L&G records £583m profit and boosts dividend
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Legal & General recorded a profit before tax of £583m for the first half of 2010 on a European embedded value basis, a significant improvement on the £1bn loss made during the same period last year.
The insurer has also increased its half year dividend by 20 per cent to 1.33p per share up from 1.11p in the first half of 2009, citing strong cash flows and expectations that growth in net cash generation will continue.
The dividend will cost L&G £78m compared to £65m last year.
On an International Financial Reporting Standards basis, the firm made operating profits of £542m up 34 per cent from the £404m recorded for the first half of 2009. It made a profit from ordinary activities before tax of £537m compared with a loss of £143m last year.
Legal & General has also boosted its capital surplus by 73 per cent to £3.3bn compared with £1.9bn in H1 2009.
Group chief executive Tim Breedon says the firm is delivering healthy returns on capital but he believes the outlook for markets is mixed.
He says: “We have delivered £358m against our £600m net cash generation target for the year. Reflecting the continuing combination of healthy net cash generation and a strong capital surplus, we have increased the half year dividend by 20 per cent to 1.33p per share.
“But the outlook for our markets in the second half of 2010 and into 2011 continues to be mixed. We are optimistic about growth prospects in UK savings and annuities, though there is little evidence of recovery in the UK housing market. We continue to see opportunities to export our investment management and bancassurance franchises into international markets.
“At the end of June the group had £3.3bn of capital in excess of our current regulatory capital requirements. This means we are ideally placed to respond to current market and economic uncertainty and to take advantage of the significant opportunities for growth that are emerging.”
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