Legal & General Group PLC (LSE:LGEN) increased its interim dividend 5% as it generated flat profits in the first half.
Earlier this summer the life insurer’s new chief executive, António Simões, set out his strategy to target 5-9% core profit growth and cumulative growth of £5-6 billion of Solvency II capital by 2027.
For the first half of 2024, the FTSE 100 group made a core operating profit of £849 million, up 0.5% on a year ago, but safely ahead of the City analyst consensus forecast of £834 million.
Within the various group divisions, profits rose 6% at the bulk annuity arm despite "lower quoting activity" in the wider market and 6% the retail life insurance, workplace pensions and retirement income wing, but fell 14% in asset management, while debt costs and investment losses and expenses put almost a £200 million dent in profits.
Capital of £897 million was generated at a Solvency II coverage ratio of 223%, respectively above and in line with analyst expectations.
A 6p dividend per share was declared, up 5% on a year ago, in line with the June strategy update’s promise for this year, though the dividend per share will only grow 2% per year out to 2027, enriched with more buybacks following the £200 million declared at the capital markets event.
Alongside the half-year numbers, Simões said he and the board continue to expect 2024 core operating profit to grow by mid-single digits year-on-year.
"We are making clear progress on delivering against our strategy," he said, highlighting the establishment of a single asset manager, "good momentum" in private markets and establishing an affordable housing fund.
Shares in the life insurer searched for direction in early trading, just above flat at 217p after an hour.
Analysts at UBS said operating metrics were better than expectations but "investment variances were a large negative", with £417 million within the core businesses and £187 million in non-core driven by a writedown in the salary finance business.
** Update: Adds share price and analyst comment **