- Legal & General Group Plc (LON:LGEN) has reported a surge in cash flow, up 22% to £1.0bn
- There were record flows into Legal & General Investment Management, which took in a net £65.6bn in the first half of the year
- Overall, profits after tax, earnings per share and operating profits were all up by 8% and the dividend grew by 5%
- L&G reported their strongest ever capital position, with a solvency ratio of 212%
- The market reacted positively to the figures, with the shares rising almost 1% in early trading.
Q2 2022 hedge fund letters, conferences and more
Legal & General's Earnings
Steve Clayton, HL Select fund manager, Hargreaves Lansdown:
“There is a lot to like in Legal & General’s statement today. Pretty much everything is going in the right direction. The group is writing large volumes of business, at good margins and well controlled capital strain. £4.4bn of Pension Risk Transfer premiums included the group’s largest ever US transaction, whilst the Capital division saw all of its Direct Investments delivering all of their scheduled cashflows. No bond defaults were seen in the group’s annuity debt portfolio, but then they haven’t had any for the last thirteen years. Flows into Legal & General Investment Management were massive, over £2.5bn per week.
L&G are very strongly capitalised and look well capable of withstanding, thriving even, despite what may be coming down the macro-economic tracks. The group is earning high returns on equity, just over 20%, so L&G are adding substantial value. They highlight this morning the strong progress already made toward hitting their medium term targets for cash and capital generation.
This combination of a growing business, underpinned by a robust balance sheet and an inherently cash generative business model makes L&G an attractive dividend payer. After today’s increase, the group looks set to offer a yield of just over 7% for the current financial year. We hold the stock in our HL Select UK Income Shares fund, where it is a core driver of the fund’s own dividend.’’
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