Legal & General: FTSE 100 giant hikes shareholder returns after strong year
Asset management and insurance giant Legal & General has reported a six per cent increase in core operating profit for 2024.
Core operating profit hit £1.6bn and pre-tax profit under IFRS accounting standards stood at £542m.
Off the back of these robust numbers Legal & General announced a £500m share buyback for 2025, as part of its commitment to return over £5bn to shareholders within three years.
The group also hiked its dividend per share by five per cent to 21.36p
The company’s Solvency II capital generation reached £1.8bn, while its Solvency coverage ratio rose to 232 per cent.
During the year, the company sold its homebuilding business, Cala Homes, for £1.35bn and its US Protection business for £1.8bn. Legal & General also entered into a strategic partnership with Japanese life insurance company Meiji Yasuda.
On a divisional basis, the group’s Institutional Retirement arm recorded £10.7bn in global pension risk transfer (PRT) deals, including £8.4bn in the UK and record volumes in the US and Canada. Core operating profit rose to £1.1bn, up seven per cent.
Meanwhile, Legal & General Asset Management recorded total global assets under management (AUM) of £1.1trn. Higher fee margin products and a strategic investment in US real estate equity specialist, Taurus helped improve margins, but the arm’s core operating profit declined 10 per cent to £400m.
Retail operations posted record annuity sales of £2.1bn and continued expansion in Workplace Defined Contribution (DC) pensions. Core operating profit rose 12 per cent to £504m.
Legal & General’s CEO António Simões said: “2024 has been a year of significant strategic progress and strong financial performance. We delivered six per cent growth in our core operating profit and core EPS, alongside excellent new business volumes, while investing for the future.”
Simões added: “We are seeing positive commercial momentum as we execute our strategy with rigour and pace. By sharpening our focus and simplifying our portfolio – through the sale of Cala and US Protection – alongside our strategic partnership with Meiji Yasuda and our investment in Taurus, we are strengthening our ability to generate sustainable growth.”
“We stated at our capital markets event that we intended to return more to shareholders and that is exactly what we are doing. Our clear capital allocation framework supports our plan to return over £5bn over the next three years, through dividends and buybacks. The dividend per share increased by five per cent to 21.36p, underscoring our commitment to delivering value to our investors.
“Looking ahead, our momentum demonstrates why we are confident in our ability to deliver on our ambitious targets, directing our capital and expertise where they can create lasting value, and making a meaningful impact for customers, shareholders, and communities.”
Richard Hunter, head of markets at interactive investor, commented: “Legal & General is in the midst of a new chapter and is transforming, although given the nature of a business entrenched in investment, it is one which is viewed through the prism of the longer term.
“The progress of the group is almost swan-like, with gradual movements masking some furious paddling underneath the water.
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“There is little doubt as to the longer-term potential for the savings and investment market, especially given ageing demographics and likely welfare reform. For L&G, an ability to participate in this market on a number of fronts, particularly the annuity and international angles should provide ongoing areas of growth.”