9th Aug 2018 08:16
LONDON (Alliance News) - FTSE 100-listed life insurance and financial services company Legal & General Group PLC on Thursday reported a drop in interim profit but upped its dividend.
In the six months ended June, Legal & General's pretax profit decreased 19% to GBP942 million from GBP1.16 billion the year before.
The financial services company attributed the drop to "lower positive investment variance" as a result of volatility in global financial markets to GBP33 million from GBP175 million the year before.
This includes a GBP90 million loss from a GBP52 million gain from the company's Legal & General Capital traded assets portfolio.
The financial services company's operating profit from divisions increased 7% to GBP1.06 billion from GBP994 million the year before, as five out of the company's six businesses increased the figure in the first half.
Legal & General Retirement grew its operating profit 9% to GBP480 million from GBP440 million. The business' backbook continued to perform "strongly".
The company's solvency II operational surplus generation increased 11% to GBP700 million from GBP600 million. This supported a solvency II coverage ratio of 193% at the end of the first half from 186% year-on-year and 189% at the end of 2017.
Legal & General's return on equity was 20.3% from 26.7% the previous year.
The company is proposing an interim dividend of 4.60 pence per share, a 7.0% increase from the 4.30p paid last year.
Looking head, Legal & General is confident of maintaining momentum into the second half. The company believes it is on track to deliver a similar performance out to 2020 as that achieved in 2011 to 2015.
The FTSE 100-listed company believes its strategy is unaffected by the on-going political and economic uncertainty.
Chief Executive Nigel Wilson said: "Legal & General again delivered consistent, positive results with five of our six businesses increasing their operating profits for the first half of 2018.
"We expect to have an exceptionally busy second half. We are currently actively quoting on over GBP20 billion of UK pension risk transfer deals, including over GBP7 billion of transactions in exclusive negotiations expected to close in the second half. We are reviewing our long term mortality assumptions and expect to make a full year release in the second half which will be larger than the GBP332 million released for full year 2017."
Shares in Legal & General were down 1.3% early Thursday at 261.01p.
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