Legal & General (L&G) has raised its dividend as its profit for the first half of 2024 exceeded expectations, after its new chief promised a “simpler” future.
The FTSE 100 insurance and pension giant reported a core operating profit of £849m for the half-year, up from £844m during the same period in 2023 and ahead of a company-compiled analyst consensus estimate of £834m.
Its total operating profit came in £920m, £4m lower than the first half of 2023. L&G said it continued to expect its core operating profit for 2024 to grow by mid-single digits year-on-year.
L&G has been making the majority of its cash in the so-called pension risk transfer (PRT) business in recent years, which involves buying up pension liabilities from corporate pension schemes.
It said on Wednesday that it wrote £1.54bn of global PRT in the first half, compared to £4.99bn during the same period in 2023 – which was a record year.
However, L&G said that despite the slower start this year, it had now written or was exclusive on £5bn and that its “pipeline for PRT is larger than ever”.
L&G announced interim dividends of 6p per share, up from 5.71p year-on-year but in line with analysts’ expectations.
In a long-awaited strategy announcement in June, L&G promised investors a “simpler” future for the firm and announced a £200m share buyback – the first in more than a decade.
Chief executive António Simões, who was appointed at the start of the year, said: “These results reflect the ongoing strength of our business, with core operating profit slightly ahead of the prior year and a solvency coverage ratio of 223 per cent.
“We continue to expect 2024 core operating profit to grow by mid-single digits year-on-year.”
“Looking ahead, we are well positioned to continue to execute our strategy with pace and ambition, delivering growth and value for all our stakeholders,” he continued.