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L&G reports £552m profit and boosts dividend

Legal & General made a profit before tax of £552m last year compared with a loss of £1.38bn in 2008, on a European embedded value basis.

The firm made an EEV operating profit of £1.3bn compared with £875m for the previous year.

On an International Financial Reporting Standards basis operating profit was up 87 per cent to £1.1bn compared with £592m in 2008 while the final dividend increased 33 per cent to 2.73p per share compared with 2.05p for 2008.

Group chief executive Tim Breedon says: “IFRS operating profit of £1.1bn is considerably higher this year and the balance sheet has been further strengthened with a capital surplus of £3.1bn after accruing for an increased final dividend of
2.73p per share.

“This increased dividend reflects underlying growth in net cash and the board’s confidence in its sustainability over the medium term. Today’s results demonstrate the significant progress we continue to make in transforming the group into a lower cost, capital efficient, cash generative business.

“This focus has helped us to exceed our full year target for net cash generation by nearly £250m in 2009. In difficult markets, sales were down 7 per cent in 2009 but each of our businesses delivered higher profits and generated more cash than in 2008.

“We expect modest growth in the UK economy in 2010. However, UK Risk and Savings markets which were depressed in 2009 are expected to rebound. These results show that Legal & General is in excellent health and is ideally placed to take advantage of new opportunities as they emerge in a financial services sector which is undergoing rapid change.”

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