Yahoo Finance Legal & General sees profits surge 11% to £2.26bn
Legal & General (LGEN.L) reported an 11% operating profit surge to £2.26bn, up from £1.60bn last year, as the life insurer and asset manager announced higher dividends.
L&G said it is benefiting from a bounce-back in the housebuilding market as its alternative asset or capital investment business, LGC, saw the biggest gain in operating profit, up 68% to £461m.
Assets under management at its investment management arm were up 11% to £1.4tn meanwhile, of which £479bn was from international customers.
L&G’s flagship retirement division saw profits dip on 2020 levels however, delivering operating profits of £1.15bn, down from £1.23bn last year.
Read more: Global dividends hit record high of $1.47tn in 2021
L&G hailed "good" new business volumes and "strong" net flows for the double digit growth. The company's total external net flows reached £34.6bn in 2021, up 70% from 2020.
Chief executive Nigel Wilson said: "The expected reform of Solvency II, the roll-out of the UK government's levelling up programme, and our growing international businesses underscore our confidence in our ability to continue delivering on a broad range of profitable growth opportunities."
L&G said that across all asset classes, its actively managed funds had overperformed the benchmark, with 61% overperforming in the last year and 81% outperforming in the last three years.
The company also announced a full-year dividend of 18.45 pence per share.
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Keith Bowman, investment analyst at Interactive Investor, said: "In all, a combination of economic and geopolitical tensions offer some uncertainty around the outlook. Intense competition in the asset management industry is also worth remembering, as is the group’s exposure to the cyclical housing market through its capital investment business.
“On the upside, L&G’s exposure to ageing demographics and pension provision remains central. An investment management business with over £1 trillion of assets under management is no small player, and its five business divisions inject some degree of diversity. For now, and with its shares sat on a historic and estimated future dividend yield of over 7%, analyst consensus opinion continues to point towards a buy,” he added.
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