ii view: Legal & General firing on all cylinders
Assets under management rise at Legal & General buoyed by international growth.
7th August 2019 10:00
by Keith Bowman from interactive investor
Assets under management rise at Legal & General buoyed by international growth.
Half-year results
- Asset under management up 15% to £1,135 billion
- Operating profit up 11% to £1 billion
- Dividend payment up 7.2% to 4.93p per share
Chief executive Nigel Wilson said:
“Legal & General's five businesses collectively delivered another strong set of results. We have a depth of management, track record and opportunities that mean all five of our businesses should contribute to future growth. Our balance sheet remains strong. We have a globally diversified asset portfolio with minimal exposure to UK sub-investment grade credit. We are well-prepared for the full range of foreseeable Brexit outcomes.”
ii round-up:
Founded by six London lawyers in the 1830s, today Legal & General Group (LSE:LGEN) has a stock market value in excess of £14 billion.
The company operates across the three areas of investing and annuities, investment management and insurance.
For a round-up of these half-year results, please click here.
ii view:
An ageing population and moves by government to place a greater emphasis on individuals to save for their own retirements provide for a favourable backdrop. Ultra-low interest rates have also seen savers seeking returns from cash alternatives such as equity related products.
A strategy to be a leader in the pension asset management and insurance markets is being pursued hard. Given intense competition in the asset management arena, L&G has for some time been embracing low-cost products. Net fund inflows have been enjoyed, with expansion overseas firmly contributing.
For investors, a prospective dividend yield of around 7%, not guaranteed, offers clear appeal, as does a record of 9 years of consecutive dividend increases. Brexit and broader concerns for asset market levels add some caution.
Positives:
- Diversity of both product and geographical location
- International assets under management rose by 50% to £343 billion
- Its direct Investments rose 36% to £22.2 billion
Negatives:
- General insurance operating profit fell 13% to £134 million
- The cost/income ratio ticked slightly higher
- Vanguard recently further escalated a price war
The average rating of stock market analysts:
Strong hold
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