Shares in Legal & General Group PLC (LSE:LGEN) were the biggest faller on the FTSE 100 despite the life insurer launching its largest-ever share buyback of £1.2 billion and saying it is aiming to "accelerate momentum".
The results were broadly in line with analyst forecasts at the operating level, though there were some notable shortfalls.
Profit before tax for 2025 leapt 143% to £807 million, core operating profits rose 6% to £1.6 billion and core earnings per share climbed 9% to 20.93p, at the top end of the 6-9% guidance previously given by management.
Chief executive António Simões said L&G was "a sharper, more focused business" following a year of restructuring, and pointed to the buyback alongside guided dividend per share growth of 2% as evidence of confidence in the group's trajectory, with total planned shareholder returns of £2.4 billion over the next year and more than £5 billion targeted between 2025 and 2027.
The group wrote £11.8 billion of global pension risk transfer business, including £10.4 billion in the UK, maintaining its leading position in a market that Simões said is still structurally growing.
Workplace defined-contribution assets under administration jumped 21% to £114 billion, with retail net flows of £6.2 billion and a further £3.7 billion of assets won and due to be onboarded in 2026.
Asset management, which has been undergoing a significant repositioning, showed signs of improvement, with private markets assets up 32% to £75 billion and average fee margins expanding to 9.1 basis points.
The Solvency II coverage ratio stood at 210% on a pro forma basis.
"We are on track to achieve the financial targets set out in our strategy," said Simões, "our priority now is to accelerate this momentum, maintaining discipline and delivering enhanced shareholder returns."
Guidance is for core operating EPS growth to remain at the top end of the 6-9% range in 2026, with healthy bulk annuity volumes to continue this year and asset management momentum improving.
The shares fell 5.7% to 243.8p in early trading on Wednesday.
Analyst Andreas Van Embden at Peel Hunt said it was a "solid set of results, broadly in line with our estimates at the operating level", with the outlook remaining "positive".
However, he said a "higher-than-expected investment variances meant a 4% miss in NAV", in other words, net asset value was lower than forecast due to a larger gap between assumed and actual returns on the group's investment portfolio.
While core operating EPS growth was at the top end of guidance, he noted that headline pre-tax profit of £807 million was much lower than his £1.19 billion estimate and the consensus.
Abid Hussain at Panmure Liberum said: "Overall, the numbers look fine year-on-year but appear to have generally missed or be in line with expectations."
He added: "The capital position remains strong with a Solvency II capital coverage of 203%, although a material miss versus expectations driven primarily by negative market movements."
** UPDATE: Adds shares price and analyst comments **