07 August 2024
If you are covering L&G’s latest results, please see the following comment from Tom Gilbey, equity research analyst at Quilter Cheviot:
"Legal & General (L&G) has released a positive set of half-year financial results, showing steady performance with operating profits 2% above expectations. The company has announced a 5% increase in its interim which will be pleasing to shareholders and reflects its confidence in its future growth potential.
"While pension risk transfer (PRT) volumes were initially lower than expected, the company has noted an uptick and annuity sales remain variable. The company has reaffirmed its targets for 2024 and 2027. Despite the miss on PRT, its pleasing to see that in the first half of the year nine of out of 15 deals involved the businesses’ Asset Management clients showing strong synergies between the two businesses.
"In terms of division performance, the Retirement division saw a 6% growth in operating profit, while the Asset Management division experienced a 14% decline. The Retail division had a 6% increase in profits, marking a slight departure from expectations but this is offset by the Retirement division exceeding forecasts.
"The decline in Asset Management’s operating profit reflects increased investment in modernising the platform and driving growth, as announced at the Capital Markets event. Revenues in this division have risen, signalling a positive direction. This business not long ago brought together LGIM and LGC to create a single, global, public and private asset manager.
"Looking ahead L&G expects modest year-on-year growth in core operating profit for 2024. It aims for a 6-9% compound annual growth rate in core operating earnings per share from 2024-27, with an operating return on equity exceeding 20%. This business is therefore poised for solid future growth."
