Life assurer Legal & General (LGEN) delivered an impressive first-half performance, with total new business sales (on the basis of equivalent annual premiums) rising 22 per cent year on year. That helped the group's half-year operating profit to rise 10 per cent to £571m.
At the annuities business, sales of individual annuities soared 44 per cent to £700m and the total divisional operating profit rose 9 per cent to £151m. And the asset management side grew assets under management 7 per cent to £433bn, helped by £8bn of net fund inflows. The division's operating profit grew 13 per cent to £135m, too. The savings business, meanwhile, benefited from May's acquisition of digital savings platform Cofunds, which accounted for all the rise in assets under management from last year's £70bn to £111bn. Operating profit from the income and mortgage protection business rose 12 per cent to £168m.
The general insurance arm looks in good shape, too. Partly reflecting lower claims thanks to benign weather, its combined ratio (of claims to premiums) improved by 18 percentage points to 81 per cent - implying impressive underwriting profits.
Analysts at Barclays Capital expect full-year EPS of 16.5p with year-end embedded value of 149.2p (from 14p and 150.5p in 2012).
LEGAL & GENERAL (LGEN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 202p | MARKET VALUE: | £11.9bn | |
| TOUCH: | 201-203p | 12-MONTH HIGH: | 205p | LOW: 127p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 93p | EMBEDDED VALUE: | 158p | |
| Half-year to 30 June | Gross life premiums (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 2.32 | 598 | 6.93 | 1.96 |
| 2013 | 3.14 | 777 | 7.82 | 2.40 |
| % change | +35 | +30 | +13 | +22 |
Ex-div: 28 Aug Payment: 30 Sep | ||||
