new business from £66m to £45m. On the annuities side, L&G pushed individual annuity sales ahead by 26 per cent to a record £132m, although proceeds from bulk annuity sales fell from £146m to £102m, but operating profits from annuities was only marginally down at £281m. Inflows on the investment management side were particularly strong, more than doubling from the previous year to £7.1bn and pushing assets under management up 9 per cent to £406bn.
Investec is forecasting 2013 embedded value per share of 176.5p and IFRS operating profits of £1.16bn.
| LEGAL & GENERAL (LGEN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 164p | MARKET VALUE: | £9.70bn | |
| TOUCH: | 163-164p | 12-MONTH HIGH: | 163p | LOW: 105p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 92p | EMBEDDED VALUE: | 151p | |
| Year to 31 Dec | Gross life premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 | 0.95 | 12.4 | 6.40 |
| 2012 | 5.67 | 1.04 | 13.9 | 7.65 |
| % change | -1 | +9 | +12 | +20 |
Ex-div: 24 Apr Payment: 29 May | ||||
