24th May 2005 07:30
Legal & General Group PLC24 May 2005 Stock exchange /press releasePart A24 May 2005 Legal & General Group Plc Restatement of 2004 Full Year Results under International Financial Reporting Standards ("IFRS") and European Embedded Value ("EEV") 2004 IFRS restatement 2004 EEV restatement IFRS MSSB EEV APOperating profit before tax £618m £608m £752m £789mProfit attributable to equity holders £451m £464m £849m £870mShareholders' equity £3,671m £3,376m £6,182m £6,116mContribution from new business* N/A N/A £276m £317m * Contribution before tax from new worldwide life and pensions business Legal & General Group Plc ("the Group") has today published the restatement ofits 2004 full year results under both IFRS and EEV bases. Andrew Palmer, GroupDirector (Finance), commented: "Phase 1 of IFRS has had a limited impact on ourresults and financial strength. We believe that the EEV principles buildsuccessfully on existing Achieved Profits reporting in the UK by providingincreased transparency and enhanced comparability between European insurers. TheEEV results show continued strength both in our capital base and profitability." IFRSIFRS has replaced the existing Modified Statutory Solvency Basis of reporting inthe Group's consolidated results. The detailed results, which are attached inPart B of this announcement, reflect the implementation of FRS27, "LifeAssurance". Adoption of IFRS has resulted in a small increase in Shareholders' equity and aminimal impact on profit. The underlying economics of the business areunaffected, and there is, therefore, no impact on either dividend policy orsolvency. Business classified as insurance or participating investment contracts willcontinue to be accounted for under the existing basis until the InternationalAccounting Standards Board's ("IASB") completion of Phase 2 for insurers at adate yet to be agreed. In accordance with the accounting standards issued by theIASB, the Group's primary consolidated financial statements for the 2005 InterimResults to be announced on 28 July will adopt the IFRS basis. Restated resultsfor the first half of 2004 on both IFRS and EEV bases will be published at thattime. EEVIn view of the phased implementation of IFRS, the Group believes that investorswill continue to place considerable reliance on supplementary embedded valueinformation. For the 2005 Interim Results the Group will adopt the EEVprinciples developed by the European CFO Forum. These principles build on the strengths of the existing Achieved Profitsmethodology and provide enhanced disclosure. They focus on specific allowancefor risk; firstly through the allocation of sufficient capital to the businessand a recognition of the cost of that capital, secondly through an explicitallowance for financial options and guarantees and thirdly through the economicassumptions, in particular in the establishment of the risk discount rate toreflect the residual risks in the business. Adoption of the EEV principles results in a 4% reduction in total embedded valueof the covered businesses to £5,505m. The new business margin for 2004 (newbusiness value added as a ratio of the present value of new business premiums)was 4.6% reflecting the scale efficiencies of our UK business. A restatement ofthe 2004 full year results is included as Part C of this announcement. Enquiries to:Investors:Andrew Palmer, Group Director (Finance) 020 7528 6286 Peter Horsman, Head of Investor Relations 020 7528 6362 Media:John Morgan, Head of Public Relations 020 7528 6213 Anthony Carlisle, Citigate Dewe Rogerson 020 7638 957107973 611888 Notes: 1. A copy of this announcement can be found in the News and Resultssection of our Shareholder web site at http://investor.legalandgeneral.com/releases.cfm 2. A presentation of the results will be made to analysts and fundmanagers at Temple Court, 11 Queen Victoria Street, London EC4N 4TP at 9.30today. A webcast of the presentation to analysts and fund managers will beavailable later today at http://investor.legalandgeneral.com/presentations.cfm This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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