L&G reveal profit despite hit from accounting rules

CHARLIE CONCHIE

LEGAL & GENERAL (L&G) beat market expectations yesterday as it posted profits of £941m for the first six months of the year despite new accounting rules putting a dent in its accounts.

In its half year results, the accounting giant said it had delivered operating profits ahead of the £834m analysts had been expecting, but down from £958m in the same period last year.

The numbers reveal the scale of the hit from new accounting IFRS rules introduced from January, which are expected to hamper reported profits across the industry.

Outgoing chief Sir Nigel Wilson, however, shrugged off the dip and said the firm “remain[s] on track to achieve our five-year ambitions and deliver attractive returns for our shareholders”.

L&G hiked its dividend five per cent to 5.71p, in line with its long-term targets and said it had delivered capital generation of £5.9bn in line with its target of achieving capital generation of £8bn9bn by 2024.

The firm has committed to delivering a five per cent boost in its dividend until 2024 to ease investor jitters.

L&G’s retirement business bolstered its performance in the first six months of the year with profits swelling 19 per cent £471m. The bump was offset by a hefty contraction in its asset management and retail divisions, however.

The retail arm saw profits fall 22 per cent to £230m, while L&G Investment Management profits fell sharply from £200m last year to £142m on the back of a volatile period for money managers, it confirmed in a statement.

Investors appeared unconvinced by the update in London yesterday morning, as shares in L&G tumbled beyond four per cent in early trading. They closed down 2.66 per cent.